The founders of Regiftable.com have declared the third Thursday in December to be National Regifting Day. This year, it falls on December 15th. You might well ask, “Why did they choose the third Thursday in December?” Another question might be, “How do regifting and estate planning relate?”

Good questions. According to Regiftable.com, December 15 is the most common day for holiday office parties in the United States, which in turn is the day 41 percent of regifters target coworkers as the recipients of their re-gifts.

At this point you might also be asking yourself “Isn’t re-gifting a taboo of some sort — why would anyone do such a thing during the holidays?” Well, it would appear that the majority of people, some 60 percent, now think re-gifting is okay as long as it falls within certain boundaries of decorum. Regifting.com describes the number one rule of thumb in this way:

“Other than not hurting the feelings of the original gift giver, the most important thing is to be sure that the re-gift is suitable for the new recipient. Are you merely burdening someone with an unwanted item, or presenting someone with something they are likely to enjoy?”

Translation: no fruitcakes, no ties, no scarves (unless, of course, the scarf is made by Hermes).

At Zimmer Law Firm, we think National Regifting Day affords us all the opportunity to think about re-gifting in a different light. By that we mean re-gifting the values, wisdom, traditions—the love—bestowed upon us by previous generations to our children and grandchildren today. Re-gifts such as these are impossible to attach a price tag.

So this year, feel free to re-gift that popcorn popper, as long as you know the recipient likes popcorn. And then, when you are sitting by the fire with your family, re-gift the things that really matter. Your values, life-lessons, and stories, including those of your living and departed family members. Also with your dreams and hopes for the future and the people you love. But don’t just limit re-gifting to holiday season. Make it part of your family bonds and relations every day of the year!

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

One of the reasons why so many people are unprepared for retirement is because of the fact that they are under the impression that Social Security will be sufficient to finance their retirement years. Unfortunately, this is really not the case unless you are capable of living an extraordinarily spartan existence. The numbers are going to move around as different people comprise the Social Security rolls, but the Associated Press is reporting that the average Social Security payout as of this writing is $1082 per month. This is clearly not going to get you very far in the current economy.

There is however some good news being circulated for Social Security recipients right around now, but it may sound better on the surface than it actually is in any practical sense. There had been no cost-of-living adjustments provided for senior citizens who are on Social Security since 2008. These adjustments are tied to the rate of inflation, and no increases have been justified utilizing the criteria that are in place. However, it turns out that there will be an increase in 2012.

Next year people who are receiving Social Security will see a 3.6% increase in their checks or direct deposits. Any increase is always going to be welcomed by those who are receiving Social Security, but when you do the calculations this is going to equate to a $39 per month increase on average. A little less than $10 extra a week is better than nothing, but it is certainly not going to change your life, especially when you consider the fact that the out-of-pocket cost of health care for seniors has risen by 14% since 2008.

The reality is that you have to plan ahead carefully if you’re going to enjoy a comfortable retirement because Social Security is not a cure-all. If you want to map out a plan that allows you to make the most of your golden years, simply pick up the phone and get in touch with an experienced retirement planning attorney to arrange for a consultation.

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

Proper estate planning includes reviewing and updating your will periodically. You should revisit and update your will if you experience any life-changing events. This includes getting married, having children or experiencing any other type of life changing event. Similarly, if you get divorced, you should make sure you change your will to delete any references and bequests to your former spouse.

Changing your will involves revoking it and creating a new will or rewriting it by amendment. If you want to amend your will, you will need to create a codicil. Generally, if you have only one or two minor changes, amending it by codicil is a good idea. However, if you have numerous changes or global edits, you may want to consider revoking it and creating a new will. If you create a codicil, your codicil follows your previous will as an appended document. Either way, you will need to comply with the original formalities required by state law in creating your original will.

At the time you create your will, codicil or amended will, you must be at least 18 years old. Many attorneys may prefer creating a new will by revoking your existing will even if you have only a few minor changes. Before the age of technology, drafting a new will meant someone had to retype the entire will or handwrite a new will. Computer software and word processing programs make drafting a new will an easier task. Our office will discuss the best course of action for your individual situation. Deleting provisions in your will by hand is generally not a good idea, and doing so may render your will ineffective.

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

Jack, Bill, and Russ dreamed of creating a restaurant chain in their hometown.  Through hard work they built a thriving business. But their dream will become a nightmare if they don’t plan for what happens when they die.

Each partner has continually reinvested in the business so each of their respective shares represent their most significant financial asset. None of their heirs want to be involved in the business after their father passes away. And even if they did, the survivor owners would not feel comfortable working with the family of  the deceased partner.

These dynamics pose serious issues for their estate planning and the future of their business. Suppose, for example, Jack was to pass away and leave his share to his family.  Since no one in the family wants to work in the business, how would they realize value for the inherited partnership interest?  Conversely, what if a family member or two become active in the business, but the other two partners don’t want to work with them, or they don’t get along?

