Many people think that if they are married, their spouse will automatically inherit everything when they pass and so they don’t need a will. While there are some situations where a spouse does inherit everything, it is not the default under Tennessee law. In Tennessee, if you are married and have children, your spouse will share your probate estate with your children. I call this the S.A.K.S. method (Spouse and Kids Share). In other words, your spouse does not inherit everything automatically.
To clarify:
If you die without a will, Tennessee law dictates that the spouse and children split the estate.
However, I believe that everyone should create their own plan for distributing their assets after death, even if the state has an understandable default on how to do this. Here’s why:
Having a Will can make it easier for your family to go through probate.
Having a Last Will and Testament can be an important way to reduce any burden on your family after your death. In your Will, you decide not only who will inherit your estate but also key decisions like who will serve as Personal Representative (also known as the Executor) and whether you want to require or waive documents that are required by statutes. Having a Will is your chance to have a say in the probate of your estate before you die. The process can be much less complicated for your beneficiaries as well because you may decide to be even more specific about some of the more difficult decisions that need to be made.
It is much easier on your family if you have an estate plan in place. A last will and testament will provide instructions on how to designate and divide assets between family members and friends. If you die intestate (without a will), then the state’s inheritance laws will determine who gets what.
Preparing an estate plan will cover situations that may arise after your passing
Have you considered what might happen if your spouse remarries? Are you aware that a future spouse can take an interest in a portion of your estate? Would you want part of your assets to go to a new spouse or to any children that they may have with that spouse? Do you have family or children that should benefit instead? There are many other factors to consider, but it’s important to discuss these things with your attorney when you create your estate plan.
A Will provides security for your spouse
If you are more concerned about your spouse inheriting from you than your children, you can plan for that too! The general rule in Tennessee is that the spouse would get no less than a third of the estate.
For example, if you are splitting the estate with two or more children, the spouse would get a third. If there is only one child, the spouse would get half.
What if you want to provide more? With a Will, you can designate that your spouse gets everything or only leave certain things to your children. Many spouses write “I love you” wills, where they inherit first from each other, and then their children only inherit when the second parent dies.
Use a Will to protect spousal inheritance from changes in family dynamics
Another consideration in making a Will is your family dynamic. Do you have children from different relationships throughout your life? Do you have concerns about how your children from those relationships will get along with your current spouse when it comes to your estate? It is important to consider how you want inheritances to be split. Your Will can dictate how your assets will be handled! You can also designate your preference for the guardian of any minor children in the event that both you and the other parent die.
Additionally, a Will provides provisions such as the appropriate age at which your children should take over responsibility for managing any inheritance. One primary concern many parents have is whether young adults will be mature enough to make sound judgments concerning any money they inherit. Your Will can establish a certain age at which young adults gain control of their inheritance, to ensure that it isn’t squandered when you would prefer it be used towards education or sound investments.
In short, your Last Will and Testament should be drafted so that your wishes regarding your family are honored.
A Will can safeguard your beneficiaries if they become disabled
Are any of your assets expected to go to a loved one who has a chronic medical condition? If so, you’ll want to consider that an inheritance could disqualify them from any means-tested government benefits that they may receive or be entitled to, which could be devastating if they are counting on that benefit. The most common examples of this are Supplemental Security Income (SSI) and TennCare (Medicaid). You’ll want to have a contingency plan in your estate plan to make sure that their benefits are secure and not at risk of being cut off due to an inheritance. You don’t want their government assistance to decrease just because you died! You definitely need a plan for that. Make sure to work with a qualified estate planning attorney so you can refrain from making errors with your family’s benefits.
If you want control over who can access your digital assets, you must make a Will
Many digital assets are governed by terms and conditions which are unlikely to specify who will take over your accounts when you die. Some providers, such as Facebook, permit you to designate someone as a “legacy contact.” However, not all companies are robust enough to provide this type of service. A Will protects your digital assets from falling into the wrong hands or being lost in digital space with no one able to claim them. Check out our blog post about how to create or change your Facebook “legacy contact” here.
