david edwards estate planning elder law

Stop Thief! 10 Things That Can Steal From Your Estate

If you’ve ever been robbed like I have, you know that awful feeling of violation and loss of control. More than the material things that are stolen, the loss of peace of mind and sense of security can have lasting effects.

When I had just started practicing law, I came home one night and saw muddy footprints on the carpet. I thought, “When did I track in mud?” Then it hit me — someone had broken a window and robbed my apartment! They didn’t get much; I didn’t have much for them to take. When it comes to your estate, there is a lot at risk.

As estate planning attorneys, we can’t protect your home, but we will work to protect your wealth and your legacy — protect it from thieves who could steal it.

What Is Robbery?

Robbery is when something of value is taken. When talking about estate planning, you can be robbed of money, but also so much more. You can be robbed of peace of mind, relationships, or even memories. There is a lot at stake if you don’t plan ahead.

Ten Thieves That Can Rob Your Estate

When creating a plan, it’s important to keep in mind these ten things that can do real damage to your plan:

  1. The IRS — Will your heirs pay unnecessary taxes? Well qualified estate planning attorneys should make sure your assets are set up to avoid issues like double taxation.
  2. Lack of organization — If you don’t have a plan for your wealth, you can’t control what happens to it.
  3. A spouse’s remarriage — If your spouse marries again, what will happen to your children’s inheritance? If your spouse has more children, will your wealth be divided among them as well?
  4. Your kids not being ready for wealth — If you were to die tomorrow, would your children be able to manage their newfound wealth? A thorough plan includes how much your kids get and when.
  5. Your kid’s divorce later in life — Estate planning attorneys make sure your wealth goes where you want it to go, regardless of the marital status of your children.
  6. A lack of training and communication with your family about your plan — I knew of a woman in her 70’s who lived by herself. Her husband had passed away a few years earlier. She had a daughter and two sons. One day she fell, broke her hip and had a mild stroke. She could no longer care for herself. The daughter who lived in town began to help her out. This daughter was never very good with money, but the family thought it made sense to grant her the Power of Attorney because the other kids lived out of town. As the daughter continued to care for her mom, many items from the house disappeared. Her brothers thought she was taking the stuff, but she adamantly denied it. Unfortunately, after the mother’s death, the siblings never spoke again.
  7. A lack of professional guidance you can trust — A very blessed man had been married 30 years to the love of his life. She was never considered a “stepmother” but a truly loving mom to his children. He completed a “do-it-yourself” estate plan. When he passed away, the family found his plan vague, confusing and lacking detail. His wife remembered him saying, “You’ll never want for anything.” His kids remembered hearing, “You will be treated fairly.” As the plan unfolded, both his wife and his kids thought the other side was being greedy and not honoring his wishes. On the brink of court, after two years and lot of legal fees, they compromised and settled the dispute. Sadly, the stepmom and the step kids never spoke again.
  8. Future lawsuits or liability — If you own a business, is your liability insulated from the business’ liability? What happens if your beneficiaries are ever sued? Estate planning attorneys can provide answers and solutions for these types of issues.
  9. Nursing home costs — The skyrocketing costs of aging in America necessitate your plan include provisions for long-term care for you and/or your spouse.
  10. Outdated legal documents — Effective estate planning attorneys help you keep your plan current so it can do what you intend for it to when the time comes.

What Would You Do If You Knew a Thief Was Coming?

When my old apartment was robbed, I didn’t expect it. It just came out of the blue. I have a friend who was in a different situation a while back. She lived in a great neighborhood. It was always very safe and quiet. But there was a time when houses started getting burglarized. Week after week, it was someone else. Would her house be next? She couldn’t know for sure, but she took steps to protect herself by installing a security system.

Nobody likes to think about it, but Benjamin Franklin told us only death and taxes are certain in this life. You know the time will come eventually. What estate planning “security system” do you have in place? If something isn’t right with your plan, would you even know it? Effective estate planning attorneys create and review existing plans to protect all you’ve worked so hard for.

How Innovative Legal Help Saved the Relationship of Two Sisters

This is the real life story of two sisters, an annuity, nursing home costs, and why Medicaid Planning matters.

