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.
On September 13, our firm will be hosting an ICLEF national speaker seminar right here in our office! The seminar will be shown live via webcast at Troyer & Good law firm. It will be featuring Natalie Choate, Boston attorney and expert on estate planning and retirement benefits. The topic for this seminar is “Estate & Distribution Planning for Retirement Benefits.” This intensive course is designed for professionals who are experienced in general estate planning. It is also designed to add to your expertise with in-depth knowledge of how to integrate retirement benefits into clients’ estate plans.
According to the ICLEF website, this popular seminar has never been more timely, as unlimited Roth conversions and the “portable” federal estate tax exemption offer new planning opportunities (and pitfalls) for your clients. The following topics will be discussed:
- Understanding the minimum distribution rules of Code section 401(a)(9).
- Making retirement benefits payable to trusts
- How to integrate benefits in the typical estate plan
- Representing Survivors: “The Pre-Owned Retirement Plan”
- “Charitable Planning with Retirement Benefits”
- Unconventional IRA investments; prohibited transactions
- Lump sum distributions, Pre-age 59½ distributions
This course will introduce you to everything you need to know regarding your estate planning clients’ IRAs and other retirement plans. You will learn about the following:
- The minimum required distribution (MRD) rules: key to maximizing the value of your clients’ benefits. How to comply with the “MRD rules,” avoid penalties, and qualify for “stretch IRA” treatment, including lifetime and post-death MRDs, separate accounts.
- Practical ways to fit retirement benefits into the typical estate plan; the six possible choices of beneficiary (three tax-favored, three not); planning for possible law changes.
- The two types of trusts that automatically qualify for “see-through” treatment under the MRD rules, and when qualification matters. When and how to name a marital, credit shelter or other trust as beneficiary.
- Case studies: trust for minors, special needs, second marriage.
- Plus special situations, where your key knowledge can save big dollars for certain clients: pitfalls of IRA real estate and small-business investing; 10% penalty for pre-age 59½ distributions; how to advise the IRA beneficiary; disclaimers and other post-death cleanup strategies; spousal rollovers; and fixing IRA mistakes.
This course will count for 6 CLE (or 7.2 CPE) credit hours. Details for attending the event:
Date: September 13, 2017
8:00 A.M. Registration
8:30 A.M. Program Begins
11:40 A.M Lunch (ICLEF providing)
12:20 P.M. Program Resumes
3:30 P.M. Adjournment
The agenda includes a 10 minute break in the morning and afternoon
Troyer & Good, PC
6303 Constitution Drive
Fort Wayne, IN 46804
Seating: Seating is limited to 10 attendees.
Pricing: Tuition – $395 ; Pass+ Holder – $0
Registration: Register here.
If you have any questions or would like to register for the event, please visit here or contact ICLEF.
Some fun facts about estate planning…
- California became the first state to allow Living Wills in September 1976.
- The “Will of Uah” is the oldest known Will in existence and was found in a tomb in Egypt. It dates back to 2548 BC and leaves all his property to his wife, Teta.
- Historians found a Power of Attorney dated 561 BC in Mesopotamia.
- The shortest known Wills are only three words long:
“All to son” and “All to wife.”
- The longest known Will ever probated was 1,066 pages and 95,940 words and occupied four gilt-edged, leather-bound volumes. An English woman, Frederica Evelyn Stilwell Cook, holds this record.
- A recent study indicates that 11% of Britons have their internet passwords in their Last Will and Testament.
- Famous Americans who have died without a Will: Sonny Bono, Kurt Cobain,John Denver, Chris Farley, Howard Hughes, and Martin Luther King Jr.
- In 1829, James Smithson created the Smithsonian Institute through a bequest in his Last Will and Testament.
“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.
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.
A recent Indiana court case addressed an issue surrounding the grounds to properly contest a Trust. Ms. Seberger executed her Trust in 1992 and amended it several times. She died in 2014. Ms. Schrage, an heir to Ms. Seberger’s estate, requested a complete copy of the Trust from the Trustee. The Trustee responded by serving her with a Notice to Beneficiary and Trust Certification, stating that he was under no obligation to provide her with a complete copy of the trust and providing notice that she had ninety days to contest the validity of the Trust. The Notice also contained a redacted copy of the Third Restatement of the Trust. Within ninety days, Ms. Schrage filed her Verified Complaint Contesting Validity of the Trust. The Trustee filed a motion to dismiss so the trial court held a hearing and entered an order. The order granted the Trustee’s motion to dismiss because Ms. Schrage failed to properly commence the action pursuant to Indiana Trial Rules and failed to name parties upon whom liability may be imposed (i.e. tortfeasors). The trial court also said she failed to properly docket the Trust.
