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Category: Oklahoma Families (Page 1 of 2)

7 Tips to Plan for a Spouse’s Death

By Sarah Stewart Legal Group, PLLC

There are more than 20 million widowers currently living in the U.S.  That number grows each year by about 1.4 million, with women being 3 times more likely to lose their husbands than husbands are to lose their wives.

More than 75% of married retirees interviewed in a Merrill Lynch study admitted that they would not be financially prepared for retirement if they lost their spouse.  And more than 50% of people interviewed who lost their spouse said they did not have a plan in place for their spouse’s death.

Losing a spouse is not only emotionally difficult, there are financial burdens as well.  Most couples are two-earner families.  The death of a spouse immediately turns your family into a single-income family. Planning for the probability that one spouse will outlive the other is crucial to providing your family with security and comfort during an already heart-wrenching time.

How to Plan

(1) Know What Your Spouse Owns

Keep a list of all the assets you own jointly and individually.  For anything not owned jointly, explore the possibility of naming a beneficiary or “payable on death”  on the asset or placing the asset into a Trust that allows ownership to pass directly to your spouse after your death without needing to go to court for a probate.

(2) Have Cash Available

You need to have a plan in place that allows your partner to access money quickly to help keep the family afloat if something happens to you. Build up a savings account for emergencies, put life insurance policies and other accounts into place, and name your spouse jointly or as a beneficiary.

(3) Own Separate Credit Cards

This may help you deduct some debt when a spouse dies.  It will also help you more easily attribute debt to the right spouse.

 

When you are nearing retirement age, there are additional steps you can take:

(4) Social Security

Claim your benefits.  They have the potential to increase a surviving spouse’s own benefit.

(5) Joint and Survivor Annuities

If you choose to have an annuity, or have a pension, in your plan, consider a joint and survivor annuity. These kinds of annuities will provide income to a surviving spouse when the other spouse dies.

(6) Long-term Care

Consider purchasing long-term care insurance and making other plans for long-term care.  With the average costs of assisted living in the U.S. running about $4,000 per month and the average costs of nursing care running about $7,000 per month, long-term care needs can quickly drain your retirement savings. Without proper planning, a spouse can be left broke while struggling with their grief.

(7) Relationships

Stay in contact with family and friends.  When something happens to one of you, you or your spouse will need and want their emotional support.

The best way to show your love for your partner is to make a solid plan for your death.  Planning allows the partner to move forward with their emotional healing without the stress and complication of financial burdens.

Reach out to your team of trusted advisors today to start your financial and estate plan for your family!

7 Considerations for 529 Accounts for Multiple Children

By Sarah Stewart Legal Group, PLLC

A 529 Plan is a savings plan for families’ future educational expenses. There are limitations to the plan, as the money can only go to qualified educational expenses.

The plan allows parents who contribute to the plan to have tax benefits for their contributions.  The extent of the tax benefit depends on the state in which the family resides. Any funds contributed to the account can be taken out, tax-free, for qualified educational expenses for the child named as the beneficiary of the account.

Though historically, the disbursements were used for post K – 12 education, recently, tax laws were changed to allow states to permit use of the funds for K – 12 education.

The earlier families begin to contribute to their 529 plans, the greater the growth over their child’s childhood. If you haven’t established a plan for your children, and want your children to attend college, or fund other qualified educational experiences, start your plan today to take advantage of compounding interest.

But what if you have two children? Should you have a plan for each child? Here are some considerations to help you make that decision.

(1)  529 Plans Only Have One Beneficiary

The 529 plan is structured in such a way that you can only use the account for one person’s educational experiences at a time.  If you have children far enough apart in age that they won’t be using the fund at the same time, one fund may work.  However, if you have two or more children who would need to access funds during the same time period, you will want to have more than one account.

(2) Investment Options Based on Age

Many plans offer investment options that change as the child ages (generally becoming more conservative).  If you have more than one child you hope to use your plan for, you may need to reconsider this type of investment approach as it may not allow you the flexibility you need for two or more children of differing ages.

(3) Gift Contributions

529 plans allow friends and family members to contribute to the fund as a holiday or birthday gift for the child.  Having one account for more than one child can make gifting difficult.

