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Wraparound bookshelf

Last month’s GoFisch book club pick was a real life soap opera-esque story of estate planning, inheritance, and complex affairs tied to extreme wealth. This month’s read is also about estate planning, but is a fiction story with the quick pacing of a comedy and dialogue of a melodrama. I bet you could fly though this one while lounging poolside or swinging in the backyard hammock!

The Nest book

The Nest, by Cynthia D’Aprix Sweeney, follows the dysfunctional Plumb Family siblings around New York City as they deal with the unexpected fallout from the eldest Plumb’s major, costly mistake. All the while, the four adult siblings are the beneficiaries to a trust fund they have deemed “the nest” (like a nest egg, so to speak). The “nest,” thanks to sound investing and a generous market, grew larger than the grantor (the Plumb’s father) ever expected. Indeed, he intended for it to be helpful, but not a pot of gold to depend upon.

Leo’s accident (the oldest brother) and the unintended consequences that follow, puts a “crack” in the nest egg all had come to count on. (All four siblings had to wait to have access to their share of the funds until the youngest child turned 40.) Tensions flare, grudges are dredged up, and each of the Plumb siblings will have to reckon with their own poor financial decisions. Indeed, they were all depending on the trust fund in different ways to help bail them out of their own missteps.

This New York Times bestseller masterfully sets an engaging domestic drama filled with familial love and letdowns midst important estate planning elements. The Nest (at least for me) naturally leads its readers to want to learn more about different types of trusts, explore why estate planning is super important, and to whom they’re leaving their money to and how. It also reminds us that it’s super important to honestly discuss estate planning decisions and intentions with your loved ones who are named in the estate plan, so everyone is on the same page.

I would love to hear your thoughts about this book in the comments below! Did you love this book or not so much? Do you have any recommendations of books (fiction or non) related to Gordon Fischer Law Firm’s core services of estate planningnonprofit formation and guidancenonprofit employment law; or donations and complex gifts? Let me know in the comments or contact me by email or phone.

subpoena and pen

The language in which much of the law is written and conducted in can be downright confusing…it’s not called legalese for nothing! Even basic words, like property and trust, can take on varied and more specific meanings than their normal everyday meanings. But other words and phrases are a part of most adult Iowan’s peripheral lexicons if even from watching shows like The Good Wife or the nightly news Certain events or people can also spark an interest in legal-based terminology. For instance, many more people have now heard of the legal term “inclusion rider” thanks to Frances Dormand’s Best Actress acceptance speech at the recent Academy Awards. We’ve seen plenty of headlines featuring the word “subpoena” in the news cycle recently particularly in relation to a former outspoken Trump aide. It’s one of those words you kind of know, or think you may know, but again aren’t for sure. In order to better understand what’s going on with special counsel Robert Mueller’s investigation on Russia’s interference in the 2016 elections, let’s review what the legal term “subpoena” really means and if you can simply ignore it or refuse to cooperate if you want to…looking at you, Sam Nunberg.

What Does Subpoena Mean?

A subpoena is a formal court-ordered command to do something specific. There are two main, different kinds of subpoenas. (Quick phonetics lesson: the “b” is silent and the “poe” makes a long “e” sound.”) We’ll use the former Trump campaign aide (and defendant in a Trump lawsuit) Sam Nunberg as an example throughout.

Subpoena duces tecum

One type, subpoena duces tecum, demands you present a kind of tangible evidence like a physical item or document. For instance, a subpoena could request letters, photographs, emails, audio recordings, video footage, and text messages related to the case. (In fact, as a practical matter, a subpoena duces tecum will generally request all these items).

In the case of Sam Nunberg, the subpoena requested documents and communications dating back to November 2015 with people related to the scope of the investigation such as Donald Trump, former campaign advisor Roger Stone, Trump’s lawyer Michael Cohen, and former chief strategist Steve Bannon, among others. The subpoena was issued by a grand jury. (Grand jury reminder: a prosecutor establishes a grand jury to determine if there is enough probable cause, or evidence, to pursue a criminal case.) Earlier this week, Nunberg said in an interview he “objected to the subpoena because it asks for information about people whom he either never talked to or with whom he had close relationships.” Nunberg also asserted that it wasn’t fair for the investigation to demand his personal communications and that his emails weren’t relevant to the investigation.

subpoena nunberg

An excerpt from Nunberg’s subpoena | The New York Times

Subpoena ad testificandum

The other type of subpoena is ad testificandum, which compels a person to give their oral testimony at a specific time before an authorized legal body, such as a court, congressional/legislative body, grand jury, or government administrative agency. Before such a subpoena is issued, the person or group seeking information will typically first seek testimony on a voluntary basis. (For example, Trump’s White House attorneys have provided the investigation team with voluntary testimony.)

