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May 7, 2022 by Cava Faulkner

Could an out of date will leave you facing eviction? It’s all too common, but unfortunately the way some lawyers handle their clients’ estate plans create more problems than solutions for future generations.

It’s critical that you understand exactly what will happen after you become incapacitated or when you die, to ensure that the people you love don’t end up cleaning up an estate planning nightmare while also grieving your passing.

Recently in Columbus, Ohio, a mom of four kids is not only grieving the death of her mother, but now also facing eviction from her home.

Here’s how it happened: Grandma signed a will in mid-2015 putting all of her assets in trust for the education of her six grandchildren. She indicated that her local bank should manage those assets for the benefit of the education of those grandchildren. That seems like a great thing to do, right?

Right. Except that then in 2016, Grandma then bought a home for one of her daughters and her daughter’s four children. And she didn’t update her will.

Unfortunately, this oversight is far too common due to the way many lawyers serve their clients. Their estate plans are often just focused on the documents and the one-time transaction, rather than ensuring they work with their clients on an ongoing basis, updating those documents each time life changes or asset changes occur.

So now, the daughter that is living in the house with her four children is being evicted. The bank was tasked with providing for the education of the children, so the bank is now selling the house with the intention of putting the money in trust for their education. Then, when they turn 21, they will get a distribution of whatever is left.

It’s hard to imagine that Grandma would have wanted this outcome for her daughter and four of her grandchildren. But without a clear plan that documents Grandma’s wishes, which could have included her daughter paying rent to the trust account for the benefit of all the grandchildren, the bank is within its right to evict the daughter and the four grandkids.

It’s a sad, sad tale. And one that could have been easily avoided if Grandma’s lawyer had foreseen the potential issues and supported grandma to update her will.

When is the last time you had your estate plan reviewed? Have you developed a relationship with a trusted lawyer who you feel confident has your back and will make sure that your kids aren’t facing eviction or some other unexpected mess after your incapacity or death? If not, now is the time.

May 6, 2022 by Cava Faulkner

Previous Post With Tax Laws in Flux: What Should You Do Now? Next Post How Estate Planning Can Bring Blended Families Closer

May 5, 2022 by Cava Faulkner

The Tax Cuts & Jobs Act (TCJA) made sweeping changes to exemptions, deductions, and credits for your family’s federal income taxes. But one major change that you might not have noticed is the way the law altered the potential tax consequences of divorce.

Unlike child support, alimony payments have long been tax-deductible for the ex-spouse making the payments and taxed as income for the recipient. And alimony payments were an above-the-line deduction, meaning that the payor did not need to itemize in order to benefit from the tax advantage.

Because the spouse making payments was typically in a higher tax bracket than the recipient, shifting the income to the recipient’s lower tax bracket could result in significant overall tax savings. Indeed, this tax savings was often an important factor when negotiating divorce settlements, and it often led to larger alimony payments.

However, the TCJA repealed the alimony deduction and totally reversed the tax obligation: For divorce or separation agreements executed on or after January 1st, 2019, alimony payments are no longer tax deductible for the paying spouse, and alimony is no longer considered taxable income for the recipient.

Divorce or separation agreements executed before January 1, 2019 are grandfathered in under the law, meaning alimony will remain tax deductible for the paying spouse and taxed to the recipient. That said, pre-2019 divorce agreements can be modified to apply the new rules to future alimony payments, provided the modification expressly states that the TCJA new tax treatment should apply.

Indeed, there could be situations where voluntarily modifying divorce agreements put in place before 2019 to apply the new tax treatment would benefit both parties. One example might be if the recipient spouse is now in a higher tax bracket than the payer-spouse. Consult with us to determine if such modification makes sense for your particular situation.

Unlike many other new provisions of the TCJA, which will sunset in 2025, the repeal of the alimony deduction is permanent. It will remain in effect unless Congress makes future changes to the tax code.

Broad implications

It’s important to note that these rules don’t just stand to affect those divorced after December 31, 2018. The repeal of the alimony deduction could also impact couples who’ve been divorced for years—and even those still happily married.

For example, those whose current divorce settlements were based around tax assumptions that no longer apply may want to renegotiate alimony payments to better align with the new tax code. Similarly, married couples who put prenuptial agreements in place based on the old tax rules should review those agreements to determine if the terms need to be altered in light of the new tax responsibilities.

A new playing field

By upending alimony procedures that have been in place for more than 70 years, the TCJA stands to completely reshape the divorce landscape. In turn, the law also stands to alter estate-planning and retirement strategies that were built around the previous tax advantages offered by the alimony deduction.