(4) Children’s Contributions

As children age, they may decide to work to add to their fund.  If there is more than one child on the account, tracking contributions will be difficult.

(5) Gift Tax

Any contributions to a 529 plan are subject to the gift tax exemption.  Each year every individual has up to $15,000 they can gift to others without having to deduct that amount from their overall estate tax exemption. If there are two 529 accounts, with two beneficiaries, family and friends can count $30,000 in the exclusion instead of only $15,000 for one account. If you have wealthy family or friends who would like to contribute, consider how their contributions could fit into their estate plans.

(6) State Taxes

Many states allow a deduction for their 529 plans.  Some states even allow that deduction per each account.  Check your state’s laws to see if you can receive a tax break for having more than one 529 account.

(7) Life Changes

Life happens.  If you become divorced or die, the successor may not know the account was intended for more than one beneficiary. Additionally, when you go through a divorce, the Orders may state that the account can only be used for a named beneficiary.

If you started one account and want to break it up, don’t fret.  Open another account for the other beneficiary and rollover the funds. Rollovers for the same beneficiary or a qualified family member are not taxable.

Shop around to look for the state benefits that fit your situation best.  If you are looking to use the funds for K – 12 education, find a plan in a state that best suits your needs and consider having another account for education after 12th grade.

Easing the Financial Strain of Caregiving

By: Sarah Stewart Legal Group

Caregiving can be a thankless job.  As the U.S. Baby Boomer populations ages, more and more people are becoming caregivers for their aging family members.  According to the AARP and the National Alliance for Caregiving, in 2015, about 13% of the population were caregivers for adults or children within the previous 12 months of the survey.

Caregivers often work full-time jobs and struggle to balance their own lives and families with the often additional full-time job of caring for their family member.  They usually receive little or no compensation for their time, and often pay out of their own pockets for their loved one’s needs.

If you are a caregiver, how can you ease the financial burdens that come with the territory of caring for your loved one?

An option for those who care for adults who receive some sort of benefits or income may be a caregiver agreement where a caregiver can be reimbursed for time and money spent caring for their family member. If these agreements are properly drafted, they can be used to “spend down” funds to qualify for Medicaid when the person receiving the care needs to.

If there is no agreement, any payments made to the caregiver may be seen as a “gift.”  In Oklahoma, the Medicaid “look-back period” is 5 years.  That means if any money or items were given to someone in that time period that are not subject to an exemption defined by the state, it could be counted against the individual trying to qualify for Medicaid or other benefits as a current asset.  That means the person seeking funding will have to wait until that money is “spent” down to the Medicaid qualification level to qualify.

Requirements for Caregiver Agreements

The agreement must be in writing and must be specific about the types of work the caregiver will do.  Will the caregiver be running errands? What kinds of errands?  Where is the loved one needing care living?  If with the caregiver, is the caregiver charging rent to the loved one?

What other, additional services will the caregiver provide?  Is the caregiver paying the bills for the family member?  Are they maintaining or repairing the house the loved one lives in?

Log Your Time and Expenses

Once you have the agreement in place, be sure to keep a detailed log of the time you spend providing the services.  If you pay for something out of pocket and want to be reimbursed, keep receipts. Keep records of the income you receive.  Payments to caregivers are generally counted as taxable income for tax purposes.

When caregivers assist their elderly family members, they are providing a benefit to the family member and the government by allowing that person to stay in their home for a longer period of time and decreasing the amount of care the government will have to pay for for the elderly loved one.

If you are in a situation where you can benefit from a caregiver agreement, reach out to a professional today!

These documents have strict requirements that must be met to ensure your loved one can qualify for government benefits when they need them. Do not try to do this on your own!

How to Protect Aging Loved Ones from Financial Scams and Abuse

By: Sarah Stewart Legal Group

The National Council on Aging reports that financial crimes against the elderly are “the crime of the 21st century.”  Financial crimes are becoming more common because law enforcement has difficulty finding the perpetrators and prosecuting them.  Criminals who financially abuse the elderly can be complete strangers or family members.

Some of the more popular scams in recent years include callers posing as the IRS, Medicare, and claiming a family member has been kidnapped when they haven’t.  These scammers try to force an unsuspecting caller to wire them money immediately and can even spoof a number to make the call look legitimate.

