Estate Planning: Helping Protect Your Interests

Death to Death Taxes: The Future of the Estate Tax Under the Proposed Tax Plan

Brian C. Zaldivar

Brian C. Zaldivar




Authored by Brian C. Zaldivar with contribution from Misty A. Watson

“Death will no longer be a taxable event in America,” said U.S. Vice President Mike Pence during a speech to a Michigan crowd in late September 2017.  Among the many proposed tax revisions, the House (“Tax Cuts and Jobs Act” or “H.R.1”) and the Senate’s proposed bills have increased the credit against the estate, gift, and generation-skipping transfer tax. The House eventually repeals the estate and generation-skipping transfer tax; however, the Senate allows the estate tax and gift tax to remain intact.

Under current law,

  • Property in an estate is generally subject to a top tax rate of 40% before it passes to the estate’s beneficiaries.
  • Additionally, property that is transferred beyond one generation, whether by bequest or by gift, is subject to an additional generation-skipping transfer tax, also with a top tax rate of 40 percent.
  • The first $5 million worth of transferred property is exempt from the estate, gift, and generation-skipping taxes, in any combination thereof. This amount is known as the basic exclusion amount and is indexed for inflation ($5.49 million for 2017).
  • Transfers between spouses are excluded from these taxes, and when an individual dies without his or her assets exhausting the basic exclusion amount, any unused basic exclusion amount passes to his or her surviving spouse, with a top basic exclusion amount of $10.98 million for 2017.
  • When a beneficiary receives property from an estate, the beneficiary generally takes a basis in that property equal to its fair-market value at the time the decedent dies, which is known as taking a step-up in basis. However, when a donee receives a gift from a living donor, that donee generally takes the donor’s basis in that property, which is known as taking a carryover basis.

As proposed in H.R.1 and the Senate Bill, Continue reading »

It’s Official: ABLE Accounts Now Available in Missouri & Illinois

Misty A. Watson

Misty A. Watson




After much anticipation, Achieving a Better Life Experience (ABLE) accounts may now be opened in both Missouri  (where they are called STABLE accounts) and Illinois.

These new accounts are designed for individuals with disabilities who developed their disability before age 26. Individuals who meet the age criteria and are currently receiving Supplemental Security Income (SSI) or Social Security Disability Income (SSDI) benefits are automatically eligible for an ABLE account. Individuals not currently receiving benefits but who meet the age requirement can open an ABLE account if they satisfy SSI criteria for “functionality limitations.”

The ABLE Act allows an individual with a disability – and his or her family – to put funds into a tax-advantaged account. ABLE account funds may be used for qualified expenses of living with a disability. In addition to medical expenses, funds may be used for basic living expenses, education, housing, transportation, employment, assistive and personal support services, health care, legal fees, health and wellness, financial management, and administrative services. Continue reading »

Understanding the Special Needs Trust Fairness (SNTF) Act

Misty A. Watson

Misty A. Watson




With the passing of the Special Needs Trust Fairness (SNTF) Act, individuals with a disability under the age of 65 may establish a first party special needs trust on their own behalf. Prior to the SNTF Act, special needs trusts could only be established by a parent, grandparent, legal guardian, or court.

Special Needs Trusts

Special needs trusts are established for the benefit of individuals with a disability to supplement the financial assistance they receive from government programs, namely Medicaid. Special needs trusts are valuable tools for maintaining Medicaid and Supplemental Security Income (SSI) eligibility, as funds held in a special needs trust are not considered when determining an individual’s eligibility for financial assistance under such programs.

Eligibility

To establish a SNT on their own behalf, the individual must be capable of making financial decisions and be under the age of 65. If eligible, individuals with disabilities enjoy increased autonomy and self-direction under the SNTF Act, especially in cases where living relatives or guardians are unable or unwilling to establish a trust on the individual’s behalf. Continue reading »

Medicaid Eligibility Expands for Elderly, Blind, Disabled

Misty A. Watson

Misty A. Watson




The elderly, blind, and individuals with disabilities will now find it a little easier to qualify for Medicare benefits – and to keep slightly more of their savings.

