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What happens if I pass without a Will?

in Articles, Attorney Advisor Series, Estate Planning by morgan morgan Leave a comment

Wills are great tools to ensure that your wishes are carried out after your passing. Wills can direct assets that are titled in your individual name to whomever you wish them to go to. They ensure that your concerns are carried through. But what happens if you don’t take the time now to create a will? What will happen if you don’t create this vital document before your death?

The answer is surprisingly simple, the state will decide where your assets will pass. The state has already created a ‘will’ of sorts for you which is called intestate succession. Under intestate succession, you do not direct where any of your assets will flow but will pass to heirs at law as determined by state statute. 

In North Carolina, if you are a single individual, your assets will flow “down the line” of your family tree. This will mean that your children will receive an equal amount of your assets immediately after your passing. If you do not have any children, then your assets will go to your parents if they are still living. If your parents have passed it will go to your brothers and sisters. The search will continue in this manner until an heir or heirs are found. This is likely why you have heard the story of someone’s great aunt twice removed passing and leaving a fortune to an unknown relative. 

The heirs under intestate succession will receive their property immediately after the probate process. This means that if any of these heirs are irresponsible, they will immediately receive their share of your hard earned funds. Additionally, they have full legal authority to spend those funds in any way that they see fit. 

Another consideration is the financial status of your heirs. If any of your heirs are disabled or receiving government benefits, the direct injection of money from your estate could jeopardize their ability to continue to receive these funds.  A proper plan can ensure that they are protected.

To ensure that your assets are directed, steps need to be taken to guarantee that your wishes are executed. Additionally, a properly executed estate plan is essential to ensure that your assets are protected at your death. At McIntyre Elder Law we take a holistic approach to ensure that your estate fits your unique needs. We would be happy to talk to you about any needs that you might have. 

Contact us today at 888-999-6600 to schedule your free consultation.

Eric Baker J.D
Elder Law Attorney

What is a Gift?

in Articles, Estate Planning, Long Term Care Medicaid, Long Term Care Planning by Greg McIntyre Leave a comment

Surely, we all have a conception of the definition of a “gift.” However, a gift, in legal sense, is something very specific. Consequently, when attempting to determine whether a transfer constitutes a gift, it’s important to look at the facts and circumstances of the purported transfer of right, title, interest, or possession of an asset. 

But why does this matter? Gifts have different effects depending on the context. Gifts may exclude something from the probate estate the heirs are squabbling over. Gifts can trigger a tax. Gifts can also render someone ineligible for benefits, like VA or Medicaid, to pay for long-term care. Transfers of real property can also be affected if it is considered a gift and not a purchase for value. Lastly, a power of attorney may not allow a transfer of an asset if that transfer would be considered a gift. 

Generally speaking, a gift is a voluntary transfer of ones asset to another without expectation of any sort of consideration or payment in return.  However, the question still remains: what does someone need to show to prove that the were given an asset in dispute?

Gift During Life vs Testamentary Gift

If there is a dispute over whether a gift was given e.g., whether an asset should be subject to division under someone’s will or whether it had already been transferred during the Decedent’s life, a person who allegedly received the gift (the “donee”) must show three things. 1. Donative intent; 2. Delivery; and 3. Acceptance. Essentially, the Donee must show that the Donor intended to give the gift, that the gift or access to the gift (also known as constructive delivery) was given, and that the Donee actually accepted the gift. 

For example, let’s say that a father want to give his son his watch. The son receives a letter from his father on his birthday saying the following: “Son it’s time I pass along this heirloom. My father wore it during the war. I have treasured it since the day he left it to me. And it’s time you carry on the tradition and sport this piece of family history.”The father includes in the envelope keys to the lock box where he keeps the watch. Lastly, the son goes into the lock box and retrieves the watch. 

Shortly after receiving the letter, the son learns of his father’s death. To make matters worse, his step mother claims that the son took the watch and it should be included in his father’s probate estate and should be sold. The son must prove to the court that the watch was a gift. The letter will show the father’s intent to give the during his life—during life is important; otherwise, it would be subject to his father’s probate estate. The keys to the lock box would show constructive delivery of the watch to the son. And, finally, the son’s retrieval of the watch will show acceptance of the gift. 

Those gifts that are transferred by virtue of someone’s death, whether by will, trust, or beneficiary designation are called “testamentary gifts.” Testamentary gifts are thus not something given during the life of the Donor. 

