When we think of income taxes, we think of how much we earn. But, another aspect of income tax is the gain or loss on assets. Income tax basis is central to how assets are taxed in the United States. This is the first of a series on income tax basis. This blog will examine income tax basis, how you get it, and how it gets adjusted. The next article will look at how income tax basis is important in estate planning.

Let’s look at the life of an asset and its income tax basis during that life. Mary bought a house for $300,000. This cost basis is the starting point of her income tax basis. If she makes certain improvements, such as a room addition or other capital improvements, these add to her basis. Let’s say she adds a bathroom for $50,000. Now her basis is $350,000.

Let’s say Mary lives in the house for two years and then sells it for $500,000. She would calculate her tax by subtracting her basis from the sale price. Her adjusted basis was $300,000 plus $50,000, or $350,000. That is deducted from her sale price of $500,000, for a gain of $150,000. If this was just a vacation property she owned, she’d owe tax on the gain of $150,000. However, if Mary owned this as her principal residence, she could exclude up to $250,000 of the gain (double that if she were married), as long as she had owned and lived in the property for two of the prior five years. Since Mary owned and lived in the house for two years, she qualifies and, thus, doesn’t owe any tax on her gain of $150,000.

But what if Mary rented the property out? If Mary didn’t live in the home for two of the prior five years, she wouldn’t qualify to reduce her taxable gain. But, when she rented it out, she would have been able to depreciate the property. These depreciation deductions would be useful to offset the income she earned from renting the property. Let’s say Mary takes the standard depreciation deductions for two years, she’d have about $25,000 in deductions over the two years. These depreciation deductions would also reduce her income tax basis from $350,000 to $325,000. (This assumes the entire value of the property was in the structure). If she rented the property over its life of 27.5 years, eventually she would depreciate it to zero. This depreciation can be very useful in offsetting the rental income she earns on the property over the years. However, when she sells the property, that depreciation gets “recaptured” as ordinary income, while the remainder of her gain is taxed as capital gains, which is typically taxed at a lower rate.

The above example looked at real estate. But other assets have an income tax basis, too. For example, investments like stocks have an income tax basis. Let’s say Mary buys five shares of stock for $10 per share, or $50. That’s her basis. The value of the stock increases to $1,000 per share, or $5,000. She sells the stock. She’ll owe tax on $5,000 less $50, or $4,950. The rate at which Mary will be taxed will depend on her other income.

Income tax basis can be very important in estate planning. It influences which assets you might want to give away and which assets you might want to keep. The next article in the series will examine how giving an asset or holding it until your death impacts the income tax basis your beneficiaries receive in the assets they receive.

When considering different estate planning strategies and which direction to take, it’s important to consider the impact on basis. “Basis” is the benchmark used for income taxation.

What does income tax basis have to do with estate planning? Property included in your taxable estate at your death gets a “step-up” in basis to its value at your death. (Certain property like IRAs don’t get this step-up.)

However, when you gift an asset, the basis generally goes with the asset. Let’s say you purchase stock for $200,000 and it appreciates to $500,000. You are diagnosed with a terminal illness.

You want to put a simple do-it-yourself plan in place and you’ve heard probate can be cumbersome. So, you decide to give the stock to your son before you die. Doing so certainly avoids probate.

You succumb to the illness. Your son sells the stock after your death. Unfortunately, the stock did not receive a step-up in basis at your death because you had given it to your son before death. Your son received the stock with your $200,000 basis.

When your son sells the stock, he’ll pay capital gains tax on the gain of $300,000. Assuming a combined state and federal rate of 25%, he’ll pay $75,000 in tax upon the sale…a tax which could have been avoided with proper planning.

If, on the other hand, you had simply put the stock in a revocable trust, it would have avoided probate. Assets in a revocable trust are included in your taxable estate at death. Therefore, all the assets in the revocable trust receive a step-up in basis upon your death. If your son were the beneficiary of the trust upon your death, he would have received the stock with a basis equal to its fair market value at your death, or $500,000. Thus, it would have avoided probate without sacrificing the step-up in basis.

Giving the asset away prior to death was designed to avoid probate costs, which it did. However, it also resulted in a loss of income tax basis step-up because the property wasn’t included in the donor’s taxable estate at death. That simple gifting plan turned out to be pretty expensive after all.