In conclusion
These are just a few of the things that you’ll want to consider when making an estate plan. I want to encourage you to have a long discussion with your spouse about how your assets should be split when one of you dies. There shouldn’t be any surprises! I cannot stress the importance of knowing each other’s values and putting them in writing. It is crucial to have the outcome you desire. A failure to plan can end up in expensive court litigation. This is why we encourage everyone to speak with an experienced estate planning attorney about how they and their spouse can protect each other through proactive planning.
Are you ready to make your Will? Schedule a free initial call and make your plan with the Team at GALS!
TennCare will use estate recovery on TennCare payments for long-term care.
Long-term medical care is expensive – but where does the money come from?
This week I want to talk about TennCare Estate Recovery. Over the last few blog posts, we have gone over the benefits available to those who qualify medically and financially for TennCare Choices, Tennessee’s long-term care Medicaid program. We have also discussed how we can help our clients adjust their finances so that they can qualify. This week we want to discuss how TennCare recoups the cost of providing long-term care services.
TennCare rules can be confusing
A long time ago, my friend told me that her grandmother had to give away her house because she could not afford to pay for medical care and needed to qualify for Medicaid. This is really unfortunate! Her grandmother clearly didn’t understand the rules of Medicaid. Unfortunately, people like my friend’s grandmother get bad information about Medicaid, the services that are available, and the requirements to become eligible. I wish I could have told my friend’s Grandmother that she could have kept her house. This leads me to my main point…
TennCare will not take your house while you are living in it.
However, TennCare estate recovery allows TennCare to get reimbursed for any funds that they spent on behalf of someone after that person dies. In other words, the state will eventually try to get reimbursed for the money they spent on your long-term care.
According to current TennCare rules, a single person can own a house that is worth up to $603,000, or land with a house worth over $603,000, without any concern about being ineligible for TennCare due to their home. However, you will want to talk to your attorney and financial advisor about how you may be able to continue to pay the costs of maintaining a home if you are in skilled nursing care.
How and when does TennCare get reimbursed for your long-term care?
For most of us, TennCare is not going to take your home even if you are living in a facility. Concern about your real estate should arise if you were hoping to pass your real estate to your family when you die. While TennCare will not try to get repaid for their expenditures during your lifetime, they will seek reimbursement after you pass away.
For example…
Roberta has a home worth $250,000 and no other assets. She was in a skilled nursing facility for two years and received TennCare services for which they paid $125,000. After Roberta passes away, her estate will be expected to pay $125,000 back to TennCare before the family receives any money. Since there is a house worth $250,000, the family would be expected to sell that house and give half the proceeds to the state. This process is called estate recovery.
Work with a probate attorney to resolve an estate recovery claim.
Is there any way we can keep the house in the family?
Estate recovery is something that TennCare takes seriously, and will go to great lengths to make sure that they are properly reimbursed. However, they will not take your home while you are living in it.
I want to be clear: A loved one receiving TennCare benefits while alive does not mean that Tennessee will later attempt to collect the money from YOU. The debt is not yours. If you have a loved one who passes away while on TennCare, your probate attorney will work with you to resolve that estate recovery claim so that TennCare can get reimbursed for any funds they spent on behalf of the deceased.
You can find more information through the Estate Recovery division here.
If you have a family member that was on TennCare or needs to get on TennCare, contact us at 615-846-6201. We’re here to help!
Many people have sufficient income to maintain a regular lifestyle but are unable to afford the high cost of long-term care. With the average cost of long-term care around $7,000.00 a month, it is incredibly difficult for most families to afford it, even more so after retirement. That’s why it’s a good idea to plan for qualifying for TennCare, also known as Medicaid.
