siblings equal

6 Reasons You Shouldn’t Treat Your Kids Equally

We have a common saying with our kids, “Fair doesn’t mean equal.”

Many of us want equality to be synonymous with fairness — maybe because it seems easier to make things equal than to navigate the complexity of fairness. But think about raising kids. Did you make sure everything was equal?

I doubt you kept track of each dollar spent to make sure it was the same for each child. One child may need braces, while the other has straight teeth. One may need money for music and sports, while the other doesn’t have an interest in those types of things. One child could have health issues and another doesn’t. One could need help with college, while another gets a scholarship. We provide our kids with what is appropriate and what we think they need, regardless of whether it is equal.

And the same should be true of your estate plan. Sometimes, it is okay to treat your children “unequally” because this really may be the fairest approach.

Here are six instances in which you might not want to treat your kids equally when it comes to your plan:

  1. Greater financial need. One of your kids may need more help financially. Kids are not equal in terms of their financial success or ability to succeed in a career. One of them may simply need more than others because of their financial situation.
  2. Health needs. A child (or even a grandchild) may have health needs that result in increased costs. Health issues can also limit one’s work options or earning potential, therefore making their need for financial assistance greater.
  3. One may not need it. For instance, if a disabled child already has their basic needs taken care of through government benefits and healthcare, then it could make things harder for that child to receive money from your estate. If you are confident that siblings will help provide for any extras this person may have in the future, you may be able to disinherit that child without affecting their quality of life.
  4. Some are better stewards. If one child has consistently made bad financial choices, and you have repeatedly bailed them out, it might make sense to leave them less because you are not confident they would use it well. Or, if you do decide to leave them a similar amount, you may want to take steps to protect their inheritance with specific rules, and someone to help manage it for them. (But not a sibling!)
  5. Early inheritance. Quite often adult children have a significant financial need and parents give them substantial help. After this happens, it might be good to consider adjusting the amount that child would receive in an inheritance. When this situation occurs, without adjusting the amount left in the estate, the child who didn’t need help often feels they are being punished for never needing help.
  6. Family farm or business. One child may rely on the family farm or business for their livelihood. If one child has spent a lifetime helping you grow your farm or business, it may be best to leave them more of the total estate so their livelihood is not negatively affected.

Some people still can’t get over the “unfairness” of leaving “unequal” amounts to their children. If you decide to leave equal amounts to each child, we encourage you to consider leaving specially tailored rules for each child, so the inheritance can be handled more fairly.

Protecting Our Kids From Threats

Another important part of an effective estate plan is helping protect our kids from threats. Whether it’s their own wild spending, a future divorce, a lawsuit or financial problems, an effective plan can help anticipate and mitigate these types of challenges. Some kids are more exposed to threats than others. Some kids are better able to handle money than others. The rules you create for your plan need to reflect that. As a parent you should feel free to handle things how you think best, without being tied by guilt into making everything exactly equal.

Involve Your Kids in the Planning Process

We often encourage our clients to involve their family in the planning process. This is especially important when considering leaving “unequal” inheritances. Effective communication with your family about why you have decided to do things the way you have can eliminate a legacy of misunderstanding, misinterpretation of your actions, and pain that children experience when parents don’t communicate about the plan ahead of time.

We have seen many adult children upset by their interpretation of their parents’ plan when the parents leave behind no explanation for their rationale, or fail to discuss ahead of time why they’ve chosen to do what they have. Estate plans can seem like a final accounting of a parent’s love. Because of this, it is really important to do the hard work of communicating with your family, either ahead of time or through your plan.

As with many estate planning matters, this is a complicated one with best solutions varying from family to family. We can’t possibly cover all the nuances in one blog post. Our process walks families through difficult decisions like whether to leave equal amounts to your children in your plan. You have the knowledge about your unique family. We are the experienced guide that helps create an effective plan based on that knowledge.

If we can be of assistance to your family, please give us a call at 217-726-9200. If you’d like to learn more about creating an effective estate plan, we encourage you to check out an upcoming workshop. Sometimes they are a great way to learn about holistic, effective planning at every life stage, along with a great way to get to know us better!

Not Your Best Option: Life Estate Deeds

So, what are life estates or life estate deeds?