This type of issue can arise in other estate planning strategies, as well. For example, in the past the amount you could pass without incurring estate taxes was much, much lower than today’s amount, which is now over $11 million. Thus, many people have plans in place designed to reduce the value of their assets for estate tax purposes. Strategies could include fractionalizing real estate, using entities with restrictions, etc. These strategies may still work to reduce the value in the estate. That’s great if estate taxes are still an issue for your estate with today’s increased exclusion. However, the value in the estate establishes the income tax basis of the asset, as well. So, if you don’t need to depress the value of the asset for estate tax considerations, you’ve unnecessarily reduced the income tax basis of the asset.

For example, let’s say you own only one asset, an asset worth $1.5 million. You have a strategy in place which diminishes its value to $1 million. When estates over $1 million were subject to estate tax, this was a great strategy because the $500,000 reduction in value would have saved estate taxes on that $500,000 excess. Estate taxes are now levied at 40% of the amount over the exclusion and used to be as high as 55%. So, the fact that the beneficiary might incur a capital gains tax up to 25% was a good trade-off. But, because your estate is under today’s exclusion of more than $11 million per person, you’ll pay no estate taxes even without the $500,000 reduction in value. Instead of the basis being $1.5 million at your death, it would only be stepped-up to $1 million because of the strategy. Thus, the strategy which was intended to save estate taxes could cost your loved ones $125,000 in increased income taxes after your death (assuming a 25% combined capital gains tax rate).

Estate planning is a complex weave of competing considerations. You want to save estate taxes, if they would be applicable. But, you also want to minimize future income taxes by being mindful of how different estate planning techniques may impact the future income tax basis.

In Linn v. Department of Revenue, the Illinois Fourth District Appellate Court reviewed the state’s statutory framework for taxing trusts.  On constitutional grounds, the court limited Illinois’ power to impose taxes under its “once subject to tax, forever subject to tax” regime.  This case creates planning opportunities to minimize Illinois income taxes. 

Illinois Trusts

Illinois trusts are subject to a 5 percent income tax and a 1.5 percent personal property replacement tax.  A non-resident trust is subject to taxation to the extent of the income generated within Illinois or apportioned to the state.  Resident trusts, on the other hand, are subject to tax on all income regardless of the source of that income.  For an individual, state income taxation on a resident basis generally requires domicile or residence within the taxing state.  With respect to a trust, one or more of the grantor, trustees and beneficiaries may have contacts with a state sufficient to uphold as constitutional a tax on all of the trust income.

Illinois defines a resident trust based solely on the domicile of the grantor.  A “resident trust” means:

• A trust created by a will of a decedent who at death was domiciled in Illinois; and
• An irrevocable trust, the grantor of which was domiciled in Illinois at the time the trust became irrevocable.  For purposes of the statute, a trust is “irrevocable” when it’s no longer treated as a grantor trust under Sections 671 through 678 of the Internal Revenue Code.

Illinois law then attempts to stretch the ordinary boundaries of nexus in forever taxing the income generated by the trust property, regardless of the trust’s continuing connection to Illinois.  One can analogize the Illinois statute to a hypothetical statute providing that any person born in Illinois to resident parents is deemed an Illinois resident and subject to Illinois taxation, no matter where that person eventually resides or earns income.

 Linn

Linn involved a trust established in 1961 by A.N. Pritzker, an Illinois resident.  The trust was initially administered by Illinois trustees pursuant to Illinois law.  In 2002, pursuant to powers vested in the trustee in the trust instrument, the trustee distributed the trust property to a new trust (the “Texas Trust”).  Although the Texas Trust generally provided for administration under Texas law, certain provisions of the trust instrument continued to be interpreted under Illinois law.  The Texas Trust was subsequently modified by a Texas court to eliminate all references to Illinois law, and the trustee filed the Texas Trust’s 2006 Illinois tax return on a nonresident basis.  At that time:

• No non-contingent trust beneficiary resided in Illinois;
• No trust officeholder resided in Illinois;
• All trust assets were outside Illinois; and
• Illinois law wasn’t referenced in the trust instrument.