With the passing of Missouri House Bill 1565, which amended section 208.010 of the Missouri Revised Statutes, beginning in fiscal 2018 (effective July 1, 2017) the asset limit to qualify for Medicaid coverage increased to $2,000 for individuals and $4,000 for married couples living together. The asset limits will continue to increase through fiscal 2021 until asset limits reach $5,000 and $10,000, respectively.

By increasing the asset limits, by the end of 2021 an additional 10,000 Missourians will be eligible for Medicaid benefits–including in-home and community-based services. In addition to expanded coverage, the increased asset limits allow for current beneficiaries to hold more funds in savings without compromising Medicaid eligibility. Continue reading »

Important Tips to Consider When Planning for the Future: Care Plans and Appointed Successor Guardian

Misty A. Watson

Misty A. Watson




Care Plans

A care plan is a document you prepare that contains information about how to best care for your child’s daily needs. It may include a list of your child’s medications and the times each is given, particular foods for your child to avoid, how often your child gets physical therapy, or what to do for your child in an emergency.

When you have a child (or other family member) with special needs, a care plan is an essential tool. A care plan conveys vital information to caretakers. This may include doctors, nurses, therapists, emergency medics, teachers, child care providers, respite providers, grandparents, friends, and neighbors.

In the event you are no longer able to care for your child and a legal guardian must step in, the care plan can be invaluable to the guardian. Information regarding medications, specialists, and even night time routines can give the guardian necessary information to provide a sense of comfort during a difficult time for the child. Continue reading »

Spotlight on I Can Go to College: The SUCCEED Program at University of Missouri–St. Louis

Misty A. Watson

Misty A. Watson




For many students with disabilities, high school is the end of their educational journey. However, some students in the St. Louis area are continuing their education through the SUCCEED program at the University of Missouri–St. Louis (UMSL).

SUCCEED is a two-year (four semester) residential, inclusive program located on the UMSL main campus. The program is open to students with intellectual and developmental disabilities ages 18–25. Students live on campus and take college courses each semester. The goals of the program are to help students become independent through “academics, vocational experience, and residential/student life.”

Each SUCCEED student takes four courses per semester: three SUCCEED electives and one UMSL course. Accommodations and modifications are provided as needed through both SUCCEED and UMSL. Continue reading »

Rights of Will and Trust Beneficiaries

Jeffrey R. Schmitt

Jeffrey R. Schmitt




After the death of a family member, people are often left wondering what interest they have in the deceased’s assets. At a time of grieving, it can be difficult to know where to begin. Lack of information or misinformation can leave potential beneficiaries in the dark as to the manner in which the deceased’s assets will be transferred.

Obtaining Wills, Trusts, and Other Documents

Fortunately in Missouri, and many other states, potential beneficiaries have rights allowing them access to information regarding the estate. In Missouri, if a will exists for a decedent, the original will must be filed with the probate court upon the death of the creator of the will. The will becomes public record at that point. If a family member believes that a will exists but has not been filed, that family member can open a probate estate with the court in order to try and require production of a will or other estate plan documents.

Similarly, trust beneficiaries often have rights to obtain copies of trust documents. Trusts do not have to be filed with the court but instead may be maintained privately by the named trustee. However, in most circumstances, trust beneficiaries are entitled to a copy of the relevant trust documents and can require production of them through a lawsuit, if necessary.

Accounting of Assets

Trustees, executors, administrators, and agents under a power of attorney all have some duty to account as to the assets and liabilities of the probate estate or trust.  After being appointed by the probate court, executors and administrators of wills have an obligation to file an inventory of assets and a corresponding obligation to advise the court concerning the liquidation or disposition of those assets.