Whether you’re in the midst of a divorce, have been divorced for years, or are married with a prenup, it’s critical that you meet with us and qualified tax advisor to discuss how this provision of the TCJA stands to affect you.

Depending on your situation, you may want to modify your existing legal agreements to bring them into better alignment with the new rules. Or, there may be planning tools available that could offset or lessen the new law’s impact on your tax obligations. Schedule a Family Wealth Planning Session today to learn more.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

April 27, 2022 by Cava Faulkner

Nobody likes to admit they’ve fallen for a financial scam, but the fact is, it’s easier than ever to get caught up in one. This is especially true in today’s all-digital world, where practically every shred of data related to your personal and financial background can be found online.

While no one is forcing you to use the Internet to manage your financial accounts, purchase goods and services, or communicate with the outside world, these days it’s nearly impossible to live your life without the web. This net-based existence can feel somewhat unnerving for those of us who came of age while the tech revolution was already underway, but for the elderly, who lived the vast majority of their lives offline, it can be absolutely overwhelming.

Given their lack of tech experience, coupled with the fact that many of them are undergoing varying levels of cognitive decline and sometimes live lonely, isolated lives, scammers view seniors as easy targets. And many of today’s con artists are so sophisticated, even the most intelligent and educated can be duped.

To protect your aging loved ones (and yourself) from such predators, it’s critical to know the warning signs of financial exploitation. The following are three big red flags to watch for:

1. Unexpected requests

If a family member or friend contacts you out of the blue asking for money, especially via email or text, you should be wary. If the request comes from an unfamiliar email address or phone number, you should be extremely wary. While such requests aren’t totally unheard of, never send money unless you can verify the individual’s identity.

A popular con, known as the Grandparent Scam, involves someone calling and pretending to be your grandchild. The “grandchild” explains he or she is in trouble and needs money immediately. The caller then asks you to wire the money or give it to a third party, usually someone posing as a lawyer or police officer.

No matter how urgent the caller may sound, you should always verify their identity. One of the easiest ways to do this is by having the person call you back on his or her phone. Or if the individual’s phone is dead or lost, you can ask them questions only the actual person would know the answer to, such as the name of their first pet. If they refuse, seem unusually aggressive, or act odd, do not send money.

Outside of relatives and friends, scammers often pretend to be from the IRS or another government agency, demanding immediate payment of back taxes or some other debt. They might even threaten you with arrest, ruined credit, or additional fines if you fail to comply. And if they don’t directly ask for money, they sometimes ask for verification of your personal information or direct you to visit a phishing website that secretly puts data-collecting viruses on your computer.

Regardless if it’s done by phone, email, social media, or text, no government agency collects money this way. Moreover, legitimate organizations will be more than happy to verify they are who they claim to be, and will never demand on-the-spot payment. No matter if it’s a government agency, a financial institution, law enforcement, an attorney, or a private business, you should always be allowed to verify the legitimacy of the request and consult with a trusted advisor like us before making any financial transaction.

2. Unsolicited money-making ventures

Whether through a savvy business deal or by winning the lottery, we all fantasize about striking it rich. And if you’re retired on a fixed income, this fantasy can be all-the-more alluring. Scammers know this and will use your dreams of easy money to trick you into investing in a too-good-to-be-true venture that promises big bucks for little or no effort.

There are endless variations on this popular con, from wealthy foreign nationals needing assistance transferring money to more legitimate-sounding business deals offering huge payoffs with no risk. These messages sometimes appear as if they were sent to you accidentally, making it feel like fortune has finally favored you—just like you always dreamed it would.

But in reality, strangers don’t just randomly offer other strangers incredible money-making opportunities. What kind of trustworthy business person would seek to partner with someone they’ve never met? And if it’s such a great investment, why not recruit someone they know or simply do it themselves? Indeed, any unsolicited money-making venture you receive online from a person you don’t know is almost certainly a scam.

Many such scams originate in foreign countries with people who aren’t fluent in English, so messages with incorrect spelling, poor grammar, and/or unusual phrasing are often a dead giveaway. Other tip-offs include messages containing the following (or very similar) language:

You’ve won one of several valuable prizes.
You’ve been specially selected for this one-time offer.
You’ll get a free bonus if you buy our product.
You’ve won money in a foreign lottery.
This investment is low risk and offers a higher return than anything else.
Our product is free, but we need to put shipping and handling charges on your credit card.
Advance payments or fees are required to clear the promised funds or complete the offer.

3. Requests for personal information

Whenever someone unfamiliar asks you for personal information like a credit card number, Social Security number, or your mother’s maiden name, proceed with extreme caution. Ask them why they need this information. Request they verify their identity. Enquire about alternate methods of proceeding that do not require such private information.

