mburkhardt@burkhardtlaw.com | (314) 518-1581

Burkhardt Law

By

Relative Caregiver Affidavit – A Power of Attorney for Minors

Many families are going on vacation right now.  Some parents with their minor children, but many without.  At least once a year about this time, I have clients or friends reaching out to give someone else a power of attorney for minor children while they are on vacation.

A power of attorney can only be created by a competent adult to give their power to make decisions to someone else.  So, it’s not possible to create a power of attorney for minors.  And guardianships are more permanent arrangements made by the court to give someone the ability to make decisions for another.  However, Missouri does provide for the Relative Caregiver Affidavit under RSMo 431.058.

The Relative Caregiver Affidavit is what most parents are looking for if they are leaving their children temporarily in the care of another.  It allows a relative to make decisions for a minor’s educational services or medical treatment.

So, if you’re going on vacation and leaving your children in the care of another, before you go, take the time to get a Relative Caregiver Affidavit notarized.  You can even find a free one provided by the Missouri Bar online.

By

Graduation Season – A Time to Plan for the Future: Power of Attorney

It is graduation season!  For many parents, graduation season is in full swing.  You may have a high school or a college graduate.  Graduation ceremonies may look a little different this year due to COVID-19 regulations and policies in place at different schools.  However, it seems like many schools have found ways to celebrate their graduates even if it looks a little different this year.  Congratulations to you and your graduate.  Graduation time is a time of reflecting on all a student has accomplished up to that point but also a time for looking towards and planning for the future.

This is a great time to talk with your graduate about the importance of planning for their future, including a discussion about estate planning for the graduate.  Many graduates are above the age of 18, meaning that legally mom and dad cannot make all the same decisions for their child as they could when they were a minor.  This summer would be a perfect time to set up a free consultation with an attorney regarding financial and medical powers of attorneys.  Without properly executed powers of attorneys, parents may not be able to access their children’s medical records or assist in making medical decisions in an emergency.   Parents would also not be able deal with financial decisions or sign legal documents on their child’s behalf without financial powers of attorney.  So while your celebrating graduation and preparing for the next chapter whether that be preparing to start college or entering the workforce, I recommend meeting with an attorney to discuss powers of attorney for the new graduate.

By

Guardians – A Tough Decision for an Estate Plan

For a long time I delayed executing my own estate plan because I got hung up on one thing, but one very important thing, who would take care of my children if something were to happen to both my husband and I.  For families with minor children choosing guardians can be the most important and hardest decision to make when working on an estate plan.  When thinking about your will, you have to decide who you want to act as personal representative of the estate, who the beneficiaries of the estate will be, and who will be appointed guardian of minor children.  That last part can be the hardest, as it is so hard to imagine anyone replacing your role as mom or dad.  No one can truly replace you, but you can consider many things when making that difficult choice.

When we first started brainstorming guardians and who we wanted to raise our children if something were to happen to us, we thought of those whom we are closest with and also more importantly, whom our children are closest with.  We thought of my parents.  Although our children are also close with my husband’s parents, they live out of town and we don’t see them as often as we would like.  My parents live less than a ten-minute drive from us, so naturally my kids are vey close with them because we are able to spend a lot of time with them.  If something were to happen right now, I would love my parents to be there for the kids.  However, it is important to look further out.  Would my parents be able to care for the kids until they were old enough to be on their own?  With our parents getting older we didn’t know that we could answer yes to that last question.  Losing parents would be hard enough on our kids, and we would want to give them as much stability as possible, so we decided for us, our parents may not be a good long- term option.  With that in mind we were able to cross both sets of grandparents off our list of possible guardians.

Next, we looked at our siblings, our children’s aunts and uncles.  My husband and I each have two siblings, so this gave us four more options to consider.  How can you choose between sides of the family?  We considered everything from mental health, medical health, relationship history, financial responsibility, location, life- style choices, and again relationship between them and our children.  We ultimately ended up choosing the sibling who lives nearby, has children that are close with and close in age to our children, and even lives in the same school district as us, so that our children wouldn’t have to be uprooted from their school community.  That sibling doesn’t always make same the parenting choices I would, but ultimately, I know that my children would be taken care of, and would feel loved under their care as the guardian.