Sometimes, instead of using a trust, people will use a life estate deed to try and protect a house or farmland. This means they deed the land to their kids but reserve the right to still use the house or the farm as long as they are living. Because all of the instructions are contained in the deed itself, it can sound like a nice, simple solution. Life estates can seem like a cheaper and easier alternative to a trust…

But life estate deeds do not always work as advertised.


A Life Estate Case Study

Click here to download the Case Study as a PDF

We recently had a situation here at the office that is a good example of why life estates are generally not a good option.  Mom had put her house into a life estate a while back. She was now in a situation where she needed more care and was going to a nursing home. The family wanted to sell the house, but if they sold the house, then a percentage of the house would be considered an asset for the purposes of Medicaid. Even with good legal planning, some of the funds would have to be spent on nursing home costs, and the ultimate goal of planning is to protect your hard-earned money and assets (like your house) that you hoped could be a legacy for your family someday. 

4 Reasons Life Estates Don’t Work

1. They don’t protect ALL the value. People are surprised by how much of the value of their house or property is still considered theirs if they need Medicaid. This is all governed by a Medicaid table. (See it here.) So, what are the exact problems with life estates and why don’t life estate deeds “work”?

Here’s how the Medicaid table works: if someone is 65-years-old, Medicaid says that almost 68% of the house is still considered yours. At age 70, 60.5% is yours. At age 80, 43.66% of the value of the house still counts as yours. 

So what does this mean? It means that if you are 70-years-old, have a stroke and need to go to a nursing home, when your house is sold then 60.5% of the house sale money stays in your name and is exposed to long term care costs. This is true even if it has been more than 5 years since the deed was done.

2. You don’t own or fully control your house or property anymore. If something unexpected happens and you “need” to sell the property, you can’t without getting the kids to sign off on it, because they actually own the property. You don’t own it anymore (even though you have the right to use it for the rest of your life).

3. You can’t change who gets it after you are gone. With a deed, it’s a done deal. The house goes to your kids at your death — no matter what. There is no way to change it. So, if your child dies before you do, you can’t reconsider who the house or property goes to. It will go through his or her estate and be completely out of your control (even though you have the right to use it for the rest of your life).

4. Life estate deeds could prevent you from getting VA benefits. The VA sees things differently and assumes that any income interest or life estate you might have are entirely yours (and therefore counted as an asset). Depending on the situation, this could cause you to be denied VA benefits. For instance, farmland with a life estate would typically prevent VA benefits without further planning.

 What’s the Solution?

In contrast to the above issues with life estates, nest egg trusts can effectively address all of these issues:

• They can protect 100% of the value once 5 years has passed.

• You can be the trustee of the trust where your farm or home is kept, which means you can sell the property, buy a different house if you want, etc.

• You can reserve a rewrite power (called a “power of appointment”) so you can change who gets it at death. That way, if circumstances change, you can respond to them appropriately.

• A trust can be set up to allow VA benefits or be adjusted later to qualify for VA benefits.

Trusts are one of the best tools that we have in our legal toolbox to help clients, and our firm is one of the best at setting them up. If you are considering a life estate deed, please give us a call first to see if there are better options available for your unique situation.

Download the Life Estate Deeds Case Study for quick reference and to share with others.

As always, if you have any questions or concerns about estate planning or elder law, Medicaid planning, long-term care planning or Veterans benefits, please give us a call at 217-726-9200. We’d be more than happy to speak with you!


save family farm

6 Ways to Save the Family Farm

older couple in field web version

When you pass away, what will happen to your farmland? Maybe it’s land that has been in your family for generations. For many families, saving the family farm is important.

Without a specific estate plan in place, the land is at risk. You may even know families like that – where they lost part of the land to estate taxes, family disputes or creditors. The best way to lose the farm is:

•Don’t do anything. Just die and see what your kids and the courts figure out.

•Leave it to your kids in your will, without the instructions or protections of a trust.

How to Protect the Family Farm

Many of our clients own farmland, and we understand how important it is to protect that land, taking into consideration things like:

•Who is operating the land now, and who will operate it in the future?

•How do we treat all children “fairly” even if the land is not going to all the children?