However, the Court of Appeals reversed and remanded. First, the Court of Appeals ruled that the trial court had erred in dismissing Ms. Schrage’s complaint for failing to properly commence the action and name possible liable parties. The appellees did not identify any person that Ms. Schrage failed to notify. They simply suggested that certain alleged tortfeasors were not notified. Ms. Schrage stated in her complaint that the Trustee also served as Ms. Seberger’s attorney and drafted the Trust, creating a presumption that certain amendments and restatements of the Trust were obtained by fraud. The Court of Appeals reversed the trial court’s dismissal and remanded that Ms. Schrage must amend her complaint and plead her allegations with sufficient specificity.
The Court of Appeals next addressed the trial court’s dismissal on the basis that a complaint contesting the validity of a Trust must be filed after the Trust is first docketed. The trial court treated Ms. Schrage’s failure to docket the trust as a matter of jurisdiction rather than a mere procedural defect. Thus, the Court of Appeals ruled that the trial court erred in that determination. It also found that the relevant statute plainly provides that Ms. Schrage was not required to first docket the Trust before bringing a challenge to its validity.
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.
As with Wills and Trusts, there are many variations when it comes to insurance. The following are types of life insurance:
Whole Life: Sometimes called cash-value life insurance. You pay a monthly premium on a policy that will, upon your death, pay a predetermined fixed amount of money to your beneficiaries. A portion of the fixed premium is invested and another portion placed into an account that is accessible to the policy owner. It can be borrowed against as a loan, or the cash can be taken as the proceeds of the policy instead of the death benefit payout.
Universal Life: A type of whole life policy that guarantees a minimum return but the value of the policy can go up or down. If the policy makes more money, the return might be high enough to cover your premium payments.
Joint first-to-die or second-to-die: This is a policy held by two people, and the beneficiary is paid after the first person or second person dies. You decide the payout when you set the terms of the policy.
Term Life Insurance: This policy carries an annual premium and pays a specified death benefit to the beneficiary. However, it does not have a cash value so you cannot borrow money from it. The only payment is made to the beneficiary. The premium is based on the amount of insurance you purchase and how old you are. If you stop paying premiums, the death benefit is not paid.
Annual renewable: A policy that has an annual premium and can be renewed from year to year.
Decreasing: Premiums remain the same but benefit decreases over time.
Level: Coverage is guaranteed for a specific period of time or term at a specific premium.
Group: Employers frequently purchase a term life policy for each employee as an added benefit. Employees get a low rate and there is no income tax on the premiums for the first $50,000 of coverage.
The Probate, Trust& Tax Section of the Allen County Bar Association is facilitating a pro bono community service project. Volunteer attorneys are providing estate planning documents to the residents of Fairington Apartments in Fort Wayne. The basic estate planning documents include Last Wills and Testaments, Powers of Attorney, and Advance Directives for Health Care. The Fairington Apartments is a senior preferred low-income housing apartment complex that is subsidized by HUD. There are at least 49 residents being assisted by this project. Our attorneys, Tracy Troyer and Leah Good, are volunteering to draft documents for the project.
The goal of this project is to help low-income individuals have a basic estate plan in place. An estate plan is essential for all individuals. The Last Will and Testament directs how your property will be distributed and who will be in charge of your estate. You can also name who will be guardian of your minor and/or disabled children. The Power of Attorney appoints someone to act on your behalf in financial matters when you are unable to do so. Lastly, the Advance Directives for Health Care appoints someone to make health care decisions for you when you are unable to do so. All of these documents are important and essential to having a complete basic estate plan. If you do not have all (or some) of these documents in place, our attorneys would be happy to help you put those in place.
If you already have a Trust, you may think that you do not need a Will as well. After all, Trusts accomplish a similar purpose to a Will: you decide who will receive your property. However, even if you have a Trust, you should have a Will along with it. One reason you want to have a Will along with your Trust is because a Trust only deals with property that has been transferred to the Trust. It is unlikely that you will be able to transfer all your property to the Trust or you may come into property shortly before you die. If you don’t remember or are unable to transfer some property to your Trust, then it will not pass under the terms of your Trust. Having a Pour-Over Will prevents this problem from happening. A Pour-Over Will directs that any remaining property not titled in your Trust will “pour over” into your Trust. Also, a Will can accomplish things that a Trust cannot. For example, you can name a guardian for your minor or disabled children in your Will. While it is always beneficial to have a Will, it is not always necessary to have a Trust. You should meet with an attorney to discuss whether or not you need a Trust. If you already have a Trust but do not have a Will, you should meet with an attorney to prepare your Will.