As Valentine’s Day approaches you’ll see all kinds of gift guides telling you if you get these gifts, your significant other will love you that much more. I’m here to present a different kind of gift guide: one with important gifts that you cannot buy from a store. These gifts are all a part of estate planning in one way or another. At this point, you’re thinking what does some legal/financial thing like estate planning have to do with a holiday that celebrates love? On the outset, not much. But, dive into the reasons behind proper estate planning and most often I find love is at the foundation for most folks.
Read on for a gift guide you definitely won’t find in a magazine!
For your Spouse: Review your Beneficiary Designations
Your estate plan is essential for the majority of your assets, but it doesn’t cover some important accounts that are passed along via beneficiary designations. Such accounts can include savings and checking accounts, life insurance, annuities, 401(k)s, pensions, and IRA accounts. Whoever is listed as the beneficiary on these accounts overrides what’s written in a will (if the two are different). That means keeping these beneficiary designations are super important. Let’s say you listed your first spouse as a beneficiary on your life insurance, ended up getting divorced, got remarried to a great person you have many happy years together and then you pass away. Unfortunately, you never changed the beneficiary designation and the ex-spouse inherits the money. More than likely you would have wanted the account assets to go to your current spouse. (More valuable than some heart-shaped Valentine’s jewelry, right?!)
It’s good practice to review all of your beneficiary designations if there have been any life events that would necessitate a change, addition, or update, such as a birth, death, or change of capacity in a beneficiary.
For the Entire Clan: Talk About your Estate Plan Decisions
It’s important to discuss your estate planning decisions with your family members both before and after the plan is executed. In drafting the estate plan you’ll need to indicate to your qualified estate planning attorney whom you’re entrusting the important roles of executor, attorney-in-fact, guardian, and other designated representatives to. Before naming someone in a legal document you should discuss the role with them first to be sure they are willing, able, and informed to the duties of the role.
After the estate plan is executed you’ll want to discuss your estate planning decisions with loved ones, family members, and beneficiaries, especially when your choices may take them by surprise. How can a discussion be a gift, per se? Explaining your wishes is a way of expressing your love by heading off any confusion your family and friends may feel upon needing to execute your plan.
This is yet another reason to have an attorney draft your plan—your estate planner can help you communicate your wishes to your loved ones.
For your Kiddos: Nomination of Guardian
This is the kind of “gift” your child(ren) will hopefully never need to experience. One of the most critically important features of an estate plan is establishing guardianship for any minors (i.e., children under the age of 18) in your care. Why? In the tragic and terrible chance that something was to happen to you resulting in immense incapacitation or death, who do you want to care for your children? Nominating a guardian in your will allows you to select the people you know will love, care, and lookout for the best interests of your child.
Unless guardianship has been established, an Iowa Court must choose guardians. Unfortunately, with no clear choice as to what the former caregivers would have preferred, the Court must basically make its own and best determination as to who the parents would have preferred and what would be in the best interest of the children. The Court may or may not, choose who the former caregivers would have named.
Valentine’s Day doesn’t just have to be mean about personal relationships! It can also be a day for sharing the “love” for charities you care deeply for. In making or updating your estate plan think about what charities are near and dear to your heart? Which organizations and how much would you want to leave for them? You can include your church, alma mater, local cause, or international organization in your estate plan as beneficiaries. It doesn’t cost anything extra, other than assets from your estate. Want a clearer picture of how a charitable bequest could help your favorite charity? Talk to the nonprofit’s leaders or fundraising staffers. I’ll bet they’ll tell you the result of your charitable bequest, no matter how big or small, can make an important impact.
Love can take on many forms and express itself through many different types of gifts and actions that show you care. Choose this Valentine’s Day to express your affection (be it for a significant other, your children, or a charity) with a “gift” that shows a clear investment in the relationship. And, speaking of amore, I would love to discuss any aspect of this gift guide with you! Contact me at any time.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/02/brigitte-tohm-210081.jpg36485472Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-02-03 00:20:302020-05-18 11:28:37Gordon Fischer Law Firm's Valentine’s Day Gift Guide
For two formidable teams (Kansas City Chiefs vs. San Francisco 49ers), it’s the culmination of a season. (And for us, it’s a great excuse to indulge in all the best tailgating snacks.) It’s a grueling seven-month schedule with tons of variables from pre-season training camp to regular season kick-off to post-season playoffs.