Trustees of trusts have similar accounting requirements and are required by law to provide periodic accountings to the beneficiaries showing the assets, liabilities and expenses of a trust. If any of these fiduciaries fail in their accounting obligations, certain categories of heirs and beneficiaries have rights to compel the executor, personal representative, or trustee to prepare accountings and either file them with the court or provide the accounting to beneficiaries.

Discovery of Assets

A common concern for beneficiaries in estate matters is that a personal representative is hiding assets, has dissipated assets, or has incurred unnecessary or extraordinary expenses (which could be for the personal representative’s own benefit). However, the law provides certain rights for beneficiaries  to make inquiries and investigate possible improper dissipation of assets by filing a lawsuit to conduct an investigation.

Discovery of asset proceedings are not only limited to decedent’s estates but also can be used to investigate conservatorships or situations where a power of attorney is misused.

Will and Trust Contests and Construction Actions

A more extreme remedy that goes beyond investigation is asserting wrongdoing with respect to the creation or amendment of estate plan documents and filing a lawsuit to contest the estate plan documents. People who believe they are aggrieved by an estate plan (including a will or a trust that was either created or amended improperly) have the right to file a lawsuit to try to set aside those estate plan documents.

Reasons for contest actions include concerns that the estate planning documents were improperly executed, that the decedent lacked requisite mental capacity at the time the documents were signed, or that other family members or friends unduly influenced the decedent to make or change their estate plan.

Additionally, some estate planning documents may be drafted in a way that leaves questions as to who the correct beneficiaries are or what interests they might have, and a will or trust construction lawsuit provides the ability to have a court review the estate planning documents in question and make orders clarifying the terms or concluding the identities of the proper beneficiaries.

As is the case with many lawsuits and requirements of the probate and trust codes, many of the above procedures and remedies have strict time requirements or statutes of limitation. While these can be difficult situations after dealing with the loss of a family member or loved one, it is vital that someone who has questions or is concerned about possible wrongdoing take action as soon as possible so that their rights do not expire.

Posted by Attorney Jeffrey R. Schmitt. Schmitt represents businesses and individuals in civil and commercial litigation matters including banking and finance, real estate, condo and homeowners associations, probate, professional liability defense, title disputes, transportation, and pension and retirement plans. 

 

A Family Member Died, Now What? How to Begin Winding up a Relative’s Legal Affairs

David A. Zobel

David A. Zobel




The death of a loved one is never easy and will likely be an emotional time for you, your children, family, and friends. You may have a lot of things running through your head about what needs to be done, when, and how. To assist you through this difficult time, here’s an outline (in no particular order) of legal considerations necessary to begin the process of winding up your relative’s affairs. You can pursue these in order or at the same time. If it makes you more comfortable, you can skip ahead and contact an attorney at the outset. Finally, it is important to communicate with other family members so these efforts aren’t duplicated.

Order Death Certificates

One of the first things to do is obtain a certified death certificate of your relative and specifically multiple certified copies of the death certificate. Your relative’s financial and service providers, debt holders, the court, contracting parties, and many other institutions may need to see a death certificate to verify your relative’s death before they will begin their internal processes of closing your relative’s accounts. While some institutions will accept copies, many require a certified death certificate, which you or your attorney can get from your county vital records office. Depending on the office, it may take some time to process your requests, so performing this step sooner rather than later is recommended. Also, please note that death certificates are often ordered by the funeral home at the time the service is planned.

Gather Your Relative’s Estate-Planning Documents

If your relative had a will, trust, or any other estate-planning documents designed to transfer any property upon death, gather those documents together. For items with specific titles, e.g. the relative’s home, vehicles, and financial accounts, check for beneficiary or transfer on death provisions. Ideally, you will locate original copies of your relative’s estate planning documents. If you just have copies, consider whether another relative has the original document or where it might be located. If the documents are located in a bank safe deposit box, a bank officer may enter the box for the sole purpose of retrieving and filing a last will and testament.