These scammers target people who have worked hard their entire lives to be able to retire in peace, people like our friend Ann. Ann and her husband were married for 40 years when he died.  They worked together to build a nice nest egg that allowed Ann to retire comfortably soon after his death.

Recently, Ann got a call.  On the other end of the line was a man who said he was from the IRS.  He claimed Ann owed the IRS $10,000 in back taxes.  If she did not pay immediately, the IRS would send someone to her home to arrest her.  Ann had never had problems with the IRS before and was, understandably, shaken.

She drove to her local bank branch while she was on the phone with the man, to try to wire the money to him as he requested.  Luckily, an observant bank teller noticed that Ann seemed distressed.  She was able to speak to Ann about the situation and assure her that the man on the phone was not with the IRS. Ann was able to keep her money that day. Many people are not that lucky.

As loved ones age, their ability to recognize these kinds of scams can diminish.  If families are concerned that their elderly loved ones may fall victim to financial abuse and scams, they can help protect them by convincing them to put an estate plan in place.

Everyone has heard of Wills and Trusts and planning for your family after your death, but many of us may not be aware of the fact that estate planning does more.  For elderly family members, estate plans allow trusted loved ones to be aware of the financial health of the aging person and help protect them.

Estate plans usually include documents that allow people to choose others to act for them when they are unable to act on their own.  These documents can include specific provisions about managing bank accounts and other assets to ensure the aging person does not fall prey to predators.

After putting an estate plan into place, be sure to list all of the companies the person holds assets with- banks, retirement accounts, stocks, bonds, insurance accounts, etc.  Also, make a list of trusted advisors- attorneys, accountants, financial planners, etc.  These lists will make it easier for family to step in when an elderly loved one needs them to take over.

Talk to your elderly loved ones about their plans today.  If they have a plan, one that may be older, review the plan and make sure they don’t need to make any changes.

Have these conversations now and get these plans complete before it’s too late!

7 Reasons to Budget and Tips to Do It Right

By Sarah Stewart Legal Group, PLLC

Do you have a budget? If so, you are in the minority.  A study from the U.S. Bank in 2017 found that only 41% of people living in the U.S. had a budget.

Experts agree making and following a budget is the best way to manage your money and save for emergencies, vacations, and retirement. Budgeting also relieves a lot of stress by allowing people to plan for expenses and be sure they have enough money to live each month.

If you aren’t budgeting, we’ll tell you why you should and how to do it right.

Why Budget?

(1) You Have Control of Your Money

With a budget you know how much money comes in and where it goes.  You know what you can afford each month and can make a plan to lower debt and plan for other life and financial goals.

(2) Emergency Planning

When you have a budget and know where your money comes from and where it goes, you can plan to put some extra aside for emergencies.  Have you ever had your air conditioning go out in the heat of the Summer? Have you had a pipe break, flooding your house?  Wouldn’t it be nice to have the money set aside to cover those expenses without affecting your month?

(3) Determine and Focus on Money Goals

Knowing where your money goes gives you the power to change spending habits and decide what money goals you have.  Have you always wanted to take a trip to Italy?  What would it take to get there?  Planning for that trip will motivate you to skip the coffee drive through a few times a week.

(4) Share with Your Spouse and Family

Budgeting allows you to work as a team with your family and teaches your children how to use their money wisely.

(5) Foresee Problems

With a budget, you learn the ebbs and flows of your finances and can head off possible financial problems before they become problems.

(6) Decide About Debt

Budgeting helps you decide what, if any, debt you can afford. Do you want a new car?  Can you really afford it?

(7) Adjust Spending

When you budget, you can get rid of unnecessary expenses and add the savings up for retirement, college funds, vacations, or whatever you want.

Budgeting Tips

(1) If you’re married, be sure to budget together.  It won’t do any good if the two of you aren’t on the same page about important expenses.

(2) Be flexible.  Every month can be different.  You may need to buy school supplies, car maintenance expenses, or holidays.  Be sure to allow room for these expenses in your budget.

(3) Start with food, shelter, utilities, clothing, and transportation. Your necessities are the most important.  Fill everything else in around them.

