Estate Planning Quick Reference
June 20, 2008 | Leave a Comment
Even though most estates won’t owe Uncle Sam, estate planning is essential for protecting you and your loved ones.
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Provide for minor children. Your will should name both a guardian and a financial trustee for your kids in case you and your spouse die.
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Designate beneficiaries. Your will should include a simultaneous death clause to pass your estate to your children or designated beneficiaries should your spouse die shortly after you. If you don’t write a will, the state will split your estate according to its laws of intestacy and your estate will have to pay for the administration.
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You can’t disinherit your spouse. If you write a will, you spouse can elect to take what you give them or their elective share entitled to them under the statute. If you don’t write a will, your spouse can elect to take their intestate share or their elective share entitle to them under the statute.
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Provide for all your children. If you leave everything to your spouse, your children that are not of the marriage will not inherit from you. You will need to create a bypass trust agreement if you want them to inherit.
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You may not be able to avoid probate. Unless your entire estate is in your trust, you may still need to rely on probating your will. The process will be shorter and less expensive.
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You can disinherit your children. Or anyone else for that matter, but only if you spell it out in your will and/or trust.
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Avoid having subjective conditions on inheritance. If you’re worried about responsibility, a spendthrift trust can control how money is distributed so an irresponsible heir can’t blow it all at once.
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Keep designated beneficiaries on retirement and life insurance policies current. These assets pass outside of the estate by contract law only if they are kept updated.
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Consider reducing your estate tax liability by giving away assets before you die, holding them in joint tenancy or transferring ownership to a trust. You can gift as much as $12,000 annually to as many people as you want, and you can pay someone’s education and medical expenses directly to the providing institution, without triggering federal gift tax.
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Review your will — and life insurance — after major life changes. If you remarry, consider a prenuptial agreement. If you move, remember that estate laws vary from state to state.
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Estate state tax obligations can be minimized if you plan for them. In 2007 and 2008, only the portion of an estate over $2 million is subject to federal estate tax. The threshold rises to $3.5 million in 2009 before the tax disappears in 2010. It will return in 2011 with a $1 million threshold unless Congress decides otherwise. In Tennessee, the threshold is $1 million.
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Prepare a durable power of attorney for finances, a living will and, because living wills aren’t always enforceable, a proxy for health care. Also consider a living trust.
It’s important to see an attorney to determine which of the above applies to you and which estate planning tool best suits your ultimate goals. Avoid do it yourself programs and cheap documents prepared by paralegals. Make sure that your final wishes are fulfilled and that you do so in the most efficient manner possible with the right estate planning tool.
Source: California Estate Planning Blog
Memphis Estate Planning Podcast Series: Health Directives
June 18, 2008 | Leave a Comment
Estate Planning 101 — Health Directives
The Memphis Estate Planning and Probate Lawyers of Ferrell Law Firm have posted the third installment of a podcast series on Estate Planning originally posted on the Death and Taxes Blog
A discussion of Illinois health-related directives such as powers of attorney and living wills.
Memphis Obituary Goes Global
May 29, 2008 | Leave a Comment
Before Ida Mae Russel Sills passed away she told her son “Honey, I just want you to do what you need to do and tell the truth.” He told the truth through an obituary that shared her life with Memphis with candor, humor, and some one liners she was known for. The obituary was originally puiblished by the Commercial Appeal in Memphis but has been passed and posted around the internet very widely.
Ms. Sills wanted her story told. If you have any wishes you would like to insure are completed for your estate planning please contact the Memphis Probate and Estate LAwyers at the Ferrell Firm.
To read the obituary please follow this link ;
http://www.commercialappeal.com/news/2008/apr/13/ida-mae-russell-sills/
To read other articles about the life of Ms. Sills follow these links;
http://www.memphisflyer.com/memphis/Content?oid=oid%3A41925
http://www.commercialappeal.com/news/2008/apr/18/colorful-death-notice-takes-on-life-of-its-own/
Memphis Estate Planning Podcast Series: Living Trusts
April 30, 2008 | Leave a Comment
The Memphis Estate Planning and Probate Lawyers of Ferrell Law Firm have posted the second installment of a podcast series on Estate Planning originally posted on the Death and Taxes Blog
This time the topic is living trusts.
The music is #40 (In Yugoslav Style) from Mikrokosmos, by Bela Bartok.
Drafting Wills in Memphis: What are my children’s rights?
