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Monday, November 30, 2020

Costs Associated with dying without a will.


When someone dies without a will, it is known as dying intestate.  In such cases, the Louisiana legislature has set forth the law that governs how the person's estate is administered. For people who leave behind large estates, unless they have established trusts or other tax avoidance protections, there may be a tremendous tax liability, including both estate and inheritance tax.

For just about everyone, the cost of having a will prepared by a skilled and knowledgeable attorney is negligible when compared to the cost of dying intestate,  since there are a number of serious consequences involved in dying without a proper will in place.

Legal Consequences

The larger your estate, the more catastrophic the consequences of dying intestate will be. If you die without a will, the freedom to decide how your property will be divided will be taken from you and the state in which you reside will divide your assets.

Not only will you not be able to decide on the distribution of your property, but a stranger will be making personal, familial decisions. This may be divisive among your family members; instead of leaving your loved ones in peace, you may leave them engaged in bitter disputes over a family heirloom or even a simple memento. This can be especially true in situations where there are children from a previous marriage.

Tax Consequences

In addition to the legal and personal problems associated with dying intestate, the tax results can be severe as well. This is particularly true for clients who have not consulted with an estate planning attorney in order to protect themselves through tax avoidance methods. Both the state and federal governments can tax the transfer of property and an inheritance tax may be imposed on the property you have left to your heirs.

The most effective way to avoid all of these negative tax consequences is to create a will with a competent attorney. Your lawyer will help you to choose a proper executor (the person who will administer your estate, distribute your property and pay your debts), and will assist you in finding ways to limit your tax liability. There are several ways your attorney can help you to do this:

  • By gifting some of those you want to inherit before you die
  • By creating one or several trusts
  • By purchasing a life insurance policy
  • By buying investments in your loved one's name

These methods will ensure that your loved ones receive the assets you desire them to have, while simultaneously protecting them from possibly enormous tax burdens after you pass.

For those who have no family, dying without a will can be even more troublesome and costly, since their entire fortunes can be left to the state. If a genealogical search doesn't turn up any blood relatives, all of your assets will be claimed by the government. This means that any individual, group, organization or charity you wished to endow will receive nothing.

It is never easy to think of one's own mortality, but it is even more painful to contemplate leaving a messy, uncomfortable situation behind when you pass. By engaging the services of an excellent estate planning attorney, who will help you fashion a legally binding, precisely designed document,  you can make sure that your loved ones are well taken care of and that your final wishes are respected and implemented.

Chip LoCoco

Attorney at Law

 


Monday, November 9, 2020

How long is the Probate Process?


As an estate attorney, I am often asked how long does the probate procedure take. Simple question right. But the answer is not that simple, as the length of time it takes to distribute assets in an estate can vary widely depending upon the facts and the type of issues that are being handled in each individual matter. 

So, what type of factors come into play which can determine the length of time that an estate will remain open. Some of the factors that will be involved in determining how long it takes to fully administer an estate include:

  1. Whether the estate must be probated with the court.
    Read more . . .


Tuesday, August 11, 2020

A Brief Introduction to End of Life Legal Planning

While being one of the most important aspects of your later stages in life, end of life legal planning is often the hardest to deal with. The issue is a mix of emotions, finance, and law – a combination that will bring anxiety to anyone. Nonetheless, being prepared for the unexpected, and eventually the expected, is exceptionally important. End of life legal planning can be split into two primary categories: healthcare and financial. 

 

Healthcare Planning

Everyone will have an opinion on what is the best medical decision to make should something happen to you. There are three primary healthcare documents that can ensure your intentions are known and carried out.

  1. Living Wil – A living will is a legal binding document that identifies your preferences and wishes with regard to healthcare services. It gives you a voice in the decision-making process should you become incapacitated. Your document provides which types of treatment you do and do not want, regarding end of life care. 
  2. Power of Attorney for Healthcare – a power of attorney for healthcare grants another person of your choice the authority to make healthcare decisions on your behalf if you become incapacitated. The power of attorney for healthcare can be used in conjunction with a living will, with certain decisions being binding under the living will and other decisions being left up to the person appointed in your power of attorney.

Financial Planning

In addition to the three above healthcare related documents, there are two finance-specific documents that should be considered.

