A Family History is Often the Most Valuable Part of Your Legacy

Jan 27, 2014  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Legacy Planning

In survey after survey, people report that the most important thing they can receive from their parents or grandparents as an inheritance is a legacy of family stories and personal histories. While many people think that inheritance and legacy planning focus solely on questions of property, those who stand to inherit often believe much differently. In a 2012 survey conducted by the Allianz Life Insurance Company of North America, respondents overwhelmingly reported that they valued keeping their family history’s life more than anything else.

Boomers and Elders Agree on Legacy Issues

The survey asked baby boomers and Americans age 72 and older a range of questions about inheritances and family legacies. The vast majority of baby boomers who responded, 86%, said that the most important part of their personal legacy was to be able to leave behind family histories and stories that were kept alive by other family members. 74% of elderly Americans said the same.

These results were very similar to those found by a previous survey conducted by the same company. In 2005, Allianz Life surveyed baby boomers and elderly Americans about family heirlooms, personal mementos, and other inheritances. Only 9% of the baby boomers who responded said they were eager to receiving a monetary inheritance, while 14% of elderly Americans said that such inheritances were important parts of their legacy.

The vast majority of people, it seems, places much less importance on inheriting money than on preserving family stories.

Preserving Your Stories and Your Family Legacy

The question of how to preserve family history is an important one to ask yourself. Many families tell stories about their history to one another, but those stories can be easily lost as family members die. Preserving important mementos can be relatively easy by creating specific estate planning tools, but preserving memories and stories is much harder to do.

Having a tangible reminder of the family histories and personal details is essential if you want to keep the stories alive. You can, for example, begin preserving your legacy by reviewing old photo albums. You can write down details about each photo either on the back of each photo, or keep notes on a separate piece of paper or document. With the details in hand you can then begin assembling stories. You can either write the stories done yourself, or if you are more ambitious, hire someone to write them for you.

You can also assemble your photos into a tangible product, such as a scrapbook or personal family history. Digital and desktop publishing also gives you the option of creating digital versions that you can much more easily share with other family members.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Differences in Advance Directive Laws Highlighted by Recent Texas Case

Jan 27, 2014  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Incapacity Planning, parents with young children

A Texas case involving a pregnant woman is drawing renewed attention to state laws about advance directives, incapacitated people, pregnancy, and the ability to make medical choices.

In late 2013, Dallas-Fort Worth area paramedic Eric Munoz found his pregnant wife unresponsive on the floor of their home. After transporting her to the hospital, Munoz discovered that his wife, Marlise, had likely suffered a pulmonary embolism that had left her incapacitated. The embolism had deprived her brain of oxygen, and left her effectively brain-dead. The doctor said they didn’t know if any damage had been done to fetus she was carrying.

Mr. and Mrs. Munoz were both experienced paramedics. They had previously discussed the question of whether they would want to receive life-sustaining treatment if they were in an unrecoverable medical condition. Eric Munoz said that his wife, even though she had not completed an advanced medical directive, would not have wanted to be kept alive artificially. He told her doctors this, but they were unable to comply with his directions because Texas state law prevents it.

Medical Directives and Pregnancy

Several states, including Texas and Washington, allow people to create advance medical directives, but do not allow the choices they make in those directives to apply during pregnancy. In the Munoz case, since Marlise is pregnant, her doctors cannot withdraw any life-sustaining treatment. Though Texas law allows people to create advance medical directives, the law specifically states that pregnant women cannot refuse to receive such treatments.

Washington Directives and Pregnancy

Like Texas, the state of Washington also imposes restrictions on advance directives made by pregnant women. The law effectively states that a woman who has created a living will or other advance medical directive cannot use that directive when she is pregnant. So, should a pregnant woman become incapacitated and have a directive that states she does not wish to receive life-sustaining treatment, her doctors are prevented from following those wishes.

Medical Choices

In the Munoz case, since Marlise did not have a directive, her husband became the person who would be able to make medical decisions on her behalf when she is incapacitated. If a similar case were to arise in the state of Washington, the same thing would likely occur. In other words, a husband of an incapacitated pregnant woman in the state of Washington could not direct her doctors to remove life-sustaining treatment even if he was sure that she would not have wanted to receive it.

