Overland Park Attorney

Weekly Blog Digest - Estate Planning - Overland Park, KS

In review, here are the five Blog Posts from this past week for your convenience.  I welcome your feed back regarding any of these posts and your input regarding any of these areas of practice which you would like for me to address.

Business Succession 101: Think Like A Royal – especially in Overland Park, KS

There any many reasons why patriarchs and matriarchs often have great difficulty letting go of the power and ownership of the family business. These may include (as with Queen Elizabeth) a fierce sense of duty, intense popularity, deep familiarity with the business, a desire to complete the heroic mission, and, not uncommonly, an unconscious fear of his or her mortality. Sometimes, however, family business owners lack confidence in the next generation or cannot find a suitable successor among them.

In-Home Vs. Institutional Care in Overland Park, KS

Nine out of 10 Americans say they want to grow old at home and keep living in their communities as long as possible, according to AARP.

Prevent Vacation Home Inheritance Quarrels, especially in Overland Park, KS

Growing numbers of families – as older parents move into their 80s and 90s – are finding themselves grappling with the transfer of second homes.

Selling A Business? Be Aware Of These 5 Truths in Overland Park, KS

All too often, an entrepreneur convinces himself no one will notice these issues and, once the sale is finalized, they all will be resolved.  But as deals are negotiated between buyers and sellers, these top five truths surface over and over again.

Medicare And “Marketplace Plans” - What's The Deal?  Especially in Overland Park, KS

Federal officials are eager to get the word out that seniors and disabled individuals enrolled in Medicare Part A -- which covers hospitalization and limited nursing home care and is free for most beneficiaries – do not need to buy a marketplace plan, because they are already meeting the insurance requirements.

Prevent Vacation Home Inheritance Quarrels, especially in Overland Park, KS

Growing numbers of families – as older parents move into their 80s and 90s – are finding themselves grappling with the transfer of second homes.

If you have a family vacation home, have you considered what will happen to the property after you are gone? While you are undoubtedly enjoying the memories you are making in your second home, the reality is you will have to transfer the property at some point.

Transitioning the family vacation home can bring out the best, and the worst, in families. Proper planning in advance can be the key to saving the vacation home – and the family.

MarketWatch recently provided some helpful pointers in an article titled “Avoiding family feuds over vacation homes.”

Aside from the obvious sibling rivalry issues or parental favoritism (real or imagined), there is the issue of the next “owner.” If you choose one side of the family or one adult child to take up ownership, then you risk slighting others and risk the “family” part of the family vacation home. If this is a concern, then you might want to consider creating an “entity” to own the property.

To allow the ownership of the home to be spread out evenly among family members, consider forming a Limited Liability Company (LLC). This approach can give certain family members a membership stake in the ownership of the home itself and a forum for polite discussion about it.

Alternatively, you might consider a trust. The original article stresses a few standby forms of trusts; the Qualified Personal Residence Trust (QPRT) and the simple revocable trust, both of which have their strengths in terms of ownership transfer, conflict mediation, and even some hefty tax benefits if you plan correctly.

Ultimately, the approach you take will depend on your unique family dynamics and the home in question. There is no one-size-fits-all approach.

Reference: MarketWatch (September 16, 2013) “Avoiding family feuds over vacation homes”

For more information about these and other Estate Planning issues in Overland Park, KS, please visit my website.

Where, Oh Where Will The Family Home Go? Especially in Overland Park, KS?

How do children nudge often-reluctant parents toward making sound and fiscally smart decisions about the future of the family home?

The family home is more than likely the most important or valuable asset in one’s estate.  So it makes sense to include plans for the future of the home in your estate planning process. How and when should real estate be passed through the family?

This can be a very difficult question. Commonly, elderly parents do not want to leave the old family home. Nevertheless, there are some important financial and legal considerations to ensure the real estate “issue” is dealt with properly and at the right time.

The New York Times recently provided some solid guidance for adult children (or other loved ones) in an article titled, “Mom and Dad, Let’s Talk Real Estate.” Given that the article originated in the Big Apple, the real estate in question is in the form of apartments.

Your home may be an apartment in the Big Apple or a farm on the prairie. The value of your home may have gone up and up, or the value may have burst with the 2008 housing bubble. Regardless, the wise counsel offered in the article is transferrable wherever “home” is.

Why? Because real estate decisions are as emotional as they are financial. Parents do not want to move from the old family home and the memories that live there. On the other hand, their children just want what is best for them and the family home itself. Sometimes, this means selling the family home or transferring it from one generation to the next.