Gift for Medicaid Purposes vs Tax Purposes

What about the dreaded “look back period?” As you may have heard, if you are attempting to qualify for Medicaid (or VA) benefits to pay for long-term-care, they “look back” 3 years for assisted living and 5 years for skilled nursing care to determine if the applicant made a gift. If the applicant did make a gift, then that gift value may be used against them a s a penalty i.e., they must pay the gift value to the facility before Medicaid kicks in. 

But that begs the question: what is a gift for Medicaid? The answer is any transfer that is uncompensated for the full value of the asset transferred. In english, this means that if you transfer something for less than its fair market value, the difference in the amounts is the gift. So, for those folks thinking about selling their home to their children for a dollar, you might want to go another route. 

At this point, many of you may be thinking that you thought that there was an amount around $16,000.00 you could give per year without it being considered a gift. It is important to know that this is only for Federal gift tax. You may give up to $16,000.00 (as of 2022) per person, per year without being required to report it on a gift tax return. 

No good deed goes unpunished. That maxim does not fail with respect to the legal treatment of gifts. Thus, you should be careful when being kind or gratuitous. After all, you wouldn’t want a gift meant for a loved one to end up being a gift to the government. 

 

 

 

 

 

 

Brenton S. Begley

Estate Planning & Elder Law Attorney

Tax Avoidance Series: How to Avoid Estate/Gift Tax with Trusts and Annuities

in Articles, Attorney Advisor Series, Estate Planning, Tax Planning by Greg McIntyre Leave a comment

 

The estate/gift tax is a tax based on the value of the assets an individual owns at the time of death or gave away during their lifetime. Luckily, there is a value threshold and everyone whose assets/gifts are below that threshold, avoids the death tax. This allows for practitioners to implement plans for those who are above the threshold, to bring them under that magic number and avoid unnecessary tax.

One way an individual can avoid the estate/gift tax, is to freeze the value of their estate. Obviously, purely gifting assets can also have adverse tax consequences and can result in a loss of control over the gifted asset. The ideal method would combine retention of assets with tax avoidance.

A threat to crossing the estate/gift tax threshold is appreciating assets. If assets keep increasing in value, they can easily subject someone’s estate to tax at death. What you want to do is freeze the value of your estate (so that it does not appreciate such that your estate will be subject to the high federal tax rates at death) and pass along any appreciation to your beneficiaries.

The method to accomplish this goal and maintain a stream of income, is to utilize a Grantor Retained Annuity Trust (GRAT).

Basics of a GRAT 

In a GRAT, you are placing assets in a trust with two distinct effects. 1. You receive a stream of payments back from the trust; and 2. You are earmarking a certain amount to pass to your beneficiaries free of gift/estate tax.

Here is how it works: The trust maker or Grantor creates an irrevocable trust and funds it with assets. The Grantor retains a right to receive an annuity from the trust (Retained Interest). This annuity must be paid to the grantor at a set rate for a set amount of time. If there is no income generated by the trust assets, the annuity payments will be paid from principle.

The annuity from the trust represents a percentage of the trust, not the full amount. Any amount not paid back to the Grantor over the set amount of time of the annuity, will be paid to the beneficiaries with no further gift tax consequences (remainder interest).

There is an assumption that any assets put into the trust will appreciate at a set rate as set forth by IRC 7520 as of the date of transfer (as of July 2022, that rate is 3.6 percent). If the assets do not appreciate at at least the 7520 rate, they are returned to the Grantor with no adverse tax consequences. If the assets appreciate beyond the 7520 rate, the excess appreciation is passed to the beneficiaries free of gift tax.

Is a GRAT right for Me?

If you have assets that are appreciating at a significant rate, it may be beneficial to consider a GRAT. GRATs are especially useful for stock owned in companies that are going public. However, they can be used for any assets that are increasing in value.

When Should I Implement a GRAT?

Interest rates are still low. That means that the IRC 7520 rate is still low. Remember, any appreciation above that 7520 rate is passed without gift tax. Thus, it is better to implement a GRAT while the rates are low.

Additionally, if you hold assets with a depressed value, a GRAT is a great strategy. When the stock market is underperforming and driving down the relative price of individual stocks, you want to plan for the rebound. A GRAT is a perfect way to manage the appreciation of rebounded equities.