The Munoz case shines a new spotlight on the important issue of medical directives. Because state laws are so different, everyone who wants to create an advance directive should always talk to an attorney in their area.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

What You Think You Know About Elder Law Could Hurt You

Jan 27, 2014  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Elder Law, Estate Planning

Elder law attorneys commonly hear a lot of myths about this area of the law. Whether you get your advice from someone who is well intended but uninformed, hear something from a friend, or see something on television, relying on bad information could harm you as you create an estate plan or consider elder law topics. If you ever have a question about an elder law issue or need assistance, you should talk to your attorney for specific advice. In the meantime, here are two of commonly held myths that many people believe about elder law and estate planning.

You can qualify for Medicaid by giving your property away.

When people consider the costs of long-term care, some of them turn to Medicaid as a way to cover the expenses. While Medicaid will pay for nursing home expenses or similar costs, not just anyone can use it. To qualify for Medicaid you have to meet some fairly strict income and asset eligibility criteria.

A lot of people are aware of the Medicaid eligibility restrictions, but they believe that they can meet these requirements by simply giving their property away. For example, people who believe they own more than the maximum Medicaid asset level believe that they can give away their property to their family and then apply for the program.

This isn’t entirely true. While you can reduce your assets by making gifts, Medicaid will look at the gifts you’ve given within the past five years. If the gifts you’ve made during that time put you over the eligibility limit, you won’t be able to qualify.

I have a will, so I don’t need to worry about elder law.

When people hear the term “elder law,” many of them associate it with estate planning. While it’s true that estate planning and elder law cover many of the same issues, they also address very different concenrs.

Your estate is the collection of assets and obligations you leave behind after you die. A last will and testament is a tool you can use to choose how you want to distribute this property to others. Unfortunately, a will isn’t the only thing you will need when you are creating an estate plan, and it does nothing to address some significant elder law issues.

For example, you cannot use your last will and testament in order to make medical choices. Wills only apply after you die.  If you want to communicate your medical wishes to your physicians in the event you become incapacitated, a last will and testament will do you no good. Creating a good estate or elder law plan requires you to address a wide range of issues, and develop the proper tools that address them.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Understanding Living Trusts by Debunking Living Trust Myths

Jan 27, 2014  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Wills and Trusts

If you are like a lot of people in the Seattle, Washington area beginning an estate plan, you have likely heard of revocable living trusts. A revocable living trust is an essential piece of many contemporary estate plans. Like other estate planning tools, living trusts will serve some specific purposes and will allow you and your estate some significant benefits.

There are, unfortunately, some commonly held myths about living trusts that you may have come across. While most of these myths are relatively harmless, it’s a good idea to understand why they’re not true. Having the right information about revocable living trusts will allow you to make much better choices when you go through the estate planning process.

Myth 1. If I create a revocable living trust I don’t have to worry about probate.

A revocable living trust is essential if you want to create an estate plan that focuses on probate avoidance. Yet creating a revocable living trust is not the only necessary step. Your trust will have to be properly funded in order for your estate to avoid probate. Funding a trust means transferring all appropriate assets into the trust’s name. Without a properly funded revocable living trust, the property left out will have to go through probate. Further, failing to transfer the property properly will also mitigate any potential probate avoidance benefits.

Myth 2. If I have a revocable living trust I don’t need a will.

While a living trust will allow you to make inheritance choices outside of your last will and testament, it doesn’t make a will and optional device. Your last will and testament affords you specific benefits and choices that you cannot accomplish through your revocable living trust.

For example, you can name a guardian for any minor children in your will. The guardian will take over parenting responsibilities should you die before the child becomes an adult. You cannot use a revocable living trust to nominate a guardian.

Myth 3. Once I create a revocable living trust I don’t have to worry about it anymore.

Managing a revocable living trust is something that requires regular activity. Like your car, your revocable living needs routine maintenance. To keep it functioning properly and to make sure you are getting the most benefit possible, you need to carefully review your living trust at least every three years.  Further, if you acquire or dispose of trust property, you need to keep accurate records. Having a living trust with poorly kept financial details can be a significant problem, if and when you have to distribute trust property or have someone step in to manage the trust when you are incapacitated.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Common Questions About Estate Tax Portability

Jan 27, 2014  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Taxes

Many people have questions about estate taxes, portability, and what it all means for them. While estate, gift, and generation-skipping transfer tax calculations can be a little intimidating, there are some basic concepts that can help you easily understand them. When it comes to portability, asking the right questions will give you a better understanding of what it means for you, your spouse, and your estate.

