What is an “Insolvent Estate”?

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When an estate is admitted to probate, it is classified as either solvent or insolvent. Solvent means that there are more assets in the estate than there are debts. Once the debts are paid, the remaining assets are distributed in accordance with the Will (or in accordance with state law if there is no Will).

However, if there are more debts than there are assets, then the estate is considered insolvent. The assets are liquidated and used to pay creditors in order of preference as outlined in Indiana code:

  1. Costs and expenses of administration, such as Attorney’s Fees, Personal Representative’s fees, and court costs.
  2. Reasonable funeral expenses, expenses of a tombstone, and expenses incurred in the disposition of the body.
  3. Allowances for surviving spouse and minor children.
  4. All debts and taxes having preference under the laws of the United States.
  5. Reasonable and necessary medical expenses of the last sickness of the decedent.
  6. All debts and taxes having preference under the laws of Indiana.
  7. All other claims allowed through the court.

Any unpaid creditors will have to write off the debt. The heirs of the estate will receive nothing as there are no remaining funds to be distributed.

Note that you are not personally liable for the debts of the estate. Simply tell creditors that the estate is insolvent and there is no money to pay the debts.

Of course, it is preferable to die with a solvent estate so you have a legacy to leave for your family and loved ones. Carefully managing your assets while you are alive will help you accomplish this.

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7 Financial End-of-Life Questions to Ask Yourself

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Credit: The Penny Hoarder

It’s a new year full of new resolutions. Is end-of-life planning on your New Year’s Resolution list? Probably not, but putting off the inevitable can leave a considerable financial burden to your loved ones. If you have cared for an aging or sick relative, you’re likely aware of the kinds of expenses that can accumulate. But if you are young or in good health, you may not have thought about your own mortality. If you die without any type of planning, your loved ones will have to piece together your financial profile without clear direction. Here are 7 financial end-of-life questions to ask yourself to help you begin your planning:

1. Do I need a Will? The simple answer is yes. Everyone can benefit from having a Will. If you are over eighteen, then you should have a Will. A Will addresses what happens to your assets, which can include your bank accounts, real estate, vehicles, and even pets. It is not just for people who have a lot of money.

2. What will happen to my bank accounts? If your bank account has a joint owner or a payable on death (POD) designation, then your bank account will go to the individual named. A note of caution: Joint ownership and beneficiary designations take precedence over your Will. So you need to keep this information up-to-date as relationships change and make sure your beneficiary designations reflect your final wishes. Also, bills may still need to be paid after you die. A joint owner or beneficiary designation can be helpful in this area because he or she will have immediate access to your account.

3. Should I have life insurance? You might think that life insurance is for the elderly. But even if you are young and healthy with no dependents, life insurance can help your family after you die. If you are younger, you may choose term life insurance because it can be cheaper than whole life insurance yet offers comparable coverage. With term life insurance, you pay a premium for a certain number of years and are covered if you die within that term. Once it expires, you buy a new policy. With whole life insurance, you pay a premium each month for the rest of your life. Figuring out how much coverage you want will depend on the type of funeral you prefer and your outstanding debts. It might be a good idea to factor in your living expenses for a year or more if you might leave behind a spouse or child without your income. Even if you choose not to have life insurance, it might be a good idea to set aside money for the immediate costs your loved ones will have to handle, such as cremation and burial.

4. Does someone know where your important documents are kept? You should set aside a place for your important documents and instructions, such as your Will, funeral planning declarations, and tax returns. Your next of kin, or someone you trust, should know where you’ve chosen to store these important papers. If you tell at least two people you trust, this will help ensure that at least one person is available to help if needed. You can also leave instructions on where to find these documents with a legal or financial professional you trust. Do NOT keep your legal documents in a safe deposit box at the bank. Your documents should be readily accessible and available, even on the weekend or holiday.

5. What about your digital files? It is a good idea to keep a hard copy list of your accounts and passwords and keep that list with your other important documents. If you have considerable digital assets that you would like to pass on to someone, make sure you list those items in your legal documents, such as in a Memorandum of Personal Property.