April 17, 2008 | Leave a Comment
Upon reading a California lawyer’s response of “It depends… on the state” to a client’s question concerning their obligation to provide for their children in their wills, our Memphis Estate Planning Lawyers wanted to give Memphis residents the requirements in Tennessee.
If you pass without a will or Intestate…
Your children will share equally or per stirpes, whatever part of your estate that does not pass to your surviving spouse. Your spouse is entitled 1] share equal to the children OR 2] 1/3 of the net estate, whichever is greater. If your child is deceased, then their children shall share that share equally.
EXAMPLE: You pass and are survived by your spouse, 2 of your 3 children, and the pre-deceased child has 2 children (your grandchildren)
- Your spouse can take 1/4 OR 1/3 share, FIRST
- Your surviving children will each take 1/4 share of remaining estate
- Your surviving grandchildren of your pre-deceased child will each take 1/8 of remaining estate
If you pass with a will or Testate…
Your children will take whatever share you chose to give them. You may specifically disinherit them. If you accidentally omit them, by either forgetting to update your will or just not updating your will in time, they can inherit their intestate share. This means unless you intentionally remove leave them out of the will by: 1] omitting them intentionally to disinherit or 2] making a gift or transfer during your life which was intended to replace receiving anything by will, your children will take whatever share they would have gotten had you not had a will, regardless of what other provisions you made for other children.
They are not entitled to the same elective share benefits of your surviving spouse.
EXAMPLE:
- Child was born after you had written your will, but you forgot to update it or passed away too soon to update… child may take intestate share
- You gave a family heirloom or paid a significant espense and made the clear and witnessed statements or actually wrote it into the will, that this was their “inheritance” and they would not received anything in the will, … child will NOT received intestate share.
This benefit does not apply to grandchildren. So if you omitted a child by mistake, and they predeceased you, their children will NOT be able to inherit the intestate share, and will inherit nothing from you.
How we can help to make your wishes clear…
While there are limited laws on the drafting of provisions of your will, without a complete understanding of how all these laws work together and without continual updates, your will may fall short of your wishes. Count on our Memphis Estate Planning Lawyers to guide you through all the ramifications of your drafting decisions and to suggest provisions that can allow for relief from mistakes and prevent misinterpretations of your final testament.
Source of post: California Estate Planning Blog and Tenn. Code Ann. §31-2-101 , §32-3-103 , and §31-4-101
Estate Planning for Non-Married Couples in Memphis
April 15, 2008 | Leave a Comment
Very extensive article that is must read for all couples contemplating any financial commitments prior to marriage. This includes buying a house with a boyfriend or girlfriend or even a fiance. You’re not legally married until you’re legally married. Our Memphis Estate Planning Lawyers recommend consulting with your attorney before making any financial commitments with someone that is not your spouse. Laws that protect spouses from and individuals creditors don’t apply to unmarried persons. While the article focuses also on same-sex marriage which is not recognized in TN, all advice is applicable to un-married couples contemplating marriages or simply in a long-term committed relationship.
Kathleen Ford Bay(Attorney at Law, Blazier, Christensen, Bigelow, and Virr, P.C.) has recently published her article entitled Untying the Knot– Until Death and Taxes Do Us Part, RPPT eREPORT (Feb. 2008).
To be cautious and practical, unmarried couples the following should meet with one of our Memphis Estate Planning Lawyers to discuss such issues as:
- Wills (avoid testamentary libel);
- Financial powers of attorney;
- Health or medical powers of attorney;
- Advanced Directives (Living Wills);
- Revocable trusts and transfer of assets to such trusts (consider the mortgage company; insurance on assets; title insurance on home);
- Declaration or nomination of guardian or conservator and stating who can never be a guardian;
- Beneficiary designations (insurable interest) and non-probate property;
- Providing for children (adoption and other issues); and
- Funeral Directive.***
Source of post: Wills, Trusts, Estates Law Prof Blog
Famous Tax Scandals
April 15, 2008 | Leave a Comment
High-profile tax troubles through the ages
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AOL
Taxing Times
Celebrities and famous folks usually crave the spotlight. But some well-known people have attracted a lot of attention they didn’t want — from the IRS.
Check out our gallery of 19 infamous tax trouble cases — the faces you see may surprise you.
Memphis Parents: Graduation 2008 is around the corner…
March 31, 2008 | 1 Comment
… Have you thought of the Estate Planning needs of your 18 year old?