In the two-page subpoena, Nunberg was also requested to appear before a federal grand jury testimony and deliver oral testimony this Friday, March 9.

Subpoenas & Enforcement

Quite literally the word subpoena is derived from the similar Latin term sub poena which means “under penalty.” This makes it pretty obvious that there are penalties involved if you don’t do whatever is requested without a valid reason. If you receive a subpoena and you don’t cooperate with the (presumptively reasonable) request, you could be held in contempt of court and/or hit with time in jail and/or a fine.

Relating this back to our infamous subpoenaed headliner—when Nunberg was asked by MSNBC if he was worried about being arrested for defying the subpoena, he didn’t seemed concerned and said, “I think it would be really, really funny if they wanted to arrest me because I don’t want to spend 80 hours going over emails I had with Steve Bannon and Roger Stone.”

If no proper legal reason was asserted by Nunberg’s attorneys, and he failed to testify in front of the federal grand jury, prosecutors could ask a judge to grant a bench warrant for Nunberg’s arrest.

supreme court building

Can You Refuse a Subpoena at all?

Some scenarios allow you to present a valid legal defense against complying with the subpoena. You can claim the subpoena’s request(s) is overly taxing or too expansive in scope. You could also refuse if the material(s), info, or data requested is eternally lost, or is privileged in nature. (Think attorney-client, executive, or physician-patient privilege.) Another avoidance tactic for a subpoena in criminal cases is asserting it violates your Fifth Amendment right not to incriminate yourself. (This, however, would still require you to show up, you just wouldn’t have to answer questions). Of course, these efforts aren’t always successful, and the subpoena could still be enforced.

In short, Nunberg’s defense of “screw that” without anything to back it up, is not a proper excuse.

In the latest reporting on Nunberg, apparently he’s indicated he will now cooperate with Mueller and comply with the subpoena.

Subpoenas are serious legal documents and always require serious legal advice. It’s important to seek counsel from a trusted attorney if you get served with a subpoena, most especially if you want to deny a subpoena request.

chess board

Applicability of this Knowledge to Nonprofits

You may be thinking, “wow, this is all really interesting, and thanks so much, but what the heck does this have to do with nonprofits?”

It’s true that the mission of Gordon Fischer Law Firm is to promote and maximize charitable giving in Iowa.

Realize that nonprofits can receive subpoenas, too! And they do!

Remember, as was stated earlier, subpoenas can be issued not only by grand juries, but also by government agencies. So, if a disgruntled ex-employee complains, you might receive a subpoena from, say, OSHA, or the Department of Labor, or the Iowa Civil Rights Commission. It’s critically important that if this happens to you, or your fave nonprofit, you understand all the legal rights and responsibilities by contacting appropriate counsel.

Questions? Thoughts? Tell me in the comments section below or contact me via email or phone (515-371-6077).

footballs on wall

Turn on ESPN, put on your jersey, and stock with fridge with a cold beverage…the College Football Playoff National Championship is tonight. While reading up on the stats and predictions for the southern powerhouse showdown between the Alabama Crimson Tide and Georgia Bulldogs in Atlanta’s Mercedes-Benz Stadium, I couldn’t help but make a connection with estate planning. Goal posts to estate planning goals may seem like a stretch, but hear me out.

Football is a complex game—the field is full of moving parts and competing strategies; it’s a game of inches where just a few missteps or right moves can make a huge difference. Estate planning works the same way. Here are just five of the surprising similarities between estate planning and the game of football:

1. Your Clock Will Indeed Run Out

Just like every football season eventually comes to an end, your (hopefully long and healthy) season will also come to a close. When it does, you need a special kind of playbook for the rest of your team…AKA an estate plan. In this analogy an experienced lawyer is the great coach who is going to help you put plans in place for when the game changes unexpectedly or the stadium lights turn off for the last time. And, just like so much can change over the course of a season, a lot will happen over the course of your lifetime. That’s where annual reviews and revisions after significant events fit in.

While it is often difficult for people to ponder their unavoidable exit off their own fictitious field, preparation for what happens after your season is over can be one of the most comforting aspects of financial and legal planning.

2. The Main Players

Let’s take this analogy a bit further and put some estate planning terms into football speak.

Estate – An estate is the whole playbook, containing the following documents: your will; health care power of attorney; financial power of attorney; disposition of personal property; and final disposition of remains. (Click on the link preview below to delve deeper.)