6. Who are your beneficiaries? You should check your beneficiary designations at least annually. It is also a good idea to review your estate planning documents to ensure that your Will and/or Trust reflects your current relationships and wishes.

7. Have you talked about it with your family? It is hard to talk about death and final wishes, but honest conversations now can make life easier later for your loved ones when you die. Sometimes people have unrealistic wishes, such as scattering their ashes off some volcano in Hawaii. However, this can put undue pressure and grief on the family because they cannot afford to satisfy those wishes. It is much better to talk about those wishes now so you can be realistic about what will happen later. Take time and thought for your final preparations. This will offer a much clearer picture to your loved ones, especially if you die unexpectedly.

Source: The Penny Hoarder

Broken Heart Syndrome

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Photo Credit: American Heart Association

When someone has a broken heart, it is generally regarded in an emotional sense rather than a physical sense. However, a broken heart can lead to real cardiac consequences. It is well-known that there are connections between depression and heart disease. In the throes of a highly stressful event, a person can suffer from broken heart syndrome.

In the medical field, broken heart syndrome is also known as stress-induced cardiomyopathy. It can cause the person to feel sudden, intense chest pain in reaction to a surge of stress hormones. This reaction could be due to the death of a loved one, divorce, breakup, or betrayal. It can even happen after a good shock, such as winning the lottery. Women tend to be more likely to experience broken heart syndrome than men.

When you experience broken heart syndrome, a part of your heart temporarily enlarges and does not pump well while the rest of your heart functions normally. The most common signs of broken heart syndrome are chest pain and shortness of breath. Irregular heartbeats or cardiogenic shock can occur. Cardiogenic shock is where a suddenly weakened heart is unable to pump enough blood for the body. It can be fatal if not treated right away. Broken heart syndrome can even occur in someone who is healthy with no history of heart disease.

Broken heart syndrome may be misread as a heart attack because of similar symptoms. The test results are also similar to those in a heart attack, such as the dramatic changes in rhythm and blood substances. However, unlike a heart attack, there is no evidence of blocked heart arteries or heart damage. The EKG results will be different from a person with broken heart syndrome and a person having a heart attack. Also, the recovery time is usually quicker with broken heart syndrome, within days or weeks, when compared to a heart attack, a month or more. Researchers are still learning why it happens and how to diagnose and treat it.

If your doctor thinks you have broken heart syndrome, you may need coronary angiography, which shows the insides of your coronary arteries. Other diagnostic tests include EKG, blood tests, echocardiography, and cardiac MRI. Your doctor might recommend an echo about a month after you are diagnosed with broken heart syndrome to keep tabs on your health.

While broken heart syndrome can lead to severe, short-term heart muscle failure, it is usually treatable. In rare cases, broken heart syndrome can be fatal. However, most people who experience broken heart syndrome fully recover within a few weeks. They are also at low risk for it happening again.

Source: American Heart Association

Helping Your Grieving Parent

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Losing a loved one is never easy, especially when it is one of your parents. How can you comfort your surviving parent while dealing with your own grief? It is good to remember that everyone grieves differently and that losing a spouse is different than losing a parent. Do not assume that you know exactly how your parent feels. Try to be understanding and patient by listening to your parent and encouraging him to talk about his loved one. Help attend to your parent’s physical needs and make sure he gets the care he needs.

It may be difficult to do these things as you deal with your own loss. You may feel frustrated as you try to help your parent move on with his life. Or perhaps you are struggling to let go and resent your parent for giving away clothes or other memorabilia. In either situation, tensions can arise and drive you apart at a time when comfort and support is needed most. Here are some tips to handle this situation as successfully as possible:

  • Take care of your physical health. Make sure you and your parent get plenty of rest, eat nutritious meals, and exercise regularly. Taking care of the body’s physical needs and staying healthy will help your body handle the emotional stress better. Because grief is stressful, it can impair the immune system, resulting in more colds or lingering illnesses. Keep an eye on your parent’s health and make sure his doctor knows about his bereavement.
  • Be patient and understanding. Grief will diminish with time but could take a year or more. Even though it may have diminished, your parent will have good days and bad days. Your parent may hear a song, see a picture, or find a note that resurfaces his grief all over again. Emotions often resurface at holidays, birthdays, and anniversaries. Try to remember these important dates and acknowledge how your parent feels at these times. He might want to do something special to honor his loved or prefer to do nothing at all. In some cases, grief is delayed and does not surface until some time after the death. Whatever the situation, being patient and understanding will be the best way to lovingly help your parent.
  • Know the signs of grief. The initial months after your parent’s death may not be the best time for your surviving parent to make important decisions or start new projects. Often times, grief can cause a person to be forgetful and disorganized. You might suggest that your parent write down reminders so as not to forget, or you might help him plan a schedule to get the daily necessities taken care of. It might be difficult for your parent to concentrate so warn him to be careful when driving or operating dangerous equipment. Your parent might suffer from a lack of motivation or interest in doing things. Let your parent express himself and offer love and support. If you think your parent might hurt himself or that he is using alcohol or drugs to deal with his grief, get professional help immediately.
  •  Take care of yourself. You may have to take on more responsibility in caring for your surviving parent or helping with paperwork. Remember to take time for your own grief. Talk with close friends or family members about your grief and your needs. Express your feelings and encourage your parent to do the same; you may feel better sharing tears and feelings with your parent rather than alone. If your emotions are overwhelming, you might seek professional help.

In such an emotionally difficult time, it can be challenging to take care of the paperwork side of the death. You may be overseeing the funeral arrangements or your deceased parent’s estate. Our attorneys understand that losing a loved one is a difficult process. We can help guide you through and demystify the administration process.

Source: http://www.legacy.com/news/advice-and-support/article/helping-your-grieving-parent

What is a Bequest?

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A bequest is a gift made through a Last Will and Testament. Your personal property can include things like your money, jewelry, or furniture. The beneficiary of the bequest (who is benefiting or receiving the bequest) can be an individual (such as a family member or friend) or an organization (such as a charity or for-profit business). There are generally five types of bequests:

Pecuniary: A gift of a fixed amount of money.

Specific: A gift of a designated or specific item. At times, such as when the item is given to an organization, the item is sold and the proceeds given to the beneficiary. 

Residuary: A gift of all or a portion of the remaining estate assets after all other bequests have been made and debts and taxes paid.

Contingent: A gift made on the condition of a certain event that may or may not happen. If the condition is not met, the gift will fail and not be made to the beneficiary. 

Charitable: A gift made serving a religious, scientific, political, educational, or general social purpose. A charitable bequest can reduce the estate taxes owed at your death.

Bequests are common ways to leave a lasting legacy to your family or charity. Our experienced estate planning attorneys would be happy to help you create a Last Will and Testament that reflects your wishes and leaves a legacy.

Source: http://www.thenonprofittimes.com/management-tips/know-4-types-bequests/

Country Star Glen Campbell Dies of Alzheimer’s

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Glen Campbell, country star in the 1960s-70s and known for his music and comedy variety show The Glen Campbell Goodtime Hour on CBS, died on August 8 due to Alzheimer’s. Campbell made history by winning four Grammys in the country and pop categories in 1967. He sang such songs as “Rhinestone Cowboy,” “Galveston,” and “Wichita Lineman.” Campbell also appeared in a supporting role in the film True Grit (1969) and sang the title song for the film. Sadly, in 2011, Campbell was diagnosed with Alzheimer’s. Rather than retreating, Campbell bravely went on a farewell tour in 2011-12 that dealt with his illness and decline.

This tour was the subject of an award-winning 2014 documentary titled “Glen Campbell…I’ll Be Me.” The film documented his decline with Alzheimer’s, how his band supported him on stage when he forgot the chords and how his fans finished the song when he forgot the lyrics. Despite his illness, Campbell remained happy and upbeat. His family became his caregivers, and the film shows how the family helped Campbell navigate places that had once been familiar to him, such as his home, the stage, and the recording studio. 