At the age of 18 your child is now a young adult… legally!
Your young adult needs a Simple Will, Advanced Health-care Directives and a Power of Attorney Effective Immediately and it is your responsibility as a parent to make that you both understand what these documents are.
While you probably don’t expect your young adult to stop being dependent on you, Universities, Colleges, Health-care Facilities, Student Loan Banks, Cell Phone Companies and Credit Card Companies will treat your child as an independent adult. The only way you can ensure that you will remain informed and involved on behalf of your young adult when dealing with these third parties is to have a Power of Attorney. If you want to be involved with the continuing health care of your young adult in case the become incapacitated you need to have an Advanced Health-care Directive. And if the most unfortunate circumstance should arise, you should apply the same estate planning to your young adult’s estate that you would to your own, don’t pay for the Intestate Administration during what could already be a painful situation, have a Simple Will.
The Lawyers of the Ferrell Law Firm want parents in the Memphis community to celebrate prom, graduation, 18th birthdays and college admissions. Set up a meeting with one of our lawyers and your young adult to start on the right foot for their next transition in life.
Kiplinger.com: Wills for the Young, Single or Broke
January 22, 2008 | Leave a Comment
Even if you aren’t rich and don’t have children or a spouse, you still need to spell out your wishes in case you die or can’t make medical decisions for yourself. Erin Burt of Kiplinger.com
Everyone needs a Plan regardless of how much (or how little) money you have, your marital status or family size, or how much (or how little) you own. Making a plan for your assets, debts and healthcare informs your family and friends of your wishes and minimizes their costs of carrying those wishes out.
Never too Young to start thinking about estate planning. You need plan for how your assets and debts will be handled after your death, a testamentary will, and a plan for how your healthcare should be handled, as well as management of assets and debts in case you should become ill or incapacitated, a living will.
A Will for the Living is necessary for the unexpected situations in life, from car accidents to medical consents. Have a detailed and specific plan for your healthcare and financial wishes prepared for a person that you trust. Saving everyone involved money, time, and heartache involved.
Your living plan should consist of three parts:
1. A durable power of attorney arranges for someone to handle financial matters on your behalf. You may choose to have an active financial power of attorney set up in case something happens to you or if you happen to be out of town. Or, you could stipulate that it only go into effect when a doctor certifies that you have become incapacitated. Without this legal form, your spouse, parents, siblings or live-in partner would have to petition a court for the right to handle things for you. All you need to do to set up a financial durable power of attorney is select a friend or family member you trust to act as your “agent” and complete a fill-in-the-blank form. You’ll then sign it in front of a notary public. Ferrell Law Firm can provide the necessary forms and serve as notary for a nominal fee.
2. A health-care proxy, or a durable power of attorney for health care, appoints a person to make medical decisions for you if you can’t do so yourself. This includes the power to consent to your doctor to give, withhold or stop any medical treatment, service or procedure, including life-sustaining procedures. Unmarried couples should also state that each partner be allowed to visit the other in the hospital in case there is a “family only” rule. Ferrell Law Firm can provide the necessary forms, serve as notary, and provide guidance for understanding advanced healthcare directives and selecting the right guardian.
3. A living will spells out the kinds of medical treatment you do and do not want if you are unable to speak for yourself. It generally applies only if a person is terminally ill and faces imminent death — or if he or she is in a persistent vegetative state. You should share your wishes with your doctor and the person you selected as your health care proxy. Although this can be a contentious issue, it’s much more likely that your wishes will be followed if you have a living will. Ferrell Law Firm can draft an appropriate living will, ensure that it is properly executed, and provide guidance for understanding advanced healthcare directives and selecting the right guardian.
A Will for End of Life is necessary because you never know when the unthinkinkable might happen. Even if you are young and healthy, creating this simple document can greatly assist your loved ones and carry out your wishes. Wihout a will, the state’s laws determine what happens to your assets and children.
A lot of married couples assume that in the event of one spouse’s death, the other will automatically inherit everything. Many young singles may think that mom, dad and their siblings will get everything if they die. Unmarried couples may assume that because they’ve been in a committed relationship for a long time, the court will give preference to their partner. And parents may think that because they have formally asked a friend or relative to care for their children in the event both parents die that they have sealed the deal. But unless all of these wishes are put into writing, they mean nothing.