There is no one solution. However, there are more options available if you plan now, rather than react later.

Reference: The New York Times (June 28, 2013) “Mom and Dad, Let’s Talk Real Estate”

For more information on Estate Planning in Overland Park, KS, please visit my website.

Joint Ownership Can Be Double the Trouble - even in Overland Park, KS

I often see older people with other peoples’ names on their property as co-owners.  Legally, the ownership is joint tenants with right of survivorship, meaning that upon the death of one joint tenant, the surviving joint tenant becomes the sole owner of the property.

Owning property comes with many ups and downs. So it’s no surprise that “joint ownership” can be double the trouble.

A recent article in Forbes reviews some of “The Perils Of Joint Ownership.”

Having two people named as owners, legally dubbed “joint tenants with right of survivorship,” or “joint tenancy” for short, is quite common amongst the elderly and families after transition. Unfortunately, unless the joint owners are spouses (the most common form of joint ownership by far) it can quickly become a problematic scenario.

Imagine: homes, bank accounts, and other common assets being controlled by two independent minds with independent agendas. The original article has a few examples, but an all-too-common scenario is the older relative and a younger relative owning the assets of the older relative in joint tenancy. If and when the younger relative realizes that he or she has the power to use and enjoy the joint assets, then problems are not far behind.

What are some concrete concerns? The original article fleshes out three:

1. Once a person’s name is added to the title of property, it can be undone only with his or her consent. 
2. Property held in joint tenancy is immediately subject to claims of each joint tenant’s creditors. 
3. Joint tenancy can produce unintended results.

Sometimes joint tenancy is a valid option, and even a quite beneficial one. That noted, there are other safer alternative means to reach the same ends.

Reference: Forbes (June 14, 2013) “The Perils Of Joint Ownership”

For more information on related Estate Planning issues in Overland Park, KS, please visit my website.

Weekly Blog Digest - Overland Park, KS - Estate Planning

In review, here are the five Blog Posts from this past week for your convenience.  I welcome your feed back regarding any of these posts and your input regarding any of these areas of practice which you would like for me to address.

Have You Considered a Conservation Easement for Your Land?  Especially in Overland Park, KS?

When you make a charitable contribution of anything other than money or marketable securities, there will always be a valuation issue. At least, it will usually be clear what it is that you are giving away.  A conservation easement is different.  You are keeping the property as it is and giving up all the hypothetical possibilities.

A New Outlook on the “Trust Fund Baby” – especially in Overland Park, KS

Many wealthy people worry about the potentially corrosive effect of making their children superrich. Not Larry Ellison. The Oracle founder and CEO, the third richest man in the United States — worth $43 billion, according to FORBES’ latest estimates — has never pretended that his son David, 30, and daughter Megan, 27, were anything but trust fund babies.

Asset Planning with a Digital Twist – even in Overland Park, KS

Much has been written about how family members struggle to get access to the e-mail and social network accounts of loved ones who have died. They have sentimental value much the way photo albums and personal letters do. But far less attention has been paid to the logins, passwords and answers to security questions that will give access to an online financial life.

A Beneficiary Blunder: Can Your Ex-Spouse Inherit Your Life Insurance?  Even in Overland Park, KS?

Words to the wise: keep beneficiary forms up to date. To change a beneficiary — for example, if you get married or divorced or your spouse dies — make sure to file an amended form. Even if your state has a law designed to cover oversights (or procrastination), you can’t always count on it to work.

Taking Care of Your Elderly Parents’ Finances – especially in Overland Park, KS

"When they are having trouble understanding bills and writing checks it might be time to step in, slowly, at the ground level," Kolinsky said adding that if parents initiate a discussion, the ideal time would be when they are in their 70s and still healthy.

Have You Considered a Conservation Easement for Your Land? Especially in Overland Park, KS?

When you make a charitable contribution of anything other than money or marketable securities, there will always be a valuation issue. At least, it will usually be clear what it is that you are giving away.  A conservation easement is different.  You are keeping the property as it is and giving up all the hypothetical possibilities.

Sometimes the greatest charity of all is simply doing zip, nada, and nothing. Well, at least that may be the case when it comes to being charitable with land. Why? Because the charity consists in preserving the land from development instead of capitalizing on its highest and best economic use.

Enter the conservation easement.

The perennial problem with easements, however, is the question of valuation of the “potential value” of the land.

The entire point behind an easement is that the land itself (or the façade, as the case may be with urban-dwellers) has intrinsic value worth saving. This can be hard to put into concrete numbers. But then again, there always remains the risk that certain persons may look to maximize the charitable deduction for an easement through creative valuation.