Will – A will deals primarily with the distribution of assets and care for minor children. You need to make certain the will is well drafted, solid, and can stand up in court. Keep in mind though, important assets such as a life insurance policy payouts, retirement assets, and investment accounts may well contain beneficiary designations that trump your will.

Trust – You have lots of different options with this player. A trust can dictate how your assets will be dispersed, the timeline and manner in which they are dispersed, and who’s overseeing the process.

3. You Must Make Mid-Season Starting Lineup Adjustments

Just as a coach may switch up who’s starting partway through the season, you’ll may need to make adjustments to your estate plan as things inevitably change over the course of your life. Big events like marriage, birth of a child/grandchild, moving to a different state, a large change in financial status, divorce, and other significant changes are good reason to review your “playbook.”

4. 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.

5. Final Score

football on field

 

There are probably at least a few more good football analogies I could tie into the conversation of why you need an estate plan, but the most important takeaway is that you never know when the game is going to change. So, you need to have your “playbook” written out ASAP. The best place to start 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).

woman in front of painting

The headlines are abuzz with a new world record for any artwork sold at an auction or privately. Leonardo da Vinci’s painting, “Salvator Mundi,” sold for $450.3 million (including the auction house fees) at Christie’s in New York to a private buyer, after an intense 20 minutes of phone bidding.

Why such a high price when the piece definitely had a good deal of scrutiny around it? For instance, it was major part of an art scandal known as “The Bouvier Affair,” was central in a legal dispute, and had been heavily restored. Additionally, it’s authenticity is doubted by some experts as not a work by the grand master himself, but perhaps his studio. Nevertheless, the piece was executed around 1500 on a commission for King Louis XII of France, was lost for centuries, and was not publicly rediscovered until an estate sale in the U.S. in 2005 where the piece, thought to be a copy, was purchased by a group of buyers for just $10,000. It’s thought to be one of fewer than 20 paintings known to exist by da Vinci. “Christie’s called the work ‘the Last da Vinci,’ the only known painting by the Renaissance master still in a private collection (some 15 others are in museums).”

All of this art excitement brings up an interesting situation to consider: how do you incorporate your art collection into your estate plan? Sure, you likely don’t have an authentic da Vinci, Renoir, or Klimt just hanging in your living room, but maybe you have a couple pieces you inherited or a growing modern art collection.

Value of a Passion

For most collectors the art isn’t about monetary value, but more so about a passion for a certain period, artist, or medium. Collecting is often an act of genuine appreciation for the fine arts. Considering both the intrinsic and market value of your art collection it’s ESSENTIAL you include it as a part of your estate plan. The collection is, after all, a part of your total estate’s value and they way it’s handled in your estate plan could impact the value of your gross estate in regards to the federal estate tax. When it comes to the estate planning goal of avoiding such taxes and fees the appraised value of your art is paramount to consider. Naturally you want your collection to be well-treated following your passing, as well as retain its value.

Let’s go through some important steps and elements to consider.

Assemble Documentation

Value of the collection will be important to the estate plan. If you haven’t done so already, you must correctly catalog, photograph, insure, and appraise the collection. You should also gather all documentation such as appraisals and bills of sale that will need to accompany the artwork as it changes hands upon your estate plan’s execution.

Weigh Your Options

With an art collection there are three main options for disposition within your estate plan (or to be executed during your life).

Donate

Donating your art to a charitable organization or a museum is an excellent way to practice smart charitable giving. It can also be one of the more simple options. Donate through your estate plan following your death and the estate will receive a tax deduction based on the current valuation. Give while you’re living and you can take an income tax deduction, also based on the value of the piece or collection at the time of the donation.

With this options you and the recipient organization should agree to signed terms and conditions BEFORE the artwork delivery. Details can include specifics as to where and how the art is to be displayed, if you want your name on the signage next to the painting, and similar details.

museum art collection

Bequest Artwork to your Loved Ones

Another common option is to keep the art within the family by passing along the art along to your estate’s heirs. Yes, you could gift each individual piece to each family member, but if you want to keep the collection in tact you could transfer the collection to a trust you create while living that can be updated and changed during your lifetime. A trust is a solid estate planning tool that allows your named trust beneficiaries to avoid estate tax and probate complications and fees. In the formation of your trust you can also define the terms for care and condition of the artwork.