What I realized, was part of my delay was from not having what in my mind was the “perfect” choice for a guardian.  Because again, how can anyone replace me, as mom?  All the uncertainty of the current pandemic definitely gave me the urge to make a decision and get things in order.  You never know what is going to happen and having a plan in place will make things easier on everyone.  And although this kind of decision definitely warrants taking time to think about, it probably shouldn’t take 10 years like it took me!  Luckily, nothing happened to us during that time, but you never know and at some point you just need to make a decision.  Documents can always be redrafted at a later time if after further thought you change your mind.

-Lisa Villareal

By

Estate Planning for your Graduate/Adult Child

If you have a recent high school graduate, likely they recently turned 18 and are now legally an adult.  Unfortunately, due to the pandemic the end of high school may not have turned out as planned as many proms, graduations, and other end of school year events were cancelled.  Pandemic reminded us all just how unexpected life can be.  Many people began thinking about estate planning.  Did you know that once your child turns 18, parents can’t access medical and financial information for their child?  As you spend the summer helping your now adult child prepare for the transition to college and help them with shopping for school supplies, furniture, and clothes for this next chapter in their life, you should add to the to do list, estate planning.

Due to the privacy rules of HIPAA, parents have no legal right to their adult child’s medical records or other health care related information.  If your child is involved in an emergency you don’t want delays in getting information or assisting in making medical decisions.  Your recent graduate  should execute a medical power of attorney and health care directive.  This will allow your child to determine who should make medical decisions if they are unable to make them for themselves.  It would also be good to execute a HIPPA authorization that would allow the child’s health information to be disclosed.  It is also a good idea for your now adult child to execute a financial power of attorney as well giving someone the authority to deal with financial decisions and sign legal documents on their behalf.  You may also have them execute a FERPA release.  The Family Education Rights and Privacy Act can protect your child’s educational records.  Having your child sign a FERPA release could allow for a parent to access information and educational records if needed.

As you begin making summer plans, don’t forget to add a consultation with an estate planning attorney to your agenda for your recent graduate!

By

Trusts: Do you need a Trust?

Often times people know someone who have a trust and so they think they need one too.  Not every estate plan needs to have a trust.  Every family has different circumstances, so just because your friend has a trust doesn’t necessarily mean that you need a trust.

There are some benefits of having a trust in addition to a will.  Assets held in trust avoid probate.  However, a trust is not the only way to avoid probate.  Proper beneficiary designations on all assets can also avoid probate. Therefore, if you’re only creating a trust because you think you need one to avoid probate, you might reconsider.

However, if you want to control your money after you’re gone, a trust is the easiest way to do so.  If you don’t want your child to receive a big inheritance all at once, a trust can be set up to distribute the inheritance over time, at ages that you decide.  You might choose to leave a certain amount upon the child’ s graduation from college, and then give a certain percentage of the inheritance when they are 25, or 30, or whatever age you feel appropriate.  If there are drug or alcohol abuse issues, a trust can help control how money is spent for a beneficiary.  A trust may help protect assets from a divorce. If you have a child with special needs, a trust is a good tool to provide for your child.

If you have young children a trust can help provide for them and can avoid probate for a conservatorship.  A minor can’t just be given all the assets, so by creating a trust, a trustee will be able to distribute money for the child until they are old enough to handle the money themselves.

It generally costs more to set up a trust.  If your circumstances warrant having a trust the extra cost shouldn’t deter you.  However, if there isn’t as much of a reason to control the assets, and you properly title all assets with beneficiaries, the cost maybe an unnecessary expense.

It is a good idea to speak with an attorney who can ask questions about your family circumstances to help you determine whether or not a trust would be needed to meet your needs and wishes.  They will be able to help you understand the pros and cons of implementing different estate planning tools.

By

Grandparent Rights

When clients call with family law issues, I am quick to defer to and refer to a few fellow attorneys I trust and who know family law infinitely better than I ever will.  However, one area, I think is important to touch on with regards to estate planning are grandparent rights.  Now I try to help my clients plan with ways to encourage visitation when I/we foresee a problem.  However, to give you a more educated view on those rights, George Halenkamp of Halenkamp Law was nice enough to put some thoughts together.

One unforeseen circumstance that can dramatically effect estate planning for grandparents is when a child goes through a divorce or has died. Goals can quickly change when this scenario occurs, especially when it comes to visitation with their grandchildren. It seems unfortunate that grandparents would have to go to court just to see their grandchildren, but sometimes grandparents are forced to consider their options.