What are the income Tax Consequences of a GRAT?

All the income, gain, and loss will be passed along to the Grantor. The purpose of the trust is to avoid gift/estate tax. The payment of tax by the Grantor will not be considered a further gift to the trust and is, thus, a further benefit to any of the beneficiaries.

Will My Beneficiaries Have Capital Gains on Any Assets They Receive at The End of The Trust Term?

The beneficiaries do not receive a step-up in basis in any of the assets they receive. However, a properly structures GRAT will have “Swap Powers” where the Grantor can swap out low basis assets for higher basis assets.

Conclusion

GRATs are a great way to avoid excess taxation. Now is a great time for a GRAT given that interest rates are low and assets values have been depressed, given the recent performance of the stock market.

 

 

 

 

 

 

Brenton Begley

Estate Planning & Elder Law Attorney

Out with the Old… In With the New…

in Articles by Greg McIntyre Leave a comment

I keep all kind of stuff. I have the most awesome baseball glove sitting on a shelf in my basement. I can see it in my minds eye right now. The Rawlings logo, a red sewn on patch with Rawlings scrawled in cursive in white attached to this divine piece of leather. I have played so many baseball games with that glove, caught so many balls. I have every award I have ever received somewhere in boxes at the house. Every once in a while I will stumble upon one and find myself lost in memories and going through the entire box. Estate planning documents like Wills are a different story, however. Not only are they not necessarily a document with nostalgic sentimental value, but there is danger in holding on to old estate planning documents if you have drafted new Wills.

Let’s say one of my children find three different wills I drafted during my life stashed away in a safe place after I die. Which one would he reveal to the family? Which one would he reveal to the courts? My hope is the latest Will I drafted. You know, the one that states: “This is my Last Will & Testament and I hereby revoke any prior Wills or Codicils drafted previously by me.” However, he might be so inclined to pick the Will that favors him the most. That may not have been my latest version. Therein lies on of the dangers. My latest set of wishes may not be followed and none would be the wiser. It is a good idea to dispose of old estate planning documents once you replace those documents with new ones. You not only ensure your latest wishes will be followed but you also ensure you have the most updated version under current law. Laws change and it is a good idea to update your estate planning documents from time-to-time. It is a good idea to have them reviewed. So, keep the sentimental items from your past, not old estate planning documents when you have replaced them with newer versions.

Greg McIntyre

Estate Planning & Elder Law Attorney


Avoid Estate Tax without Sacrificing the Step-up in Basis

in Articles by Greg McIntyre Leave a comment

The Estate Tax, also known as the “death tax,” is going to be a reality for many more individuals once the estate tax threshold lowers automatically in 2025.

One strategy for avoiding the estate tax is to take advantage of the high exemption now. Currently, the exemption for an individual is $12.06 million. This exemption will sunset back to the previous $5 million amount in 2025 (with a likely adjustment for inflation).

The method to take advantage of the current exemption amount (without dying) is to transfer assets to an irrevocable trust. However, it is crucial to have a  proper plan in place to avoid estate tax without leaving behind a huge tax advantage: the step-up in basis.

Grantor Trust

A Grantor trust is one where the trust maker (the “grantor”) retains power over the trust. Since the grantor still has power over the trust, the assets transferred to the trust are still considered to be owned by the Grantor. Because the assets are still technically owned by the Grantor, the assets will be included in the Grantor’s gross estate for estate tax purposes.

For example, George creates a grantor trust and puts all of his assets, worth $12 million, into the trust. George, in 2030, dies and his beneficiaries are trying to determine whether his estate will be subject to the federal estate tax. Because the trust is considered a “grantor” trust, the assets will all be included in George’s gross estate, which is what is examined to determine whether the estate is taxable. Because George’s gross estate is $7 million above the estate tax exemption ($5 million), that $7 million will be subject to the maximum federal estate tax rate of 40%.

There is an important caveat to this scenario however. While the Grantor trust failed to exempt the assets from the estate tax, it did preserve the step up in basis for the assets.

Step up in Basis

Basis in an asset is the basis by which a capital gain is determined. Basis is typically determined based on how much you paid for an asset (“cost basis”). Alternatively, if you were given an asset, you get the basis that the donor had (“carry over basis”).