You could instead bequest the collection to an entity like an LLC you create. In this case your heirs would own interest in the LLC instead of each owning a piece of art. In your estate plan and in the development of the entity you can appoint a manager (or multiple managers) who make sales or purchasing decisions for the collection.

framed art collection

Sell

It goes without staying that art is expensive—to buy and to sell. There are benefits (and detriments) to this option during life and after death, but waiting to sell until after death means the art’s value will be included in the estate. As such the capital gains tax could be lessened or entirely eliminated because the tax basis for the art collection is increased to fair market value at the time of death, instead of what you paid for the art/collection. If you instead would like to sell while alive you can likely expect to pay a capital gains tax on top of a sales commission fee and sales tax (among other potential fees).

black and white art collection

Give, gift, sell—whatever option you choose, select a plan that allows you to feel at peace with where and to whom your collection is headed.

Enlist an Expert

Regardless of what option you want to pursue in the disposition of your art work, you need to work with an experienced estate planner who can help navigate the complexity of your estate. It’s your estate planning lawyer who can help you establish a framework for passing along your artwork to your chosen beneficiaries.

Discuss With Your Family

Depending on your family dynamic, discussing your estate plan with your loved ones can be difficult. It can bring up emotion and hard topics like mortality, however to avoid litigation, mitigate in-fighting, and to help determine what’s the best course of actions forward for your property it’s necessary. When it comes to your art collection, your heirs may not feel the same way about the artwork that you do and knowing these opinions is critical in the decision of what to do with the collection.

When having the conversation, cultivate an environment in which your family can discuss openly and freely without judgement. You want their honest opinions as a part of your decision in what to do with your collection in the event of your passing.

art graffiti


Just as the art itself can be exceedingly complex, so can incorporating said art into an estate plan. You probably have questions; don’t hesitate to reach out at any time via email or phone (515-371-6077). I offer a free one-hour consultation and would love to help you protect your artistic assets through quality, individualized estate planning.

senior citizen guardianship

Recently a friend sent me an article from The New Yorker, “How the Elderly Lose Their Rights.” (While a long read, it’s worthwhile.) The piece focused on the tragic case of a Nevada couple—Rudy and Rennie North—who fell victim to a court appointed guardian who failed (terribly) to put the senior victims’ best interests first and asserted the little known situation where “Guardians can sell the assets and control the lives of senior citizens without their consent—and reap a profit from it.” At first this situation is a bit confusing. How can a couple, with grown adult children, be assigned as wards of a state-appointed conservator/guardian who is then in charge of making health, financial, and social decisions for the individuals?

Given the current and growing population of elderly in the U.S. the issue of court-appointed guardianship it’s an important subject. According to the Census Bureau, “residents age 65 and over grew from 35.0 million in 2000, to 49.2 million in 2016, accounting for 12.4 percent and 15.2 percent of the total population, respectively.” And, between 2000 to 2016, 95.2 percent of all U.S. counties experienced increases in median age.

senior couple at table

What is a Guardian / Conservator?

To be able to protect yourself against such a situation, let’s establish what a guardian and/or conservator actually does and what are the causes for a conservator to be appointed. One person may be both the guardian and conservator and can be combined into a single court action. (Note: these definitions are applicable in the State of Iowa. In some states the words have different definitions and a “guardianship” in Iowa may be considered a “conservatorship” under the verbiage of a different state.)

Iowa Legal Aid offers a clear definition of the two terms:

“In a conservatorship:

  • The court appoints a person (the conservator) to control the property (or estate) of a ward.
  • A conservatorship deals with the person’s financial decisions.

In a guardianship:

  • The court appoints a person (the guardian) to control the person of the ward.
  • A guardianship deals with non-financial decisions such as where the ward lives and what type of medical care the ward gets.”

For simplicity’s sake, for the rest of the article we’ll just say guardian/guardianship, but know that could also include a conservator/conservatorship.

How does a Guardian get Appointed?

A guardian may be appointed if a court finds an individual incapacitated, which can be due to varied conditions like mental disorder, physical or mental disability, chronic abuse of drugs and/or alcohol, or physical illness. Basically if the court is convinced that a person lacks sufficient ability or understanding to communicate or make decisions in their best interest they could appoint a guardian for the continued supervision and care of the individual.

The process is such that a petition is filed in the prospective ward’s state with information regarding the proposed guardian, the guardian and ward’s relationship (if any), and other info on heirs. Any person deemed “competent” can be appointed as a guardian, so that could include an adult child/parent, spouse, or friend. It could also be a professional guardian entirely unrelated to the ward.

two senior citizen women

The legal standing for guardianship immigrated over to the U.S. colonies from England and is based on an English statute that’s survived for over 800 years. The state holds the power of parens patriae, “a duty to act as a parent for those considered too vulnerable to care for themselves.” Because this power is of the states and not federally regulated, there are disparate record keeping standards, sealed court records, and no databases of collective figures at the local, state, nor federal levels.

