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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:

1. Preventing important communication between family members;
2. Withholding documents from other family members;
3. Encouraging financial gifts or economic benefits to recently-met connections (usually in the same network as your parents’ “new friend”);
4. 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;
5. 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.

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.

Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy-sounding name, it’s a fact that a tremendous amount of wealth will pass from aging Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of intergenerational wealth in history.

Because no one knows exactly how long Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. But studies suggest it’s somewhere between $30 and $50 trillion. Yes, that’s “trillion” with a “T.”

And while most are talking about the benefits this asset transfer might have for younger generations and the economy, few are talking about its potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance.

Indeed, an Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that intergenerational wealth transfers often become a source of tension and dispute among family members, and 70% of such transfers fail by the time they reach the second generation.

Whether you will be inheriting or passing on this wealth, it’s crucial to have a plan in place to reduce the potentially calamitous effects such transfers can lead to. Without proper estate planning, the money and other assets that get passed on can easily become more of a curse than a blessing.

There are several proactive measures you can take to help stave off the risks posed by the big wealth transfer. Beyond having a comprehensive estate plan, openly discussing your values and legacy with your loved ones can be a key way to ensure your planning strategies work exactly as you intended. Here’s what we suggest:

Create a plan: If you haven’t created your estate plan yet—and far too many of you haven’t—it’s essential that you put a plan in place as soon as possible. It doesn’t matter how young you are or if you have a family yet, all adults over 18 should have some basic planning vehicles in place.

From there, be sure to regularly update your plan on an annual basis and immediately after major life events like marriage, births, deaths, inheritances, and divorce. We maintain a relationship with our clients long after your initial planning documents are signed, and our built-in systems and processes will ensure your plan is regularly reviewed and updated throughout your lifetime.

Discuss wealth with your family early and often: Don’t put off talking about wealth with your family until you’re in retirement or nearing death. Clearly communicate with your children and grandchildren what wealth means to you and how you’d like them to use the assets they inherit when you pass away. Make such discussions a regular event, so you can address different aspects of wealth and your family legacy as they grow and mature.

When discussing wealth with your family members, focus on the values you want to instill, rather than what and how much they can expect to inherit. Let them know what values are most important to you, and try to mirror those values in your family life as much as possible. Whether it’s saving money, charitable giving, or community service, having your kids live your values while growing up is often the best way to ensure they carry them on once you’re gone.

Communicate your wealth’s purpose: Outside of clearly communicating your values, you should also discuss the specific purpose(s) you want your wealth to serve in your loved ones’ lives. You worked hard to build your family wealth, so you’ve more than earned the right to stipulate how it gets used and managed when you’re gone. Though you can create specific terms and conditions for your wealth’s future use in planning vehicles like a living trust, don’t make your loved ones wait until you’re dead to learn exactly what you want their inheritance used for.

If you want your wealth to be used to fund your childrens’ college education, provide the down payment on their first home, or invested for their retirement, tell them so. By discussing such things while you’re still around, you can ensure your loved ones know exactly why you made the planning decisions you did. And doing so can greatly reduce future conflict and confusion about what your true wishes really are.

Regardless of how much or how little wealth you plan to pass on—or stand to inherit—it’s vital that you take steps to make sure that wealth is protected and put to the best use possible. We have unique processes and systems to help you put the proper planning tools in place to ensure the wealth that’s transferred is not only secure, but that it’s used by your loved ones in the very best way possible.

Moreover, every plan we create has built-in legacy planning services, which can greatly facilitate your ability to communicate your most treasured values, experiences, and stories with the ones you’re leaving behind. By working with us, you can rest assured that the coming wealth transfer offers the maximum benefit for those you love most.

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.

When you are a kid, finding a suitable gift for Father’s Day can be a struggle. You want to get Dad something he’ll enjoy, but few young people can afford a new set of golf clubs or a shiny new grill, so you end up settling once again for the standard necktie and socks.

And even after you become an adult, that struggle for the perfect Father’s Day gift often continues, albeit in a slightly different way. When it comes to expressing your love and appreciation for everything Dad has done, more “stuff” doesn’t cut it.

If your father is like most, he’d tell you that the greatest gift you could give him would be for you to abide by the values and principles he taught you and share them with your children.

We may go to great lengths to protect and pass on our family’s financial wealth. Still, very few of us take the time to even document, much less preserve, our family’s legacy. The stories, values, insights, and life lessons of our parents, grandparents, and those who came before them— are typically lost forever when a beloved father figure passes away.

With this in mind, give your father a tribute to the role he has played in your life by preserving his legacy for generations to come with a Family Wealth Legacy Passage.