Just like all the games leading up to the Super Bowl, a lot can happen throughout a lifetime. So many variables, so many strategies, upsets, and so many potential outcomes.
While it may be difficult to ponder the inevitably of your own timer running out, preparation for what happens after your season ends is indeed necessary.
The Main Players
Estate plan – An estate plan is the whole playbook, generally containing the following documents: your will; healthcare power of attorney; financial power of attorney; disposition of personal property; and final disposition of remains.
Will – A will is a superstar which can accomplish so much for your team. For example, who will quarterback the distribution of your property at the end of the game? You need to make certain the will is well crafted, solid, and can stand up in court. Keep in mind though, important assets such as retirement assets and investment accounts may well contain beneficiary designations that actually trump your will.
Trust – You have lots of different options with this multi-tool MVP. A trust can help your team in so many different ways and provide you huge advantages in every facet of the game.
Thorough planning is the best way to plan for the end of your season so that you and your family are never caught unprepared. When you are no longer around to coach and care for the rest of your “team,” make sure they are both provided for and are provided training on how to keep pushing forward by settling your affairs. A comprehensive estate plan, written by an experienced estate planner, is the best way to do this.
No ‘I’ in Team
Your loved ones and close friends are all a part of your team; part of being a strong team player is including them on the plays you’re making. Discuss important aspects of your estate plan with the people it involves to avoid any confusion or conflict when it comes times for them to carry out your wishes. For instance, if you have minor children (under age 18) you’re going to want to establish legal guardianship if the worst happens and you’re no longer around to care for them. You’ll want to discuss with your chosen guardians ahead of time to make sure they’re willing and available to carry out the responsibility.
Pro football coaches switch up who’s starting for the best winning strategy. Similarly, you may well need to make adjustments to your estate plan “lineup” as things inevitably change over the course of your life. Big events like marriage, the birth of a child/grandchild, moving to a different state, a large change in financial status, divorce, and other significant changes are a good reason to review your designated representatives, beneficiaries, and overall goals.
Charity Factor
Pro football players make bank, but many also make significant contributions to charities they care about. Some NFL players have founded their own charitable foundation, while others focus on a few nonprofits whose missions they care deeply about. For instance, Chris Long, the Eagles defensive end, announced last fall he will donate his entire salary ($1 million) from the season to educational charities. Most players also work together as a team to give back to their communities. The league as a whole also supports building awareness for nonprofits through initiatives like “My Cause, My Cleats.”
Given their high profile sports status, these players also help inspire folks across the country to do the same. (In one great example, these football fans donated to NFL players’ favorite nonprofits!) You too can be a fierce philanthropist, but without actually having to sprint, throw, or sweat! You can include your favorite charities in your estate plan as beneficiaries. Then there are the other charitable giving tools that can be included as a part of your “end game” like charitable gift annuities and the charitable remainder trust.
I cannot predict who will win the Super Bowl today, but I can say without a doubt that you never know when the game is going to change. You never know when you (and/or your team members) are going to need any one of the documents a part of your estate plan. So, you need to have your “playbook” written out ASAP…well, you can wait until after the big game!
The best place to start on your estate plan is with my free, no-obligation Estate Plan Questionnaire. You can also shoot me an email or give me a call at 515-371-6077 to discuss your situation (or football).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/02/Screen-Shot-2019-02-03-at-2.06.47-PM.png5721036Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-02-02 11:00:402020-05-18 11:28:37Love Super Bowl Sunday? Then You'll Love Estate Planning!
Typically when you think of a nonprofit you generally think of a public charity. However, private foundations (and private operating foundations) are also 501(c)(3) organizations under the IRS’ classification system. Understanding the difference between the different tax-exempt organization is key because, while public charities and private foundations have much in common, there are also major differences. The most important of these differences to understand is that private foundations are subject to much stricter regulations and oversight than public charities.
Because this can get complicated in this post let’s just cover private foundations and the rules related to “self-dealing.”
Look to the Code
Section 4941 of the Internal Revenue Code (IRC) and related regulations prohibit any direct or even indirect financial transaction between a private foundation and virtually every person closely associated with it, who are known as “disqualified persons.”
Disqualified Persons
The IRS code is quite specific as to who “disqualified persons” are—and they can be individuals, as well as legal entities, trusts, and even other foundations; it’s a very wide net.