Let’s say George buys a home for $100k in 2022. In 2030, George decides to sell the home, which has appreciated to $300k. George’s basis in the property is what he paid, $100k. To calculate capital gain, he looks at the difference between what he paid and what it’s selling for. Here, the gain is $200k. Even at the lowest applicable capital gain rate (above 0%), that’s a $30k tax bill.

A step-up in basis serves to eliminate or reduce capital gain and is available if an asset is received by virtue of someone’s death (inheritance). Let’s say that George bought the same property in 2022. In 2030, he dies and leaves his property to Bill. Bill’s basis in the property is stepped up because he received the property as an inheritance. Bill’s basis is now equal to the fair market value at the date of George’s death. If Bill turns around and sells it the next day for $300k, he will have virtually no capital gain. Alternatively, if Bill hangs on to the property and lets it appreciate in value, he will have less capital gain than he would have had he received the property as a gift (with carryover basis).

In a grantor trust, the grantor still owns the trust assets. A transfer of an asset to the trust is not a completed gift to the beneficiary. Therefore, the beneficiary receives the asset only by virtue of the grantor’s death and, in turn, receives a step-up in basis.

Intentionally Defective Grantor Trust (IDGT)

In an IDGT, the trust assets are considered to be owned by the trust and not the Grantor. A transfer of assets to the trust constitutes a complete gift to the beneficiaries. This means that the assets will not be included in the grantor’s gross estate. However, this sacrifices the step up in basis because the beneficiaries are not receiving the assets by virtue of the grantor’s death (since the gift to them is completed during the grantor’s life).

 IDGT and Swap Powers

 Let’s pause for a second to talk about strategy. To get the benefit of estate tax avoidance, one does not need to put all assets into the IDGT, just that amount which is above the estate tax exemption. In fact, leaving some assets out will give you some flexibility in planning, as we will see below.

An IDGT gives you estate tax benefits but not the step up in basis. So, some creativity is required to get the best of both worlds. If the IDGT doesn’t give the step-up, then we want to put “high basis” assets into the IDGT. These would be assets that have either not significantly appreciated in value nor have been intentionally depreciated for tax purposes.

But this begs the question, what if the basis changes? Let’s say George put a high basis home in the trust, then a golf course gets built next door and the value of the home skyrockets. If something like this happens, George has the option to “swap” a high basis asset for the home. This allows George to take the home out of the trust and put in a high basis asset of equal/similar value. George would then ensure that the home was in a grantor trust which preserves the step-up.

What if you do not have a high basis asset to swap? You could borrow money and swap the cash out for the asset. Let’s say George doesn’t have a high basis asset to swap. He bought the home at $1m and it has appreciated to $5m. He could borrow the $5m and swap out the cash for the home. When he dies, the home gets a step up in basis and is sold immediately with no capital gain. Then the home proceeds pay off the outstanding $5 million loan.

This is where the utilization of an insurance product can be incredibly helpful. Instead of borrowing from a bank, with applicable interest rates, one could instead borrow the cash from an insurance policy to perform this swap.

In conclusion, the use of an IDGT can save you and your loved ones from unnecessary taxation as long as you have the proper plan in place.

Brenton Begley

Estate Planning & Elder Law Attorney


Is Your Legacy Leaving A Tax Burden?

in Articles by morgan morgan Leave a comment

Many people are under the false assumption that when they pass their loved ones will receive a large tax bill in the mail. This doesn’t have to be the case. To avoid probate many will gift their real property directly to their loved ones.  There are reasons why you may not want to directly give the property ought right to your loved ones. If you gift the property outright, you lose full control over the property; you can no longer make decisions for the property. The person who receives the property can sell, mortgage, or rent the property without your consent.  Another thing to consider is the tax ramifications of gifting property. 

If you gift your property to your loved ones outright, prior to your passing, your loved ones will receive what is called a Gift Basis in the property. The Gift basis will be the same basis that you have on the property. For example, If you bought a house for $100,000 then your basis on the property will be $100,000. This will mean that if you later sold the property for $400,000, you will have to pay tax on the difference of the selling price and your basis. In this example this will mean that there will be $300,000 worth of gain ( $400,000 sales price – $100,000 basis = $300,000 in gain). When you gift your property to a loved one then they receive that same basis in the property. If they later sell the property, they will receive the same basis in the property. 