The Illinois Department of Revenue (the “IDR”) determined that the trust was a resident trust and that, as such, the trust should continue to be subject to Illinois income tax.  The trustee countered that the imposition of Illinois tax under these circumstances was unconstitutional as a violation of the due process clause and the commerce clause.  The court sided with the trustee based on due process grounds (not reaching the commerce clause arguments), and recited the following requirements for a statute to sustain a due process challenge:  (1) a minimum connection must exist between the state and the person, property, or transaction it seeks to tax, and (2) the income attributed to the state for tax purposes must be rationally related to values with the taxing state.[3]

This being a case of first impression in Illinois, the court cited a number of cases from other jurisdictions, including Chase Manhattan Bank v. Gavin, 733 A. 2d 782 (Conn. 1999), McCulloch v. Franchise Tax Board, 390 P.2d 412 (Cal. 1964), Blue v. Department of Treasury, 462 N.W.2d 762 (Mich. Ct. App. 1990) and Mercantile-Safe Deposit & Trust Co. v. Murphy, 242 N.Y.S.2d 26 (N.Y. App. Div. 1963).  Gavin, which upheld the application of the Connecticut income tax on the undistributed income of an inter vivos trust created by a Connecticut grantor, was cited at length by the court.  A critical fact in that case was that the beneficiary resided within the state for the year in question.  In Linn, the court noted, there were no Illinois beneficiaries.  Relying on Blue and Mercantile, the court found that a grantor’s residence within a state isn’t itself a sufficient connection to satisfy due process. 

The IDR argued that significant connections with Illinois existed, maintaining that the trust owed its very existence to Illinois and listing numerous legal benefits Illinois provides to the trustees and beneficiaries.  The court disagreed with the testamentary trust cases the IDR relied on, finding that an inter vivos trust’s connections with a state are more attenuated than in the case of a testamentary trust.  Further, the court found that the Texas Trust wasn’t created under Illinois law, but rather by a power granted to the trustees under the original trust instrument.  The court proceeded to dismiss the trust’s historical connections to Illinois and focused on contemporaneous connections finding that “what happened historically with the trust in Illinois courts and under Illinois law has no bearing on the 2006 tax year.”[4]  For 2006, the court concluded that the trust received the benefits and protections of Texas law, not Illinois law. 

 Steps to Consider

Although the IDR could appeal Linn or Illinois could issue a legislative response to the case, the decision provides guidance to trustees of trusts that are or could be administered outside of Illinois. 

Trustees of resident trusts with limited contacts to Illinois (in particular, those trusts without trustees, assets, or non-contingent beneficiaries in Illinois) should consider:

• Review state taxation:  The trustee should review connections to Illinois and consider whether actions could be taken to fall within the purview of the Linn holding.  Contacts with other states and those states’ rules for taxing trusts should also be reviewed.
   
• File return with no tax due:  Pending guidance from the Department of Revenue, the trustee could consider filing an IL Form 1041 referencing the Linn case and reporting no tax due.  For each tax year, a tax return must be filed in order to commence the running of the statute of limitations.  An Illinois appellate court decision that supports the taxpayer’s position will ordinarily provide a basis for the abatement of tax penalties.[5]
   
• Amend prior tax returns:  The trustee could consider filing amended tax returns for prior years.  A trustee that has timely filed prior year tax returns may file an amended tax return at any time prior to the third anniversary of the due date of the tax return, including extensions.  For example, the 2010 tax year return may be amended at any time prior to Oct.15, 2014.

Other Considerations

Given the holding in Linn and uncertainty regarding trust tax law, trusts that offer flexibility and can adapt to changing circumstances may have a distinct advantage.

• Officeholders:  Carefully consider the residency of officeholders, and provisions regarding the appointment and removal of officeholders.
   
• Decanting provision:  Consider providing the trustee with broad authority to distribute trust property in further trust. 
   
• Inter vivos trusts:  While the legal basis for the continued income taxation of a testamentary trust may also be questionable, testamentary trusts (meaning trusts established under a will that may remain subject to the supervision of a probate court) can be avoided by creating inter vivos trusts.
   
• Situs and administration:  Consider establishing and administering the trust in a state that doesn’t assess an income tax.
   