Mom did not have a lot, but she owned her home, had a steady retirement income, and had purchased two annuities. Each in the amount of $50,000.

Each daughter was named the beneficiary of “their” annuity and would, therefore, receive the $50,000 from the annuity when Mom passed away.

The older daughter fell on hard times and asked her mother if she could cash-in the $50,000 annuity. Mom agreed and the older daughter received her $50,000 “inheritance.”

The younger daughter, not needing her money, left her annuity in place as Mom had originally intended.

Unfortunately, several years later, Mom had a stroke and had to enter a nursing home. She privately paid for the nursing home costs until nothing was left but the home and the younger daughter’s $50,000 annuity.

But the annuity wasn’t truly the daughter’s. Mom was listed as the owner because she was still alive and would, therefore, have to spend the younger daughter’s inheritance before she could apply for Medicaid.

Of course this was very upsetting to the younger daughter. She was the one who hadn’t requested her money early. She was the one following Mom’s original plan for the money to pass upon her death. And yet, she was the one “being punished” financially by her Mom’s stay in the nursing home.

A Resolution

One of our attorneys sat down with the sisters for several hours listening to their story and devising a plan. In the end, we were able to develop a strategy that would allow an immediate transfer of the house to the daughter (thereby equalizing the daughters’ inheritances) while qualifying Mom for Medicaid several months later.

The mother continued to get the care she needed as she aged, and the daughters got a resolution to a very sticky situation. It was a very satisfying experience for our attorney and the two sisters!

We work with families everyday to find solutions to the challenges of estate planning — complicated family circumstances, business and farm succession planning, paying for a nursing home. It is our greatest pleasure when we can help families figure out legal solutions for complicated problems.

What Should You Do Next?

If you want to learn more about planning for exorbitant nursing home costs, check out the following resources:

  1. Download a copy of our Medicaid FAQ (that ran in a local publication) to learn more about paying for nursing care, qualifying for Medicaid, etc.
  2. Sign up for our Medicaid Planning e-course. This series of emails will teach you the basics about planning for Medicaid and applying for the benefit, plus provide you tangible steps to get started.
  3. Attend a free workshop to learn more about effective planning. At our workshop, How to Protect Your House and Life Savings from the Nursing Home, you’ll learn the five ways to pay for care, how benefits like Medicaid or VA can help get the care you or your loved ones needs, and the three keys to creating a “Good Care Roadmap” to protect your family and life savings. Check for upcoming dates here.
  4. If you need help right away, just give us a call at 217-726-9200. We understand that many cases like these are urgent. Our Benefits Coordinator, Melissa Coulter, will be more than happy to discuss your situation and what immediate actions should be taken.

(Video) When is the best time to contact an attorney about long-term care?

If you already know what an elder law attorney does, then you may be wondering when it’s best to contact them for help.

Anytime there is a transition period or crisis situation, your lawyer can help lay the groundwork for care and help get more benefits to pay for that care. Having a lawyer can help you understand your options if your loved one must move from their home or needs more care in an assisted living or nursing home facility.

Examples of transition times when an elder law attorney can help:

  • If you or your loved one are in the hospital or a rehab facility and may be unable to return home.
  • If you or your loved one are in an assisted living facility but are needing a higher level of care, possibly a skilled nursing facility.
  • If your loved one is unable to stay at home without additional help from family or caregivers to help with Activities of Daily Living.

Learn more in this video from Attorney David Edwards:

If you or a loved one is experiencing a transition where paying for care is a challenge and concern, we urge you to call us at 217-726-9200 and speak with our Benefits Coordinator, Melissa Coulter. She loves helping families find solutions for this very stressful time of life. If you want to learn more about planning for nursing home costs, feel free to attend an upcoming workshop, How to Protect Your House and Life Savings from the Nursing Home.

5 Big Risks of Adding Your Kids to Your Bank Account

The Truth About Adding Your Kids to Your Bank Account

Many parents think that “adding their children’s names to their bank account” is an easy way to be sure their kids can help if something unexpected happens, but it can cause some unintended consequences. Legally, what you are doing is naming a child as a joint owner of the account. This can have big legal implications that you might not intend. Despite friends or bankers telling you it’s a good idea, this sort of “coffee shop” legal advice can cause big problems down the road.