•How do we avoid estate taxes at death? Particularly with the dramatic increases in land values.

There are 6 specific things that can be done, with the help of an experienced estate planning attorney, to protect and save the farm for future generations:

1. Plan ahead for long-term care. The biggest threat to your farmland is the future need for long-term care. Nearly 70% of people over the age of 65 will need some sort of long-term care, and it’s usually quite expensive.

2. Assist in choosing a good “helper” who will manage the farm well.

3. Coordinate financial tools such as life insurance, to make things “fair” between the farming and non-farming kids.

4. Minimize capital gains taxes now and at the next generation by using a trust or well-timed transfers to kids.

5. Use a “nest egg” trust to avoid long-term care risks that can result in liens being put on the farm or even loss of the land altogether.

6. Create protections from kids’ divorces or financial problems that may arise in the future.

Let us help your family prepare to transfer farmland smoothly, the way you want, while avoiding taxes. Call our office at (217) 726-9200 to find out more about ways we can help you protect your family farmland.

gamble estate plan

Do You Like to Gamble? Advice for Those Who Haven’t Planned Yet

Michelle and I don’t gamble very often. But when we do, watch out!

A few years go, the kids went to the grandparents’ and we spent the weekend in St. Louis. We were staying near Laclede’s Landing at a new hotel near the Lumiere Place Casino. The evening after we checked in, we headed out to do some serious gambling.

We stopped at the penny slots and started playing. About 10 minutes later, we hit a big jackpot! Being up all of $12, we decided to quit while we were ahead.

Do you enjoy gambling? We find that most of our clients don’t like to roll the dice about their planning. Instead, they want to tie it down so they can have real peace of mind.

Not planning ahead to protect your family and your assets is gambling.

What will happen if you die suddenly? What will happen if you need long term care?

Leaving things to chance is a gamble and the losses can be HUGE.

4 Reasons to Plan Ahead

With good planning, you can have real peace of mind and not gamble that these vitally important things will just work out. By planning ahead, you can avoid these 4 hardships:

1. Stress. You wouldn’t purposefully place extra stress on your spouse or your kids, would you? But a lack of planning on your part can do just that, leaving everyone to wonder, “What should we do? Who do we contact?” Good planning makes it easier on your loved ones by providing a clear plan.

2. Delay. Messy estate plans take longer to wrap up, causing the stress and extra work of an estate to drag on and on. Good planning helps things get wrapped up as quickly as possible.

3. Conflict. Lack of planning can lead to arguments in the family. Arguments between siblings, between the step-mom and step-kids, between nieces and nephews. Good planning will make it easier on the family, making less to fight about and less stress that can lead to conflict.

4. Loss of life savings. Lack of planning can result in the loss of your wealth — to the nursing home, to probate expenses, to taxes, to creditors or to wild spending by your heirs. Good planning will protect what you have worked so hard for.

If you’re ready to stop gambling on the future and get started planning, we encourage you to call us at 217-726-9200. We would be more than happy to answer any questions you may have and to set up an Initial Meeting.

Estate Planning is Like… Working a Puzzle

Bailey and I bought some puzzles at our neighborhood garage sale a while back. We started work on a 100-piece jigsaw puzzle of Mickey Mouse and Goofy, but something was wrong. Pieces were missing — a lot of pieces! In fact, we counted and there were only 57 of the 100 pieces there. We did what we could, but the puzzle was useless and ended up in the trash.

This reminded me that estate planning is just like a puzzle. And you know how much I like to compare everything in life to estate planning! (Read how estate planning is like your favorite board game here.) If you’re missing pieces in your plan (or you got a “bargain” on your plan) then your life can be thrown into chaos when someone dies, faces a stroke or struggles with dementia and needs to go into long-term care. Our process is so thorough that we make sure there are no missing pieces to the puzzle. When the time comes to use your plan, all the pieces will be there in working order. No surprises.

The best way to find out if your plan has all its pieces, and to see if Edwards Group is right for you, is to attend a workshop where you can learn about effective planning at every stage of life. Check out the upcoming dates here and be sure to call us at 217-726-9200 to save yourself a seat.