• Governing law:  Consider including trust provisions that allow the trustee to elect the laws of another state to govern the administration of the trust.  (Allowing the trustee to change the law governing interpretation, validity and duration is inadvisable.)
   
• Discretionary dispositive provisions:  Consider including discretionary trust distribution provisions, as some states may tax a trust based on the residence of beneficiaries with non-contingent trust interests.
   
• Severance provisions:  Consider including provisions authorizing a trustee to sever a trust without altering trust dispositive provisions.  This type of provision may allow a trustee to divide a trust into separate trusts and isolate the elements of a trust attracting state taxation.  For example, a trust may simply be divided into two separate trusts, one trust for the benefit of a child and his descendants that live in Illinois, and a second trust, not subject to Illinois taxation, for a child and his descendants that don’t live in state.

Twenty-five percent of the identities stolen every year are taken from the deceased. A family grieving the death of a loved one doesn’t need the headaches of identity theft on top of heartache over the loss. The identities of the dead are easier to steal and abuse than those of the living – after all, they can’t fight back.

But there are ways to minimize information exposure to help let the dead, and their financials, rest in peace. Here are six tips for avoiding after-death ID theft.

Alert the credit bureaus – When someone dies, contact the credit reporting bureaus – Equifax, Experian and TransUnion. You’ll need to provide the deceased’s Social Security number and tell them the person has died. Ask that their credit report be flagged with the note “Deceased. Do Not Issue Credit.” Also, get a copy of the deceased’s credit report so you know what accounts need to be closed.

Contact the Social Security Administration – The Social Security Administration (SSA) wants to know if someone died so they can remove them from the payroll. As an incentive, they provide a death benefit of $225 when you report a deceased beneficiary. Why a whopping $225? Because that’s what an average funeral cost in 1938 when the SSA was established. It’s one SSA benefit that was never adjusted for inflation. Nowadays, that won’t cover an obituary in a major market newspaper.

Close credit card accounts – When you’re alive, shutting down credit card accounts affects your credit rating. After you’re dead, it doesn’t matter! Don’t let a thief go on a shopping holiday by leaving credit card accounts open. The surviving spouse or executor must resolve all outstanding debts before the account can be closed or the deceased person’s name can be removed from the account.

Keep obituaries short – You wouldn’t put a Social Security number in an obituary. Yet the details prized by genealogical researchers also help identity thieves. It’s a sad fact that information like place of birth, mother’s maiden name, date of birth and date of death can be used to set up new accounts under the deceased person’s name. Avoid using such details in a publicly shared space.

Close email and social media accounts – Shutting down email and social media accounts can help avoid identity theft, as well as minimize painful reminders of the loss. A service called eClosure can close down the emails and social media accounts of a deceased person – also known as digital assets – even if the family does not have the passwords. For $150, with a death certificate and a valid ID, eClosure can shut down Facebook, Twitter, LinkedIn, Pinterest, Google+, Yahoo Mail, Microsoft Mail and other accounts.

Protect documents with sensitive information – The executor or trustee should secure the deceased’s driver’s license, bank statements, military records, and other documents with a Social Security number. ID thefts can often originate within the family. Someone may feel they got shorted in the will; someone may be an addict. There can be any number of family issues.

Take these steps to help secure the identity of the deceased as soon as possible. It can save a lot of headaches as well as heartaches.

Bob

There are a lot of misconceptions about hospice. People tend to think that choosing hospice care instead of hospital care is like giving up instead of fighting to keep living. Many people don’t want to “give in” to accepting hospice care until it is too late for it to have a real impact on their quality of life. And that’s what hospice is really about – ensuring quality of life until the very end. However, since most of us won’t have any experience with hospice until and unless we are in the position to need it, or have a loved one who needs it, it is hard to dispel this misunderstanding.

In honor of the 40^th anniversary of hospice care in the United States, a new website has been created to help educate the public about the real goals of hospice care. The site is called Moments of Life (www.momentsoflife.org), and is part of a new campaign to show, through video clips and short written statements, the kinds of final experiences people are able to have by including hospice in their end of life plans. There is the 51-year-old father diagnosed with metastasized lung cancer who was able to dance with his daughter in honor of her wedding. There is the opera-lover who was able to gather with family and friends for one last concert of the music he enjoyed so much. There was the woman diagnosed with ALS who, through the guidance and assistance of her hospice nurse, was able to continue working on her art projects and even hold a lavish tea party with her grandchildren.