Potential Dangers of Guardianship

Guardianship in the U.S. straddles a fine line between protection and exploitation.

One of the major tenants of the concept of guardianship is “trust.” And, it’s true that there are great guardians who certainly work in the best interests of their charges. Most people assume the role of a guardian for good reason (like caring for a parent), but there are also substantiated cases where victims (largely senior citizens) were subjected to physical abuse, financial theft, and neglect. In a 2010 report, “Guardianships: Cases of Financial Exploitation, Neglect, and Abuse of Seniors,” the Government Accountability Office identified over 150 reported victims who had suffered a total of $5.4 million in stolen funds.

Guardianship has large potential for issues and consequences given the large quantities of people involved. Currently there over 1.5 million adults who live under the care of a guardian who is either a family member or unrelated professional. These guardians control an immense amount of assets to the tune of $273 billion. It’s also true that in the majority of states there are no qualifications to attain the status of guardian other than taking a course, having not declared bankruptcy recent, and not be convicted felon.

two seniors speaking on sidewalk

The American Bar Association published the statement that “an unknown number of adults languish under guardianship” even if they no longer have the need for someone to make decisions for them (or never did).

Another danger is that while guardianship could be terminated through a court hearing if it can be proved the need no longer exists, the ABA study also asserted the guardianship situation is typically permanent, leaving few ways out for the adults under care. Those who do try to fight against a court-appointed guardian often end up paying excessive amounts of money in attorney and court fees—some even going bankrupt in the process.

Additionally, the aging population of America places increased pressure on court resources which, in turn, can make it difficult for court appointmented guardians to have the optimal high level of oversight necessary. Thus, shady guardians can more easily slip through the cracks and continue to abuse the system and their wards’ assets.

How to Protect Against the Potential

It’s pretty safe to say that no one in their right mind would want a court-appointed guardian (particularly a stranger) to have control over your life. Especially in a way that they could legally:

  • Change your permanent residence to a more restrictive location.
  • Consent to withdraw life-sustain medical procedures.
  • Place restrictions on communications, visit, or interactions with another person.
  • Make decisions contrary to your wishes regarding general life in areas like recreational activities, clothing, and food choices.

As an example of the prospective consequences of these powers is how a guardian placing restrictions on whom their ward can interact with can result in isolating the ward from their family members. According to Elaine Renoire, a director of the National Association to Stop Guardian Abuse, a victims’ rights group, the top complaint she hears about guardians is how they can legally prohibit their wards from seeing or speaking to their loved ones.

senior citizen on bench

The following legal and estate planning tools are proactive measures you can take today to avoid the potential of being subject to court appointed guardianship.

Health Care Power of Attorney

Health care power of attorney is one of the six main documents all Iowans should have as a part of their estate plan. It allows you to choose a designated representative to make medical decisions on your behalf if you are to become incapacitated either temporarily (such as under anesthesia) or permanently. If you cannot express your medical treatment wishes clearly and coherently, your agent could then make such wishes be known on your behalf. The designated agent also retains the right to receive your medical record information that would otherwise be inaccessible as it is protected under HIPAA laws.

Financial Power of Attorney

Similar to the health care power of attorney, financial power of attorney is a legal document that designates someone to handle your financial decisions and take actions like pay bills, settle debts, and sell property on your behalf if you become incapacitated and unable to do this yourself.

Trust

The number of different types of trusts are practically limitless and a trust could be a valuable estate planning protection tool in some situations. A successor trustee could be named and the document could be used as a safeguard for financial protection.

woman walking down street with flowers

Proactivity is Key

By being proactive, you can be certain that someone you love and trust will be responsible with their guardianship powers and big/small life decisions, not the courts. Have these documents crafted by an experienced estate planner (not a DIY website) and keep them up-to-date as circumstances change. Luckily there are smart people in Iowa working toward policy change, such as the National Health Law and Policy (NHLP) Resource Center at the University of Iowa College of Law and their recent task force report citing 232 policy recommendations. But, the road toward substantial policy change is long and it’s best to have your own legal safeguards in place just in case.

Want to discuss guardianship further or get started on your powers of attorney documents? Contact me at any time.

Checklist with coffee and croissant

It’s National Estate Planning Awareness Week! In an effort to break down the barriers, myths, and excuses surrounding estate planning, I’ve created this handy dandy ultimate estate planning checklist. It runs down just about everything you need in terms of a comprehensive, quality estate plan including the six major documents, reviewing beneficiary designations, considering if a trust is applicable to you, and discussing your estate plan with your loved ones.