This theme was picked up in a recent Forbes article titled “Conservation Easement No Deduction For Hypothetical Vineyard.” The lesson is less outlandish than the title suggests – not every problem comes from supposing the remote possibility of a vineyard, a stadium, or a skyscraper. Rather, when asking for the easement you need to settle upon one out of every possible use of the land and the IRS has to agree that potential use is the best and most likely use.

The IRS has a presumption against any big dreams, you might say, and that can be difficult to overcome.

Proper valuation is a key component of any purchase, gift, or act of charity. When it comes to easements, however, the subject of valuation may be more difficult to capture accurately.

Placing an effective easement means building a case and an effective understanding of the true potential to any land given.

Reference: Forbes (June 5, 2013) “Conservation Easement No Deduction For Hypothetical Vineyard”

For more information about related issues for Overland Park, KS, please visit my website.

Weekly Blog Digest - Overland Park, KS - Estate Planning

Knowing the Value of Your Business

With the day-to-day demands of running their businesses, most owners put off getting a valuation until a sale is imminent. But some are starting to treat the act of valuing their business as an integral part of running it.

Passing On the Family Home to the Next Generation

There are nearly half a dozen ways to give a home to your child. And a couple are tax-free.

Tax Breaks Available for Supporting Elderly Parents

You might be able to claim your parent as a dependent, take a dependency care tax credit, write off your mom or dad’s medical expenses or get some combination of these tax breaks.

Disinheritance Challenges

As cruel as it sounds to disinherit a child, people have their reasons. Sometimes there is no relationship. Other parents might feel the adult is well-off and does not need an inheritance.

Avoid the Sting of the Estate Tax Rules

The good news is the estate tax won’t apply to as many business owners as we feared; the bad news is that when it applies, it has a nasty sting.

Weekly Blog Digest - Overland Park, KS - Estate Planning

The Totals Are Trickling In for 2012 Charitable Giving

America’s billionaires gave less in 2012 than in 2011, a new Chronicle tally shows.

The Toils of Joint Tenancy

Elderly parents regularly set up bank accounts — checking, savings, certificates of deposit — in joint tenancy with a child ...Running around in the background here is a belief that the terms of a will are going to take priority over a joint tenancy designation in a bank account. That, however, is not correct.

Fiscal Cliff Deal’s Effect on Long-Term Care

At first glance, the budget agreement includes an important trade-off -- the creation of a national long term care commission ...Yet, there are elements in the measure creating this panel that are very troublesome.

The Resurrected IRA Charitable Rollover: Limited Window for 2012 Transfers

When it comes to taxes, never say die. As part of the "fiscal cliff" deal, Congress has resurrected a popular tax-law provision, known as the "IRA charitable rollover," that had expired at the end of 2011.

A Trustee’s Interpretation of a Trust: Prevention or Promotion?

I suspect that trustees are most often comfortable with a prevention-focused mindset.

Here’s my take: Our ability to recognize and deliberately change our mindset just might be a game-changer.



The Toils of Joint Tenancy / Overland Park, KS

Elderly parents regularly set up bank accounts — checking, savings, certificates of deposit — in joint tenancy with a child ...Running around in the background here is a belief that the terms of a will are going to take priority over a joint tenancy designation in a bank account. That, however, is not correct.

Have you ever encountered a solution that seemed so simple at first, only to later realize it was as complex as could be? Been there, done that. This scenario of confusion is not lost of those who have tangled with “Joint Tenancy with Rights of Survivorship.”

The subject of joint tenancy was taken up recently by gazette.com, the online version of The Gazette newspaper in Colorado Springs. The article is titled “Money & the Law: Joint tenancy can have unexpected consequences,” and the author notes that elderly parents commonly add an adult child as a “joint owner” on their assets. While the parents’ intentions are good (e.g., to avoid probate), they come with some significant risks.

As the article notes, one risk is that of unintentionally disinheriting any children not added as joint tenants. This can cause family quarrels lasting for generations. Another problem not discussed in the article includes subjecting jointly held assets to the divorces, lawsuits, and creditors of each joint owner.In conclusion, add third parties (e.g., children and friends) as joint tenants to your assets only after consulting with your estate planning attorney. Consider it “legal dynamite” – handle with care.

 Reference: The Gazette (December 16, 2012) “Money & the Law: Joint tenancy can have unexpected consequences”

For mor information on Joint Tenancy, especially in Overland Park, KS, and other estate planning issues, please visit my website.