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Category Archives: Estate Planning

Do your will or trust in 2017

This is the time of year to make resolutions and set goals for the new year. Your list might include goals like getting in shape, organizing your house, and traveling more. Another popular New Year’s resolution is to get a will or trust in place. Our firm can help you cross that goal off your list and it will be easier than you think.

Why should you get your planning done in 2017? With well-drafted documents prepared by our attorneys, you can accomplish the following:

  1. Ensure that your assets transfer to the person(s) of your choice
  2. Identify who is in charge of your estate and any money you leave to minor children
  3. If you have children, name who would take care of them if something happens to you
  4. Identify who will make financial or health decisions for you if you can’t
  5. Preserve your wealth by avoiding probate fees and estate taxes
  6. Perhaps most importantly, you will have peace of mind knowing you have a great plan in place

Getting your will or trust done does not have to be a daunting task. Contact Barchet Law today and schedule a complimentary initial meeting. We are friendly, straight-forward and genuinely believe in getting great plans in place for our clients. You can be finished in just a few weeks. It really could be the easiest goal you cross off your list all year!

Are you going on a big trip?

Are you going on a big trip over spring break or over the summer? Everyone knows that they need to pack, find a place for the dogs to stay, and get to the airport two hours early. But here are a few things you might not have thought about:

1. Turn your water off. If it’s going to be cold, consider turning the main water valve in your house off. This will help keep your pipes from freezing. The last thing you want to come home to is a pool in the basement!

2. Let the police department know you’re going to be gone. If you live in Columbia, you can fill out this form online and the police will increase their trips past your house for the time that you’re gone.

3. Execute a power of attorney for child care. If you are going on that elusive child-free vacation, you should consider executing a special power of attorney for your kids’ care. These documents give someone of your choice the power to make medical decisions for your kids while you’re gone. These only last for one year, so if you’ve done one in the past, you may need to do it again. Call our office if you want more information about this.

4. Update or do your wills and/or trust. Going on a big trip or family vacation is one of the most popular reasons that clients contact us to do their planning. Getting your will or trust in place before you leave will give you immense peace of mind.

What happens if I don’t have a will?

There’s a fancy word for dying without a will in Missouri. It’s called “intestate.” So, what does it mean to die intestate (never got around to doing that will)? It means that the State of Missouri decides how your estate will be distributed. There is a very specific distribution scheme laid out in the Missouri statutes. This distribution is in line with some people’s wishes, but definitely not with everyone’s.

In addition to losing your right to determine who gets your estate, failing to do your will also means you have no say regarding the following:

  • Who will take care of your kids if they are under 18 (called a guardian)
  • Who will be in charge of your estate (called a Personal Representative or Executor)
  • Who will overlook any money your minor children inherit from you
  • How much of your estate each relative inherits
  • Whether your Personal Representative will be supervised by the Probate Court

If you care about any of the above, and our guess is that you do, you need a will! The process is much easier than you think. Most clients only need to meet with an attorney twice and are finished in a matter of weeks. Contact our office today to schedule your complimentary initial meeting.

Why should I have a trust? Part I

Today is our second post in a series of posts about trusts.  Last week, we answered the question, “What is a trust?”  Over the next several weeks we will explain the advantages trusts can offer.

  1. Uncomplicated Asset Management during Life. A revocable trust can avoid probate and manage your assets in the event you become disabled or incapacitated and unable to handle your affairs.  In the event of disability or incapacity, the successor trustee that you designated in the trust, takes over management of the trust assets for your benefit.  This occurs without probate court involvement or changes to your trust.
  2. Avoids Probate upon Incapacity or Disability. A revocable trust is beneficial if you become “incompetent” or incapacitated.  Without a trust, the probate court may need to get involved and a guardian and conservator would be appointed by the court to manage your property and personal affairs.  Court-supervised conservatorship and guardianship is an expensive undertaking, a matter of public record, and very restrictive.  This can be completely avoided with an effective estate plan and if your assets are held and managed by the successor trustee of your revocable trust.
  3. Ease of Changing Your Estate Plan. A revocable living trust will act as the master key to your estate plan.  You can make any changes simply by changing the terms of your trust.  You will not need to contact any banks, life insurance companies or other financial institutions where you have accounts.  One change to your trust changes all accounts, property and assets in the trust.  This makes it easy and efficient to keep your estate plan current and up to date.