(4) Pay off debt.  The less money you owe, the more you have for yourself!  Not to mention, credit cards and loans charge interest and penalties, taking more of your hard-earned money than you can imagine.

(5) If you’re struggling with certain expenses in your budget, such as entertainment, pull out cash for the month for that category.  Only use the cash.  Once it’s gone, you can’t spend any more on that category.

If you don’t have a budget yet, sit down with your family and set one up today!

Planning for Temporary Child Custody if You Die

By: Sarah Stewart Legal Group

If we don’t plan for our assets after our death while we’re alive, the Court will take over for your family and tell them who gets what. Because of this, estate planning tools are important for everyone.   But, families with young children have even more at stake if they don’t plan properly for their children.

Traditional estate planning tools like Wills and Trusts allow parents to name a Guardian for their children if the parents die while the children are under the age of 18.  At the very least, parents should think through who you trust to care for and raise your children if you’re not there.

Though these documents are important for every young family to have,  there are other plans parents of young children may not be aware of that are just as crucial.

Sometimes when both parents have died, children can be taken into state custody, at least for a brief period.  If you want to minimize the chance of this happening to your children, you will need to make plans and arrangements with family members or friends if something happens to you.

Let’s say you go out on a date night and leave the kids with a sitter, but you get in a car accident and don’t make it home.  Who would the babysitter call? Who would care for the children until the Guardian can go to court and establish Guardianship? Getting a guardianship is a process that can take weeks.

What about young families who do not live close to their parents, siblings, or other family members?  What if closest relatives are more than 5 hours away? Where would your children go?

If you have a trusted friend you would like them to stay with until family arrives, you will need documentation granting the friend authority to keep the children temporarily.  Otherwise, child protective services will likely take them into custody.

If you are a parent or Guardian of young children, you should consider drafting a plan for your family.  You can give a copy of the plan to your proposed caretaker and keep a copy somewhere in your home that is easily accessible and that the sitter knows about.

Your children will have enough stress and trauma from dealing with your loss if you die suddenly.  Do you want to make that process even more difficult by having the state take them into custody and hand them over to strangers?

If not, get to work on your temporary custody plans for your children today!

5 Mistakes to Avoid When Making Your Estate Plan

By Sarah Stewart Legal Group

Estate planning is a topic a lot of people try to avoid, despite all the sage advice otherwise.  Though statistics vary, the consensus is only about 50% of people have actually planned for their family’s inheritance after their deaths.

Adults with children younger than 18 years of age, arguably the people who need to plan the most, have the lowest rate of planning- 36%.

Estate plans help families decide what assets go to whom, when, where, and can possibly save thousands of dollars in attorney and court costs. Planning is important for everyone, and it must be done correctly to meet your goals.

Here are 5 common mistakes you should avoid when estate planning.

(1) Not Planning

The difficulty of talking about death and working through a plan make people put off estate planning.  While you’re waiting for the right time, life, and death, can happen. If you die without an estate plan, the state decides who gets what, while your family is out thousands of dollars in court fees and attorney costs to get the state to divide your assets.

If you’re married, and you don’t have an estate plan, your spouse will not receive everything you left behind.  If you have children from a previous relationship that are not 18, and your previous partner survives you, your previous partner will receive your assets to manage for your children.  Are you comfortable with that?  If not, you need to make a plan.  Now.

(2) Forgetting Health Care Directives

Advance Directives for Health care are the only documents in the state of Oklahoma that gives someone the authority to withhold life-sustaining treatment on your behalf.  If you have certain situations where you would not want to be on life support, you need an Advance Directive in place.

Another important health care document is the Durable Power of Attorney for Health care.  If you are in a situation where you cannot make decisions for yourself, the Durable Power of Attorney will name someone you trust to make those decisions for you.

(3) Not Choosing a Guardian for Your Kids

If you don’t have an estate plan, and you have young children, you have not named a guardian for your children if something happens to you.  Your family will have to go to court, and possibly argue with other family members, to get guardianship of your child. And, the guardian may wind up being someone you wouldn’t want.

Remember when picking your guardian, that though your parents may be your first choice, if your children are older and your parents have health issues in the future, they may not realistically be able to care for them.  Consider naming a back-up guardian or co-guardian who is younger.

