While your child with special needs is under eighteen, there is no question that you, the parent, are the decision maker. Upon attaining the age of eighteen, your child becomes an adult in the eyes of the law and is presumed to be able to handle their own affairs. This presents a problem for parents of children with special needs. Once your child attains eighteen, you are no longer legally eligible to make decisions for your now adult child. Continue reading What happens when your child with special needs turns 18?
I covered this in an earlier post, but I was just speaking to a friend this morning about it and thought I would share it again. Click here to read why your adult child desperately needs to have a medical power of attorney.
Modifying or decanting an irrevocable trust can cause a trust that is exempt from the GST because it was irrevocable prior to the effective date for the GST in 1986 (known as a “Grandfathered Trust”) to lose its exempt status.
Administrative modifications such as changing trustees is generally OK. What should generally be avoided is shifting benefits to a lower generation. You should carefully review Treasury Regulation section 26.2601-1 before making any changes whatsoever.
Such trusts may nevertheless be decanted or modified for purposes of extending the term of the trust. However, the longest time that such a trust may be extended is the latter of: Continue reading Practitioners Beware: Modifying or Decanting a GST Grandfathered Trust can cause the Loss of GST Exemption
One of the many things that the Trust Code has enabled practitioners to do is to change or perhaps simply “freshen” an old irrevocable trust. With the Death Tax exemptions being so high, many of these old trusts are no longer needed—at least not for their original purpose. Some of these changes require judicial approval, but many do not.
Modify to Achieve Income Tax Savings. Lets take that old trust set up under Dad’s Will to use his tax exemption for Mom (still living). Maybe Mom’s estate is not going to incur death taxes even if you took Dad’s trust into account. Maybe the trust holds assets with low tax basis.
However, before you say that, know this: your designated beneficiary did not change just because you got a divorce. Here I am referring to life insurance, retirement accounts such as 401(k)’s and IRAs, and anything that allows you to name a beneficiary. If you did not change your beneficiaries after you got a divorce, then your ex-spouse probably gets everything if something happens to you.
In both Arkansas and Tennessee, provisions to an ex-spouse are revoked. This is not the case in Mississippi. In Mississippi, the provisions for the ex-spouse remain and he or she takes whatever you may have left them—perhaps everything.
No matter where you live, it is still time to revise your Will. Had a knowledgeable probate judge not been on the bench when Lorenzen Wright’s ex-spouse walked into probate court with his Will that left her everything, she might have been appointed in control of his estate. In fact, she tried. Order opening estate of Lorenzen Wright
Now you’re thinking (perhaps cynically)—there’s nothing left to get. Ok. Even if that’s true now, that may not be true five or ten years from now.
When will you update if not now?
Its time for an update.
. . . without naming you on a medical power of attorney!
Alright. I know. That was bad. However, if you keep up with my blog you will soon learn that I love bad puns. Now that I have gotten that out-of-the-way. . .
If your adult kids (over 18) don’t do any other estate planning, they should name you as their agent under a medical power of attorney.
When your kids are minors you as their parent and natural guardian make their personal and medical decisions for them. However, as soon as they reach adulthood they are presumed to be able to make their decisions. Likewise, when they turn 18 (if they do not have a medical power of attorney), neither you nor anybody else can step in to make their decisions if something happens to them.
UPDATE: The Supreme Court has ruled on this matter. Click here to read more.
Are Inherited IRAs Exempt from Bankruptcy? That is the exact question that will be argued before the United States Supreme Court. Click here to read more. Keep up with the latest on the case by clicking here.
An Inherited IRA is what your retirement account is called in the hands of your named beneficiary (e.g., your child) after you have passed away.
There is no question as to whether retirement assets are exempt in bankruptcy. The question before the Court is whether Congress intended an inherited retirement account to be included in that protection.