Question 1. What is the estate tax?

The estate tax is a federal tax that applies to property left behind by a deceased person. If you die leaving behind property, your estate may, through your estate representative, have to pay a portion of its value as a tax.

Question 2. Do all estates have to pay an estate tax?

No. Federal law allows every estate to exempt a specific amount of property from the estate tax. The exemption is the amount of money your estate gets to keep before it has to pay a single dollar in estate taxes. In 2014, the estate tax exemption limit is $5.34 million. This means that if you die in 2014 and have an estate worth under $5.34 million, your estate will not have to pay any estate taxes at all.

Question 3. What is the estate tax portability?

Estate tax portability applies to married couples who want to use the individual estate tax exemptions together. Essentially, portability allows spouses to combine their individual exemptions.

Here’s how it works. Let’s say you are married and your spouse dies leaving behind an estate worth $3 million. Several years later you die leaving behind an estate worth $6 million. Because your estate is worth more than the $5.35 million exemption limit, your estate would have to pay some estate taxes if you died as a single person.

However, because your spouse died before you did and did not use all of the exemption, there is still a little left over that you can add to your own. If your spouse died leaving behind an estate of $3 million, there would be $2.35 million in unused exemptions. Through portability you can apply a spouse’s unused exemptions to your own. In this situation, your exemption would total $7.7 million. Because your estate is worth $6 million, this means that your estate won’t have to pay a single penny in estate taxes.

However, applying the portability concept to any individual situation does require some careful attention to detail. For example, you’ll have to ensure that your estate administrator files the appropriate IRS form in order to gain the full benefit of portability. For more information about this, contact our office so we can discuss the concept in more depth.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Estate Planning in the Face of Alzheimer’s

Jan 27, 2014  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Elder Law

If you, or a close family member or loved one, has recently been diagnosed with Alzheimer’s disease, there are many estate planning issues you will need to consider. As with any significant medical condition, a diagnosis for Alzheimer’s disease should prompt you to seek out the advice of an experienced estate planning lawyer in Washington. The progressive nature of Alzheimer’s disease means that your time to create an estate plan is limited, and you need to act quickly. To help you get started, here are two issues you need to consider.

Alzheimer’s Disease and Capacity

There is currently no treatment or cure for Alzheimer’s disease. Furthermore, the disease has different stages, each of which can lead to different symptoms. In order to create an estate plan in light of Alzheimer’s disease, you must be sure that you’re capable of making choices.

The ability to make choices is necessary whenever you create a legal document. As someone with Alzheimer’s disease, your ability to make these choices could be compromised depending on how far the disease has progressed.

Your diagnosis and the opinion of your physician are critical when you’ve been diagnosed with Alzheimer’s. As long as you retain your decision-making capacity, you can make an estate plan. However, if the disease progresses to the point where you lose your capacity to make decisions, a court will have to get involved to appoint someone to make decisions on your behalf.

Incapacitation Planning

Because Alzheimer’s disease eventually leads to incapacitation, taking steps to prepare for that event is essential for anyone diagnosed with the disease. When you lose your ability to make choices, you will need someone to manage your affairs. Whether you’re single or married, you have the ability to choose who those people will be.

First, you can create a durable financial power of attorney to appoint an agent to manage your financial concerns. The power of attorney can allow your agent to begin managing your finances now, or at a later time. You can choose anyone you like, but spouses, close relatives, or even close friends or professional advisors are common choices.

Second, you’ll need to create advance medical directives. Like a power of attorney, you can appoint someone who will make medical decisions for you, and who can talk to your doctors about your condition when you cannot make choices for yourself. Similarly, you can create a document that states what your medical wishes are in the event you lose capacity.

