Bowers Harrison Attorneys David Gray and Paul Black to Present on the Probate Process in Indiana

On June 19, 2014, Bowers Harrison, LLP attorneys, David E. Gray and Paul E. Black, will present on “The Probate Process – From Start To Finish” for the National Business Institute (“NBI”). The seminar will take place in Evansville, Indiana and is geared towards attorneys, paralegals, accountants, trust officers, financial planners and estate planners. Paul and David will provide those who have limited probate experience with tips on successfully handling a probate case. Program highlights include:

  • A step-by-step walkthrough of a probate case complete with practice tips from seasoned practitioners.
  • Implementing a complete estate timetable in order to know what needs to be done – and when.
  • Effectively guide the executor and the administrator through their various duties.
  • Avoiding problems arising from creditors’ claims and insolvency with our powerful strategies.
  • Knowing the secrets to confidently handling a spouse’s elective share.
  • Forestalling disagreements between beneficiaries by adhering to the guidelines of precedence in case of intestacy.
  • How to best get results for your client, including exploring successful strategies for litigating in probate court.
  • Closing procedures ensuring that any accounting is complete before distribution takes place.
  • Ethical pitfalls to avoid.

Please contact Bowers Harrison for help registering this event or click here go to the NBI website.

Indiana Authorizes a New Form of Advance Medical Directive (Indiana Physician Orders for Scope of Treatment (POST))

Indiana added, in 2013, a new advance directive to the tools available to patients wishing to make decisions regarding their own health care.  The new form, called an Indiana Physician Orders for Scope of Treatment (or “POST” for short), is available for anyone with:

  1. An advanced chronic progressive illness;
  2. An advanced chronic progressive frailty;
  3. A condition caused by injury, disease or illness from which, to a reasonable degree of medical certainty, there can be no recovery and death will occur from the condition within a short period without the provision of life-prolonging procedures; and/or
  4. A medical condition that, if the person was to suffer cardiac or pulmonary failure, would cause resuscitation to be unsuccessful or within a short period the person would experience repeated cardiac or pulmonary failure resulting in death. 

The POST form must be signed by both you and your physician to become effective.  A health care representative, guardian, or a parent, in the case of a minor, may sign for an incapacitated person. You or your legal representative may revoke the POST by signing a written revocation, by physically destroying the POST, or by orally expressing the desire to revoke the Post to a health care provider. We plan to provide this form to our clients under appropriate circumstances.  It is also currently available online through the Indiana State Department of Health.  

If you are in need of representation in any estate planning or probate matter, please contact David Gray to schedule a consultation to discuss your needs. 

Learning about Trusts – June 17, 2013

On June 17, 2013, Bowers Harrison, LLP partner, David Gray, and other Southern Indiana attorneys will present a seminar on providing clients with the full spectrum of wealth preservation options.  This seminar is designed for the attorneys, financial planners, accountants, CPAs, tax preparers, trust officers, and paralegals although any other individual involved in creating, administering and terminating trusts is welcomed to attend. David and the other attorneys will provide a structure, which begins by breaking items into basic building blocks, for understanding various types of trusts, including revocable living trusts, trusts used for tax reduction, and grantor trusts.  They will also provide guidance on estate planning for the disabled as well as ethical considerations for creating trusts in general. The seminar will specifically provide professionals with knowledge on:

 

  • What not to do when selecting and drafting a revocable trust to avoid common mistakes;
  • How to choose the most beneficial vehicle for preserving your client's wealth;
  • Understand the purpose behind the various types of irrevocable trusts;
  • Exploring the powers and duties of personal representatives in irrevocable trusts;
  • Saving money on taxes with effective use of defective trusts;
  • Learning why it's important to know when to file the tax return for grantor trusts;
  • Determining whether a client qualifies as a beneficiary of a special needs trust; and
  • Sample trust documents and use our drafting tips to create airtight trusts.