Take a Preliminary Accounting

When you are gathering your relative’s estate planning documents, you will want to start taking a preliminary accounting of your relative’s assets. Here is a general checklist of information and documents to gather in preparation for your meeting with your attorney. In general, take note of the following: Continue reading »

A Family Member Died, Now What? Preparing for the Initial Meeting with the Attorney

David A. Zobel

David A. Zobel




In our recent post “A Family Member Died, Now What? How to Begin Winding up a Relative’s Legal Affairs,” we outlined several actions to take to start winding up a deceased relative’s legal affairs, including gathering your relative’s estate-planning documents and taking a preliminary accounting of your relative’s property.

Below is a general checklist of information and documents which will be helpful for you to assemble in preparation for meeting with your attorney. It is not necessary to have the checklist completed prior to the initial meeting. However, for reference, you may want to print this post, fill it out, and bring it with you to the initial meeting.

  1. Decedent’s Background Information (may attach a death certificate in lieu of this section):
    • Full Name:
      ______________________________________________
    • Residence Address:
      ______________________________________________
    • Date of Birth:
      ______________________________________________
    • Social Security Number:
      ______________________________________________
    • Marital Status:
      ______________________________________________
    • Spouse’s Name:
      ______________________________________________
  2. Relative’s Financial and Medical Affairs:
    • Employment Status:
      ______________________________________________
    • Employer’s Name:
      ______________________________________________
    • Banks / Institutions / Brokerages (including accounts held,
      e.g. savings):
      ______________________________________________
      ______________________________________________
      ______________________________________________
      ______________________________________________
    • Safe Deposit Box Location:
      ______________________________________________
    • Pension (if so, from where):
      ______________________________________________
    • Life Insurance Policies (provider(s) and amounts):
      ______________________________________________
      ______________________________________________
      ______________________________________________
      ______________________________________________
    • Vehicles and VINs:
      ______________________________________________
      ______________________________________________
      ______________________________________________
      ______________________________________________
    • Known Creditors (mortgage, credit card, etc.):
      ______________________________________________
    • Receiving Medicaid Benefits?
      ______________________________________________
    • Receiving Social Security Benefits?
      ______________________________________________
    • Important Notes / Special Circumstances to Tell Attorney:
      ______________________________________________
      ______________________________________________
      ______________________________________________
      ______________________________________________
      ______________________________________________
  3. Documents to Assemble (If you don’t have access to an account,
    just indicate that below):

_____     Certified death certificate
_____     Copy of death certificate of spouse, if widowed

_____     Original last will and testament and any codicils (amendments to the will)
_____     Copy of trust and any amendments

_____     Copy of all bank statements from accounts titled in relative’s name from month of relative’s death
_____     Copy of all brokerage statements from accounts titled in relative’s name from month of relative’s death
_____     Copy of all bank statements in the name of the trust for the month of death
_____     Copy of all brokerage statements in the name of the trust for the month of death
_____     Copy of all retirement account statements in the name of the relative for the month of death
_____     Original life insurance policies
_____     Death certificates for any predeceased owners or beneficiaries of insurance policies or co-owners of financial accounts

_____     Original vehicle titles (including boats, motors, and trailers) in the name of the relative and trust
_____     Copy of titles for any real property in the name of the relative or the trust
_____     List of extraordinary personal property (paintings, expensive jewelry, etc.)
_____     Original savings bonds
_____     Information on safe deposit box

_____     Information regarding any creditors of the relative (accounts, balances)
_____     Information regarding any Medicaid benefits the relative received
_____     Information regarding the relative’s beneficiaries/heirs (addresses, dates of birth and social security numbers)
_____     Information on any long term care policies
_____     Copy of funeral bill

David A. Zobel is a member of Danna McKitrick’s team of estate planning and probate professionals. If you would like to learn more about the considerations above, would like assistance administrating a relative’s estate or help with you estate planning needs, one of our firm’s experienced attorneys would love to meet with you.