Under Mo. Rev. Stat. §452.402 (RSMo Supp., 2011), the court may grant grandparent reasonable visitation with their grandchild under the following circumstances:

  1. When the parents of a child are filing for divorce, grandparents are able to file a Motion to Intervene to request a reasonable period of visitation from the Court or file to modify an existing order;
  2. When the parent of a child is deceased, and the surviving parent denies the decedent’s parent reasonable visitation with the child; or
  3. If the child resided with the grandparent for a minimum of six months within the two years from the filing of the petition, and if the grandparent has been denied visitation with the child for at least 90 days.

A common assumption has existed over time that grandparents have little to no chance of being awarded visitation with their grandchildren. This assumption is not necessarily true. It is presumed that parents living together know what is in their child’s best interests, but this is a “rebuttable presumption,” meaning that the burden of proof is on the grandparents to prove that granting them visitation is in the child’s best interest.

How do grandparents show that reasonable visitation it is in the child’s best interests? The answer is complex and fact specific. However, generally speaking, Missouri statutes allow the court to appoint guardian ad litem, order a home study or consult with the child in order to determine the child’s best interests. The court may consider several factors in determining the best interest of the child. Additionally, the court may conduct a further analysis to make this decision, including talking to the child about his or her own wishes.

In many cases, grandparents are a valuable part of a child’s life. While the parents of the child do generally have primary rights to the child, grandparents are place into a difficult situation if an unexpected divorce or death happens. Grandparents do have legal options to consider in certain circumstances. It is always preferable for the relationship to stay outside of the court room. However, grandparents sometimes may not have any other choice but to involve the courts.

By

Not Just One – Using One Beneficiary, Instead of Multiple

In the past month, I’ve talk to two different clients who have listed one person as a beneficiary on an asset when the asset is meant to go to multiple people or another person entirely.  If you have done this, please stop reading, and go change it right now!

Now the most common place I see this is for minor children.  Parents will put the person who is supposed to use the money for the child as the beneficiary on life insurance.  Now, I really dislike this for two major reasons.  First, that person is the legal owner of the money and does not have a legal obligation to use it for the child.  Well, if you trust that person enough with the money, hopefully that’s a non-issue.  But even if that’s not an issue, what happens if that person inherits the money then dies?  Chances are it will not go back to the children, but rather a spouse or that person’s children.  Just best to avoid by planning properly for minor children.

The other time I see people do this is for real estate.  They want to avoid a beneficiary deed where all the beneficiaries (and their spouses) must sign and make decisions together; instead they put one person on the beneficiary deed and tell them their wishes.  But the problem is that person has no legal obligation to share the money as instructed.  Further, while there may not be a tax consequence, there are likely extra tax returns that should be filed (which probably won’t be).  In the end, it causes a bigger mess than just creating a proper estate plan with a trust.

Finally, the biggest asset this is a problem with is traditional retirement money.  Instead of listing all the beneficiaries on an IRA, I had a client only list one sibling and ask them to share that money among all eight siblings.  Again, this person has no legal obligation to share, which makes me wary, but even more importantly there is likely to be a tax problem here.  Traditional retirement money has not had income tax taken out of it yet and so when the account is liquidated, income tax is paid at that time.  So, if a person inherits the retirement money, then liquidates it to divide it, that person will be paying a lump sum of taxes.  Instead, by listing all intended beneficiaries, each beneficiary will have the option to retain the retirement money as an inherited IRA, and only pay taxes in small amounts each year.  A much more tax efficient option.

So, if you have set up your plan listing one person instead of all the intended beneficiaries, you might want to reconsider your plan and even start thinking about a trust.

By

What Type of Estate Plan Do You Need? Choosing the Right Estate Plan

When I work with clients, I see so many different family types and not everyone has the same needs. There are some generalities that I use to guide what plans the different type of families need. For instance, I think most families with minor children need a trust. However, even then, not all clients fall into those generalities. That’s why it’s so important to evaluate each family’s need individually through a consultation. However, even at the end of the consultation, I think it’s extremely important for a client to understand and choose their own estate plan. Part of this is understanding the documents and how they work, which I’ve explained many times. But another large part of choosing the right estate plan is knowing the different considerations that go into the plan.

One of my first questions when sitting with a new client is always about their family and who we’re planning for. The more complicated a family is (i.e. step-children, half-siblings, etc) the more likely a trust or a more complicated plan will be needed to ensure things go where they are intended. Missouri law only provides for a very traditional family and even then isn’t often what clients would want. Thus, legal documents are needed to change these “default” laws and the more certainty a client needs of where assets will go, the more complicated the documents get. It’s also important to know if there is anyone who would potentially challenge a plan.