Call us today at 573-441-9000 to learn how you can protect your assets and provide for your family with a trust.

Don’t forget to read Part II and Part III of this post.

What is a trust?

Today is our first post in a series of posts about trusts.  Over the next several weeks we will explain what a trust is and the advantages trusts can offer.

An estate planning trust, sometimes called a revocable living trust, is a key document for saving time and money during life, protecting assets, and avoiding probate.  A trust can also make a smooth transition of wealth to children and other beneficiaries in the event of death.

What is a trust?  A trust is a separate legal entity to manage property, according to the terms of the trust, for the benefit of the beneficiaries.  The person establishing the trust is the “Settlor” who usually serves as the first trustee or manager and is usually the initial beneficiary.

What is a revocable living trust?  A revocable living trust is simply a trust made during life that is changeable by the maker (Settlor).

How does a trust work?  We help individuals establish trusts as part of an effective estate plan.  The trust is a roadmap and sets the rules for the management of the maker’s property during life; then, sets out how the property is to be distributed to the beneficiaries after death.  After the trust is created, the maker transfers many of their assets to the trust.

Can the maker get this trust property back?  Absolutely.  In almost every situation, the maker keeps the right to withdraw any assets from the trust, the right to income from the trust and the right to add additional property to the trust.  However, the trust only works on property in the trust.  So, it is usually not advisable to take property out of the trust unless there is a specific reason to do so.

What are the tax consequences of making a trust?  There is no tax due for making and transferring property to a trust.  In most instances, during the maker’s life, there are no additional tax forms to file or tax returns to be prepared.  Because of the complete control the maker or Settlor retains over the trust, the trust is disregarded for both income and estate tax purposes.  There can be very significant estate tax savings through complex types of trusts for high net worth individuals and couples.

Call us today at 573-441-9000 to learn how you can protect your assets and provide for your family with a trust.

“I don’t have an estate.” Yes you do!

When people hear the words “estate planning,” many think it doesn’t apply to them because they don’t have a sprawling mansion or a Bill Gates sized bank account.  A recent article from Forbes explains why this simply isn’t true.

Your estate consists of everything you own, whatever that happens to be.  So, if you have a vehicle or a bank account, you have an estate.  Estate planning is just the process of formalizing what will happen with your assets after you’re gone.  You have the right to decide who gets your assets and who is in charge of your estate (called a personal representative or executor).  If you don’t formally make these decisions in your will or trust, the State will make the decisions for you.

If you want to exercise your right to decide what happens to everything you have worked so hard for, call our office today.  We will help you ensure that your assets are protected and that your wishes are followed.

Can you write your own will?

Did you know that the vast majority of handwritten wills are not valid in Missouri?  Missouri’s requirements for a valid will are very strict.  If you do not follow the formalities exactly, then your handwritten will is not a will at all.

Your will is important and you want to ensure that your wishes will be followed.  Our office can help you craft a will that reflects your goals and objectives and that will be recognized under Missouri law.

In life, some things have to be precise- your will is one of them.  Contact us today to learn how we can help.

Does A Will Avoid Probate?

No! Wills are your instructions to the probate court about what to do with your property. Property passing through a will goes through the probate process. The probate process is, essentially, a formal method to make sure that your bills are paid and that your beneficiaries receive the property that you are leaving to them.

So, what are the benefits of a will if it doesn’t avoid probate?

1 – A will allows you to control who receives your property after you die. Do you want to give all of your money to your spouse, your children, or only some of your children? Do you want to make sure that a disabled child, your parents or other dependent is taken care of? Is providing for your place of worship, school or charity important to you? A will can ensure that your wishes are followed. A will can also provide for contingent beneficiaries if a beneficiary unexpectedly predeceases you.

2 – Wills save your family money, as they can authorize many shortcuts that streamline the probate process. Wills can allow your executor to proceed without probate court hearings, waive the surety bond requirement, and allow the court to authorize independent administration. Without a will, your family may have to endure the long form of probate – supervised administration.