(4) Forgetting to Update Documents

When big life changes occur- divorce, birth, death, marriage, kids growing up- you should re-evaluate your plan.  Is everything the way you want it?  Has anything changed?  Documents are easy to amend if your plans change, but you have to stay on top of things.

(5) Incorrectly Titling Assets

Some people take the time and money to set up a trust, but forget to put their assets into the trust.  A trust is only as good as what you put in it.  Be sure to talk to your banks, financial planners, employers, and other asset holders to get your assets put into your trust.

If you don’t have an estate plan in place, or need to update yours, reach out to a professional today!

 

Lessons from Anthony Bourdain and Kate Spade on Planning for Your Estate When You’re Separated

Photo: Laurie Woolever/Grub Street

Photo: Wendy Maeda / The Boston Globe via Getty

By: Sarah Stewart Legal Group

The world was rocked this month with the news of the suicides of TV Personality and Chef, Anthony Bourdain and Fashion Designer, Kate Spade. Though the two share their tragic means of death, they also share something else.

When they died, both Bourdain and Spade were separated from their spouses.  Separations don’t only lead to legal battles in divorce court, they can also cause a whole new set of problems for estate planning.

When couples choose to remain separated for a longer period of time and don’t finalize a divorce, they open their families up to complex, and often, messy legal issues if one of them dies.

Deciding on Separation Instead of Divorce

Studies show more and more families are choosing to separate permanently instead of filing for divorce.  Bourdain was open about his choice to separate from, but not divorce, his wife of many years.

He stated in a People Magazine article in 2016 that his choice to separate permanently was based on his belief it led to a better co-parenting relationship of his child with his wife.

Though the concept may be nice for child-rearing, if possible, the arrangement has led to a hiccup in Bourdain’s funeral and estate planning.  By law, since they are still married, his wife is his beneficiary, and the person who makes decisions regarding his funeral and what happens to his remains.

It has been reported that his body will be cremated in France and the ashes shipped to the U.S. This decision may be difficult for family members who may have more of a stake and interest in funeral decisions than a wife he hasn’t lived with for several years.

Additionally, since she is still Bourdain’s wife, she will be eligible for certain Social Security and other benefits she would not have received had the couple divorced.  Benefits that may have gone to his child in other circumstances.

Kate Spade and her husband were reportedly separated when she died as well.  Her family will face similar challenges to Bourdain’s.

Proper Planning

If you choose to permanently separate instead of divorcing, there are some options to protect your estate.

(1) Healthcare Directives

If you are concerned that your spouse may be able to make healthcare decisions if you are unable to, you will want to consider putting an Advance Directive into place.

Although Oklahoma law does not provide that anyone can make those decisions without a valid Advance Directive or Court Order in place, in practice some facilities have policies that allow them to work with “closest kin.” Separated or not, if you’re married, that’s your spouse.

To protect yourself from that situation, you will want to implement a Healthcare Directive and choose a healthcare proxy to make those decisions.

(2) Trusts

Generally, couples separating are restrained from making any changes to legal documents during their proceedings.  The reasoning behind this requirement is that the couple is assumed to be working toward completing the divorce and separating the assets and the Court wants to make sure nothing is moved or spent before the finalization.

If you know that you will not finalize a divorce, you should talk to your family law attorneys about provisions in your paperwork for your case to allow you and your spouse to change your estate plans.

If an estate goes through probate, your spouse can always argue for a marital share.  If you do not have a plan in place, or only have a Will, your estate will go to probate.  With a Trust, going to court is less likely.

Though your spouse could still sue and argue for a marital share, if you both sign off on the documents, it is far less likely your separated spouse would take from your estate and you could have more control over who gets what.

If you are in a permanent separation, be sure to reach out to your financial and estate planning professionals today!

 

Legal Battles Possible Over Frozen Embryos When Couples Separate

By: Sarah Stewart Legal Group

Stories of legal battles over frozen embryos have been making the rounds in the news lately.  Beginning with the high profile case in 2013 between Sofia Vergara and her former fiance,  Nick Loeb, cases concerning couples’ frozen embryos became more popular.