Either scenario does not bode well.  In the first instance, Jack’s family want to force the sale of the business so they can realize cash for their interest. “Fire sales” like that usually bring bargain hunters to the table, which is not in any owner’s best interests.  So Bill and Russ decide they will buy out Jack’s family. But Jack’s family have an unrealistic opinion as to what a third interest in the business is worth. They also want all the money at once and will not accept installment payments.  EVen if Russ and Bill agreed to their extortionate selling price, paying it all at one time would take more than their saving to pay operating expenses during slow seasons.  Since the parties cannot find a middle ground, they feud and muddle along, but in just a couple of years the business folds and closes.

Let’s change the facts a bit and assume Jack’s family found an outsider to buy hisinterest in the business. Bill and Russ are afraid that this inexperienced third party will disrupt their operations and they are right.  They end up in litigation as the new owner seeks to force Bill and Russ to sell out to him at a very low price, which they reject.  This eventually drives the business into receivership and bankruptcy, as an outside buyer cannot be found.

Could Jack, Bill and Russ plan their estates to avoid these risks?  How can they be fair to each other, and realize value for their heirs in a way that will not financially stress the surviving partners?

The most common solution a Buy-Sell Agreement (“BSA”) made while the partners are alive, healthy and getting along without issue.  A well-drawn BSA can realize all the objectives mentioned in this discussion, and keep the business profitable for generations.

There are different types of BSA’s.  Today I will highlight the Cross-Purchase BSA and the Structured Buy Out.  In a Cross-Purchase plan,each partners takes out an insurance policy on the others. For the purposes of this example they would be valued at a third of the agreed upon value of the business.  Should Jack pass away, Russ and Bill would use the proceeds from the insurance policies that they had taken out on Jack’s life to purchase his share in the business from his estate at the previously agreed upon price, in cash.  There is no fighting over the purchase price or the payment terms. The buy-out price is paid from the insurance policies which the partners have paid for a little at a time over the years so it does not financially stress the business or Bill and Russ.

They also agreed to re-value the business from time to time, to make sure the price is fair and adjust the life  insurance. But if the insurance is not enough (or if there is no insurance ) then there is a structured buy-out. That’s where the parties agree in advance to accept installment payments of the purchase price over an extended period of time, to the extent it is not covered by life insurance. Specialized provisions can be added to make sure that events after the sale of the deceased partner’s interest are not unfair to the selling partner’s estate.

Estate planning for cosely held businesses can be frought with issues, but good planning makes it fair.  Failure to plan could doom a business.  Contact a skilled and experienced estate planning lawyer for your options.

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

My sister and I now count ourselves in the Sandwich Generation. That refers to Baby Boomers who are raising  children,  helping them through college and in getting a start in life — while also caring for their aging parents.

After our father died 3 1/2 years ago at age 88, our mother seemed to change overnight. Now, she lives in an assisted living facility suffering from dementia and physical impairments.

My sister lives near our mother in Florida and sees that she is well cared for. I attend to the finances and legal aspects from here in Cincinnati. I visit as often as I can, most recently to clear out her condo and list it for sale.

If you have ever done this for loved ones, either when they must move out of their home or after their passing, you know what an emotional experience this can be. This was actually the second time for us, as we had to sell our parents’ home (our family home) in Canton, Ohio, after Dad died.

We agonized over so many personal effects that for the most part had no economic value, but evoked memories of our childhood and lives with our parents.  Do you keep it or throw it away? Or give it to charity? If I keep it, where will I put it?  And so on.

The physical labor was hard, but the emotional work was the hardest. It was truly a Passage of Life.  I wondered through the process whether our kids will one day feel the same bond to their past.  Some of what we found I wouldn’t trade for a million dollars. Truly, there are  legacies worth more than money!

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

On a recent visit with my younger brother,  we were on the receiving end of a random act of kindness from a stranger that touched my heart.

Bruce is about 9 years younger than me, and was born profoundly retarded. As my parents aged, we moved him to the Cincinnati area so I could become his legal guardian and see to his care. He lives in a wonderful home in Batavia called the Southwest Ohio Development Center. It is run by the State of Ohio.

Bruce loves to eat out.  To see him, you would not notice anything different. But he cannot speak although he understands basic directions or questions. His affect is a bit off, and it is not hard to see after a few moments that he is special.

I talk to Bruce just like anyone else,  but he can’t reply. I help him with his food and keep him clean. On a recent Sunday, we were having lunch at the Frisch’s in Batavia. Our favorite waitress Judy was helping us. But when it came time to pay, she explained that the lady sitting across from us had paid the check.

It seems this lady and her companions had silently watched us together and it reminded her of her deceased brother who was also a special needs individual.  Paying our check was her tribute to us and her brother.

So often people stare in wonder at those who are not fortunate to be normal and healthy.  I was touched to see another person who understood that mentally handicapped individuals are still human, and  that they want and need love and attention just like the rest of us.

To this kind lady, whoever you are, thank you and I hope we can meet again some day!