 

If you leave your property to your loved ones as a result of a death event, they will receive what is called a step-up in basis. If the property is left via a will; a trust; a deed with survivorship rights; or a Lady Bird deed, then the property will receive a step-up in basis tax treatment. When a property receives this treatment, the basis becomes the fair market value of the property at the date of your death. For example, if you bought the property at $200,000 your basis is $200,000. If the property appreciates in value to $500,000 then your basis will remain at 200,000. When you pass and you leave your property to loved ones via one of the methods listed above; their basis becomes whatever the fair market value was at the time of your death, in this example $500,000. So when your loved ones sell the property immediately; then under this example, they would not pay tax ( $500,000 sells price – $500,000 their new step-up in basis = $0 in gain). 

By taking the right steps now you can ensure that your loved ones receive the best tax treatment for the legacy that you leave to them. We would be glad to talk to you about this or any other estate planning needs that you might have. Please feel free to contact us today to schedule your free consultation.

 

 

 

Eric Baker 

Estate Planning & Elder Law Attorney


Avoid the Gift/Estate Tax with the Crummey Trust

in Articles by Greg McIntyre Leave a comment

 

The estate and gift tax work hand-in-hand. There is a set limit on the amount you can either give during your life or at your death before the gift/devise will be taxed (lifetime exclusion). The current limit is $12.6 million (which will go back down to $5 million, before inflation, in 2025). This means that if you give over $12.6 million during your life, you will pay gift tax; if you leave an estate worth more than $12.8 million at your death, your estate will be subject to estate tax; and if you both gift and and leave behind assets over $12.6 million, there could be estate or gift tax.

The way the IRS keeps track of gifts, is that they require that any gifts given over a certain amount per year be reported. Your lifetime exclusion will be reduced by the amount reported. Thus, if you give reportable gifts over the lifetime exclusion amount, you will pay gift tax.

The gift tax is not so much a concern as the estate tax. Most people give the majority of their wealth away as an inheritance rather than a gift during their lives. Consequently, the amount given at death, tends to be much larger than the gifts given along the way.

A goal then, would be to attempt to lower your taxable estate without:

1. Chipping away at your lifetime exclusion; and

2. Giving up control over the money you gift.

A strategy to avoid the estate and gift tax is to give an annual gift per year. Currently, the gift tax exclusion is $16k per person, per year. If someone is looking to lower the size of their taxable estate, they can choose to gift an amount up to the annual gift tax exclusion annually.

For example, let’s say George wants to avoid having his estate taxed. He is over the estate tax exemption of $5 million (he doesn’t think he will die until after 2025) and every dollar over that amount is subject to tax. He can lower his net worth by giving away $16,000.00 to each of his children per year for the rest of his life and he would not be required to report the gift.

The problem with gifting in this manner is that the money/asset has been given away. When it comes to money you’ve worked hard to earn, most want to be able to control the assets and also be able to determine when the assets will be distributed.

If George were to gift directly to his children, they could do whatever they want with the money. If they have poor financial habits, an addiction, or a greedy spouse, that money could vanish very quickly. George may want to set that money aside for their college, wedding, retirement etc.

Placing the annual gift into a Crummey Trust will allow George to both make the gifts, which will lower his taxable estate, and control how the money will be distributed to his children. Additionally, if George is married, the trust would allow him and his spouse to double the exemption to $32k per year ($25.2 million for life).

The reason why a transfer to a Crummey Trust qualifies for the annual gift tax exclusion is because the transfer to the trust is treated as a completed gift. You can imagine that a transfer to a regular revocable trust, where the beneficiary has no rights, would not constitute a complete gift. The difference in the Crummey Trust is that the beneficiaries have the right of withdrawal.

The idea is that the beneficiaries will have a right to withdraw contributions made to them in the trust for a period of at least 30 days after having been given notice of the right. However, the expectation is that the beneficiaries will not exercise this right. This tends to be the case, given the leverage the trust maker has over the beneficiary I.e., “if you exercise the right to withdraw, I will just stop making transfers to the trust.”

As long as everyone is on the same page, the Crummey Trust allows for the gift to be made and stay in trust. The money gifted will then be distributed for the express purpose written in the trust document I.e., payment for education. The trust can also control how much the beneficiaries get when the trust maker dies. For example, let’s say that George set aside $500k for his child Chuck. He could mandate, in the trust terms, that Chuck gets his $500k in yearly increments for the next 10 years after George’s death. Thus, George can still control how and why the money he is gifting will go to his beneficiaries.