Evaluate and restructure your assets to qualify for TennCare
It’s worthwhile to know how to qualify for TennCare
As we discussed in our blog last week, there are certain criteria you need to meet to be eligible for TennCare. As an elder law attorney, one of my jobs is to help families get their loved ones qualified for TennCare while maintaining resources available for the rest of the household.
One of the ways that we do this is by restructuring a family’s assets. We do this by turning resources that are countable for TennCare purposes into items that TennCare does not count as part of its eligibility assessment
This process is known in the elder law community as a spend-down. The goal of the spend-down is to make you or your loved one eligible for TennCare as far as your assets are concerned. If you are overqualified for income-based criteria, we can use a special type of trust called a Qualified Income Trust, or a Miller Trust, to reduce your income. The goal of a spend-down is to maintain the quality of life for all family members including those who need long-term care.
Bob might benefit from purchasing a quality mobility device
What is a “spend-down”?
For example…
Bob needs to go into long-term care. Bob is eligible based on his income. He makes $2,000.00 a month of social security retirement income. Bob also has a house, a car, and $50,000.00 in the bank. Bob is widowed and his children are adults.
We need to do something with at least $48,000.00 from Bob’s bank account in order to make him eligible for TennCare. His house and his car are not countable for TennCare purposes in most cases. What can we do?
Make improvements to his home that would improve his quality of life and access to the things that he needed in the home. This might include:
Grab bars in the shower or hallway.
A ramp into the main entrances.
Paving the driveway or expanding it closer to the door
Widening doors
Buy some things for Bob that his Medicare did not cover, such as:
Hearing aids
Dentures
Eyeglasses
Top of the line mobility devices
There may be other things that would improve Bob’s quality of life. There are things we can spend money on or convert into income. I am also going to suggest to everyone that they use the money to make arrangements for end-of-life needs if they have not done so already. Since at some point Bob’s children will need to make arrangements for his burial or cremation, paying for it now from his excess funds is a great way to make those funds unavailable for TennCare purposes and meet a future need.
Bob has peace of mind because he has plans in place for long-term care
Bob might want a Care and Savings Assessment
It’s not easy getting approved for TennCare / Medicaid, and we know it! That’s why we offer help in planning your steps to qualify. It doesn’t matter what your starting point is, we’re here to help you navigate the process with one goal: get our clients the quality of care that they need. Contact us if you would like to make plans for qualifying for TennCare.
Heading into the month of December, we wanted to focus on the idea of gifting. While in our line of work, we often think of gifting in terms of taxes or inheritance, but there are so many other ways to leave gifts to those in your life. We asked our colleague Alyssa at Purple Fox Legal to share with us some of the “gifts that keep on giving” through intellectual property law, which is her focus. If Alyssa’s post helps you or you have questions about your copyrights or trademarks, reach out to her at alyssa@purplefoxlegal.com or 629-248-3310. -April
Owning the copyright to a song is an amazing accomplishment!
Professional creatives, like songwriters and musicians, pour endless amounts of time, energy, and passion into their craft. They spend months perfecting each project, and years carrying the pride of a job well done. And, for many, this hard work continues to live long after they do.
This is where estate planning comes in. Proper estate planning guarantees that your legacy will be managed according to your standards, even when you’re not around to do so. The process names the people and organizations that can lay claim to your assets, and protects your work with red tape and safety nets. It is a critical step in any songwriter’s life.
Knowing the importance of something, and understanding how to do it are two separate matters. In this article, we’re introducing musicians and songwriters (like you!) to the most basic steps of estate planning. We’re covering the top five important tips for songwriters planning their estate.
1. Understand how property is transferred through estate planning
Comprehensive estate planning is crucial for ensuring that all property is transferred to its intended parties. While most estate plans will easily transfer common assets, like cash, vehicles, and real estate, professional songwriters also need to consider protecting their intellectual property. Intellectual property, like copyright, is incredibly important for you to continue providing a stream of income that can flow for generations.