 

Ultimate Estate Planning Checklist

I would love to help you check these items off your list. If you want to get started, download my Estate Plan Questionnaire. Otherwise contact me to discuss your individual situation and what estate planning provisions make the most sense.

hands of 2 grooms

Everyone needs an estate plan! By estate planning, I mean a set of legal documents which cover everything from who will inherit your property, to who will care of your pets, to your health care decisions on subjects like life-sustaining measures.

In Obergefell v. Hodges, the United State Supreme Court’s 2015 decision which legalized same-sex marriage, was a major win for LGBT rights and, indeed, human rights. It was also a simple yet revolutionary statement that love is love is love.

Love is love written on card

You may be surprised to learn that Obergefell also had an enormous impact on estate planning. It can’t be it covered by a single article, so I’ll hit the high points.

Bottom line: the decision opened a multitude of previously unattainable tools and tax-savings that come along with a legal and recognized marriage. Yet, same-sex couples still may have situations that require extra or special planning. Here are five considerations for same-sex spouses engaged in estate planning.

Unlimited Marital Deduction

The unlimited marital deduction is a money-saving must for all married couples. The unlimited marital deduction is an essential estate preservation tool because it means an unrestricted amount of assets can be transferred (at any time, including at death) from one spouse to the other spouse, free from taxes (including the estate tax and gift tax). Prior to Obergefell, same-sex couples had to depend on their individual applicable exclusion in order to provide for a surviving partner.

(Note that the marital deduction is available only to surviving spouses who are U.S. citizens. If your spouse is not a U.S. citizen, look at other tools, such as a qualified domestic trust (QDOT), which may act to minimize or eliminate taxes.)

marriage equality flags

Guardianship of Minor Children

A will is so critically important for several reasons, including the fact a parent can make a designation of guardianship for minor children should something happen to the parent while the child is still under age 18. Without a will, no guardianship can be established, and Iowa Courts must choose guardians. Unfortunately, with no clear evidence as to what the former caregivers would have preferred, the Court must make its “best guess” as to who the parents would have preferred and what would be in the best interest of the child. The Court may, or may not, choose who the caregivers would have named.

Child smiling on bridge

Establishing guardianship is SO important for all parents, but especially so for same-sex parents. The legal relationship between a minor child and a parent in a same-sex marriage should specifically be identified in the estate plan. Additionally, if only one spouse is currently the natural or adoptive parent of a minor child, the spouse of the said parent should consider adopting the child to legalize the relationship. Without this officially established relationship, the death of the adoptive/natural parent could open the door for a custody battle with the deceased’s family or the child’s birth parents. To avoid litigation (and avoiding litigation in estate planning is always a good idea), co-parent adoptions protect each parent’s rights regarding guardianship.

If adoption isn’t on the table, it’s smart to create a trust with specific provisions for the relationship between the non-legal parent and the minor child if someone else were to become the guardian.

(Expert advice: The adoption tax credit is not available for a spouse adopting a spouse’s child. If adoption is in the plans it may be financially advantageous for the adoption to take place prior to marriage.)

Give Your Assets to your Child(ren)

Adoption also plays an important role not just in guardianship but in the passage of assets. Typically, when parents die their assets are passed on to their child(ren). If this is indeed an estate planning goal for a same-sex couple, adoption should definitely be considered since it’s more common in same-sex marriages for only one parent to be biologically related to the child.

The term for adoption by a spouse (without the “first parent” losing any parental rights) varies from state-to-state and can be called second-parent adoption, co-parent adoption, stepparent adoption, or confirmation adoption.

mom and daughter blowing kiss

Once adoption is final, an adoptive parent has all the permanent legal rights and responsibilities of a parent-child relationship, exactly the same as that of a birth parent.

Without the legal determination and an estate plan the child(ren) may not get anything as the couple’s assets could flow instead to other family members.  

Professional Planner

For all the aforementioned considerations and more, it’s smart for all couples, but especially same-sex couples, to avoid the DIY online estate plan templates. Most of these services don’t include the specific provisions and important estate plan needs of LGBT couples. Seek out a lawyer with ample experience in estate planning who understands the potential legal challenges your estate could face so they can adequately protect your assets from potential peril. For instance, if you think the situation could arise where family members who disprove of the marriage or decisions regarding the estate could create future conflict, your lawyer should be able to advise on how a “no contest” clause to be incorporated into the estate plan.

Comprehensive Review

As stated before, given the tax-saving tools that marriage provides, it’s nothing but beneficial to review any and all existing estate plan documents of each spouse. (Married couples often seek joint representation in estate planning, but individual representation can help couples avoid conflicts of interest.)