Reputable sources will respect your privacy and be more than willing to provide you with identity verification, or at least offer an alternate way for you to proceed without the need for such personal data. For example, if you receive an email request for your credit card number, look up the organization’s phone number using a source other than what they provide in the email, and ask if you can call and give your information over the phone instead.

One such con has scammers call claiming to be from the Social Security Administration (SSA), and the number may even come up on your caller ID as the SSA. The caller says your Social Security number has been stolen, used in a crime, or suspended. To protect your funds, they direct you to withdraw the money in your bank account and transfer it to a gift card. The scammers then ask for the gift card PIN number for “safekeeping.” They also may try to get you to reveal your SS number by having you verify it over the phone.

However, the SSA does not suspend your Social Security number, nor will it ever direct you to withdraw money from your bank account. What’s more, any situation in which you’re told to buy gift cards and then give out the cards’ PIN number is undoubtedly a scam.

Today’s most sophisticated scammers don’t even need to ask you for your personal data: They can steal it simply by having you open an email attachment or visit a website that’s loaded with data-scraping bots. Don’t open email attachments from strangers—or even friends and family if the attachment seems unusual. Set all of your social media accounts to private so that your personal info isn’t public. And invest in anti-virus and anti-spyware programs to protect your computer from hacking.

Protect your loved ones from all possible threats

By becoming familiar with how such deceptions work and knowing what to look for, you and your loved ones will be far less likely to be conned. At the same time, you should also do everything you can to safeguard your family’s finances from other threats that have nothing to do with fraud.

Without comprehensive estate planning, your family’s wealth and assets are in real danger of being seriously depleted or lost in the event of your death or incapacity. Meet with us to learn about the best planning strategies to put in place to ensure your loved ones will be taken care of no matter what happens to you.

April 26, 2022 by Cava Faulkner

Can same-gender couples use Estate Planning for parental rights? In 2015, when the Supreme Court ruled that same-gender couples had the right to marry, the LGBTQ community celebrated a huge victory. With the issue of marriage settled, it looked as if same-gender couples were finally going to have equal standing with heterosexual couples in the eyes of the law.

But while same-gender couples now have nearly all of the same matrimonial rights as heterosexual couples, there is one key right that’s still up in the air—the automatic right to be legal parents. Known as “marital presumption,” this right deems that when a married man and woman have a child, they’re both automatically considered legal parents of the child.

While parental rights are automatically bestowed upon the biological parent of a child in a same-gender couple, the non-biological spouse/parent still faces a host of legal complications and challenges. Because the Supreme Court has yet to rule on the specific issue of the parental rights of non-biological spouses/parents in a same-gender marriage, there is a tangled, often-contradictory, web of state laws governing such rights.

If you’re a same-gender couple, for example, some states and courts may not consider you a legal parent based solely on your marriage. And even in places where there are some protections under the law, same-gender couples can still experience discrimination and difficulty gaining all the same legal rights as married heterosexual couples. Indeed, it’s a real possibility that you could have total legal rights as a non-biological parent in one state, but drive across the border to a neighboring state and be a complete stranger to your child in the eyes of the law.

Given the murky nature of state laws, most legal experts advise same-gender couples that the best way to ensure you have full rights as a non-biological parent in every state is to obtain a second-parent adoption. The Supreme Court has ruled that the adoptive parental rights granted in one state must be respected in all states.

However, it can be extremely difficult for married same-gender couples even to adopt. In fact, seven states currently permit employees of state-licensed adoption agencies to refuse to grant an adoption if doing so violates their religious beliefs. In other states, however, the state law specifically forbids such discrimination.

What’s more, second-parent adoptions are often costly, averaging about $4,000 nationally. They can also be extremely time-consuming and laborious, requiring the non-biological parent to jump through a range of legal hoops, including physicals, blood work, fingerprinting, along with additional state and FBI background checks.

Some states even mandate home visits from social workers to see if a “suitable environment” exists for the child. All of this can be a major inconvenience at the very least and downright demeaning in other cases.

That said, many people are not aware that same-gender couples can achieve nearly the same parental rights that are granted through a second-parent adoption by using a combination of estate planning and family law protections. Moreover, gaining such rights in this manner will involve far less—if any—background screening and/or additional legal obstacles.

As your Personal Family Lawyer®, we offer a number of unique legal services to provide a non-biological, same-gender parent with as many parental rights as possible, without a full adoption.

Starting with our proprietary Kids Protection Plan®, couples can name the non-biological parent as a legal guardian of the child, both for the short-term and the long-term, while confidentially excluding anyone the biological parent thinks may challenge their wishes.