 

Registration is open to the public at the National Business Institute’s website.  Click here.

HOW TO STAY INVOLVED AFTER YOU MAKE A GIFT THROUGH THE USE OF DONOR ADVISED FUNDS AND PRIVATE FOUNDATIONS

There are many ways to make charitable contributions that can benefit both you and the charity receiving the contribution.  Some of the more popular options include outright gifts, charitable remainder trusts, charitable lead trusts, and charitable gift annuities.  Two other options appear to be gaining in popularity, at least in our practice.  Those options are “donor advised funds” and “private foundations.”  The popularity of these two options may be growing because they allow the donor to have some control over the manner in which his or her gift is used after it is made.

Donor advised funds generally allow you to make a gift to an existing charity which is immediately deductible for income tax purposes and arrange to have that charity make smaller, incremental gifts to recipients you help to select over a period of time.  Thus you could make a lump sum gift to a charity offering donor advised funds with the understanding it would be used to fund scholarships for students meeting the requirements you help to create in perpetuity.  Or you could make a lump sum gift to such a charity with the understanding that the income generated by your gift will be used funds grants to a number of different charities each year. 

Many charities offer donor advised funds.  Community foundations are prime examples.  We have a number of community foundations in Southwestern Indiana.  Many private companies with widely recognized names have formed charitable entities to offer donor advised funds. Contributions to such organizations do not ordinarily require a great deal of work by your attorney since the basic vehicle for the gift (the charity receiving the gift) already exists.

Private foundations allow you to, in effect, create your own charity to either support other charities or actually perform charitable functions you select.  They come in a variety of shapes, sizes, and colors.  The two basic forms are operating and non-operating foundations.  Non-operating foundations basically use their funds to make grants to other qualified charities on an on-going basis.  Operating foundations actually perform hands-on charitable functions themselves.  Both types must comply with a multitude of special tax laws to remain qualified for tax purposes, but the rules governing operating foundations are even more stringent. 

Private foundations are an attractive alternative for a person with significant wealth who is charitably inclined, but who does not wish to surrender complete over the funds being contributed.  While neither the donor nor persons close to him can receive gifts from the foundation, they can be actively involved in its management and activities in many different capacities, including serving as trustees and employees.  Creating a private foundation is generally more expensive than contributing to a donor advised fund because the basic vehicle must be created from scratch and approved by the IRS. 

There are advantages and disadvantages to all of these options.  We can discuss those factors with you and help you select the best option to fulfill your goals. We can also help you create the necessary documents and entities.  If you have any questions regarding these matters, please contact the author, David E. Gray.
       

INDIANA INHERITANCE TAX TO BE PHASED-OUT

Governor Daniels recently signed a new law that will phase out Indiana’s inheritance tax by reducing the tax otherwise payable by 10 percent per year beginning 2013.  The inheritance tax will thus be completely eliminated for persons dying after December 31, 2021.  This phase out is accomplished by granting a credit that increases by 10 percent per year to each person liable for the tax.  The new law appears to leave some unanswered questions about how the credit is to be calculated since it does not appear to specify whether the amount of the credit is determined as of the deceased person’s date of death, the date the tax is due, or the date the tax is actually paid.  Stay tuned for updates.   

The new law also increases the exemption available to each Class A transferee from $100,000.00 to $250,000.00.  This increase applies to transfers made by a person dying after December 31, 2011.  The exemptions available to Class B ($500.00) and Class C ($100.00) transferees were not changed.  Class A transferees are essentially the deceased person’s lineal ancestors and lineal descendants.  Stepchildren and their descendants are included as Class A transferees.  Surviving spouses of a deceased child or stepchild are included as Class A transferees as of January 1, 2012.  Class B transferees include a deceased person’s siblings and their descendants.  Class C transferees include anyone not included in one of the first two classes.  Note: Transfers to a deceased person’s surviving spouse generally qualify for an unlimited marital deduction which effectively eliminates inheritance tax on such transfers.          