To truly understand estate planning, songwriters must understand what an estate actually is. In layman’s terms, an estate is a portfolio that includes all property (tangible and intangible) accumulated throughout an individual’s lifetime. After your passing, all of your property, assets, and funds will become the property of the estate.
Once you pass on, all of your estate planning goes into action. The executor, or person responsible for carrying out the probate process, will distribute your property through a complex legal procedure. Your final wishes and requests will be followed, typically passed down in the form of a will. A judge will direct your executor to follow state regulations to transfer your assets and distribute your property.
Create a paper trail! Protect your songs by properly registering them with the Copyright Office.
2. Register your copyrights and maintain copies of every contract associated with them
Copyright registration is paramount in the songwriter’s estate plan. Registering your copyrights will ensure that they are protected for up to 70 years after the author’s death. But, songwriters and musicians should recognize that each song they produce carries two copyrights. It’s not only the sound recording and “master” copyright that matters but the musical composition must also be protected. This includes the lyrics and underlying music.
To add another layer of complexity, copyright protection doesn’t end with registration. A consistent and cohesive record should be kept of all contracts associated with your copyright. This will help clarify the copyrights owned by the estate itself.
Remember: A notice to the Copyright Office is also required each time a copyright changes ownership. If copyrights are not included in the estate, they cannot be distributed to heirs. Filing with the Copyright Office is so important because it creates a public chain of custody and lowers the likelihood of litigation after your death.
3. Add beneficiaries to your performance rights organizations and mechanical rights organizations
When it comes to copyright law, registration grants the owner a number of different legal rights. In fact, the US Copyright Act provides six unique and exclusive rights for each copyright. And, each registration lasts long past the life of the author.
Because of this, every songwriter should consider adding potential beneficiaries to transfer control of these six unique protections. Including intended beneficiaries during the estate planning process can prevent expensive litigation after your death. But first, each beneficiary must be added to a musician’s Performance Rights
Organization (PRO) and Mechanical Rights Organization (MRO), in addition to creating a will.
Most musicians are familiar with and registered with both a PRO and MRO. PROs are responsible for administering performance licenses, collecting licensing fees, and distributing these fees. They handle music that is publicly broadcasted on the radio or the Internet, in television shows, or out in public. MROs, on the other hand, collect mechanical royalties. They reserve a fee each time your song is played.
Accurate, updated information is required in both your PRO and MRO accounts. Adding beneficiaries to them cannot be recommended enough.
4. Be aware of the deadline for recapturing copyrights
When a copyright is created and then assigned to someone else, the original author is afforded an opportunity for a second bite of the apple. This means that original authors can elect to recapture copyright ownership by filing a specific notice with the US Copyright Office. It’s important to know that there is a limited period of time before the termination goes into effect.
For many songwriters, recapture is available as early as 35 years after publication.
Not all gifts come from a store! What will you do with your art?
5. Write down how you want your property to be transferred before creating a will
A valid and effective will is just one step in the estate planning process, but it may be the most important one. A will dictates exactly where your assets will go after your death, including the methods of transfer and the terms you expect. Anything in a will is subject to probate court though, which is why it shouldn’t be the only document in your estate plan. Wills serve best when used as a safety net for any assets not covered in your other estate planning documents.
Final Thoughts
When it comes to estate planning and managing your assets, age should never be a factor. Songwriters with assets should always be protected. Just look at Kurt Cobain and Selena Quintanilla, who didn’t have wills when they died. Their lack of an estate plan created a whirlwind of legal problems for their families.
Creating a will can be overwhelming The process to get there can be overwhelming though, but having help from an experienced attorney can make the process seamless for you and your family.
As if choosing health insurance under an employer’s plan wasn’t difficult enough, figuring out which type of Medicare plan is best for you is even more confusing. I call Medicare an alphabet because there are 4 parts- A, B, C, and D. Oh, and you might want to consider a supplement too!
Don’t worry. With a little time and some guidance, you can master the Medicare alphabet just like you mastered your ABCs!