While naming your child(ren) as joint owner of your bank account could insure that bills and other obligations can be taken care of without you, it is best to understand what other problems you may be creating for yourself and your child by adding them to your bank account.

5 Risks of Simply Adding Your Child’s Name to Your Bank Account

There are many potential issues that could come up later if you add your child to your bank account now. Here are just a few to think about:

  1. If you die, the child on the account gets all the money in the account. This can be a real problem if there are several children in your family, but you only named one of them on the account. Even if you intended for all the children to share the money upon your death, legally the money belongs to the child whose name is on the account.
  2. If the child on your account gets sued or divorced, YOUR money in your bank account could be at risk.
  3. If your child becomes disabled (through a car accident or a stroke) after you are already disabled, then their spouse will gain control of the account and your money.
  4. If creditors come after your child, they could come after YOUR money in the “joint account.”
  5. If your child is on the account as a joint owner, then they have every legal right to come and take ALL the money from the account anytime they want. And there is not much you could do legally to stop them from doing so. You’re probably thinking, “My child would NEVER do that.” But money makes people do strange things. We see it nearly everyday.

2 Solutions That Can Prevent Future Problems

1. Power of Attorney

If you want a child to be able to pay your bills if you are sick, then name them a Power of Attorney instead of adding them as a joint owner of your bank account.

2. Payable Upon Death

If you want your money to go to your child or children at death, use a payable on death designation or give instructions in your will or trust.

Experienced Estate Planning and Elder Law Attorneys Can Help

Ultimately, you need to find solutions to accomplish your goals without creating unintended problems down the line. This is why it’s important to have the help and advice of an experienced estate planning and elder law attorney. Attorneys use legal tools like Powers of Attorney, trusts, wills and payable upon death designations to make sure things will go smoothly upon death or disability.

The most effective attorneys can help you solve problems without causing extra stress and unwittingly creating more problems down the road. Experienced estate planning and elder law attorneys should be able to anticipate the potential problems that your current actions may cause and prevent them through the use of legal solutions.

To continue learning more on the topic, download our free report, 12 Reasons Not to Give Your Property or Your Money to Your Kids Right Now. We also offer free monthly workshops for the community — Wills & Trusts: How to Get Started and How to Protect Your House and Life Savings from the Nursing Home. You can find upcoming dates for those workshops here or give us a call at 217-726-9200 to save yourself a spot.

give your house to your kids

(Video) Beware of What Happens When You Give Your House to Your Kids

When faced with the shocking costs of long-term care or a nursing home, many people have to scramble to figure out a way to pay the enormous fees. Realistically, the $6000+ a month it costs for a nursing home in Central Illinois is a big financial burden for most people. Many are left with Medicaid as the only possible way to get the care they need as they age. In fact, it is estimated that 70% of nursing home residents rely on Medicaid to pay their nursing home bill.

Without planning, the most common way to qualify for Medicaid is to “spend down” most of your assets.

So, in order to try and protect assets (like the family home), some people consider transferring their house or other assets to their kids. This can work for Medicaid, if done at least 5 years ahead of when care is needed, but there are risks involved.

The unintended consequences from this approach can create big problems. Learn more about the risks by downloading our guide, “12 Reasons Not to Give Your Property or Your Money to Your Kids Right Now,” or watch the following video where Attorney David Edwards explains a little more about the risks involved in giving money or property away to your children.

Cinderella and estate planning

7 Important Things Cinderella’s Father Could Have Done Better

The secret to avoiding disaster in the Magic Kingdom — plan ahead.

So much of parenting is about planning and anticipating problems BEFORE they happen. And trips to Disney World are no exception. We know from experience that our kids get worn out if they days are too long. So, now we purposely build in days to quit early and have some down time back at the pool. On our most recent trip, I was reminded once again of how disastrous bad estate plans can be when minors are involved. Cinderella’s father made her life even more difficult by not anticipating what would happen if he died. Keep reading to find out what he could have done differently. But also be sure to download our FREE Kids Guardianship Kit. (Or pass it on to your adult children for your grandkids’ sake.)