Campbell courageously advocated for Alzheimer’s awareness and helped to remove some of the stigma associated with the disease. After the film aired, Director James Keach said people came up to him “who had family members or themselves had Alzheimer’s who said, ‘I no longer feel ashamed.'” His daughter, band mate, and caregiver, Ashley Campbell, said she was glad her father’s honesty about Alzheimer’s helped so many people to “not feel so alone.”

More than 5 million Americans suffer from Alzheimer’s, and every 66 seconds someone develops Alzheimer’s. You can help advance Alzheimer’s support, care, and research by participating in the Walk to End Alzheimer’s.

 

Source: ABC News “Glen Campbell’s Public Alzheimer’s Battle Set His Legacy” by Kristin M. Hall

Nine Things to Know Before Going to a Funeral Home

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Things to think about when going to a funeral home:

  1. You can pre-plan without pre-paying.

Pre-planning your funeral and making final arrangements in advance is a great idea. It helps your family make difficult decisions during an emotional time. It can also give you peace of mind knowing that things are in order. However, it is not always necessary to pre-pay when you pre-plan your funeral. If you decide to pre-pay, be sure to look carefully at the contract and familiarize yourself with local and state laws.

  1. You can rent a cremation urn or casket for the memorial service.

Most funeral homes offer rentals that you can use for the funeral or memorial services. This can save on the costs of a casket or an urn from the funeral home. It can also save you on costly overnight shipping charges if you order a casket or urn online. You can often rent a high-end attractive casket for the public service without the high costs attached. You can then have the body buried in a less costly container or taken to the crematorium for cremation.

  1. Ask the funeral home for low-cost options.

Simply ask if they have more budget-friendly casket or urn options that fit your needs. By being upfront about what you want and need, the funeral home can better help you find a casket or urn that is suitable for you and your family.

  1. You can use an “alternative container” for cremation.

There is no law that you must use an urn or casket for cremation. Every provider of cremation services is required to tell you that alternative containers (such as cardboard) are available. Or perhaps you have a special container that you would like to use for cremation rather than purchasing an urn.

  1. Veterans with honorable discharge can get free burial services.

The National Cemetery Administration of the U.S. Department of Veteran’s Affairs offers offers free burial and other services (such as perpetual care and personalized headstones) to veterans and their spouses. The funeral related services are pre-specified and generally only apply to burial at a national cemetery. To see if this may work for your situation, you can visit https://www.cem.va.gov/cem/burial_benefits/index.asp.

  1. Ask for a price list for all services.

Many funeral homes offer packages designed to help you save when purchasing a variety of services. However, these packages may have services that you do not want. If you ask, funeral homes are required to provide an itemized pricing list for all services they offer. You can even do this over the phone, as consumer protection laws require that the funeral home provide funeral costs over the phone. It may be cheaper to pay only for the services you want and need rather than purchasing a package.

  1. Most services are optional.

You may be uncertain about what you really need. Or perhaps the wide array of options offered makes you feel like purchasing more services than necessary. Whatever the situation, remember that almost all services offered by the funeral home are optional.

  1. You can receive a written statement of costs before you pay.

It may be a good idea to ask the funeral home to provide you with a written statement and explanation of all costs associated with the funeral, burial, and/or cremation services you have chosen. This is helpful to make you sure you are not choosing services or products you do not want.

  1. Bring a friend.

It is a good idea to bring a friend with you as you are shopping for and deciding on funeral options. If you bring a friend who was not as close to the decedent, they can give helpful opinions that are not based on emotion.

Source: http://www.usurnsonline.com/funeral-resources/10-things-funeral-home-wont-tell/

Transfer on Death and Pay on Death Designations

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“Transfer on death” (TOD) and “pay on death” (POD) accounts are your property and completely in your control during your life. At your death, they are paid or transferred to the persons you name as the recipients. No one other than you has any right to this property during your life. The property passes outside of probate to the named recipient, rather than the person listed in your Will or your heirs, when you die. You can change the beneficiaries on these accounts at any time. Real estate and personal property such as furnishings and automobiles can be transferred on death by a Deed, bill of sale, or other proper written instrument.