In conclusion, a Crummey Trust is a great way to lower your taxable estate and take advantage of the annual gift tax exclusion without giving up control over how your assets will pass to the next generation.

 

 

 

 

 

Brenton S. Begley

Estate Planning & Elder Law Attorney


Planning and Mental Health

in Articles by Greg McIntyre Leave a comment

With the turn of the century, a light now shines on mental health. Still, many people are not accustomed or even comfortable discussing their mental health with their friends or family. There is a lingering perception that difficulties with mental health and struggles with related diagnoses are somehow the fault of the afflicted. Western society suggests avoidance of uncomfortable feelings and so we, as individuals, build walls in response to protect ourselves (or so we think). Consider this short writing an opportunity to let the walls down.

As we age, we often must consider critical life decisions and significant milestones that we never would have contemplated in our earlier years. Do I have my affairs in order? What happens to me in the case of an accident, illness, or injury? What about my spouse or children? What happens if I suddenly passed away? Am I leaving behind a mess for others to clean up?

What about the legal implications of starting a new job or career, getting married or divorced, having children, going to college, or buying a home? While some folks have the good fortune of newfound wealth at a young age, most people ultimately build their wealth over the course of their lifetimes and begin to consider protective measures somewhere in the middle. So, what makes the most sense? And where does mental health fit in?

As I’ve said time and time again, there is no “one size fits all” for estate planning. It is a highly individualized conversation that considers various factors and client goals. The earlier you begin planning, the better. That said, the diagnosis of a mental illness can often be the catalyst for beginning that very same planning. However, this can be a double-edged sword. For instance, what if it is too late? How will you know?

As a general matter, the diagnosis of a mental illness is not dispositive on the issue of capacity. In other words, just because you have been diagnosed, does not necessarily mean you are prohibited from engaging in estate planning. It is not the fact that you have been diagnosed that is the deciding factor, but rather, the degree to which you are affected by the underlying diagnosis.

For example, what if you are one of the hundreds of thousands of people recently diagnosed with Alzheimer’s Disease? Alzheimer’s Disease is one of the most debilitating and disabling afflictions commonly found among the elderly and is often progressive in nature. It is known as a “slow killer.” To that end, Alzheimer’s Disease is often accompanied by dementia related symptoms. Gaps in memory, confusion, difficulty with abstract thinking, etc. So, does that mean, if you have been diagnosed with that kind of disease, that it is too late to do any planning? In short, it depends. It depends on many different factors, the most important of which should be discussed with competent legal counsel.

The conversation does not stop at Alzheimer’s Disease either. Depression, anxiety, and a number of other various disorders fall under the umbrella of mental health. And while their presence serves as the catalyst to begin planning for some, they act as planning deterrents for others. The point is, do not let the involuntary override the voluntary. Take control of your life now, or risk moving past the point of being able to manifest your own will into existence.

That said, early planning leads to goal satisfaction. We often watch professional athletes deliver stunning results and make unbelievable plays on television. The untrained eye might ask, how in the world they could possibly do that!? To the learned, there is a realization that it is merely a product of proper planning and preparation. Practice, practice, practice. By the time gameday hits, they’ve already been through the motions a hundred times and relived it in their head a hundred more.

The same principles can be applied to your life and your plan moving forward. Whether you are facing a recent or current diagnosis, or whether you’re looking toward the future, I encourage you to consider the value of planning. If there is a diagnosis in place, it is all the more important that you consider consulting with an attorney to understand your rights and what options may be available.

Please do not hesitate to contact us directly at 704-749-9244 or visit us at www.mcelderlaw.com to schedule your free consultation today. We welcome the opportunity to serve you.

 

 

 

 

 

 

Therron Causey

Estate Planning & Elder Law attorney


Do You Need Some “Tough Love”?

in Articles by Greg McIntyre Leave a comment

If I could travel back in time, what would I tell myself when I was 20 years old? Would I do the obvious investment tips, or would I tell myself the important things, the most important things?

  1. Be true to yourself.
  2. Never fear.
  3. Have faith in your vision, in your dreams.
  4. Start investing in real estate right away.
  5. Don’t worry about what others say.
  6. Plan… Stick to the plan.
  7. Be disciplined with your life, schedule, and body.