Beyond incapacity planning, you’ll also want to create an estate plan that addresses what will happen to your property after you die. For example, you’ll want to appoint an executor to manage your estate, as well as make inheritance decisions.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Advanced Directives: Do You Need One? [Infographic]

Sep 10, 2013  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning

An advanced directive is a legal document that allows the person executing the document to make important, end of life decisions. It may also allow you to appoint someone to make healthcare decisions for you if you are unable to make them yourself at some point in your life. Understanding what an advanced directive can and cannot do, and why they are becoming so common, can help you decide if you should execute one yourself.

Advanced Directives: Do You Need One?

 

Click here to view a larger image.

 

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Are You Doing Too Much? The Difference Between Caretaking and Caregiving

Jan 26, 2013  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Elder Law

As more people spend time providing elder care services to parents or other elderly family members, they often experience stress or difficulties because of the services they provide. Elder care, especially for untrained volunteers, can be very difficult, and it’s important to know when you need to step back and think about the difference between caregiving and caretaking.

Caregiving and caretaking are both words that describe elder care, but they can also be used to distinguish between a healthy relationship and an unhealthy one. A caretaker is someone who provides care but in a manner that is unhealthy either to the caretaker or to the elderly person. Caregiving, on the other hand, can be used to describe a healthy relationship where both the caretaker and the elderly person have a positive experience.

So how do you know the difference? It’s a fine line, but caretaking is often stressful, frustrating, and exhausting. Caregiving, on the other hand, is loving and, though it can be stressful at times, is something you draw strength and inspiration from.

Caretaking will often lead to feelings of depression in the person who provides care. The long hours, stressful situation, and feeling of constant pressure are common feelings for caretakers who are overwhelmed by the process. Also, unhealthy caretaking relationships do not give the person providing care a sense of accomplishment. Caregivers, on the other hand, come away feeling better about themselves knowing that they have helped someone else with their problems.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Understanding the Clauses in Your Will

Jan 26, 2013  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Wills and Trusts

Knowing about the different kinds of clauses that are in your will is an important part of understanding the estate plan that you’re trying to put together. After all, if you don’t know what the will is saying, how can you know for certain what you’re doing with your estate? With that in mind, take a moment to look over some of the various types of clauses contained in a will.

Declaration and Revocation 

These clauses work in tandem of to let the reader now that you have unequivocally made it so that the document they are holding in their hands is, without a shadow of a doubt, what you intended as your last will and testament. For example, “I, William Jones, declare this to be my last will and testament.  All wills and codicils that I have previously prepared are hereby revoked.”

Guardianship 

The clause is where you designate someone to serve as guardian to your children if you are unable to do so yourself, due to death or incapacitation. A guardian is kind of like a replacement parent, so don’t make this decision lightly.

Residuary Gifts 

This clause is used as a catch-all for any of the assets that you do not specifically give to someone elsewhere within the will. It will designate the person or entity to which this residual property will pass.

Signatures, Witnesses and the Self-Proving Affidavit

A self-proving affidavit is a unique statement that the witnesses sign to indicate that the proper procedures were followed, and that you knew what was going on when you signed, and you signed willingly.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Learning From General Norman Schwarzkopf

Jan 26, 2013  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Legacy Planning

As commander of coalition forces during operation Desert Shield and Desert Storm, General Norman Schwarzkopf left behind a legacy as a great military commander when he died this December. He also left behind a legacy that can teach us a lot about estate planning, even if we did not serve in the Armed Forces or were not as noteworthy or famous as the late general.

Legacy Planning

Part of estate planning is not simply making choices about who we leave our money to and how we can best structure our estate to minimize tax exposure, but it’s focused on the broader picture of protecting our legacy and leaving behind a memory of which we would be proud.

When Mr. Schwarzkopf left the Army, he could have taken any number of paths that would have affected his legacy. He could have remained in the public eye, entered into politics, or taken positions that could have impacted his legacy positively or negatively. Instead, General Schwarzkopf chose a mostly private life that was lived outside of the public eye. By maintaining this position and not becoming involved in disputes or political fights, the general’s legacy remained largely intact when he retired soon after leaving the successful Gulf War.

Veterans Benefits

As one of the highest ranking military officers of his time, the general not only had notoriety, but also had access to all the veterans benefits that’s everyone who has served in the Armed Forces can access. Veterans have access to benefits such as aid and assistance, survivor benefits, commissary access, and a range of other programs that can help you now, and help your family after you die.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.