If you have any questions regarding this topic or any other estate planning matter, please contact the author, David E. Gray.
 

STANDBY GUARDIAN DESIGNATIONS

As of July 1, 2011, Indiana statutes allow parents of minor children and guardians in general to name “standby guardians” to take over for them in the event of their death or incapacity.  This must be done in a written “declaration” signed by the parent or guardian.  The Standby Guardian designation is temporary in nature and automatically terminates 90 days after it becomes effective unless the Standby Guardian files a petition for guardianship of the minor or protected person during that period.  If this occurs, the declaration remains in effect until that petition is ruled upon by the court. 

Most parents with minor children name guardians for their children in their wills.  This normally works fine in the event the parent or parents die, but a court might hesitate to rely upon a designation of guardians in a will in the event the parent or parents become incapacitated rather than die.  There would be a bit of uncertainty about who has the right to custody of the minor children even in the event of death until the will is probated and the court formally appoints the person or persons designated as guardian.  This new provision provides stop-gap coverage for that problem as well as a clear method for naming a person to take over for a parent in the event he or she or they simply become incapacitated.  This could be an important advantage in certain situations.   

If you have any questions regarding this topic or any other estate planning matter, please contact the author, David E. Gray, or the Bowers Harrison attorney with whom you normally work.
 

Joint Matrimonial Trusts

Indiana real property law has been changing rapidly over the last couple of years.  Several new concepts have been added.  One authorizes the use of “transfer on death deeds” to transfer real property interests at death to named beneficiaries.  This topic was discussed in an earlier article on this website.  

Another new concept is the “joint matrimonial trust.” Pursuant to a new statutory provision which took effect in mid-2010, it is now possible for married couples to transfer real property into either one joint or two separate revocable trusts and still enjoy the protection from foreclosure by the creditors of only one of the spouses that they would otherwise have if they continued to own the property as tenants by the entireties.  A couple must specifically elect this treatment.  This is done by either including a statement to that effect in the deed transferring the property into the trust or by a separate written statement recorded in the county where the real estate is situated.

This new provision makes it much safer for married couples to place real property into trusts prior to death.  Couples might wish to do this for any number of reasons, not the least of which would be to avoid probate.   

Couples should consider electing joint matrimonial trust status if they are contemplating transferring real estate into a new trust or have an existing trust which contains real estate.

If you have any questions regarding this topic or any other estate planning issues, please contact the author, David E. Gray.

Indiana Transfer on Death Act Provides Alternative Methods to Avoid Probate

Have you heard about Indiana’s Transfer on Death ("TOD") Act?  Passed in 2009, the TOD Act provides a method for Hoosiers to transfer just about any type of property they might own at death to designated beneficiaries without having to open an estate.  Real estate, securities, motor vehicles, and tangible personal property can now all be set up to pass to designated beneficiaries by signing the proper TOD designation form.  It had been possible to arrange transfer on death designations for certain types of property before the new Act, but the possibilities are now virtually limitless. 

The TOD designations do not become binding until your death, so the TOD beneficiaries can be changed at any time until then.  The ability to create TOD designations for all types of property may allow you to simplify and streamline your estate planning arrangements and documents. 

Keep in mind that it is unlikely that the TOD Act will completely eliminate the need for a will or a trust and a durable power of attorney.  This is because you will still need to make arrangements for someone or some entity to take care of the virtually unavoidable tasks of paying debts, final expenses and any taxes due in the event you are unable to manage your affairs or at your death.  Placing all of your assets in TOD arrangements could make those tasks more difficult since there would not be an undesignated source of funds available to pay those expenses if everything passes directly to designated beneficiaries through TOD designations outside your estate.   

If you have any questions regarding this topic or any other estate planning issues, please contact the author, David E. Gray, or the Bowers Harrison attorney with whom you usually work.