If you have nagging doubts about your plan, or huge worries that you don’t even have a plan, give us a call today and take your first step towards peace of mind.

Can your estate plan pass the Down Low test?

What a Child’s Game Can Teach us About Planning…

In our house, the “Down Low, Too Slow” game is very popular. It goes like this:

Give me five (hand slap)

Way up high (another hand slap)

Down low (pull hand away before it can get slapped)

Too slow!!

It always gets a laugh out of the kids. Even after the 10th time in a row!

“Up High, Down Low” is also good estate planning advice. A good plan will include:

  1. NOW – look at your situation, finances, family. What are your goals and risks?
  2. UP HIGH – look at the older generation. When the older generation passes, will they be leaving you an inheritance that could create estate tax problems for you? Will they face nursing home costs that could impact the family? Will their lack of planning give you more stress later or more conflict with other siblings?
  3. DOWN LOW – look at your kids and grandkids. What is their financial situation? How will an inheritance impact them? Will they be ready for it? Will your daughter-in-law spend it all? Will it lead to extra taxes for the kids?

A good estate plan considers those older and younger than you. If you’re not sure about the state of your plan, give us a call at 217-726-9200. We’ll be happy to chat with you.

life care planning

8 Keys to Effective Long-Term Care Planning

Long-term Care Planning is one of the biggest issues facing aging adults today. With experts projecting that nearly 70% of all individuals needing long-term care at some point in their life, the issue cannot be ignored. And yet, many surveys and statistics are showing that people are doing just that. Without proper planning, the need for long-term care can be the single greatest crisis that an aging person will face in their lifetime. (Source: National Care Planning Council)

Keys to Effective Long-term Care Planning

  1. Plan Ahead. The longer you wait to plan, the less options will be available. Financial options such as long-term care insurance may become unavailable or too expensive. Legal options such as irrevocable trusts or gifting strategies will not be as effective if they are implemented later in life. The earlier you plan, the better. Read about the 5 life stage of planning here.
  2. Maximize Your Benefits. Get legal advice to maximize available benefits such as Veterans benefits or Medicaid. Many families are unaware of the possible benefits they could legally receive.
  3. Veterans, Don’t Miss Out. Many Veterans miss out on VA benefits they qualify for and earned through their service to our country. Widows may qualify for benefits as well. So, even if the Veteran is deceased, his widow should get advice from a qualified professional on possible Veterans benefits available to her.
  4. It’s Never Too Late to Plan. Even if someone is already in a nursing home, there still may be legal strategies to maximize benefits.
  5. Don’t Rely on “Free” Advice. Some families are told informally by their nursing facility or social worker to just spend down all the assets before seeking other benefits. By seeking the advice of an experienced professional who works with these issues everyday, families may discover other planning options.
  6. Long-term Care Insurance Gives You the Best (and most) Options. If you qualify, and can afford, long-term care insurance, then that is often the best strategy. Long-term care insurance gives the most options for protecting assets, staying at home, and having more free choice as to which facility you can enter when the time comes. Read “Should I buy long-term care insurance?” here.
  7. Beware of Jointly Owned Property. If you own property jointly with others (siblings, parents, friends) then their lack of long-term planning could impact you. If they need care, the property may end up with a lien and then you may be forced to pay off the lien or sell the property.
  8. Watch Out for Gifting Without a Master Plan. Suppose someone is unconcerned about long-term care, but decides to give away large gifts to their children. Later, if care is needed, those gifts may cause a problem when applying for Medicaid benefits.

Are you putting off long-term care planning? If so, you’re putting yourself and your family at great risk of financial and emotional hardship. If you’d like our help in creating a long-term care plan give us a call at 217-726-9200! If you already have a loved one in a nursing home, we can help you identify areas in which you may be missing benefits that can help ease the burden of paying for a nursing home. Our Elder Care Advisors help families everyday with this stressful time of life.

family feud

How to Prevent a Family Feud

Did you catch Hatfields & McCoys on the History Channel recently? I really enjoyed this great mini-series starring Kevin Costner. (Seeing him shooting and riding a horse again made me think of the movie “Dance With Wolves.”) I liked it so much that I bought a book about it on my Nook. The book is titled, “Blood Feud” by Lisa Alther — good summer reading!