Disqualified persons include:
Any substantial financial contributors to the foundation
Officers, directors, trustees, or persons who can act on behalf of the organization
All family members, including spouses, children, grandchildren, and spouses of children of individuals described above
Controlled entities (e.g., a corporation of which disqualified persons own more than 35% of the combined voting power)
Certain government officials
Simply put, if a person has influence over the decisions of the private foundation or a particular relationship with it, it’s extremely likely that they are a “disqualified person.”
Self-dealing occurs when a disqualified person acts in his or her own financial interest, rather than in the best interest of the private foundation he or she serves.
The IRS code lists these six (6) specific acts of prohibited self-dealing:
The sale, exchange, or leasing of property
The lending of money or other extensions of credit
The furnishing of goods, services, or facilities
Payment, compensation, or reimbursement of expenses
Transfer to, or use by, or for the benefit of, a disqualified person of any income or assets of the foundation
An agreement to pay a government official
As you can see, rules against self-dealing are quite expansive when it comes to financial transactions.
Like most areas of the law, there are exceptions to the self-dealing rules for private foundations. But great care must be taken because they are relatively narrow and require both skill and care to use.
Exceptions to self-dealing rules include:
A disqualified person can make a loan to a private foundation with no interest or charge if the funds are used exclusively for purposes related to the foundation’s charitable goals;
A disqualified person can enter into a no-rent lease with a foundation or otherwise make its facilities available free of charge;
Compensation and reimbursement of expenses for services provided by disqualified persons are permissible if the amount is both reasonable and necessary to carry out the foundation’s charitable goals;
Certain scholarship, travel, and pension payments to government officials are allowed.
Common Problem areas
There are several self-dealing hazards for private foundations. The most common include:
Pledges
Allowing the foundation to satisfy a personal pledge of a disqualified person with foundation dollars is considered self-dealing.
Event tickets
The foundation’s purchase of event tickets for a disqualified person unless the disqualified person attends a grantee’s event in order to evaluate the charity’s activities.
Family member expenses
Family members of disqualified persons are considered disqualified persons, so allowing a foundation to pay their expenses is considered self-dealing if they don’t have foundation duties to justify payment of their expenses.
Shared resources
If a company devotes office space, staff, or other resources to a private foundation it establishes, the private foundation must keep meticulous records to avoid self-dealing.
Protect Your Private Foundation with a Team of Advisors
If you’re thinking about forming a private foundation, I highly recommend you see the advice of an attorney well-versed in the nuances of nonprofit law. The info in the blog is, at best, a mere outline of the complex and stringent laws governing private foundations. That said, forming and growing a private foundation can be immensely rewarding to the communities and causes you want to serve. To best execute, it’s wise to build up a team of knowledgable professional advisors that can safely guide the way through the legal hoops.
If you want to learn more, don’t hesitate to contact me as I offer a free consultation. You can also download my free, no-obligation nonprofit formation guide.
Gordon Fischer Law Firm’s Valentine’s Day Gift Guide
Estates & Estate PlanningAs Valentine’s Day approaches you’ll see all kinds of gift guides telling you if you get these gifts, your significant other will love you that much more. I’m here to present a different kind of gift guide: one with important gifts that you cannot buy from a store. These gifts are all a part of estate planning in one way or another. At this point, you’re thinking what does some legal/financial thing like estate planning have to do with a holiday that celebrates love? On the outset, not much. But, dive into the reasons behind proper estate planning and most often I find love is at the foundation for most folks.
Read on for a gift guide you definitely won’t find in a magazine!
For your Spouse: Review your Beneficiary Designations
Your estate plan is essential for the majority of your assets, but it doesn’t cover some important accounts that are passed along via beneficiary designations. Such accounts can include savings and checking accounts, life insurance, annuities, 401(k)s, pensions, and IRA accounts. Whoever is listed as the beneficiary on these accounts overrides what’s written in a will (if the two are different). That means keeping these beneficiary designations are super important. Let’s say you listed your first spouse as a beneficiary on your life insurance, ended up getting divorced, got remarried to a great person you have many happy years together and then you pass away. Unfortunately, you never changed the beneficiary designation and the ex-spouse inherits the money. More than likely you would have wanted the account assets to go to your current spouse. (More valuable than some heart-shaped Valentine’s jewelry, right?!)
It’s good practice to review all of your beneficiary designations if there have been any life events that would necessitate a change, addition, or update, such as a birth, death, or change of capacity in a beneficiary.