In your estate plan review confirm that definitions accurately reflect relationships with verbiage such as “spouse,” “children,” “husband,” “wife,” and the like, so there’s no ambiguity when it comes to execution of the plan.

Following marriage, it’s also a good idea to take a look at re-titling property (such as a home) from sole ownership to joint tenancy. This means that if one spouse were to pass, the other would get the property without it passing through probate. (Depending on your situation, you could also consider “tenancy in common” as another option for holding property titles under multiple names.)

Additionally, don’t forget to check your beneficiary designations on accounts such as savings/checking, insurance, 401k, and retirement benefits, as these designations actually trump your will.

Ask your professional advisors—lawyer, financial advisor, insurance agent—to help you maximize your money-saving benefits when it comes to gift, income, and federal/state estate taxes.

two brides getting married

Get Started

You’ve worked hard for the assets you’ve built and the property you’ve acquired. Almost assuredly you want these assets to pass to the ones you love—the ones you’ve built a life with and around. Don’t let legal loopholes, family members that will never fully understand that love is love, or guardianship issues get in the way you crafting your legacy. It’s never too early to get started on your estate plan (with my free, no-obligation) estate plan questionnaire. I’m always happy to discuss the topic over the phone (515) 371-6077 or via email.

Estate planning is all about strategy—leaving the right assets and inheritances to the right beneficiaries; timely distributions of the estate; and avoiding as many taxes and fees as possible. Another strategic move is deciding whether you and your spouse should use the same lawyer, or whether you should each have your own lawyer.

If you are married, please note you have the option of hiring separate attorneys for your estate planning needs.

Though the goals of most married persons are the same when it comes to wills, trusts, and estate planning, some married individuals (especially individuals who have children from prior marriages) have differing views on the ownership of property and beneficiaries, and naming executors, trustees, and guardians. Likewise, some married individuals have private information they do not wish to share with their spouse — information that may be essential to the estate planning process that would have to be disclosed to the attorney and, therefore, disclosed to the spouse if I am representing both spouses. Additionally, sometimes married individuals have “awkward” questions they wish to ask the attorney — questions they would not be comfortable asking in the presence of their spouse, such as how a divorce might affect their estate plan.

By obtaining separate attorneys, you would be able to: (1) share in confidence any secrets or private information with your attorney that may be important to the estate planning process; (2) ask in confidence whatever questions you may have; and (3) receive completely confidential advice and counsel. If represented jointly, you will be waiving and losing all three of the above rights with respect to your spouse.

If you decide to obtain separate attorneys, this firm would be pleased to represent either one of you separately. If you are married and decide you would like this firm to represent both of you, then complete this Estate Plan Questionnaire form jointly (please do not fill out two separate forms).

Joint Representation

Two brides in white wedding dresses

For many married couples, joint representation is a likely choice. The benefits are obvious; joint representation can be cost-effective and can be more efficient since you can work together on a single Estate Plan Questionnaire in preparation to meet with the estate planning lawyer. Another advantage is that the joint representation somewhat forces open and honest communication between you as a couple as you make decisions on beneficiaries (such as children and grandchildren), executors, and disposition of property.

It’s important for your lawyer to avoid conflicts of interest, so they can uphold and respect your attorney-client privilege. If you choose to have joint representation you may waive the conflict of interest clause so that you may be represented together. Or, of course, you can seek separate legal counsel and not sign such a clause.

This communication is critical if you opt for joint representation. Without it, disaster can strike mid-meeting with the lawyer if couples disagree about which child is most responsible in terms of estate execution or how much of a trust fund each beneficiary should receive at age 18.

Individual Representation

couple holding hands in green space

There are times when it is best for each spouse to seek separate legal counsel. One such time is when there are different interests that are at odds with each other. For example, if one or both people have children from a previous marriage/relationship that will be named as beneficiaries. There can be conflicting interests between stepparents and stepchildren when it comes to the estate. Additionally, if you both have your own individual estate planning lawyer, you may have more freedom to voice individual concerns, without having to audit your opinions in accordance with your partner’s desires.


Have questions? Need more information? A great place to start is by downloading my Estate Plan Questionnaire, or feel free to reach out at any time; my email is Gordon@gordonfischerlawfirm.com and cell phone is 515-371-6077. 

Someone pointing into the sunset

Estate planning allows people to elect tools and strategies that makes life for their loved ones as uncomplicated as possible following death. Almost everyone I work with wants to ensure their family members are set up for success.

Dad holding daughter

One such estate planning tool to accomplish this is the handy dandy trust. There are almost limitless different types of trusts; trusts may be classified by their purpose, duration, creation method, or by the nature of the trust property. For instance, there is the fairly common “animal care” or “pet” trust. You can also place almost any asset imaginable in a trust.

