by: Bradley R. Coppedge, Esq. Any “basic” estate plan will (or should!) include a Last Will and Testament, along with a Power of Attorney, and an Advance Directive for Healthcare.  Let’s look briefly at these latter two ancillary documents, which allow you to designate who makes decisions for you if you become unable to act or speak for yourself. A. Financial Power of Attorney A Power of Attorney, also known as a Financial Power of Attorney, General Power of Attorney or Durable Power of Attorney, is an instrument by which you authorize another person or persons to act on your behalf. This person is known as your “agent” or your “attorney in fact.” This document allows your agent to make financial decisions on your behalf should you become incapacitated, without the need to have the Probate Court appoint a guardian or conservator, which is a time-consuming and expensive process. A…       Read More

By: Bradley R. Coppedge, esq. “Basis” is defined by Black’s Law Dictionary (6th ed.) as “The value assigned to an asset for the purpose of determining gain (or loss) on the sale or transfer or in determining value in the hands of a donee”. Stated in layman’s terms, your basis in an asset is the threshold for determining if any tax is due when the asset is subsequently sold. The terms we will review to understand basis are Cost-Basis, Adjusted Basis, Carry-Over Basis and Stepped-Up Basis. A person’s basis in an asset is initially his “cost-basis” in a purchased asset, i.e., the amount that was paid for an asset. Assuming there has been no depreciation claimed on tax returns (which would reduce basis), nor any significant capital improvements to the asset (which would increase basis), a person’s cost basis will remain as the basis until the asset is sold. (On…       Read More

By: Bradley R. Coppedge Estate Planning, when done properly, can be much more than just a Will and a power of attorney. It can include trust planning, asset protection planning, and Medicaid planning. In fact, accomplishing traditional estate planning goals while also planning for Medicaid eligibility is becoming more of a concern as our baby boomers age and longevity continues to increase. A. Generally. Most people begin planning for Medicaid too late. A common client scenario I see on a monthly or more frequent basis is as follows: “Mother has suddenly taken ill or has fallen and is going to need help we can’t provide. We will be moving her to a nursing home in a couple of weeks/months, but she wants to go ahead and transfer her CDs and house to us kids.” The family is thinking that if mom makes these transfers it will avoid having to use…       Read More

Written by: Bradley R. Coppedge, Esq. Beneficiary designation forms seem easy, right? Fill out the form, send it in. These days it’s often easier still—a few keystrokes online and you’re done. In many cases, you accomplish exactly what you think you want. Unfortunately, these forms and how they are completed can have also have unintended, unanticipated, and unfortunate consequences. These risks are often exacerbated by the ease of making online changes, without having ever consulted with your estate planning attorney or financial adviser. Let’s start with a brief review. When a person dies, either with or without a Will, his or her estate must be administered. If property passes through the estate, it is generally termed “probate property”, and is disposed of in accordance with the terms of the Will if one exists, or otherwise by provisions of state law. If such property instead passes by operation of law or…       Read More

Written by: Bradley R. Coppedge, Esq. Special care must be given to planning for a special needs child.  “Special Needs”, for our purposes, means a child (whether an adult or minor) who at birth or subsequently thereafter is mentally, physically, emotionally or developmentally impaired or disabled to such degree as would enable the child to be eligible, or potentially eligible, for means-tested public or governmental benefits or assistance. I. Estate Planning for a parent of a disabled or special needs child. A parent who has a special needs or disabled child has basically three (3) planning options in implementing the parent’s estate plan: (1)        Effectively disinherit the child, and allow the child to rely solely on public benefits.  This is not as harsh as it may sound in that if the parent’s wealth is modest, the child’s needs great, and there are other children to provide for, this may be…       Read More

By: Bradley R. Coppedge, Esq. If you’ve read any materials on estate planning, you’ve likely heard of these trusts. For example, you see a lot on-line, in AARP magazine, and in The Wall Street Journal. There exists a significant amount of commentary and recommendations on using these trusts along with a very simple Will known as a “pour over” Will. While they are very common in many parts of the country, Revocable Living Trusts are not used as frequently in Georgia or Alabama. Most of the commentary on Revocable Living Trusts comes from articles and books written by financial planners or attorneys outside of the Southeast. The primary purpose of a Revocable Living Trust in most states is “to avoid probate”. However, probate is a relatively simple and inexpensive process in both Georgia and Alabama, and several other southeastern states, when you have a proper Will which names an executor, waives…       Read More

Written by: Bradley R. Coppedge, Esq. As an estate planning attorney, I hear all manner of misconceptions about Wills and other basic estate planning documents. Let’s take a few moments to address (and dispel) some of the more common: Myth #1. If I don’t have a Will, the State will get my property. Well, the good news is that this is almost never true. All states have a statute that determines the order of priority of inheritance in the event of intestacy, though it’s not always exactly what you would expect. (More on this in myth #2). First, let’s understand two basic terms: “Testate” and “Intestate”. Testate simply means you have a valid Last Will and Testament in place at your death. Intestate means you die without a valid last Will and Testament. Under the laws of most states, your spouse and children would first inherit. And while it varies…       Read More

Written by: Bradley R. Coppedge, Esq. Unfortunately, there is far from a one-size-fits-all answer. My October blog explored the use (or risks) of these trusts in older Wills as related to the possibility of inadvertently disinheriting a spouse. This article will explore their use from an overall federal estate tax, and capital gains tax, perspective. First a little history. A person’s federal estate tax exemption amount (previously known as the “unified credit”) is the amount of assets that may pass to someone other than the spouse without incurring estate taxes. For many years, particularly throughout the 1980s, 1990s, and even well into the 2000s, a decedent’s exemption amount was regularly utilized to create a trust at the death of the first spouse, commonly known as a “credit shelter trust” or “bypass trust”. As explored in October’s blog, the purpose of this trust was to take the maximum amount of assets that…       Read More

Written by: Brad Coppedge, Esq. There have been substantial changes in the estate and gift tax laws since 1997, and particularly in the last 5  years. These changes may result in extreme ‘bad’ consequences under estate planning documents, such as Last Wills and Testaments, that were drafted prior to 2010. If you have a Last Will and Testament that was executed prior to 2010, it may be essential that you have it reviewed. Otherwise, you may suffer some results that were very much unintended at the time you drafted the Will. And for those individuals who are in second marriages, often times the result can be as extreme as completely disinheriting the surviving spouse at the death of the first spouse! Here is a quick primer if your eyes are already glazing over or if this is already sounding like piglatin to you:  Each person has an amount of assets…       Read More

Written by: Brad Coppedge, Esq. On August 2, 2016, the Treasury Department issued long awaited (or long feared) proposed regulations under IRC §2704 regarding the valuation of family owned businesses. Valuation discounts are a major tax planning tool to reduce or eliminate federal estate and gift taxes as part of a comprehensive estate plan. Clients have used valuation discounts to transfer substantial amounts of their wealth tax-free, or at significantly reduced tax cost, from one generation level to the next. Discounts for lack of marketability (meaning the inability to quickly sell or monetize an asset) and for a minority interest (meaning the inability to control the liquidation of an entity’s assets, the entity’s  distributions, the timing of the distributions and the management of the entity) have enabled clients to discount the values of gifts to family members and to discount an estate’s value at the client’s death. Valuation discounts generally…       Read More