If you are single, young, with no children, no more than $2 million in assets, and have no complicated wishes on how your assets should be handled, you will be fine with a simple will. However, you should consult with an attorney to competently assess your needs. Ferrell Law Firm offers a free consultation to help you determine your estate planning needs, additionally we provide lifetime 3 year review and update for all wills and estate plans that we draft.
Basically, your will should cover four main areas:
- What people or organizations will inherit your property.
- Who will serve as guardian to care for your minor children.
- Who will manage the property you leave to your minor children.
- Who will serve as executor — the person who will carry out the wishes in your will.
A member of a committed couple (married or unmarried) may choose to leave all their property to each other in case of death, or to their children, or to another party.
A single person may decide to leave everything to their parents, a sibling, a friend, a charity, or divide up their assets.
Don’t think you own anything of value? While some of your personal items be not be of much value, don’t forget that your car, bank accounts, retirement accounts and maybe even family heirlooms or inheritances are part of your estate. No matter how seemingly insignificant your possessions, it’s important to make the matter of settling your death as easy as possible on your family. A little planning now can lift a huge weight off their shoulders later.
And once you have drawn up a will, you should revisit it if your life situation changes. If you get married, divorced, have a child, your spouse dies, break up, or your assets grow to the point of falling subject to estate taxes ($2 million in 2006), you’ll need to take another look at your will. Ferrell Law Firm offers complete estate planning consultation, review and updating every 3 years for your lifetime on all plans that we draft. We can assist you in drafting Powers of Attorney, Simple Wills to more complex Trusts and Estate Plans.
TN HOPE Scholarships: Need or Merit
January 9, 2008 | Leave a Comment
The 2008 Session of the 105th General Assembly of Tennessee is beginning with a very important issue on its plate. What to do the $400 million surplus of lottery revenue. Many of our state lawmakers are divided along party lines, with the Governor and Democrats calling for need-based changes and Republicans wanting the program to remain merit-based.
TN HOPE Scholarships
Application and General Information can be found here.
Lottery Scholarship at a Glance can be found here.
Award amount - $4,000 for 4-year institutions; $2,000 for 2-year institutions (no more than cost of attendance)
Minimum Requirements - TN Residency, Entering freshman must have either 21 ACT (980 SAT) OR 3.0 GPA, GED Applicants must have 525 OR 21 ACT (980 SAT).
If eligibility ever ceases, HOPE may only be regained once.
Argument for NEED
Lawmakers calling to reduce the GPA requirement to 2.75 in order to expand eligibility to more Tennesseans. Allowing more students to remain in college longer and reaching the long-term goal of higher graduation rates. The argument is simply that since there is enough money to pay for more students, we should. This change would indirectly fund state colleges and universities in a more reliable manner, by ensuring that the money earmarked for a particular student will not go to waste if the student ceases to be eligible. Currently one third University of Memphis freshman and 40% of Christian Brothers University freshman lose their scholarships by their sophomore year according to Channel 24 News. Memphis City Schools and schools across the State do not prepare all students for the demands of college classes. By lowering the GPA requirements to a B minus level, students may have more of chance to overcome their disadvantages. Eventually being able to graduate with a bachelor’s degree.
Argument for MERIT
Lawmakers who want the GPA requirement to remain at 3.0 simply want to keep the program to its original goal of keeping the best and brightest students in Tennessee. Their argument is that the surplus money should be used to directly fund colleges, universities and other institutions through building projects and funding programs. The argument that students are not prepared for college is reversed when discussing merit-based scholarships. As evidenced by high schools across the State, simply pushing students through school to increase graduation rates does not benefit anyone. They will “skate” by in college as they “skated” by in high school. Proponents of the current GPA requirements would agreed that there is no “waste” funds if funds were earmarked for the institutions instead of the individual student.
Awaiting the RESULTS
Lawmakers in Nashville won’t be coming to a quick decision on the matter. Fortunately, while there is always a budget crunch, Memphis Daily News reports that lawmakers are optimistic about handling the situation. Overall, the Lottery Scholarship Program has been successful in helping many Tennesseans have a chance to go to college. But remember, college preparedness does not simply come from the classroom. Children must be prepared academically, emotionally and financially for college. While we can all hope that we can rely on HOPE when saving for college tuition, it’s important to keep a realistic perspective. Ensure that there is no interruption in the funding of your child’s educational dreams by discussing them with your Estate Planning Attorney.
