Lee on Law

Ease the Transition During Times of Grief

When you pass away (after a long and happy life, of course) you hopefully have a current estate plan in place to provide for your heirs. However, even if you’ve executed the most intricate plan, there is a transition period after the death of a loved one which consists of gathering paperwork and information, paying final bills and expenses, and notifying friends and advisors. It is this transition period, which takes place exactly when your loved ones are experiencing the worst of the grief and shock, which can be the most difficult.

There is no way to eliminate this trying transition, but it is possible to make it a little bit easier.  The article Eight Steps to Make Life Easier for Your Heirs, online at Boston.com, gives some simple but effective steps to smooth the way for your loved ones after you’re gone.

Our firm is committed to helping you with the first step; keeping an updated Will (and other estate planning documents), but we know that the other steps mentioned in the article are just as important in helping your heirs immediately following your death.

Compiling information in a notebook is a key step.  Having to go through a deceased loved one’s drawers and files looking for bank statements or account numbers is not only time consuming, but can be emotionally draining as well. Keeping all of your essential numbers and documents in one clear place will save time and heartache when you’re gone.

Setting aside cash to pay last expenses is another simple step that can be a huge resource later on. This is especially true if you don’t have an agent or trustee poised to take over your financial affairs immediately upon your death.

The second to last step, keeping your home market-ready, can be a difficult one, but your heirs will thank you for it. Readying a home to be put on the market is difficult under the best of circumstances; trying to accomplish it in the middle of mourning a loved one can be overwhelming.

There is just no way to avoid the heartache of losing a loved one, but some of the chaos surrounding that transition period can be avoided. By following some of these steps now, you can help your children and family when they’ll need it most.

Caring for the Child Who Cares for You

We’ve had one or two posts on our blog about caring for elderly parents, written for the most part for those who are—or who will someday be—providing the care. Today, finally we have a post for those who are the recipients of that care - your caregiver child.  

Parents know how much their children may have to give up in order to care for their needs. In fact, we know that many parents allow their children to care for them only reluctantly. And these parents, while they want to be fair to all their children, also want to do something extra for the child who has taken on the greatest share of caretaking.

It’s not always easy to know the best way to do this, or even if there is a way to do it. Many grown children are reluctant to talk with their parent about the possibility of that parent’s death. And even more of those children are uncomfortable discussing the idea that they might want (or need) financial reimbursement for caring for someone they love so much. Alternatively, perhaps you as the parent are the one who is uncomfortable discussing monetary issues with your children.

However, if it is your wish to in some way provide for your caretaker child, here are some options to help you do so:

• Executing a Caregiver Agreement
• Providing for your child in your estate plan
• Taking out a Life Insurance policy
• Using one of a several options to transfer your home to your child
  

Any of these options can be a viable way to help provide for a child who is currently helping to provide for you. But each option requires the help of a knowledgeable professional or there may be negative tax consequences. Call our office today to find out more about your options.

Minimum Wage Increase and Your Small Business

Most of our small business clients probably already know that the federal minimum wage increased this week from $5.85 to $6.55 an hour. The increase is the second in a three-step process to bring the minimum wage to $7.25 an hour next year.  In California, the minimum wage was increased to $8 an hour on Janunary 1, 2008.

The increase will help workers deal with soaring energy and food costs, as described by Christopher Rugaber of the Associated Press, but many entrepreneurs are wondering if the increase will adversely affect their businesses. In fact, according to an article by Angus Loten in Inc.com (published last year when the increase was first approved by the House of Representatives), most small business owners will not be hit by the increase, because they already pay their employees more than the state or federal minimums.

There is a web of interconnectedness in small businesses that is more readily apparent than in large corporations, which means that small business owners often can’t help but see and react to the financial well-being of their employees. Loten, in his article, quotes Mark McCurry, the president of a small Atlanta-based delivery service as wondering “how you could pay anyone less than [the minimum wage] in good conscience?”

This seems to be the prevailing opinion of small business-owners across the country, who, according to Inc.com, generally pay employees more than minimum wage anyway, and 70% of whom reported that “raising the federal minimum wage would have little impact on their labor costs.”

Small business owners are struggling just as much as the next person with the current record inflation levels, but in an intimate work environment where the boss works side by side with employees, it’s difficult not to see how everyone is affected by the ups and downs of our recent economy. Perhaps it is for this very reason that these same small business owners are ahead of the minimum wage curve, providing for their employees and giving themselves some breathing room in the process.

Congress to the Rescue!

With the US housing market continuing to struggle, Congress passed a comprehensive bill designed to curb foreclosures and to extend additional credit to two of the nation's leading mortgage lenders. On July 30, President Bush signed the measure into law.

Some of the key provisions of the bill include the following:

- $300 billion in loans to help distressed homeowners refinance their mortgages into more affordable 30 year fixed loans backed by the government.

- A tax break of up to $7,500 for first-time homebuyers.

- Authorizes the United States Department of the Treasury to provide an increased line of credit to Fannie Mae and Freddie Mac.

- Provides $3.9 billion in grants to states and local communities to buy and repair abandoned and foreclosed properties.

 

Incentive Trusts Build Fortune and Character

When you imagine leaving your hard earned money as an inheritance to your children or beneficiaries, chances are you imagine it supplementing their income, allowing them to have some of those “little extras,” saving them from having to struggle quite as hard as you did, helping them to take care of their family. What you probably don’t imagine is that your legacy will allow your child to flit from job to job, never really having the incentive to settle down and become a contributing member of society.

You may think, “but I’ll be dead, what can I do about it? I can’t control what my kids do with their inheritance.” But the fact is that you can give your children an inheritance and incentive to live a productive life and contribute to their community. Or perhaps you would rather give your kids incentive to go as far as they can with their education, or to follow their dreams and become entrepreneurs. Whatever your goal for your children, the inheritance you leave for them can help you encourage them in that direction by leaving it to them in an incentive trust.

By creating an incentive trust you don’t take anything away from your heirs, you are still helping to provide for them. The difference is that an incentive trust gives your heirs something to work for. Working to build your fortune is something you can take pride in, something that brings you character and confidence; would you want to take that same opportunity from your children? And creating an incentive trust doesn’t mean that you’re pulling strings from the grave, you can make your trust as lenient or strict as you wish. 

Whether you value education, entrepreneurship, charity or family, an incentive trust can help you pass those same values on to your heirs. It allows you to provide for your beneficiaries’ characters as well as their financial well-being.