Family Wealth Legacy Passages: Sharing Your Family’s Story

As your Personal Family Lawyer®, we know that estate planning isn’t just about protecting and passing on your financial wealth and tangible assets when you die. When done right, estate planning supports you to pass down the most precious assets of all—your life stories, lessons, insights, and values, intentionally.

We do this with a unique service we’ve developed known as Family Wealth Legacy Passages. We will personally guide your father to create a customized recording to share his most insightful memories and experiences. We will provide you with the recording digitally to rest assured it will survive long after he—and even after you—are gone. The Family Wealth Legacy Passage is at no additional cost to you since it is part of each estate plan.

Including Family Wealth Legacy Passages in your estate planning ensures the most valuable assets never get lost and the process of documenting them is as easy and convenient as possible. We use a series of helpful questions and prompts, which makes the process both easy and enjoyable.

Many of our clients tell us that going through this process helps rekindle life moments they would otherwise not share with their loved ones during their lives. This unique process can enrich your family with something far more valuable than material wealth. After the interview, many of our clients have told us they feel as if they’ve become better, more conscious parents along the way. And the best part is, it takes less than an hour.

In the end, your family’s most precious wealth is not money, but the memories you make, the values you instill, and the insights and lessons you hand down. If left to chance, these assets are likely to be lost forever.

Create A Lasting Legacy

During the month of celebrating Dad, take this opportunity to ensure that all of the wisdom and experience your father has gained during his life won’t be lost once he’s gone. Even if your father is no longer with us, perhaps you have a figure in your life that you can honor with this process. No matter the father figure in your life, meeting with us, your Personal Family Lawyer®, will benefit future generations. Contact us today to schedule your appointment.

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.

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act bill into law, and taxpayers are still trying to figure out how it might affect them. This is especially true for business owners, as the most dramatic changes under the law are aimed at how businesses are taxed.

We’ve highlighted the most significant changes to business taxation that will likely affect you here, but to clearly understand the law’s full effects and take advantage of the benefits offered, you should contact us as your Creative Business Lawyer®, so we can meet with you and your CPA right away.

The new law sets a flat 21% tax rate for corporations. However, this flat rate only applies to C corporations, and not so-called “pass-through” businesses, which are taxed at the business owner’s individual rate.

Obviously, this would eliminate the competitive benefit of the pass-through status if the individual rates were higher than 21%, so the law was revised to provide a new deduction for pass-through entities, which is covered below.

Owners of pass-through businesses—sole proprietorships, partnerships, Limited Liability Companies (LLC), and S corporations—now qualify for a straight 20% deduction on their taxable income. However, this deduction is subject to several restrictions and limitations, so not all pass-through entities will qualify.

For example, the deduction comes with a threshold amount that begins at $157,500 for individual taxpayers and $315,000 for married couples. If your income is above the threshold amount, you are subject to additional limitations and exceptions that are determined by your occupation type as well as wage and capital limits.

These limits and exceptions are extraordinarily complex and vary greatly depending on the type of business you run and where your business income comes from. Given the complexity of this new change, it’s crucial that you meet with us as your Creative Business Lawyer® now to discuss how this deduction affects your unique situation.

The corporate alternative minimum tax (AMT)—which was aimed at ensuring business owners pay at least some federal income tax—has been completely repealed.

Under the new law, a company can only deduct interest expense of up to 30% of its earnings before interest, taxes, depreciation, and amortization (EBITDA). Any amount in interest expense beyond that amount is no longer deductible.

In 2022, the deductibility of corporate debt will be capped at 30% of earnings before interest and taxes but after depreciation and amortization expenses.

Today, we’re seeing more and more people getting divorced in middle age and beyond. Indeed, the trend of couples getting divorced after age 50 has grown so common, it’s even garnered its own nickname: “gray divorce.”

Today, roughly one in four divorces involve those over 50, and divorce rates for this demographic have doubled in the past 30 years, according to the study Gray Divorce Revolution. For those over age 65, divorce rates have tripled.

With divorce coming so late in life, the financial fallout can be quite devastating. Indeed, Bloomberg.com found that the standard of living for women who divorce after age 50 drops by some 45%, while it falls roughly 21% for men. Given the significant decrease in income and the fact people are living longer than ever, it’s no surprise that many of these folks also choose to get remarried.

And those who do get remarried frequently bring one or more children from previous marriages into the new union, which gives rise to an increasing number of blended families. Regardless of age or marital status, all adults over age 18 should have some basic estate planning in place, but for those with blended families, estate planning is particularly vital.

In fact, those with blended families who have yet to create a plan or fail to update their existing plan following remarriage are putting themselves at major risk for accidentally disinheriting their loved ones. Such planning mistakes are almost always unintentional, yet what may seem like a simple oversight can lead to terrible consequences.