For the Entire Clan: Talk About your Estate Plan Decisions
It’s important to discuss your estate planning decisions with your family members both before and after the plan is executed. In drafting the estate plan you’ll need to indicate to your qualified estate planning attorney whom you’re entrusting the important roles of executor, attorney-in-fact, guardian, and other designated representatives to. Before naming someone in a legal document you should discuss the role with them first to be sure they are willing, able, and informed to the duties of the role.
After the estate plan is executed you’ll want to discuss your estate planning decisions with loved ones, family members, and beneficiaries, especially when your choices may take them by surprise. How can a discussion be a gift, per se? Explaining your wishes is a way of expressing your love by heading off any confusion your family and friends may feel upon needing to execute your plan.
This is yet another reason to have an attorney draft your plan—your estate planner can help you communicate your wishes to your loved ones.
For your Kiddos: Nomination of Guardian
This is the kind of “gift” your child(ren) will hopefully never need to experience. One of the most critically important features of an estate plan is establishing guardianship for any minors (i.e., children under the age of 18) in your care. Why? In the tragic and terrible chance that something was to happen to you resulting in immense incapacitation or death, who do you want to care for your children? Nominating a guardian in your will allows you to select the people you know will love, care, and lookout for the best interests of your child.
Unless guardianship has been established, an Iowa Court must choose guardians. Unfortunately, with no clear choice as to what the former caregivers would have preferred, the Court must basically make its own and best determination as to who the parents would have preferred and what would be in the best interest of the children. The Court may or may not, choose who the former caregivers would have named.
For your Favorite Charity: Charitable Bequest
Valentine’s Day doesn’t just have to be mean about personal relationships! It can also be a day for sharing the “love” for charities you care deeply for. In making or updating your estate plan think about what charities are near and dear to your heart? Which organizations and how much would you want to leave for them? You can include your church, alma mater, local cause, or international organization in your estate plan as beneficiaries. It doesn’t cost anything extra, other than assets from your estate. Want a clearer picture of how a charitable bequest could help your favorite charity? Talk to the nonprofit’s leaders or fundraising staffers. I’ll bet they’ll tell you the result of your charitable bequest, no matter how big or small, can make an important impact.
Love can take on many forms and express itself through many different types of gifts and actions that show you care. Choose this Valentine’s Day to express your affection (be it for a significant other, your children, or a charity) with a “gift” that shows a clear investment in the relationship. And, speaking of amore, I would love to discuss any aspect of this gift guide with you! Contact me at any time.
Love Super Bowl Sunday? Then You’ll Love Estate Planning!
Estates & Estate Planning, Events, Powers of AttorneyFor two formidable teams (Kansas City Chiefs vs. San Francisco 49ers), it’s the culmination of a season. (And for us, it’s a great excuse to indulge in all the best tailgating snacks.) It’s a grueling seven-month schedule with tons of variables from pre-season training camp to regular season kick-off to post-season playoffs.
Just like all the games leading up to the Super Bowl, a lot can happen throughout a lifetime. So many variables, so many strategies, upsets, and so many potential outcomes.
While it may be difficult to ponder the inevitably of your own timer running out, preparation for what happens after your season ends is indeed necessary.
The Main Players
Estate plan – An estate plan is the whole playbook, generally containing the following documents: your will; healthcare power of attorney; financial power of attorney; disposition of personal property; and final disposition of remains.
Will – A will is a superstar which can accomplish so much for your team. For example, who will quarterback the distribution of your property at the end of the game? You need to make certain the will is well crafted, solid, and can stand up in court. Keep in mind though, important assets such as retirement assets and investment accounts may well contain beneficiary designations that actually trump your will.
Health care power of attorney & financial power of attorney – Don’t let a sudden disability completely take you out of the game. Have someone strong come off the bench to carry you to your personal goals.
Trust – You have lots of different options with this multi-tool MVP. A trust can help your team in so many different ways and provide you huge advantages in every facet of the game.
Get a Good Playbook!
Thorough planning is the best way to plan for the end of your season so that you and your family are never caught unprepared. When you are no longer around to coach and care for the rest of your “team,” make sure they are both provided for and are provided training on how to keep pushing forward by settling your affairs. A comprehensive estate plan, written by an experienced estate planner, is the best way to do this.