7 Important Things Cinderella’s Father Could Have Done Better

You’re probably familiar with the age-old story — Cinderella’s mother dies when she’s a young child, leaving just her and her father. Sadly, while Cinderella is still a minor, her father dies after remarrying a woman with two children of her own. His estate is left to his widow. (A regular occurrence in the real world.) And we all know what happens next: the wicked stepmother takes control of the estate of the benefit of herself and her own daughters. Treated as a servant in her own home, Cinderella is reduced to befriending rodents and birds.

Unfortunately, attorneys see these sorts of real life disasters everyday. The parents of modern day Cinderella’s aren’t bad people. They just failed to properly plan. They certainly didn’t wish for bad things to happen to their children. But that’s what happens when you don’t plan for things that are common to the human experience. (Like death.)

Here are 7 estate planning actions Cinderella’s father could have taken to better protect her once his wife died:

  1. Name guardians who share his values. See our Child Raising Priorities Checklist in our Kids Guardianship Kit to help you decide what’s most important to you.
  2. Leave instructions for the guardian about how he wants her raised. This could include schooling preferences, where he wants her to live, religious upbringing, etc.
  3. Don’t think of planning as “all or nothing.” All of the father’s assets didn’t have to go only to the second wife OR only to his child. He should have considered dividing the assets between the spouse and Cinderella.
  4. Name an “outside” helper. Even in the best of circumstances, putting a stepparent in control of the stepchild’s money (or vice versa) can lead to frustration or awkwardness. A professional trustee (such as a bank, CPA or attorney) could have better balanced the interests of both Cinderella and her stepmother.
  5. Prioritize key needs for Cinderella such as future educations costs, wedding expenses, a down payment for a home, etc. Setting aside priority funds in a trust will make sure they are not spent on other things.
  6. Pass on a non-financial legacy. Cinderella’s father could have done a better job in transmitting his values, traditions, stories, faith and experiences, and this should have been especially important because Cinderella was so young when her mother died. By passing on a non-financial legacy, he could have insured that her mother’s things — photos, jewelry and other important “belongings” or memories were passed to Cinderella and not the stepmother. Read about 10 Non-financial Planning Issues You Should Consider here.

The type of planning that best protects minors when the unthinkable happens requires attorneys to act as counselors for the client. This also often involves collaboration with other professional advisors. By working as a team, these professionals who deal with real life Cinderella stories everyday can develop solutions for issues such as a creditor protection, remarriage protection, guardianship and special needs.

An estate plan is not really about YOUR DEATH. It’s about your CHILDREN’S LIFE if you’re not there to protect them anymore. You do everything you can to protect them right now — bike helmets, the best car seats, safe cars, healthy food, etc. but what if the unthinkable happens? Will all your protection go away if you go away? Preparation now avoids extra heartbreak and tragedy later. Read a real life story about lack of planning and the death of a young mother here.

Download our free resource to help you get started thinking about naming guardians for your children. Oftentimes, this is the single hardest activity a parent will engage in. We give some guidance in this document, but we give even more guidance in person when clients go through this process with us. As always, feel free to give us a call at 217-726-9200 if you have any questions!

What You Need to Know About Nursing Care and Aging

So, what do nursing homes have to do with estate planning? When most people think about estate planning, they almost exclusively think of a Last Will & Testament, but a Will only works AFTER you pass away. A Will sets out what will happen, who’s in charge, and where your assets will go AFTER your death. Around the office, we refer to this as “death planning” because the plan you make goes into effect after you’re gone.

Because people are living longer, a new aspect of estate planning has emerged over the last decade. And this new type of planning is just as important as the traditional “death planning.” We call this form of planning, “Life Care Planning,”because it addresses the type of care you may need toward the end of your life.

It is difficult to face, but statistics tell us that 70% of people who reach the age of 70 will need some sort of long-term care (like a nursing home). The need for long-term care happens because of stroke, dementia or any number of health problems. When serious health issues crop up, you and your family will come face to face with the following questions:

  • How do we pay for good care?
  • How do we keep peace in the family during this extremely stressful time?
  • How do we protect our loved one’s life savings if the average cost of a nursing home in Central Illinois is $60,000/year?
  • How can we take maximum advantage of the help available to pay for good care?