 

I have 6 children so in a way I do get to have these conversations. I give them freedom. I don’t want them to be co-dependent on me. I want them to develop their own interest. I want them to become their own little people. I want them to be confident and pursue areas where they are talented and have passion.

My son, Tucker, just graduated from high school. He is going to college and pursuing a science/biology degree. He also has a passion for acting, directing and comedy. I know that he will be successful in anything in life where he has a passion, but I want him to have a “burn the ships” mentality. I want him to go 100% after his biggest passion. Once he has success in that area, he can use his resources to also pursue other interests. I think the problem with myself when I was younger was that I thought I could do anything and everything and it took me awhile to focus on one thing. That one thing was the law. Within that career field I pursued estate planning and elder law. Once I established myself in that field, I was able to also acquire and manage real estate, pursue my passions for business, writing, video, media, and marketing. All these things are passions of mine. However, I couldn’t have pursued them all at once. To quote my long-time business coach and friend, Bob Demers, “You can only hit one homerun at a time.” Sometimes my focus is better than others. When I am laser focused, I can attack complex tasks with ease. However, I must settle, think, meditate, and plan to achieve that level of focus. I am trying to impart this lesson on a younger version of myself, Tucker, right now. I want him to focus on one thing intently. I want him to not make the mistakes that I made. However, if he is like me, he may have to learn life’s hard lessons for himself. Regardless, I know that he will be amazing because he is already.

Instead of what would I tell my younger self, perhaps the better question is:

What would I tell myself today?

This is an important question, conversation, and reality check to have with ourselves in the mirror from time-to-time. Let’s review the earlier advice I would give my younger self and see if that applies to me, right now:

Be true to yourself. Absolutely!!! Be true. Know yourself. Know that your aims are true. Know that you are enough for any situation. Know that in the end, everything will be okay, no matter what.

Never fear. Never fear others. Never fear what they think. Never fear criticism. Never fear failure. In fact, do bigger things now. Things you fear. Fail!!! Fail faster!!! It is the quickest way to learn. It is the quickest way to find the right answers.

Have faith in your vision, in your dreams. Your ideas, your vision, your dreams are the only thing that is truly yours. You don’t have to patent them because they live inside of you. In fact, you should share them with the world. Be like Jesus in this way. Don’t argue with others over your vision. Just present it. Bring it to life. The more attention, positive or negative, you get, the more energy will surround your creations.

Start investing in real estate right away. I never wanted to be one to sit around and lament the property I “could have” bought for $5,000 back in 1942. If I run the numbers in my head, my gut tells me a deal is right, I do it. There are even an infinite number of ways I can fix a mistake. I DO NOT believe in bad deals. The failure comes in not acting, analysis paralysis, or just not having the guts to believe in yourself (revert to #2, Never Fear). The worst thing that could happen is I learn, and that is actually a great thing, so there is zero downside to action. I wish I had woken up, conquered my fears, and been more disciplined younger and I may own 100 times the real estate I own today. However, I don’t like this type of thinking. Looking backwards hurts my neck and I want to keep looking forward. I also know that without going through life exactly as I have done so thus far down to the minutest detail, I would not be the person I am today, and I am cool with myself. I am grateful for my successes and for my failures.

Don’t worry about what others say. This is a HUGE one. I spent so much of my earlier years really caring, dwelling on, and giving myself a hard time about what others said or thought. I felt it as if it were a physical force. I stressed over it. I worried about the comments and thoughts of friends, spouse, parents, coworkers, other lawyers, judges. I played them back repeatedly in my head and gamed out strategies to control what others thought and their perceptions of me. The BIGGEST freedom my soul has ever known is not caring at all what others think (revert to #1, Be true to yourself… NO ONE ELSE!!!).

Plan… Stick to the plan. Plans should be flexible, but I take that as a given. The point is to have a target, a goal, a bearing so you know where you are headed. You can strategize the steps to getting to that goal over time and you can limit your time in which to achieve those goals, but life happens. When life happens that doesn’t mean you scrap the plan, that means the plan is a source of stability, a framework or skeleton by which you can play jazz around it while life happens and while progressing toward your goal. Setting goals and planning is something I spend a large amount doing in many areas of my business and personal life.