Just as important as giving these desired “moments of life” to those with terminal illnesses, is the help hospice provides to families coping with saying goodbye. Studies have shown that people who watch their loved ones die painful deaths in hospitals’ intensive care units are more likely to suffer from depression after their loved ones’ passing. The families of those who choose hospice care are able to see their loved ones living out the ends of their lives without pain, usually remaining in the comfort of their own homes. Hospice care also provides a litany of specialists to help both the terminally ill and their families in hopes of easing the pain of this process for everyone involved.

This type of patient-friendly information is just right for many people: people without medical backgrounds who really do not want to be thinking about this topic. In the end, hospice care will be relevant for a significant number of people. Some of these may decide with their families that hospice is simply not the right choice for them. Others may decide that it absolutely is. Regardless, all deserve the chance to make an informed decision about how they want to live their precious final months. And this includes having a realistic, not misconceived, understanding of what hospice can and can’t do for them and their families.

With greater numbers of baby boomers approaching their retirement years, Americans have a heightened awareness regarding the importance of putting their affairs in order.  One need only Google the search phrase “do-it-yourself will kits” to know that marketers of online legal forms are eager to fill the void.

As more consumers begin to dabble in drafting their own legal documents, estate planners and financial advisors should advise their clients about the pitfalls of do-it-yourself estate planning.  While some of your clients may have convinced themselves that their DIY legal documents will pass scrutiny in the probate courts once they’re gone, it’s often not the case.    

Having practiced as a probate attorney for a number of years, I’ve seen my share of poorly drafted legal documents.  As a result, I often find myself representing heirs, executors, administrators and trustees in contested wills and in other expensive probate litigation proceedings.

In a high percentage of the probate cases that I’ve handled, I come away reflecting on how the heirs could have been spared the anguish, delay and expense of probate litigation had the deceased individual (testator) sought the services of qualified legal counsel.

An effective way for professional advisors to recommend a cautious approach for DIY clients is to share with them real-life stories, such as the following case I encountered. 

Litigation Over Mom’s DIY Will

This case involved one of my Florida clients, whose mother created her own typewritten will.  The mother had four adult children from two different husbands, but chose not to mention my client’s two half-siblings in the will.  Having been named in the will as personal representative for the estate, my client became the target of a lawsuit by her half-siblings who alleged undue influence, among other claims.

In addition to failing to mention the two children by a previous marriage, the mother’s will left out a residuary clause, which provides for the disposition of what’s remaining in the estate after specific devises have been made.  While the will mentions a minor grandchild as a beneficiary, there were no trust provisions established to ensure that the inheritance would be properly managed for the benefit of the child until the child reached legal age. 

In short, the will was poorly drafted and the cost to litigate the estate was nearly $22,000.  Perhaps more important than the financial diminution of the estate was the emotional trauma my client experienced, knowing that her half-siblings would sue her while she was still in the process of grieving her mother’s loss.   

State-specific Provisions

When heirs are disinherited or given unequal shares in a will, family disputes and litigation often occur.  Such situations require the advice of qualified legal counsel and can’t be resolved with DIY wills. 

In the above case, my client’s mother didn’t have the legal expertise to know that Florida is one of approximately 18 states that have adopted (either in its entirety or in part) the Uniform Probate Code (UPC), which addresses lines of succession (that is, who inherits what and in what order, if there’s no will).  The UPC, in addition to simplifying and standardizing the processes and rules of distributing property, sets forth provisions that are intended to protect spouses and children who are entitled to some minimum amount of property – even if the testator (such as the mother in the case above) fails to mention them as beneficiaries in the will.

Penny Wise, Pound Foolish

Professional advisors should remind clients that well-drafted estate-planning documents are a “gift” to one’s children.  Preserving one’s legacy and final wishes in the precise manner of one’s choosing shouldn’t be risked with the use of DIY forms.  In many cases, it will cost their heirs more in the long run than it would had the testator sought the expertise of legal counsel to either look over their documents or create them altogether. 