3 – A valid will is the only legal way to nominate a guardian for your minor child or children. If you have minor children, you know how important they are. Without a will, your opinion will not legally count. Neither the court nor your family members will have the benefit of your insight when determining who will care for your children and who will manage their money. You can also use your will to create a trust for your children’s education and support.

4 – Wills are the lowest cost planning option. They can be simple and yet very effective. Wills cost less than trusts or other sophisticated legal documents. A simple will, drafted by a licensed attorney, is the baseline protection that everyone with a child, home or bank account needs.

5 – Wills never expire during your lifetime, they are good for life. The will you create today has no expiration date. A valid and proper will can provide for the transfer of current assets as well as any property you may accumulate in the future. This is not to say that you should never review your will. Any time you have a major life change, you should make sure your will still reflects your wishes.

6 – Your will is a roadmap for the probate judge and your executor to follow. You direct how your property is handled and distributed. Without a will, your property will be distributed according to the intestate laws – these are the laws that provide the general default plan for people who die without a will. These default rules do not authorize any of the allowable shortcuts and may or may not fit your wishes regarding who receives your property.

7 – Your will shows your family that you care. A valid will makes everything easier, simpler and more streamlined. It eliminates hassle and gives your family the tool that they need in a crisis. The last thing a family wants to deal with during a time of mourning is a complicated and messy legal situation, especially one that could be avoided.

If you would like to learn more about what a will can do for you and how it is an integral part of an estate plan, contact us.

Medicare vs. Medicaid: What’s the difference?

The difference between Medicare and Medicaid is important, because Medicare doesn’t pay for nursing home care, except in limited short-term rehab situations.  Medicaid is the only government program that will pay for long-term skilled residential care or nursing home care.  Both programs offer medical care or health care reimbursement, but they serve different groups of people, and the implications for nursing home care, financial planning and elder law issues differ dramatically.

Medicare is similar to standard health insurance for people over 65 years old. If you are over 65, there is no asset or income test in order to qualify for Medicare.  People who become disabled for Social Security purposes, will qualify for Medicare 2 years after the date of their disability, regardless of age.  There are different plans and levels of coverage offered under Medicare with monthly premiums that vary accordingly.  However, after Medicare provides its benefit, that is the end of the Medicare transaction.  Medicare will not seek repayment for medical services that it covered for the Medicare participant.

Medicaid, now known in Missouri as MO HealthNet, is need-based, and there is an asset/income test to be eligible to receive benefits from the program.  Medicaid is run by the Department of Social Services.  This program also has an estate recovery mandate, which means that the State will seek to recover or collect the entire cost of benefits it has paid for a participant.  This program is like a cab – you get in and the meter starts ticking.  Once you qualify and Medicaid, or MO HealthNet, starts paying for your health care or nursing home fees, Medicaid will be keeping a running tab or bill for you.  Medicaid keeps a record of everything they have paid out on your behalf, calculating the total sum of the medical bills/benefits paid by the State for your care.

After a Medicaid participant dies, the bill comes due – the State files a claim against the participant’s estate for reimbursement for everything it has paid out for the recipient during their lifetime.  These are known as Medicaid’s estate recovery provisions; this recovery program is mandated by the federal Medicaid laws.  There are many rules, strict procedures and exceptions regarding how and when the State can recover.  Our lawyers know the rules, and we can help plan to avoid or fight the estate recovery.  There are steps that can be taken to maximize what the family gets and minimize the State’s recovery.  If you would like to learn more about planning for long term care,  contact us today.

Will Your Estate be Subject to the “Death Tax”?

This year, the gift and estate tax exemptions are $5.12 million, which means you can transfer up to $5.12 million as gifts or after you pass away, tax free.  At these current levels, relatively few people need to be concerned about the estate tax, also known as the “death tax.”

However, unless Congress takes action before the end of the year, the exemption will revert back to the lowest amount in a decade: $1 million.  Additionally, anything over $1 million will be subject to a 55% top tax rate.  Your home, bank accounts, retirement accounts, life insurance and all of your other assets are all included in your gross estate for estate tax purposes, regardless of whether the assets are held in trust, go through probate, or are jointly owned.  That means many more people may be affected by the estate tax in 2013.

If you would like to discuss the estate tax and how you can minimize the taxes on your estate, please contact us.  We can help you protect your assets.

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