  1. Durable Financial Power of Attorney – like the power of attorney for healthcare, the durable financial power of attorney allows you to grant another person the authority to act on your behalf. Here, the selected person can manage your finances to the extent you grant such power. Examples of management include filing your taxes, managing your real estate and other investments, buying insurance, and managing retirement benefits.
  2. Will – The document which allows you to direct to whom your assets go to upon your death. You can provide protections for your spouse, your children, and can create special needs trusts for children who would benefit with such a trust. You can also name the executor, the person who will handle your affairs when you pass away, and you can give them Independent powers which an save thousands of dollars for an estate.

These are the two primary categories when considering end of life planning, but there are many things to explore in all of them that an experienced estate planning attorney can assist you with in tailoring an estate plan for your families' needs. 

Chip LoCoco

Many & LoCoco

Attorneys at Law

504-483-2332


Monday, May 4, 2020

The Law of Usufruct in Louisiana. What is it?


When a person owns property in full ownership, all three principals of ownership rest in that person. Those principals are: 1) They have the right of possession; 2) the income derived from it 3) and the right to sell, lease, mortgage or otherwise transfer the property. Property in this context means any asset, not only real estate. 

In Louisiana, a person can grant the right of usufruct over any type of property. When this is done, then the rights of full ownership are split into usufruct and naked ownership, with the three principals of ownership being divided among them

The usufructuary is the person who owns the usufruct.


Read more . . .


Thursday, April 9, 2020

Living Wills, Healthcare Powers of Attorney, and DNRs Explained


With everything going in the world today, you will hear people speaking about three types of documents that you may be unfamiliar with or you or not exactly sure what they are and what they do. These three documents are:

 

  1. Living Will or also called an Advance Medical Directive.

  2. A Medical Power of Attorney or sometimes called a Healthcare Proxy.

  3. A DNR – Do not resuscitate order.

 

In this brief article, we will look at each of these in a little depth.


Read more . . .


Wednesday, April 8, 2020

Why Louisiana has Parishes Instead of Counties?


After watching a national news reporter consistently use Orleans County for days in a row, I decided to shed some light on why New Orleans has parishes instead of counties. By the way, the only State besides Louisiana not to have counties is Alaska, which has "boroughs".

The reason why Louisiana does not use the term counties dates back to a bygone era and to the first settlements in this State. Louisiana was officially Roman Catholic under the rule of both France and Spain. The initial boundaries dividing the territories of what is now Louisiana generally coincided with church parishes.


Read more . . .


Tuesday, March 31, 2020

Remote Notarizations

Please be aware that - although with the emergency declaration by the Governor of Louisiana which allows for certain Notarial acts to be done electronically under specific guidelines - the declaration by the Governor DOES NOT APPLY to Wills and Trusts and other legal documents which require witnesses and the Notary to all be in the physical presence of the signor. So, if a lawyer sends you a copy of your Will and/or Power of Attorney and says to sign it and email or mail it back to him/her, IT IS NOT LEGALLY VALID, as it was not signed in the presence of the Notary and witnesses. As you know, Louisiana has very specific rules regarding notarial Wills and authentic acts which requirements still need to be met even while in the midst of a pandemic.

Chip LoCoco
New Orleans Estate Planning Attorney


Read more . . .


Saturday, March 28, 2020

The Stimulus Passed. Now Beware of IRS Scam Phone Calls.


With the passing of the stimulus bill, please, particularly for your parents and grandparents, be aware of IRS scam calls asking you to provide banking information so you can receive your stimulus check. Please remind your loved ones that the IRS rarely calls individual taxpayers, and when they do, it's usually well after the taxpayer has received written notice of whatever issue the taxpayer is handling. You should treat any phone call out of the blue from someone claiming to be from the IRS as a SCAM, and provide no information to them. If you would like to confirm with the IRS that there is no issue, you can call the IRS directly at 1.800.
Read more . . .


Thursday, March 26, 2020

Cover-19 Update


 

We hope everyone doing well in these crazy times. Just a quick update.

 

My office is open, while we are working remotely. Please feel free to call the office number to set up a phone conference with me. For existing clients, if you need certified copies of Wills, Powers of Attorney, or Living Wills, please call and let us know as we do have access to all of those files.
Read more . . .


Tuesday, February 11, 2020

How to Leave Gifts to Step-Children

Today, blended families have become increasingly common, and many individuals have step-children, that is, children of a spouse. In situations where step-children have not been legally adopted, however, they do not have a legal right to an inheritance from a step-parent. For those who wish to leave step-children part of their estate, it is necessary and a must to include them in an estate plan.