While legal professionals can’t provide clients with a guarantee that there won’t be a lawsuit when it pertains to disinherited siblings, unequal shares or other complex family dynamics, the likelihood of a successful legal challenge can be greatly reduced with carefully worded legal documents.

It has often been said that the path to knowledge begins with knowing what you don’t know. As usual, this year’s Heckerling Institute helps put the estate planning attorney on the path to knowledge by highlighting how much is uncertain.

Section 2001(b)(1) calculates the estate tax in the year of death as the sum of the tax on the taxable estate and the tax on the amount of adjusted taxable gifts over the aggregate amount that would have been paid on the gifts if they had been taxed as part of the decedent’s estate in the year of death. Section 2001(b)(2).

This works fine in a situation of a rising applicable exclusion. However, in the situation of a declining applicable exclusion, as we may have in 2013, it may cause an estate tax on prior non-taxable gifts.

Example: John has $6 million and gifts $5 million in 2011. He dies in 2013 with $1 million.

Section 2001 is intended to add back the prior gifts so that the $1 million is taxed at the rate of 50% rather than an effective rate of 34.58%.

Instead, Section 2001 could be read to tax the situation as a $6 million estate, or $2,940,800 less the unified credit of $345,800, which would result in $2,595,000 in tax.

The speakers at Heckerling were uncertain how the clawback issue would be resolved. However, they and I think it would be grossly unfair to give an applicable exclusion of $5 million in 2011 and 2012, only to have the decedent’s estate discover that those gifts resulted in an estate tax at the decedent’s death in 2013.

Of course, even if the clawback does exist, one would still be better off to use their $5 million applicable exclusion in 2011 or 2012. At least the appreciation on the asset would escape transfer taxes.

In our example, let’s say John’s $5 million of gifts in 2011 appreciates to $10 million by the time of his death. Thus, without the gifts in 2011, John’s estate would be $11 million and the tax would be $5,395,000, after use of his exclusion. Even with application of the clawback, the John’s estate would have saved quite a bit by doing the gifting. The tax would be $2,595,000 rather than $5,395,000.

As the days and hours ticked down in 2010, we faced a great deal of uncertainty on the extension of EGTRRA. With the potential “clawback,” we likely will be facing at least as much uncertainty in the waning days of 2012.

When a senior is no longer able to adequately care for themselves, there are two main options. One is to live in an assisted care facility such as a nursing home, and the other is to hire an in-home caregiver for private care. The latter option is ideal for seniors who prefer the comfort of their own home and some level of independence. Here are a few guidelines for hiring an in-home caregiver.

Determining a Senior’s Needs

There can be a considerable difference in a person’s specific needs, which will dictate the type of service that’s necessary. Some seniors will be able to dress, bathe and cook for themselves, while others will require assistance. There may also be medical needs that require a caregiver with an advanced skill set. Other times, a senior might primarily seek companionship and someone to run errands. That’s why it’s smart to write down a list of needs prior to contacting potential caregivers.

Agency vs. Direct Hire

Generally speaking, it’s best to go with an agency because they must meet certain requirements and tend to be safer than hiring directly. When looking at agencies, they should be evaluated on the quality and knowledge of their staff. Each caregiver should be run through a background check and be capable of meeting all of a senior’s daily needs.

For states that require licensure, a caregiver should be fully licensed. Being a member of the American Association for Homecare is ideal because it means that an agency is recognized for its professionalism. If a senior requires extensive care, it’s smart to have one or more backups available ahead of time to avoid any complications in the future.

Cost of Care

According to MetLife, “the average hourly cost of a home health aide worker is $19 per hour, with some states being as high as $30 per hour and as low as $9.” The exact cost will depend on the state and the level of care needed. It’s important to compare three or more agencies to find affordable pricing while still ensuring great care. Be on the lookout for additional fees like deposits and extra payments for holidays and weekends.

Monitoring the Caregiver

Upon hiring an individual, it’s a good idea to monitor that person to make sure they are fulfilling their duties and the senior is properly cared for. This can begin with asking the senior for input and determining their overall level of happiness. Dropping by unannounced from time to time while the caregiver is on the job is also effective for gauging how well they are performing their duties.