Legal Issues

The problem couples face when they separate and have remaining frozen embryos is deciding what to do with those embryos.  They can decide whether to store the embryos, destroy the embryos, donate them to science, or donate them to a couple with fertility issues.

Courts addressing the issue face a strange mix of Constitutional, family law, and contract law questions. The case can become even more complicated when the couple was never married. Courts must decide what rights each parent has and what rights, if any, the embryos themselves have.

Michigan Case

An interesting case arose in Michigan this month when an unwed couple started a legal dispute over their frozen embryos.  The former couple have a child together who has sickle cell disease.  The mother believes she could use bone marrow from another child she conceives to ease her daughter’s suffering and possibly save her life.

The father refuses to consent to the release of the embryos. The matter is currently in litigation, but there should be an outcome in the next few months.

The Law

Historically, most of the parents seeking custody in a frozen embryo dispute have lost.  Courts usually see the Constitutional right of privacy of one parent who chooses not to reproduce prevailing over the right of the other to bear a child and any contract that existed before between the two.

Exceptions to this rule have applied where the parents in the case suffered from cancer and the treatments took away any other chance they had to reproduce.

Embryo Donation in Oklahoma

In Oklahoma, we do not have specific, published cases concerning custody of human embryos.  However, we do have statutes that address embryo donation in adoption. If an embryo is donated, Oklahoma statutes require both couples to consent to the donation and adoption. The consents must be filed with the court.

The statute states the receiving couple will legally be the parents of the child born from the embryo and the donating couple is relieved of all parental responsibility.

If you have questions about embryo donation or custody, consult with a health care attorney today!

 

5 Ways to Support a Caregiver

By Sarah Stewart Legal Group

Caregiving takes on many forms.  Parents are caregivers for their children.  Adults may have caregivers if they have Special Needs or health and mobility issues.

Caregivers face a lot of challenges. On top of juggling their own careers, family lives, and lifestyles, they now take on the responsibility of caring for another person and managing that person’s life.

Caregiving is often a thankless  job.  Family members and friends may not understand the physical and emotional toll caregiving can take on the caregiver.

If you know a caregiver, reach out and offer your support. Here are 5 ways.

(1) Offer Your Friendship

Simply being a sounding board for your friend in their time of need and checking in on them can help the caregiver in your life.  Offer to take them out for coffee or dinner, or drop in to say hi.  Let them know they’re still important in your life.

(2) Lend A Hand

Offer to visit the person needing care and give the caregiver a break to attend to the caregiver’s needs.  Bring dinner by for the caregiver and the person needing assistance.  Schedule a respite service or dinner delivery for the caregiver if you don’t live locally, or can’t help personally.

(3) Avoid Judging

Make a point to avoid criticizing the caregiver.  If you think something can be done better or differently, come up with a solution, such as taking on that matter yourself, or helping hire a respite worker who can.

Caregivers struggle enough with their duties and responsibilities and feeling like they aren’t doing enough.  Offering a helping hand will always go further than arguing and critiquing.

(4) Avoid Complaining

Sometimes families can add more stress to caregivers by complaining about things the caregivers really can’t control, such as the condition of the house before the caregiver stepped in, the locations of items owned by the person, legal requirements and processes, or other matters the caregiver simply can’t control.

Though family members may think they’re helping by pointing out these problems, chances are, your caregiver already knows.  Bringing them up to the caregiver can make them feel helpless and add to their stress.

(5) Avoid Telling Them How They Can Be Better or What They’re Doing Wrong

This is another area of stress for caregivers.  The stress only increases when the person suggesting how the caregiver can improve isn’t present to see the circumstances or help out themselves.

Instead of focusing on the negative, focus on the positive things the caregiver is doing for the family, how their actions help you, and how you can help the caregiver. Unless you have strong reason to believe otherwise, trust that they are doing their best.

Most caregivers are doing the best they can for their families, often with limited time and resources.  They simply need a little compassion from the people who matter most to them in their lives.

Of course, there can be situations where the “caregiver” is actually taking advantage of the person they are caring for.  If you believe a caregiver is abusing the person they are caring for emotionally, physically or financially, report their actions to Adult Protective Services or Child Protective Services.

If you know a caregiver facing legal difficulty getting care for the person they’re caring for, have them reach out to an attorney today!

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