That way, if the biological parent becomes incapacitated or dies, his or her wishes are clearly known and stated, so the court can do what the parent would’ve wanted and keep the child in the non-biological parent’s care.

Beyond that, there are several other legal protections—living trusts, power of attorney, and health care directives—that a Personal Family Lawyer® can grant to offer the non-biological parent additional rights. Finally, we also create what are known as “co-parenting agreements,” legally binding arrangements that stipulate exactly how the child will be raised, what responsibility each partner has toward the child, and what kind of rights would exist if the couple splits or goes through a divorce.

If you’re in a same-gender marriage, or even involved in a committed partnership with someone of your own gender, and you want that person to stay in relationship with your kids (or yourself) should you become incapacitated, or you want that person financially provided for if you die, contact us to see what kind of protections we can help you put in place.

April 23, 2022 by Cava Faulkner

In a previous article we shared steps to understanding your parents’ estate planning and the nature of their assets, as well as how to ensure you’re not left with a mess when something happens to them.

Today, we want to focus on one of the major risks of not being “in the know” when it comes to your parents’ estate planning matters: the undue influence of bad actors.

It’s an unfortunate fact that predators emerge during times of upheaval to take advantage of people. That means the COVID-19 pandemic can leave your parents vulnerable in more ways than one. But even when things go back to normal, this chronic problem of financial exploitation will still be a risk.

We see it happen far too often. Maybe your elderly parents live several hours away, in another state or country, and someone in their community gets close to them. Or maybe they have a close relationship with a financial advisor who isn’t really looking out for their (or your) best interests. This person could even be another family member, friend, business partner, hired caregiver, professional advisor, or even someone they’ve just met.

Sometimes, when bad actors become involved with your parents’ lives and assets, it can lead not only to a loss of money, but even a loss of personal freedom. One of the worst cases of this I’ve heard of is the case of Milo, a retired veteran living in Arizona, and his son Greg, who lived in Northern California. It all started when Milo asked Greg to help him protect his small amount of money from a family member who was “borrowing” it freely. All Milo had was a savings of $140,000 and payments of $3,700 per month from social security, a pension, and veteran’s benefits.

To help his father out, Greg applied for guardianship of Milo’s money, and the court granted it to him. At the same time, without notifying Greg, the court appointed a professional financial Conservator that neither Milo nor Greg knew. The Conservator quickly set to draining Milo’s small savings, with the court barring Greg from filing any more motions.

The situation escalated even further when the Conservator decided to move Milo from his assisted living facility to a cheap lock-down facility, where he wouldn’t even have access to the outdoors. This would, of course, free up more money for the Conservator to access. Before this could happen, though, Greg hurried to pick his father up and bring him back to California with him.

Now, the two are essentially on-the-run from authorities, who are trying to bring Milo back to Arizona and under the control of the Conservator. Milo and Greg are out of funds and are now trying to raise the $15,000 it would take to hire a lawyer and free Milo from this terrible situation.

The scariest part is that Milo and Greg had all the proper legal documents in place. Sometimes, though, that is not enough to protect your parents from being taken advantage of—even to this extreme of a level. Especially in a time of stress and confusion like the COVID-19 pandemic we are currently living in, it is vital to be vigilant and get the best possible counsel to avoid something like this happening.

This isn’t meant to make you paranoid or distrustful of the people around you, or of how your parents handle their own lives. Well, maybe it is a little. Mostly, though, it’s a call to encourage you and your family to be aware, educated, and empowered in knowing what risks are possible for your parents, and for your future inheritance.

Look out for the following actions we have seen from influencers:

Preventing important communication between family members;
Withholding documents from other family members;
Encouraging financial gifts or economic benefits to recently-met connections (usually in the same network as your parents’ “new friend”);
Naming recently-met connections as attorney-in-fact (under a financial power of attorney), or as a joint owner on financial accounts, real estate, and other assets;
Giving financial advice that may not be in your or your parents’ best interests, but rather in the interests of the advisor.

We recommend you start talking with your parents now about how they want their affairs to be handled. Also, you should immediately investigate any situation where you suspect your loved ones are being taken advantage of. There have been too many cases of financial abuse or inappropriate influence where family members are too late to stop the bad actor.

Ideally, you know the value of your parents’ tangible assets (i.e.,home, car, business, stocks) and intangible assets (i.e., generational stories, personal relationships, theological legacies). Additionally, you should be working with an advisor to help you understand how family dynamics and the law will impact you, and everything that matters to you and your parents, when they’re gone.

If you’d like our assistance in considering your parents’ affairs, and how you can be in a position to support them when they need you, contact us. We can help.

Could an Out of Date Will Leave You Facing Eviction?