But the biggest question and concern for me is if there is a need for control. This normally applies because there are minor children who cannot legally handle money for themselves. However, if there’s a beneficiary who just makes bad financial decisions or has a substance abuse problem a trust might also be necessary. There’s also a limited ability to keep spouses or in-laws away from a plan if they could potentially cause problems through a divorce or other issues.

Finally, assets also are an important part of deciding a plan. If there are extremely limited resources, it’s hard to justify the expense of a more complicated plan, but it might also be worth it if any of the above are concerns. However, the type and location of assets also may make a trust worth it or not. For instance, with real estate anyone listed on a beneficiary deed plus their current spouse must sign on any sale of that real estate. That can cause major problems if there are multiple people involved and not all work together. The need for one person to make decisions on real estate may be enough to justify a trust. However, on the other hand, if most of the assets are liquid (retirement money, bank accounts, etc.) and it’s simply a matter of dividing money, then a trust might be overly complicated.

There are so many factors that go into what kind of plan fits a family. However, the more you know about the process and why a particular plan might be right, the better decision you can make for your loved ones.

By

Being a Parent: Planning for Children

When I first began my law firm, I started estate planning thinking of my brothers and sisters, nieces and nephews. Then when I had my first born almost three years ago, my perspective changed dramatically. Now as we prepare for our second child, I thought I would take a moment and reflect on how our estate plan has (and hasn’t changed) since children have come along.

The benefit of drafting your own legal documents is you can think ahead and prepare them for changes in the future. So, our documents from five years ago included provisions for future children. However, anytime a new addition is added to the family, the estate plan needs to be reconsidered.

This might mean a completely new structure. Going from a will to a trust. But it also means updating children’s names and very simple updates to make sure everyone is included.

It’s also an opportunity to make sure the people handling money and in charge of the children’s well-being are still appropriate. We had the trustee and guardian decided before Duncan arrived, but it’s amazing how the logically decision became so much harder once my son was actually here. In the end, I believe we made the right decision and we have not changed it. However, it’s mainly because I realize there is no right answer and no one can truly take our place if we aren’t here to parent. We can only choose and hope the transition would be as easy as possible.

Finally, it’s also a great time to review assets and make sure all assets will avoid probate and are included in your plan. If you’ve never talked to a financial advisor, it’s a great time to review life insurance as well as planning for the children’s future with 529s or other investments.

Now, I know many of my clients have children that are all grown up. However, those grownup children might have to start thinking about their own children. So, even if you’re not preparing for your own minor children anymore, it’s worth mentioning to your children for your grandchildren.

By

Blended Families – Accidental Disinheritance – Burkhardt Law Firm

This week I presented at a personal finance college class and a topic that always seems to engage the students is what I refer to as accidental disinheritance. Unfortunately, I’ve seen this come up in several instances, but the most common occurs in blended families.

Husband and Wife both had children before they were married. Because they’re married, they’ve set up all of their assets jointly or have their spouse as the beneficiary on their individual assets. This is normal for most families, but the outcome isn’t always as expected.

When Husband passes, everything passes to Wife as intended, but it’s when Wife passes, that the family realizes things weren’t set up as intended. When Wife received the assets, Wife did not include H’s children as beneficiaries or did not put down beneficiaries at all. In either situation the outcome is the same, Husband’s children are not included. According to Missouri law, a widow’s assets go to her children alone, step-children are not included in intestate law. So, Husband’s children don’t even have a legal right to challenge Wife’s estate unless they were included in her will. And even if they are in the will, if she listed her children as the only beneficiaries, the beneficiary designations control over the will.

I like to believe in these situations that if Wife were informed, she would do everything correctly and Husband’s family wouldn’t have need to call me. But, of course, I get the phone call after the fact, and Wife has passed accidentally disinheriting Husband’s family. Or in some situations, Husband and Wife have met with an attorney and have set up their plan, but because they don’t fully understand the mechanics of the documents things go wrong.

For this reason, it’s extremely important that clients understand their documents and how they work. Especially in blended families, where when things go wrong, accidental disinheritance can happen.

 

Burkhardt Law Firm

Phone: (314) 518-1581
Email: mburkhardt@burkhardtlaw.com
Address:
2333 Grissom Dr., Suite 107
St. Louis, MO 63146