Be disciplined with your life, schedule, and body. I find that the older I get the more my vices negatively affect me. Part of my life has become self-evaluation and identifying what habits and behaviors positively and negatively impact my life. I work well on a schedule and making lists. I know this so I schedule most everything. I function best when I routinely workout. I function best when I sleep adequately. The biggest areas I am working on right now is nutrition and sleep. The more tuned up I can stay the better I preform personally and professionally. The more impact I can have on my family, my clients, and my team at the office.

I would encourage you to also evaluate your life. What would you tell your younger self? What would you tell yourself today? I am a planner. It is not only what I do for myself in my personal life, but it is what I do professionally for others as an estate planning and elder law attorney. One of the ways we can have a big impact on our own lives and the lives of our families is by getting our affairs in order both during our lives, planning for big life events like long-term care, and leaving a legacy for our children and grandchildren. Imagine if everyone did this. Imagine if all our ancestors would have done this. The only person I can control is myself. I would encourage you to have that “mirror” conversation with yourself and evaluate if you truly have a plan in place?

If you would like to sit down and have a conversation with me about planning I would be glad to make it easy. In under an hour, we can usually flush out goals and develop a great plan to protect your hard-earned money and property. Click the link below to schedule your FREE consult today.

 

 

 

 

 

 

Greg McIntyre

Estate Planning & Elder Law Attorney


What Assets have to flow through Probate?

in Articles by Greg McIntyre Leave a comment

 

The goal of many is to ensure that their assets do not have to flow through probate. This ensures that assets are not tied up in the legal process and saves many headaches for your loved ones. There are many tools that we can employ to ensure that assets do not flow through probate. However, certain assets have unique ways that they will pass to your loved ones and great care needs to be taken to ensure that that these do not unnecessarily pass through probate. In the article below I will address 3 different categories of assets and the implications of each.

The first category will be assets that are retitled into the name of a trust. Assets that are retitled into the name of a trust are not considered part of your probatable estate. This is true if the trust is an irrevocable trust or a revocable trust.

Trusts can be a great way to have your assets avoid the probate process. You must ensure though that these assets are titled in the name of the Trust itself and not in your individual name. For real property this can be accomplished by recording a quit claim deed that transfers title of the property in the name of the trust. For financial accounts this can be accomplished by signing the appropriate forms with that institution which transfers title in the name of the trust. When it comes to trusts, no matter the asset, you must transfer title to the name of the trust or the asset will most likely have to pass through probate.

Assets in your individual name that has no beneficiary designation (sometimes referred to as payable on death) will certainly have to go through probate upon your passing. This includes any bank accounts, your house, and investment accounts that do not have beneficiaries.

One asset in your individual name that many people forget about is your vehicle. The default position of the DMV is to have a vehicle in your individual name solely. Even if there are two people on the title this still does not mean that the vehicle does not have to go through probate. If the title does not “JTWROS” (Joint Title with Right of Survivorship) stamped on it then each named person only owns a percentage interest in the vehicle. This means that the owners partial interest in the vehicle will have to pass through probate. This potential headache can be removed however if the joint owners have the DMV issue a new title showing that the ownership is joint title with right of survivorship.

Assets that that have a beneficiary designation or are payable on death will not have to pass through probate. Examples of these assets are Life insurance and investment accounts.  Care needs to be taken to ensure that the beneficiaries on these accounts are in place. There are many examples of individuals believing that they have designated a beneficiary only for the family to discover later that paperwork was not filled out correctly or was never filed. In these unfortunate incidents these assets are treated assets in the individual name of the decedent and must pass through probate. We always recommend that you check with your bank and financial institution to ensure that your accounts have the named beneficiaries that you want to receive your legacy.

There are other assets that will pass automatically to beneficiaries as well. These are real property that is owned via a life estate, joint title with a right of survivorship, a ladybird deed, or a home owned by married couple as tenants by the entirety. All of these forms of ownership ensure that the interest is passed to their loved ones automatically and will avoid the probate process.

Great care needs to be taken when ensuring that your assets are protected and will avoid probate. One wrong designation can have disastrous consequences to your estate plan and your loved ones. Always make sure that you talk to a licensed attorney when planning your estate to avoid potential pitfalls. We would to talk to you about this and any other needs that you might have. Please feel free to contact us today to schedule a free consultation.

 

 

 

 

 

 

 

Eric Baker

Estate Planning & Elder Law Attorney


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