The Rabalais Law Firm's La. Estates Blog

Do You Have an Outdated Will?

I met this woman who came in and they had their wills prepared for them 27 years ago and they needed to know if they needed to do anything just to update things so their legal affairs would be in order. They really had two main concerns. The first concern was they were really worried that they would lose everything if he or she went into the nursing home. The other concern was they wanted to make sure it was easy for their 3 children, their daughter who they wanted to appoint to be in charge after they pass away lived in Texas.

We started having a discussion about different kinds of trusts that they could create. We talked about trusts that avoid probate; we talked about trusts that avoid losing everything to the nursing home. They wound up getting things secured so that if they went into a nursing home, everything would be protected and also setting things up in a way where the survivor doesn’t have to do anything. The survivor will remain in control and after the survivor passes away, they will have named their daughter to be in charge and she can disperse what assets they have equally to the 3 children. She will be able to do that quickly outside of all of that any government interference that really gets in the way of many family relationships. Typical example of a nice couple, we love to help families get through this process.

If this is a concern of yours, give us a call on our toll free number 866-491-3884. We would be happy to walk you through that. I’m Paul Rabalais, have a great day!

Get Paul Rabalais' Brand New Book for FREE at the Life Begins @ 50 Expo!

Hi, I'm Paul Rabalais and I'm an estate planning attorney with Rabalais Law and I want to invite you to the Life Begins @ 50 Expo on Saturday, April 20th at the Baton Rouge River Center. We are a big sponsor every year and I'll be giving a seminar in Seminar Room 1 at 9:45am. Everyone who attends my seminar is going to get a free copy of my brand new book, Estate Planning in Louisiana and we have the new 3rd Edition. We will be handing them out to each and everyone who attends that seminar, but you will have to get the seminar early because every year they close the doors and people can't get in who want to attend that seminar. The Expo is free, but you have to get a ticket to get in the River Center door and we have tickets at our office on 9191 Siegen Lane. So come pick up your ticket and we will see you on the 20th at the Life Begins @ 50 Expo the Baton Rouge River Center. If you have questions about the event give us a call at 225-329-2450. Have a great day!

Own Your Real Estate In An LLC. Transfer Your LLC To A Trust for Simple Transfers During Life And At Death

Both this morning and yesterday afternoon I dealt with a couple of families and both of those families owned several different tracks of real estate but what made it easier for them to manage this during their life time and to leave it to their children was they owned those real estate pieces inside of an LLC. One of the things each family wanted to do was to transfer that real estate to a trust and ordinarily there are a lot of real estate transfers and a lot of real estate recordings and a lot of documentation that needs to be done to transfer real estate to a trust.

Since that real estate was already owned by their LLC we could just do one transfer of that LLC interest and that made it very simple to arrange their affairs to leave things to their children. We are doing some transfers of their LLC interest into the trust, nothing recorded in the real estate records, it’s simple it’s easy.

There are a lot of different uses for an LLC if you own real estate, sure there is liability protection, but there is a lot of simplicity in leaving that real estate from one generation to the next. If you own real estate and you want to make that simple for your family, give us a call 866-491-3884. Have a great day!

Free Living Trust Events

 

Hey I’m Paul Rabalais, with Rabalais Law and I’m standing here at one of our venues where we put on our estate planning educational events. I am actually here in Harvey Louisiana, right outside of New Orleans and we will have a room full of people in here in just about an hour.

I would like to invite you to attend one of our many educational events that we have all over the state. From Lake Charles, Lafayette, Shreveport, Monroe, Baton Rouge, New Orleans, Covington, Slidell, Houma, Thibodaux. What you will need to do to attend one of these educational events, and you are going to want to because we just jam pack a lot of information into those events in about an hour and it is only for people who live in Louisiana. We just lay out all of the different types of ways and things that you can do to make this whole process easy for you and family. Check out our events page at www.rabalaislaw.com.