No ‘I’ in Team
Your loved ones and close friends are all a part of your team; part of being a strong team player is including them on the plays you’re making. Discuss important aspects of your estate plan with the people it involves to avoid any confusion or conflict when it comes times for them to carry out your wishes. For instance, if you have minor children (under age 18) you’re going to want to establish legal guardianship if the worst happens and you’re no longer around to care for them. You’ll want to discuss with your chosen guardians ahead of time to make sure they’re willing and available to carry out the responsibility.
Lineup Adjustments
Pro football coaches switch up who’s starting for the best winning strategy. Similarly, you may well need to make adjustments to your estate plan “lineup” as things inevitably change over the course of your life. Big events like marriage, the birth of a child/grandchild, moving to a different state, a large change in financial status, divorce, and other significant changes are a good reason to review your designated representatives, beneficiaries, and overall goals.
Charity Factor
Pro football players make bank, but many also make significant contributions to charities they care about. Some NFL players have founded their own charitable foundation, while others focus on a few nonprofits whose missions they care deeply about. For instance, Chris Long, the Eagles defensive end, announced last fall he will donate his entire salary ($1 million) from the season to educational charities. Most players also work together as a team to give back to their communities. The league as a whole also supports building awareness for nonprofits through initiatives like “My Cause, My Cleats.”
Given their high profile sports status, these players also help inspire folks across the country to do the same. (In one great example, these football fans donated to NFL players’ favorite nonprofits!) You too can be a fierce philanthropist, but without actually having to sprint, throw, or sweat! You can include your favorite charities in your estate plan as beneficiaries. Then there are the other charitable giving tools that can be included as a part of your “end game” like charitable gift annuities and the charitable remainder trust.
Winning Score
I cannot predict who will win the Super Bowl today, but I can say without a doubt that you never know when the game is going to change. You never know when you (and/or your team members) are going to need any one of the documents a part of your estate plan. So, you need to have your “playbook” written out ASAP…well, you can wait until after the big game!
The best place to start on your estate plan is with my free, no-obligation Estate Plan Questionnaire. You can also shoot me an email or give me a call at 515-371-6077 to discuss your situation (or football).
Private Foundations: Avoid Self-Dealing
NonprofitsTypically when you think of a nonprofit you generally think of a public charity. However, private foundations (and private operating foundations) are also 501(c)(3) organizations under the IRS’ classification system. Understanding the difference between the different tax-exempt organization is key because, while public charities and private foundations have much in common, there are also major differences. The most important of these differences to understand is that private foundations are subject to much stricter regulations and oversight than public charities.
Because this can get complicated in this post let’s just cover private foundations and the rules related to “self-dealing.”
Look to the Code
Section 4941 of the Internal Revenue Code (IRC) and related regulations prohibit any direct or even indirect financial transaction between a private foundation and virtually every person closely associated with it, who are known as “disqualified persons.”
Disqualified Persons
The IRS code is quite specific as to who “disqualified persons” are—and they can be individuals, as well as legal entities, trusts, and even other foundations; it’s a very wide net.
Disqualified persons include:
Simply put, if a person has influence over the decisions of the private foundation or a particular relationship with it, it’s extremely likely that they are a “disqualified person.”
Specifically Prohibited Self-Dealing Acts
Self-dealing occurs when a disqualified person acts in his or her own financial interest, rather than in the best interest of the private foundation he or she serves.
The IRS code lists these six (6) specific acts of prohibited self-dealing:
As you can see, rules against self-dealing are quite expansive when it comes to financial transactions.
Exceptions to Self-Dealing Rules
Like most areas of the law, there are exceptions to the self-dealing rules for private foundations. But great care must be taken because they are relatively narrow and require both skill and care to use.
Exceptions to self-dealing rules include:
Common Problem areas
There are several self-dealing hazards for private foundations. The most common include:
Pledges
Event tickets
Family member expenses
Shared resources
Protect Your Private Foundation with a Team of Advisors
If you’re thinking about forming a private foundation, I highly recommend you see the advice of an attorney well-versed in the nuances of nonprofit law. The info in the blog is, at best, a mere outline of the complex and stringent laws governing private foundations. That said, forming and growing a private foundation can be immensely rewarding to the communities and causes you want to serve. To best execute, it’s wise to build up a team of knowledgable professional advisors that can safely guide the way through the legal hoops.
If you want to learn more, don’t hesitate to contact me as I offer a free consultation. You can also download my free, no-obligation nonprofit formation guide.