First, let’s go through the four types and what they cover.
Part A only covers emergency care, such as if you need to stay at the hospital.
Part B covers regular care like doctors visits, bloodwork, and any other testing or treatment that your doctor recommends.
Part C is often referred to as an “Advantage Plan”. It is administered by private insurance companies, just like an employer’s plan. It includes Part A and B coverage and may include other benefits as well, such as dental, vision, and prescription drugs.
Part D covers prescription drugs. That’s it.
When you approach age 65, ask yourself what your current health needs are, what family history might impact future healthcare needs, and what type of coverage you are used to receiving. Then look at your budget.
Part A is free for those who are eligible through their tax contributions. In 2021, most individuals will pay $148.50 per month for Part B, although the amount can be higher depending on your income.
If you anticipate that you will need something more than just emergency and regular doctor’s visits, there is another alternative. Consider a Part C “Advantage” plan or a Medicare Supplement (or “Medigap” plan), instead. This plan will provide coverage for those things that Parts A and B don’t, like such as prescription medications, dental, or vision care. Keep in mind that you still pay co-pays and deductibles on Medicare, so you will want to look at those amounts and not just your premium when considering your budget.
When thinking about the Medicare alphabet, I have a little way to help me remember what each part covers:
A is for an Accident that lands you in the hospital
B is for Bloodwork they do at the doctor’s office
C is for Comprehensive coverage you can get with an Advantage plan
D is for Drugs (They made that one easy!)
Now you know your ABCs….next week I hope you’ll join us when I share my favorite FREE resources to learn about Medicare before you sign up.
Many grandparents wish to leave a legacy behind for their grandchildren; however, they may run into some issues if those children are underage. A Nashville Wills and Trusts lawyer can help you determine what the best options are for leaving assets to underage beneficiaries, whether those assets are held in a Will or Trust, financial accounts, or as part of a life insurance benefit.
Underage Beneficiaries in a Will or Trust
As a Nashville Will and Trust lawyer, I always ask my clients if any of their beneficiaries are underage, or even if they would like to keep younger beneficiaries from accessing their full inheritance until they’ve reached a certain age, which is usually 25 or even 30. If the children are underage, an adult guardian must be named since minors are not allowed to own property. If a significant amount of property is left to the minor, a Trust is usually a good idea to manage the property until the child comes of age. In fact, Trusts can be used to ensure the minor only receives their full inheritance once they reach a certain age or milestone, such as graduating from college, while at the same time providing assets to make sure the child can achieve that milestone. I can speak with you about leaving an inheritance to an underage child and will help you choose the best option for administering the distributions.
Underage Beneficiaries of Financial Accounts
Many people choose to make beneficiary designations directly on their financial accounts, such as savings accounts, annuities, and retirement plans. Nashville Wills and Trusts lawyers urge their clients to carefully examine the details surrounding these beneficiary designations, as minor beneficiaries often cannot directly inherit assets after your passing. It is important to consult with a Nashville Wills and Trusts lawyer to determine the best way for your underage beneficiaries to receive the inheritance you leave for them at a time when they can make informed financial decisions on their own. Directing the assets to Trust is often the best bet in these situations, but consulting with an attorney will give you a much better idea of how this should be done.
Underage Beneficiaries on Life Insurance
Many parents and grandparents name their children or grandchildren as beneficiaries on their life insurance policies. As with the cases above though, an adult guardian or a Trust must be named in order to hold the life insurance proceeds until the minors come of age. It is generally not advised to name minors as beneficiaries to life insurance policies, as courts will often appoint an adult to look after the proceeds until the child comes of age – and that adult may not be someone you would have wanted to be appointed to such a role. Speaking with a Nashville Wills and Trusts lawyer may help you determine the best way to handle your life insurance beneficiary designations.
If you have any questions about the best ways to leave an inheritance to underage beneficiaries, please contact us at 615-846-6201 to set up a consultation.