For some parents looking to help a son or daughter (minor or adult) with special needs, a trust can be a powerful avenue to continuing to support the loved one. (In this trust situation the child would be the beneficiary of the trust, the parents would be the settlor, and a trustee would be assigned.) Why? In general, the idea is that a special needs trust can use estate assets to enrich and enhance the child’s life while maintaining the individual’s viability for enrollment in public benefits programs. Examples of assistance programs can include Supplemental Security Income (SSI), Medicaid, subsidized housing, and vocational rehabilitation, among others.

Smart estate planning for special needs ensures that the parts of the estate which pass on to the individual with special needs are NOT considered an “available asset” by the associated agencies that disperse essential benefits. Many people make the mistake of leaving assets to a loved one with a disability through a will. This is problematic because acquiring assets, such as a significant lump sum of money, can disqualify your loved one from certain government assistance programs. By setting up a special needs trust, instead of solely using a will, you can avoid these issues. How? Because the trustee has total control over the management of the funds, and the beneficiary does not, government program administrators, like the ones from SSI and Medicaid, don’t “count” the trust assets when considering eligibility.

Rose in hand

Beyond protecting the beneficiary’s eligibility for public benefits a special needs trust can also:

  • offer assured lifelong money management for the child; and/or
  • establish a pool of of available funds in the future event that public benefits should be restricted or revoked.

It’s important to remember that details of each special needs trust will vary depending on factors like the beneficiary’s age, competency, and familial situation. Also, because of the complexities involved, special needs trusts require extremely careful drafting. So, If you’re even considering establishing a special needs trust as a part of your estate plan, it’s definitely necessary to speak with an experienced estate planning professional to make sure all of the nuances of the trust are executed properly.

Don’t hesitate to contact me with questions via email (gordon@gordonfischerlawfirm.com) or on my cell phone at 515-371-6077.

Stacked books and notebook

What’s It All For?

In Hamilton: An American Musical, a perplexed Alexander Hamilton asks Aaron Burr, “What was it all for?” Regarding trusts, we know that all the work is for the beneficiary.

Classic Definition of “Trust” and “Beneficiary”

A trust is created when a property owner transfers property to a person with the intent that the recipient hold the property for the benefit of someone else. There are three parties to a trust: (1) the settlor (also called donor or grantor); (2) the trustee; and (3) the beneficiary. Every trust must have at least one beneficiary – a person for whose benefit the trust property is being held and who therefore has legal rights to enforce the trust.

Beneficiaries Must Be Sufficiently Definite

 

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The beneficiaries must be described with sufficient detail that their identities can be determined. If the description of the beneficiaries is too vague or indefinite, then the trust will fail and the property will be returned to either the settlor or the settlor’s estate.

Let’s take two simple examples.

  • Alan establishes a trust for the benefit of his then-living children. The beneficiaries are sufficiently definite.
  • Sara establishes a trust for the benefit of all her friends. The beneficiaries are insufficiently definite.

Easy, right?

Exception: Charitable Trusts

There is one narrow, but critically important exception to the rule beneficiaries of a trust must be sufficiently definite. Charitable trusts–trusts established to fulfill a recognized charitable purpose – can be for the benefit of an indefinite group. For example, a charitable trust set up to provide scholarships to disadvantaged youth will be held valid.

Multiple Beneficiaries: Concurrent Interests or Successive Interests

Trusts can have more than one beneficiary and they commonly do. In cases of multiple beneficiaries, the beneficiaries may hold concurrent interests or successive interests. An example of concurrent interests is a group of beneficiaries identified as grandchildren of the settlor, who all receive distributions after their grandparents’ deaths. An example of successive interests is a trust in which one beneficiary has an interest for a term of years, and the other beneficiary holds a future interest, to become possessory only after the present interest terminates.

 

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Special Remedies for Beneficiaries

There are several remedies available to an aggrieved beneficiary in the event of a breach of trust by a trustee. Such remedies include claims for damages, injunction to restrain a breach, tracing and/or recovery of trust property, among others. A beneficiary may be able to recoup damages, perhaps even from the trustee’s personal assets. If the trustee wrongfully disposes of trust property, the beneficiaries may be able to reclaim the property from a third party. Again, legal remedies for a breach of trust by a trustee are broad.

Let’s Talk More About Trust Beneficiaries

Interested in establishing a trust or having difficulty deciding on beneficiaries? Don’t hesitate to reach out; email me at gordon@gordonfischerlawfirm.com. I offer a free one-hour consultation to everyone, without any obligation. I’d be happy to talk to you any time.