Knowing what to expect and what constitutes quality in-home care should result in the right hire. That way a senior’s needs can be met and a caregiver can be around for the long haul.

Unless you have a complete, valid and executed “Guardianship Appointment” then a court will decide who will raise and care for your children.  All of the below is eliminated and unless the appointed guardians are incapacitated, your wishes will be followed.

A minor is a person under the age of eighteen years.  A guardian of a minor is an individual appointed by the court who has legal custody of the person or property or both of an individual under the age of eighteen. 

The Probate and Family Court, the Juvenile Court, and the District Court have the power to appoint guardians for minors. 

The Court may nominate the guardian if a minor is under the age of fourteen.  A minor aged fourteen or older may, before a justice of the peace, notary public, or municipal clerk, nominate the guardian on the petition.  The Court, after notice to or assent of the parents, will conduct a hearing and appoint a guardian. 

The guardian must prepare and submit to the Court an annual inventory and accounting of the minor’s assets.

Grandparents, aunts, uncles and friends can file for guardianship of a minor.   The Petition must be filed in the County where the child is living.   

Sometimes it is necessary to file for Emergency Temporary Guardianship when there is an emergency (the parents are incapacitated).  Once documents are filed with the Court, a hearing is held.  The Court may provide a Temporary Order for Guardianship.  This Temporary Order is only good for 30, 60 or 90 days.  With a Temporary Order of Guardianship, the Court will provide instructions on what the guardian MUST do before getting Permanent Guardianship.  All parties need to be notified that a Temporary Guardianship has been named.

If there is not an emergency (death of the parents), after all required Court documents are filed, a notice needs to be given to other parties.  The other parties are generally the biological relatives of the child (ren), or any other party that has an interest in the child (ren).   What is the problem with this?  Anyone connected to the child(ren) can contest and seek custody of the child(ren).

Remember, all of this is a cost that your estate will pay. 

IN ORDER TO AVOID THESE ISSUES AND MAKE SURE THAT YOUR CHILD(REN) ARE CARED FOR BY THE PERSON(S) THAT YOU WANT, CONTACT ME TO DISCUSS YOUR ESTATE PLANNING.

In 1969, Elisabeth Kübler-Ross published her groundbreaking book On Death and Dying which introduced what became known as the five stages of grief: denial, anger, bargaining, depression, and acceptance. These stages were originally based on Kübler-Ross’ years of working with dying patients but came to be applied to people who are grieving the death of a loved one or experiencing a significant loss (such as divorce, chronic illness, losing a job, etc.). Kübler-Ross’ five stages are controversial within the grief support community due to the ways in which popular culture has used them to try to explain grief and prescribe how the bereaved should behave as if the stages were a “how to” list.  Those who work with the bereaved know that grief is not a linear process, and each individual’s grief journey is unique.  Kübler-Ross herself never meant these stages to be used as a rigid framework to be applied to everyone who mourns. In On Grief and Grieving: Finding the Meaning of Grief Through the Five Stages of Loss (Scribner, 2005), the last book she wrote before her death in 2004, she said of the five stages, “They were never meant to help tuck messy emotions into neat packages. They are responses to loss that many people have, but there is not a typical response to loss, as there is no typical loss. Our grief is as individual as our lives.”

No two people grieve in the exact same way. Even within a family each person will grieve differently based on the relationship they had with the person who died. Current grief theory reinforces the personal nature of each individual’s grief journey and focuses on what might help the bereaved create meaning from the experience of the death and come to an understanding of what the death means in terms of their personal beliefs and their identity. The bereaved often feel alone in their grief, that others don’t understand or are judging them for somehow not grieving “right.” Grief is not something that someone goes through with a definitive end point.  The goal of grief work has moved away from getting over the death, to instead finding a way to incorporate the memory of the person who died into your life in such a way that over time their death feels less painful.

Children often talk about aspirations they have for themselves based on their relationship with their deceased family member, “I want to do well in football because my dad used to be my coach,” or “I want to be as kind as my sister was.” The people we love are a part of our lives forever and even after their deaths, our memories of them and their influence upon us affects our beliefs, behavior and goals.

Bob