Or if you want to find out more you can call our toll free number from anywhere in the country to attend one of our events that we have in Louisiana. The number is 866-491-3884. Have a great day!

Can Your Executor of Your Revocable Living Trust Live Out Of State?

Hey I’m Paul Rabalais and I’m standing here, I’m actually in the Westbank in the great city of Harvey where in about an hour we are going to have a full house of people at our estate planning event.

  I want to tell you about a meeting that I had yesterday with a great guy. He is single with 3 children and his main concern was that the child (his daughter) the one he wanted to handle things after he passed away lives in California. He had a few pieces of real estate and he wanted to make it as easy as possible for her to be able to handle the real estate when he passed away. It became pretty obvious that he wanted the benefits of a Revocable Living Trust so that when he passed away, his daughter could immediately take over that real estate, handle leases, sales, divide the property equally among the children, avoid the delays and costs that are involved or getting that probate or succession here in Louisiana.

A lot of people now are establishing trusts when they have children out of state and they want to make it easy for those children or they have assets that they want a certain child perhaps to have immediate access to right after someone passes away. So beware of that, that is just one of those options that you have to really simplify your estate settlement.

  I’m Paul Rabablais and if you have any questions regarding that or you would like to come to one of our events, just go to our events page at www.rabalaislaw.com . Have a great day!

NEW Estate Tax Laws Don't Solve ALL Your Estate Issues

Well they did it again. A last minute deal in Washington called the American Taxpayer Relief Act of 2012 kept us from falling over the Fiscal Cliff. While some predicted that Congress would with allow the estate tax exemption to fall to $1 million, and others predicted the estate tax exemption would settle in at around $3.5 million, the end result was even more generous to families.

The key components to the NEW estate tax are:

1. The estate tax exemption for 2013 is $5 million (increased slightly annually for inflation);
2. Portability remains intact.

Portability is important. It's only been around for a couple of years. In the past, married couples were required to engage in complex legal strategies to make sure that each spouse fully utilized each spouse's estate tax exemption. Now, though, with portability in place, so long as the proper elections are made within nine months after the death of the first spouse (call us to make that happen after your spouse dies), married couples will be permitted to give or bequeath more than $10 million in assets to their children or other loved ones.

But there's so much more to protecting your estate than avoiding estate tax. Let's take a look at some of the issues you will want to address as you try to protect your estate for yourself and your family:

1. Make Your Estate Settlement Simple. There are a number of things you can do to simplify your estate settlement, from having customized Wills and Trusts, along with correctly titling your real estate, and accounts, and beneficiary designations. Getting this right can save your family months or years of frustration and a heap of estate settlement costs. Many Louisiana families today are taking advantage of Succession avoidance trusts to allow trusted and designated family members to completely control the estate settlement process quickly and without outside cost and delay.
2. Other taxes. While the estate tax is more generous to families, income tax and capital gains tax rates are on the rise. Most estates and heirs wind up paying income tax and capital gains tax, and it's important on the front end to do what you can to keep your family burdened with unnecessary income tax, capital gains tax, property tax or other tax.
3. Long Term Care Costs. Louisiana residents that have worked a lifetime to save up a nest egg of a few hundred thousand dollars will see it all go poof if they have a long term care stay in a nursing home. I spoke with a woman last week whose parents spent three quarters of a million dollars on their long term care, and were in the process of cashing in all of their life insurance policies and spending that, prior to qualifying for Medicaid assistance. The key here is to plan early - ideally at least five years before you enter the nursing home.
4. Protecting Your Children's Inheritance. You can protect your children's inheritance from their divorces, and you can protect your children's and grandchildren's inheritances from their future bad decisions. Your descendants won't value their inheritance as much as you valued it while you earned it, so you can put measures in place to make sure it's used for the right reasons.
5. Keeing Your Plan Current. Your family circumstances change. Laws and estate planning trends change. While they say that our new estate tax laws are permanent, note they are permanent only until they change them again. Review your legal plans at least every five years and update them as necessary.