Here, we’ll use three different hypothetical scenarios to discuss how a failure to update your estate plan after a midlife remarriage has the potential to accidently disinherit your closest family members, as well as deplete your assets down to virtually nothing. From there, we’ll look at how these negative outcomes can be easily avoided using a variety of different planning solutions.

John has two adult children, David and Alexis, from a prior marriage. He marries Moira, who has one adult child, Patrick. The blended family gets along well, and because he trusts Moira will take care of his children in the event of his death, John’s estate plan leaves everything to Moira.

After just two years being married, John dies suddenly of a heart attack, and his nearly $1.4 million in assets go to Moira. Moira is extremely distraught following John’s death, and although she planned to update her plan to include David and Alexis, she never gets around to it, and dies just a year after John. Upon her death, all of the assets she brought into the marriage, along with all of John’s assets, pass to Moira’s son Patrick, while David and Alexis receive nothing.

By failing to update his estate plan to ensure that David and Alexis are taken care of, John left the responsibility for what happens to his assets entirely to Moira. Whether intentionally or accidentally, Moira’s failure to include David and Alexis in her own plan resulted in them being entirely disinherited from their father’s estate.

There are several planning options John could’ve used to avoid this outcome. He could have created a revocable living trust that named an independent successor trustee to manage the distribution of his assets upon his death to ensure a more equitable division of his estate between his spouse and children. Or, he could have created two separate trusts, one for Moira and one for his children, in which John specified exactly what assets each individual received. He might have also taken advantage of tax-free gifts to his two children during his lifetime.

Whichever option he ultimately decided on, if John had consulted an experienced estate planning attorney like us, he could have ensured that his children would have been taken care of in the manner he desired.

Mark was married to Gwen for 30 years, and they had three children together, all of whom are now adults. When their kids were young, Mark and Gwen both created wills, in which they named each other as their sole beneficiaries. When they were both in their 50s, and their kids had grown, Bob and Gwen divorced.

Several years later, at age 60, Bob married Veronica, a widow with no children of her own. Bob was very healthy, so he didn’t make updating his estate plan a priority. But within a year of his new marriage, Bob died suddenly in a car accident.

Bob’s estate plan, written several decades ago, leaves all of his assets to ex-wife Gwen, or, if she is not living at the time of his death, to his children. State law presumes that Gwen has predeceased Bob because they divorced after the will was enacted. Thus, all of Bob’s assets, including the house he and Veronica were living in, pass to his children. Veronica receives nothing, and is forced out of her home when Bob’s children sell it.

By failing to update his estate plan to reflect his current situation, Bob unintentionally disinherited Veronica and forced her into a precarious financial position just as she was entering retirement. If Bob had worked with an estate planning attorney to create a living trust, he could have arranged his assets so they would go to, and work for, exactly the people he wanted them to benefit.

For example, if he wanted the bulk of his assets to go to his children, but didn’t want to cause any disruption to Veronica’s life, he could have put his house, along with funds for its maintenance, into the trust for her benefit during her lifetime, and left the remainder of his assets to his kids. This would allow Veronica to live in and use the house as her own for the rest of her life, but upon her death, the house would pass to Bob’s children.

Steve is a divorcee in his early 60s with two adult children when he marries Susan. Steve has an estate valued at around $850,000, and he has told his kids that after he passes away, he hopes they will use the money that’s left to fund college accounts for their own children. But he also wants to ensure Susan is cared for, so he establishes a living trust in which he leaves all his assets to Susan, and upon her death, the remainder to his two children.

Yet, soon after Steve dies, Susan suffers a debilitating stroke. She requires round-the-clock in-home care for several decades, which is paid for by Steve’s trust. When she does pass away, the trust has been almost totally depleted, and Steve’s children inherit virtually nothing.

An experienced estate planning attorney like us could have helped Steve avoid this unfortunate outcome. Steve could have stipulated in his living trust that a certain portion of his assets must go to his children upon his death, while the remainder passed to Susan.

Additionally, Steve might have used life insurance to provide cash for Susan’s care upon his death, or he could have purchased a second-to-die life insurance policy for himself and Susan, naming his children as beneficiaries. Such a policy would ensure that regardless of the amount remaining in the trust, Steve’s children would receive an inheritance upon Susan’s death.

Along with other major life events like births, deaths, and divorce, entering into a second (or more) marriage requires you to review and rework your estate plan. And updating your plan is exponentially more important when there are children involved in your new union.

As your Personal Family Lawyer®, we are specifically trained to work with blended families, ensuring that you and your new spouse can clearly document your wishes to avoid any confusion or conflict over how the assets and legal agency will be passed on in the event of one spouse’s death or incapacity.

If you have a blended family, or are in the process of merging two families into one, contact us, as your Personal Family Lawyer®, today to discuss all of your options.

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.