The Basics of Needing Assistance as You Age

When it comes to needing assistance as you age, there are basically three choices:

  1. Stay at home with help. Many prefer to stay in their own home and hire someone to help with light housekeeping, meal preparation, bathing assistance or the activities of daily living (ADLs). However, in-home medical help can quickly become too expensive for most families.
  2. Move to an assisted living facility. At an assisted living facility, you have your own living space, meals provided in a common dining area, and social activities. In addition, they can help with care needs such as bathing and medication. In order to be in assisted living, one generally needs to be mobile (able to get to the dining room, get in and out of bed, etc.).
  3. Enter nursing home care. Most of us would like to avoid this option, but it is often a reality as medical complications from aging begin to stack up. In addition to meals and social activities, nursing homes provide around-the-clock-care, administer medications, offer rehabilitation (in the form of Physical Therapy or Occupational Therapy), etc.

Every month we offer a workshop on this very topic. At this 1.5 hour workshop titled, How to Protect Your House and Life Savings from the Nursing Home, you’ll learn about protecting your life savings while still having options for care as you age. You’ll discover the 5 ways to pay for nursing or in-home care, plus how VA or Medicaid benefits can help get you the care you need. We’ll also talk about how a “Good Care Roadmap” can guide you through this stressful time of life. Check on upcoming dates for this free workshop.

why you need long-term care planning

Why You Need Long-term Care Planning

Finding good care as you age has always been stressful. And thanks to the rising costs of long-term care in the U.S., the last decade of life is now more stressful than ever. Long-term care planning (or Life Care Planning) can help make sure you get good care, help find ways to pay for the care and decrease stress so you can enjoy time with your loved ones.

Attorney David Edwards shares some of his thoughts on why you need long-term care planning.

If you or someone you know could benefit from long-term care planning, we encourage you to attend one of our upcoming workshops entitled, “How to Protect Your House and Life Savings from the Nursing Home.” See the upcoming dates here. At this 1.5 hour workshop you’ll learn more about the planning process and how to create a “Good Care Roadmap” to protect your family and life savings.

david edwards estate plan

Secrets: 5 Things Your Adult Children Need to Know About Your Estate Plan

Parenting often involves keeping secrets, especially when the kids are little — remember all the secrecy surrounding Christmas or birthdays?

Back when my daughter was 4 years old my wife and I kept a big secret from her. For her 5th birthday we surprised her with a trip to Disney World in conjunction with an estate planning conference! (She was excited about the first, while I was pretty excited about the second.) It was hard to keep the secret at times, but it sure was a fun surprise when we pulled it off.

Estate Plan Secrets

Secrets can be fun. But where estate planning is concerned, they most definitely are not. Sometimes it’s hard to know what our kids may or may not know about our plan. Walt Disney’s daughter was once asked by kids at her school what it was like to be his daughter: She came home that night indignant, telling her dad, “You never told me you were Walt Disney!” Sometimes things that seem obvious to us might not be so obvious to our kids.

5 Things Your Kids Need to Know About Your Estate Plan

What do your kids know or not know about your estate plan? Here’s a quick checklist to consider:

  1. Burial — Do your kids know whether you want to be cremated or buried? If you want to be buried, where do you want to be buried? Have you already purchased a cemetery lot?
  2. Who to Call — Do your kids know who your attorney is or how to get a hold of him/her? Can he help tie up loose ends or was he only used to fill out forms and make them official during planning?
  3. Assets — Do your kids and/or family know what your assets are? If you suddenly have a stroke or heart attack can they easily find that information?
  4. End of Life — Are they clear about your wishes for ending treatment and “pulling the plug?” Do they know how you feel about organ donation?
  5. Your Plan — Do they know where to find your will, trust and/or powers of attorney? (And if they’re in your safe deposit box or home lock box, can they get in? Do they have the key or the combination?) Will your kids be surprised by your plan? (How you divided assets or whether you gave to charity…) Unfulfilled expectations can mean conflict between your kids or lifelong heartache for a child who misreads a plan as being a symbol of how the parent felt about them.