 

You Don't Have to be Rich to Have an Estate Worth Protecting

Years ago, the term "estate planning" was a term that described how the wealthy left their many belongings to their heirs. It seemed inappropriate to say that you had an "estate," when you were struggling to make sure you have enough money to make it through your golden years comfortably.

But now virtually everybody has an estate - and you better do some pretty serious and informed legal planning or you'll lose it. You may not know how you will lose it, but there's a pretty good chance you'll lose your estate (or at least a good chunk of it) to the following:

• Taxes. You pay income tax your entire life. Then, when you die, you face an estate tax that will take up to 55% of what you own. Planning techniques can avoid or minimize what your family must give to the government and the earlier you start planning to avoid estate tax, the more likely it is that you'll keep more in your family.
• Nursing Home Poverty. Every day, families are wiped out from long term care costs. The finest legal plan does no good if you are forced by the government to spend it all first on your long term care needs. Fortunately, if you are smart enough to plan ahead (at least five years ahead), you can protect your life savings and the value of your home from these medical expenses.
• Probate. Probate costs are rising. Probate costs commonly include court costs, attorney fees, executor fees, appraisal fees, accounting costs, bonding fees, and recording charges, sucking a big chunk of your estate away from your family. Fortunately, you can arrange your affairs to minimize (or eliminate) probate, leaving more for your loved ones.
• Divorce. The divorce rate these days ain't what it was when you were growing up - it's much worse. Unless you set things up right, there's a good chance that you'll leave your child an inheritance, and then they'll lose it when they later get a divorce. Fortunately, there are legal strategies that are available so that you can protect your children's inheritance from their past, present and future divorces.

It's tough enough to keep what you have. It's even harder to ensure that what you have goes intact to your loved ones die. There will be many vultures tugging away at it after you pass on, so do what you can to protect it for them in the future. I'm predicting that in the future, the taxes will be greater, and it will be harder for the next generation to accumulate some savings, so the more you can do to help them - the better. Have a great 2013!

 

The Difference Between Probate and Non-Probate Assets

I was working with a family earlier this week and they came in because a family member had passed away. The family came in to talk about getting the probate done, or in Louisiana we called it a succession, they called it a probate. A probate is all of that court supervised process of getting things transferred when somebody dies.

We went through all of their assets and we realized that a probate was not even necessary because you may own what is called "probate assets" or you may own some "non-probate assets." Common non-probate assets are assets that when you pass away they don't have to go through the courts to get things transferred. Things like IRA's that have a designated beneficiary, annuities that have a designated beneficiary, life insurance and there are non-titled personal effects that typically don't go through the court process.

They had some assets in a trust, and again if the trust is worded right the courts don't need to oversee the distribution of those assets because they are not frozen. So all of these assets that this family had didn't need to go through the courts because everything they had was a non-probate asset. Now, if you do own a probate asset in your name when you pass away there is a court process including real estate that is in your name, investments that are in your name, those are the kinds of things that will often have to go through the court process to get things transferred.

In conclusion, realize that there are probate assets, non-probate assets, some will have to go through the court process, and some will not have to go through the court process. I'm Paul Rabalalis and if you have some questions, maybe a family member passed away and you don't know what to do about getting assets transferred, we work in all 64 Louisiana parishes. You can call us at our toll free number at 866-491-3884.

Naming One or Two Executors or Trustees

I'm often asked whether you should designate one person to be in charge when you pass away to divide up your estate among your hires, or whether you designate two or more people to have that job. If you have a will, the person that you will be designating is called the executor. If you have a trust, the person or persons you will be designating is called the trustee or trustees.

I always tell people it is up to you, it's a personal decision that involves your children and your family dynamics. Some people have different skill sets, but if you designate one person it's often easier to get things done because you only need one person's signature and one person can typically make decisions quickly.