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

Some people feel as though estate planning is something that they don’t have to worry about until they reach an advanced age, but the reality is that this is really not the case.  Estate planning becomes relevant to you as soon as you become a self-supporting adult who is responsible for your own life and decision-making. However, once you get married and have one or more people relying on your income, estate planning becomes an absolute must.

If you were to pass away suddenly due to an accident or catastrophic illness and your paycheck was to disappear, would your family be able to maintain their quality of living? Most people would say no, and this is why it is so important to have adequate life insurance in place. As your expenses rise and your family grows, you must continually revisit your coverage to make sure that it matches the current financial responsibilities of your family.

Many people recognize the fact that retirement  planning is a natural extension of estate planning, so it is never too soon to get started planning for your retirement. If you have been following the recent news cycle you are aware of the fact that the budget deficit is a big issue in Washington. Given the cost cutting mood the future of these programs is uncertain, even though retirement may seem like a long way off the  onus is on you to be proactive about making sure that you are personally prepared when the time comes. A good estate planning attorney can help you get your legal documents in order, and often can refer you to a good financial planner and investment adviser who can help you with the financial aspects of planning for retirement.

The issue of guardianship is something to consider as well when you are a young parent.  If  you and your spouse were to pass away together in a car accident, who would care for your children? How would you provide financially for their care? How will the money be handled for them, and who will be responsible?

If you fail to plan for such an eventuality, state law requires a probate court guardianship for your children and their money.   The court decides and controls who will parent your children and control the money you leave for them. Because this is a probate proceeding, it carries all the excess baggage of probate.

The matter of caring for minor children after your death  is the most important estate planning.   estate planning now — before a crisis — assures the care for your children that you would want.  You can even avoid a guardianship for your children’s money with a living trust set up while you are living.

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

For many people the process of estate planning has everything to do with implementing strategies that enable probate avoidance. Probate is the legal process that your estate must pass through before your heirs will receive their inheritances if you use a last will as your primary vehicle of asset transfer. Though probate does provide some protections, there are pitfalls involved with the process and many people prefer to look for ways to transfer assets to their loved ones in a direct and hassle-free manner.

What exactly are the pitfalls of probate? For one thing, probate is a public proceeding so it is a matter of public record; many people would prefer that their final affairs be resolved outside of the public eye. Plus, probate provides an open forum for people who may want to challenge the will and this is a door that many people would rather keep closed. Probate is also time-consuming, taking anywhere from several months to several years to run its course, and the heirs to the estate do not receive their full inheritances until the estate has been closed. And finally, probate can be expensive, consuming anywhere from 2% to perhaps as much as 5% of the overall value of the estate, and sometimes even more in complicated cases.

One very direct and straightforward way to transfer assets to your loved ones outside of the probate process is through the creation of pay on death accounts, sometimes known as transfer on death. You simply open one of these accounts at a bank or financial institution of your choosing, and when you do you name a beneficiary who will assume ownership of the funds in the account upon your death. Many brokerages also offer POD or TOD accounts. In addition to the ease of transfer outside of the probate process, pay on death accounts also provide flexibility. You have access to the funds throughout your life, and you are free to change the beneficiaries as you see fit or even close the account entirely at any time if this is what you would like to do.

However, TOD/POD has limitations and shortcomings, also, which is why so many people choose a funded, revocable living trust as the centerpiece of their estate plan.

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

Estate planning and retirement planning go hand-in-hand for most people because in essence your estate will be comprised of the assets that remain after you finance your retirement years.  Of course there are some who have accumulated sufficient wealth to have two separate funds for each respective purpose, but these folks are in the minority. So when you are planning for your retirement it is important to get as firm a handle as possible on the expenses that you may be facing later in your life. Though this is certainly an imperfect science, it is important  to keep your finger on the pulse of elder law issues and gain an understanding of the lay of the land.

One thing to consider is just how long you can expect to live. The average lifespan right now 78.4 years, but as you get older your likely lifespan increases. Once a woman reaches the age of 65 her life expectancy is 85.5 years according to the Social Security Administration. In fact, the segment of the population that is at least 85 years of age is the fastest-growing age demographic subset the United States. So if you are planning conservatively it would be logical to be prepared to live into your mid-to-late 80s and perhaps even beyond.

This leads to the subject of long-term care and the costs involved. According to United States Department of Health and Human Services 75% of people who reach the age of 65 will need long-term care at some point in their lives, and this includes in-home care as well as residence in a long-term care facility. How much does long-term care cost? According to the MetLife Mature Market Institute survey the national average for a yearlong residence in an assisted living community in 2010 was just under $40,000. The latest annual survey published by Genworth Financial Services puts that cost at $38,220.00. Genworth pegs the annual cost of  a semi-private room in a facility for skilled nursing care at $67,525, or $75,190 for a private room.

Whichever study you rely on in the final analysis, when you’re planning for your retirement years the facts are clear it is likely that you will need long-term care at some point. The costs  are considerable. This is something to budget for when you are planning for the latter portion of your life.

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.

New blog posts coming soon!

The Zimmer Law Firm is a member of the American Academy of Estate Planning Attorneys.