The easiest way to leave gifts to step-children is to name them in a will. As with any other gift, they can be given a percentage of the estate, or specific gifts. If there are other children involved, it is important to avoid confusion by naming each child and step-child by using their individual names, rather than terms such as "descendants," "heirs," or "children."

There are also a number of estate planning tools that can be utilized to include step-children in an inheritance. If the objective is to avoid probate, for example, a revocable living trust can be established in which a step-child is named as a beneficiary. Moreover, it may be necessary to provide for a disabled step-child who is eligible for public benefits by establishing a special needs trust. Lastly, a step-child can also be named as a beneficiary in a life insurance policy.

While there is no legal obligation to leave step-children an inheritance, it may be the best choice for those who have a close relationship, or played a significant role, in raising them. However, this will reduce the amount of assets available to other children and beneficiaries. Because blended family relationships are complex and subject to emotional challenges, it is important to explain these decisions with all family members.

And in Louisiana, in particular, close attention must be paid the our laws of Forced Heirship and how  those laws will come into play in your estate plan relative to your children and your step-children.

By engaging in an open and honest dialogue, you can minimize the potential for strife and the possibility of a will contest. In particular, it is important to clarify why you gave each recipient a gift, the selection of your executor, and your thoughts about the family.  Lastly, you are well advised to engage the services of an estate planning attorney who can help ensure your wishes regarding step-children are carried out.

Chip LoCoco

Attorney at Law

Many & LoCoco


Wednesday, January 29, 2020

What is the Medicaid Lookback Period?

Medicaid is a healthcare program jointly operated by the individual states and the federal government. Medicaid is designed to help individuals with limited income and resources pay for healthcare costs including nursing home care, assisted living, or in-home care. However, qualifying for Medicaid can be difficult. While eligibility is state-dependent, there are generally four key requirements: (1) you must be 65 years of age or older, permanently disabled, or otherwise qualify depending on your specific state’s class requirements, (2) you must be a resident of the state in which you are applying, and either a U.S. citizen, permanent resident, or legal alien, (3) your income must be within your state’s income limitations, and (4) your assets must be within your state’s asset limitations.

To help individuals qualify for much-needed Medicaid coverage, multiple strategies exist to reduce one’s income and assets to the state threshold without adversely affecting the individual’s life. These include gifting assets to family and friends, transferring assets to a spouse, and investing in exempt assets (exempt assets are assets that do not count as “assets” for Medicaid purposes – most states allow certain home values to be exempt).

To avoid individuals taking advantage of these strategies at the last minute to qualify, however, the federal government implemented a “lookback period.” This is a period of time for which financial transactions involving the applicant will be reviewed. The purpose of the lookback period is to identify assets, such as money or cars, that may have been gifted or sold below market value in an effort to reduce the applicant’s assets to within the state’s Medicaid asset limitation.

For all states except California, the lookback period is 60 months (5 years). For California, the lookback period is 30 months (2.5 years). The lookback period begins on the day that the individual applies for Medicaid. Thus, when an application is filed, the government will review all financial transactions to look for transactions that violate Medicaid eligibility provisions, such as certain gifts and transfers.

If the reviewing agency identifies transactions within the lookback period that violate the eligibility rules, the applicant will be assessed a penalty. The penalty for violating a transaction during the lookback period is ineligibility for a certain period of time. To calculate the length of the penalty, the government will divide the amount of the transaction in violation by the average monthly or daily private care costs in a nursing home. For example, if an individual gifts $40,000 in a violating transaction during the lookback period and the state’s monthly private care cost for nursing home care is $4,000, then the individual will be assessed a penalty of 10 months of ineligibility. Here, the individual would be assessed a penalty of 10 months to begin from when the individual became eligible for Medicaid.

Given the harsh penalties for violating transactions during the Medicaid lookback period, having proper legal representation can help to ensure that your planning complies with all state and federal law.

Chip LoCoco

Attorney at Law

 


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The Attorneys of Many & LoCoco assist clients throughout parts of Southern Louisiana, including but not limited to New Orleans, Metairie, Mandeville, Convington, Gretna, Arabi, Marrero, Westwego, Harvey, Chalmette, Kenner, and the Parishes of Orleans, Jefferson, St. Tammany, and St. Bernard, LA.



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