If you have two or more people, it's a little more paperwork but maybe you are more comfortable designating your children to work together because you don't want to offend one of them or you don't want to appear partial to one or more of your children. It is really a judgment call on your behave. Some people ask, Should I designate a child that is here in town or should I designate that child that is out of town?

I always say it's more important to have the right person than designate the person just because they are here. Maybe the best solution is to designate one person, but that one person is organized, gets things done, and has excellent relationships with everyone involved and a good communicator. Just as long as those relationships are handled appropriately than things go smooth and go well.

In closing, those are some of the factors that go into designating one or more people when you pass away. I'm Paul Rabalais, have a good day!

How to Keep Half Your Estate from Going to the Government When You Die

The election is over. We all now know that President Obama will be in office for another four years. What does this mean for the federal estate tax? What does this mean for families that want to keep what they have and pass it along to their heirs? We're not sure. But the following are a few observations about the estate tax and what you should be doing to protect your estate for yourself and your loved ones.

MAKE SURE YOUR ESTATE PLANNING LEGAL DOCUMENTS ARE IN ORDER

Even though we don't know what the future holds for the estate tax, there are strategies that can help your family keep what you have no matter what the law brings. We know that for the remainder of 2012, the federal estate tax exemption is roughly $5 million. This exempts almost all Louisiana families from being subject to the tax. However, if Congress and the President fail to pass new federal laws, the estate tax exemption will be $1 million for deaths occurring in 2013 and beyond. 

It's critical now for married couples with assets exceeding $1 million in value to have their estate legal documents in order. If you have everything set up exactly right, and if the surviving spouse makes the right moves after the first spouse dies, married couples will be able to exempt $2 million from the estate tax, and no estate tax will be due after the first spouse's death.

With an estate tax exemption of only $1 million, many more Louisiana families will be burdened with an estate tax that starts at 37% and quickly rises to 55% of the value of your assets when you die. Properly structured trusts, wills, and powers of attorney are a must to make sure you protect your estate for your loved ones. Many more families will be faced with attempts to make "death bedZ transfers," but if the right estate legal documents and Rabalais Law Firm powers of attorney are not in place, your family may not be able to take the needed actions at the right time to avoid a 55% estate tax.

YOU CAN MAKE GIFTS ANNUALLY - BUT YOU MAY NOT WANT TO

Most people realize that you can give away $13,000 to as many people as you want to each year to reduce the value of your estate. Starting in 2013, you can give $14,000 to as many people as you want to. But you can't have your cake and eat it to. If you want to get it out of your estate, you have to give it away with no strings attached. Sure, you can put the gifts into a trust for your heirs, but you can't retain rights in the trust.

While many people are adamant that they want to avoid estate tax, they are reluctant to make gifts because they are concerned they might run out of money before they die - a valid concern. You have to weigh the fact that you want to keep control and access to your estate so that you won't run out versus the desire to avoid estate tax by giving it away during your lifetime. Good luck with that!

BIG GIFT FOR THE RICH - TIME IS RUNNING OUT

Since you can use your estate tax exemption either during your lifetime or upon your death, it appears that the super-wealthy have a one-time opportunity to give away $5 million to their heirs before 2012 ends without having to pay any gift or estate tax. If you have a good bit more than a $5 million estate, it appears that you can give away up to $5 million this year free of tax, rather than leaving it in your estate and leaving only $1 million to your heirs when you die free of estate tax. This one time opportunity though really only applies for someone who has more than a $5 million estate AND is willing to donate $5 million to their heirs before the end of 2012.

CONCLUSION

It's mroe important now than ever to have a pro-active, education-oriented, layman's speaking, book-authoring, technology driven, and well-endorsed estate planning law firm on your side to help protect you and your estate - not only from taxes but from all the other things that can go wrong with an estate that will tear your estate apart and rip family relationships to shreds.