Payable-on-death bank accounts offer an option to keep money out of probate – just fill out a simple form at the bank naming the person you want to inherit the money in the account at your death. As long as you are alive, the person you named does not have any rights to the account. You can spend the money, name a different beneficiary, or close the account. At your death, your named beneficiary can go to the bank with proof of identity and your death certificate and receive the funds. If the bank account is joint, the pay-on-death designation does not come into play until after the death of the joint owner. Also, your retirement accounts (such as 401(k)s and IRAs) give you the option to name a beneficiary, which act the same as a pay-on-death designation.

Indiana has adopted a law (Uniform Transfer-on-Death Securities Registration Act) that allows you to name a beneficiary to inherit your stocks, bonds, or brokerage accounts. When you register ownership, you make a request to take ownership in “beneficiary form.” The beneficiary will have no rights to the stock, bond, etc. as long as you are alive. After your death, the beneficiary you named can claim the securities. Similarly, you can name someone to inherit your vehicle by indicating a beneficiary on your certificate of registration. With real estate, you can sign a Transfer on Death deed that will transfer the real estate to whom you name at your death.

VLP Receives Pro Bono Service Award

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The Volunteer Lawyer Program of Northeast Indiana received a pro bono service award in recognition of its bankruptcy program. The award was presented to the VLP at the 66th Annual 7th Circuit Bar Association meeting held in Indianapolis on May 1. The bankruptcy panel that received the award comprises over 25 attorneys committed to helping people without adequate funds achieve equal access to quality legal representation.

The award presentation and dinner was held at the JW Marriott in Indianapolis in conjunction with the 7th Circuit Judicial Conference. Attendees were honored to hear the following featured speakers: Hon. Elena Kagan, Associate Justice, Supreme Court of the United States and Eva Mozes Kor, survivor of the Holocaust and founder of the CANDLES Holocaust Museum and Education Center. Ms. Ruth de Wit, Executive Director of the Volunteer Lawyer Program, gratefully accepted this prestigious award on behalf the volunteers and in recognition of the countless hours of pro bono service provided over many years in Northeast Indiana.

The Volunteer Lawyer Program of Northeast Indiana serves families and individuals at 200% or below the federal poverty guidelines in many areas of civil law. Over 200 volunteer attorneys representing northeast Indiana make up the panels of legal expertise, including our very own Tracy Troyer and Leah Good. Tracy and Leah specifically help individuals in services of estate administration, estate planning, and guardianship.

Those seeking assistance from the VLP must first call the office to see if they qualify for the program. Qualification is based on household income and assets, case type, and availability of volunteer attorneys. Callers should be prepared to provide this personal financial information when they call.  Once a client qualifies for the program, he/she will need to provide the VLP with the necessary financial and legal documents required for the successful completion of the qualification process. Staff members from the VLP then attempt to place the client with a volunteer attorney.

For more information, check out their website.

Changing Your Will

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When you create a Will, it is not a permanent document that you can never change. This is good because our lives change often – we have children, grandchildren, marriages, divorces, births, deaths, etc. Your Will can be revised, or replaced if needed. If you need to change just a specific portion of your Will, you may decide to create a codicil to your Will. A codicil is a separate legal document that adds to your existing Will. Sometimes, though, you may have many changes to make to your Will. In this case, it may be best to replace your Will with a new one.

Some people make specific bequests in their Will, meaning that they leave specific property (such as a boat or jewelry) to someone. However, if the named property is missing from your estate, then it is considered “adeemed.” Ademption statutes govern the distribution of your belongings, and the state will take over if items are missing. It is best to update your Will if you sell, lose, or destroy property named in your Will. If a beneficiary named in your Will dies before you do, this might create a lapse situation depending on the language of your Will. It is best to specifically state in your Will where the property will go if the beneficiary dies before you, such as to the beneficiary’s children or to the residuary estate. If you have no specific provision for this situation, Indiana provides that any lapsed bequest will go into the residuary estate.