Estate Feuds

After a funeral, some families end up with their own version of a feud over an estate. Sadly, most feuds could be prevented with good planning ahead of time. Here are a few examples of things that can cause problems:

  1. SPECIAL BELONGINGS  Maybe grandma’s old pie plate or the antique rocker? Items with high emotional value can sometimes lead to more fighting than money itself. Download our resource to help with that here.
  2. PROCRASTINATORS  Sometimes the trustee or executor just can’t seem to get around to taking care of the important legal and financial details. As time goes on, they feel nagged by others but others feel wronged that the estate is being held up by someone else’s laziness. Read about 7 Types of Helpers to Watch Out For here.
  3. A BULLY’S POWER TRIP  When someone who enjoys power is named executor, watch out! They may disagree with what the will says or think the estate’s bank account is their personal slush fund. And they’re good at rationalizing all of it. Just ask them, they’ll tell you why it’s okay!
  4. THE ENTITLED  Sometimes a family member feels entitled to live in mom’s house or use her old car or farm the land without paying rent. Of course, they think there are good reasons for it. But, unfortunately, it’s just like stealing from the other family members who are entitled to their share as well.
  5. STEP-KIDS BATTLE  Good relationships based on years of love and trust can go up in smoke with poor planning. I’ve seen situations where the stepmom even refused to give the kids their photo albums!

With the Hatfields and McCoys the body count was high. If your estate ends up in a feud, the casualties may be family harmony, extreme stress and frustration, extra expense or legal fees — even loss of assets altogether (like family land). I say it all the time, “Bad estate plans break up good families!” This doesn’t need to be the case. Call 217-726-9200 to schedule an Initial Meeting today.

illinois cornfield joint property ownership

Joint Ownership Seems So Fair and Easy…

Grandad left his property to Dad. Then when Dad passed away he left it to his two daughters and one son. The three kids owned it jointly after he died. Everything seemed fair and good. They never saw a need to divide the property.

Well, the son was in his 50’s when he started facing health problems. The family was sad to see his health go downhill so quickly. Finally, he spent time in a nursing home before passing away.

Not long after his death, the sisters were surprised to learn that the State of Illinois had placed a lien on the family property because of the nursing home care their brother had received. Now, the sisters were faced with a really tough situation of how to pay off the lien. Should they sell the land or take out a loan and pay off the government so they could try to keep it in the family?

The problem with jointly owned property

Jointly owned property — it sounds so clean, easy and fair. But it can also lead to many problems. Do you and other family members own real estate jointly? If so, then not only do you have to worry about your own estate planning, but you also better make sure the other joint owners have planned well, too. If not, their lack of planning could land in your lap later.

Our team is experienced in helping families deal with the challenges that farmland or family property presents. The key is planning AHEAD to lessen the challenges that may come. Our comprehensive process helps identify and anticipate potential problems that can crop up. (No pun intended.) Give us a call at 217-726-9200 to get started today, or keep learning more with the following articles:

6 Ways to Save the Family Farm

Saving the Family Farm

12 Reasons Not to Give Property or Money to Your Kids Right Now (a free report)

Hey Kids! Don’t Sell the Farm!

A few years back, Michelle and I took Bailey to her Kindergarten preview night. They say kids grow up fast, and it’s true. All too quickly they head out into the big world with lots of advice from mom and dad. I hope she’ll remember our advice and follow it.

Here’s a true story about a family where the kids didn’t follow their dad’s advice:

Dad always said not to sell the farm. “Keep the land and you’ll always have income.” Dad died and left the farm to his daughters. Relatives and friends reminded them, “Don’t sell the farm.” Well, guess what they did?

They sold the farm. The money was too tempting. They had some financial pressures and their spouses wanted to be able to spend some of the money. Ten years later they said, “You know, I wish we had kept the farm like Dad told us. We don’t have anything to show for it now. The farm’s gone and so is the money we got from the sale.”

Every week Edwards Group works with owners of farmland to make sure the land is protected for future generations. Do you know a family who could use our help?

Call us at 217-726-9200 to schedule an Initial Meeting or learn more on our blog:

Don’t put off peace of mind. Get started today.