5 Tips to Make Sure There are No Secrets About Your Estate Plan

  1. Talk. Have conversations with your kids about aging, death and what will happen. There are good conversation starter resources at EngageWithGrace and The Conversation Project. You can also read our post on the subject HERE. The holidays, when families gather together, are a good time to get these conversations started.
  2. Find an experienced attorney. Work with an attorney who keeps your plan up to date through a membership program or a maintenance plan. That way, even if you don’t want to share all of your financial information with your kids now, the attorney will have it to provide them with later. Read about our program HERE.
  3. Don’t assume. Recognizing if your kids will know what to do or how to do it once you are gone can be really hard. Tell them what you expect now. Things like which advisor to rely on or “take care of your little sister” can go a long way.
  4. No surprises. Give your kids the overview of your plan, so they know what to expect. News such as, “I’m going to leave your brother the farm,” is better with an explanation from you now. Your attorney can help with this, providing as much or as little detail as you want.
  5. Don’t just fill out a form. Include purpose statements in your will or trust. Tell why you did what you did, or explain that “it is my intent” that the plan work a certain way.

Estate planning works much more smoothly when there are no secrets or surprises. Save your family a lot of money and heartache by doing a little work now. Read about how to avoid an estate battle after you’re gone HERE.

5 Estate Issues You and Your Family Should Plan For

“An ounce of prevention is worth a pound of cure.”

When it comes to estate planning, this quote from Benjamin Franklin could not be more true. Oftentimes, people don’t think of estate planning, or the issues related to it, until it is too late. As a firm who deals only with estate planning issues, we have seen our fair share of terrible problems that could have been prevented by planning ahead and creating an effective estate plan. Dave says it all the time, “Bad estate plans break up good families.”

Taking advantage of David’s unique perspective, in this post we’ll explore the most common problems he encounters every day — problems that could be avoided by just planning ahead. Here are 5 key issues you should consider as you create an effective estate plan:

“Assets? What assets?”

You might be surprised at how often those left behind have no idea about life insurance, stocks, bank accounts, etc. Discovering these “hidden” assets takes time, money, patience and a lot of detective work. And despite any dreams you once had of being Joe Friday, the last thing you want to do while mourning the loss of a loved one is play detective.

“Attorney? What attorney?”

Oftentimes those left behind have no idea if an attorney is needed, or if an attorney has already been consulted. Does looking in the phone book and calling the first attorney whose ad catches your fancy seem like the best way to handle your loved one’s estate after they’re gone? Many of our clients’ families meet us before they need us, ensuring that a trusting relationship is already in place and decreasing stress and anxiety when the time comes to execute the estate.

“Equal? What’s equal?”

Many people plan on just having their children split things equally upon their death. It seems like a beautifully simple and fair way to handle things, but when emotions run high and money or cherished possessions are at stake, things seldom go down the way you would expect. We often see conflicts between family members who have different ideas about how to handle things — conflict that could have been avoided with more in-depth preparation. We’ve also seen that seemingly good ideals like “equal” puts some adult kids at a disadvantage.

“Taxes? What taxes?”

Did you know your lack of planning could cost your family money? Without proper planning, they could end up paying extra income tax on IRAs or annuities (or pay them earlier than necessary). We see this quite often. To avoid this, you should get specific advice regarding your tax deferred accounts, both now and after death.

“Issues? What issues?”

There are a lot of unique circumstances that arise when dealing with minors or even young adult children. Are your kids prepared to responsibly handle what you’re leaving them? Have you distributed the wealth in such a way that the younger children will have adequate care for the proper amount of time? As experienced estate planning attorneys, we see the ramifications of families not being fully prepared all the time. We hate seeing this and don’t want any family to have to go through it. Our firm is experienced in thinking through every issue your family needs to consider when creating an effective plan.

So what do you imagine for your family after you’re gone? Do you imagine them having no idea what or where your assets are? Do you imagine them knowing exactly who to call or struggling to figure out who your attorney is? Do you imagine great stress and distress in the middle of their grief as they scramble to figure out what needs to be done? Surely not. Planning ahead is not being morbid or pessimistic. It is protecting and caring for those you love. (Get our free checklist, What to Do When a Loved One Dies, here.)

Find out more about effective estate planning by attending our free workshop, Wills & Trusts: How to Get Started. If, after attending the workshop, you decide to set an Initial Meeting, you’ll receive $200 off the fee.