Law News and Tips
Fred L. Vilbig © 2019
Mary’s husband Joe died over a year ago. They had a simple estate. Everything was owned jointly. They had done some estate planning by signing “I-Love-You” wills, durable powers-of-attorney, and medical directives. An “I-Love-You” will is one that says everything goes to the surviving spouse, but if they’re not alive, then everything gets divided equally among the kids and distributed outright. Nothing fancy, but it covers the bases.
Since everything was held jointly, Mary didn’t bother to file the will with the Probate Court. She didn’t think it was necessary. Although it’s not important to our story, the law does say that if you have a decedent’s will, you are supposed to file it. If you don’t, the court can order you to file it. It’s kind of serious business. Now back to our story. As I said, Mary didn’t file the will.
Time passed. Mary had a hard time going through Joe’s stuff. They had been married for a long time, and Mary missed him terribly. But after almost 2 years, she started going through all of his papers to sort through them and throw out things she didn’t need or want. And as sometimes happens, she found an old life insurance policy. Joe had been in the military before they had married, and he had taken out a paid-up life insurance policy. He named his parents as the beneficiaries, but they had died a long time ago. There wasn’t a backup beneficiary, so the life insurance proceeds would have to be paid to Joe’s probate estate. But that was the problem.
Since Mary didn’t file Joe’s will within a year of his death, the will could not be filed. To be valid in Missouri, a will must be filed within a year of a person’s death. In addition, without a filed a will, you can only open an intestate estate (an estate without a will) within one year of the person’s death. So even though Mary had Joe’s will and the insurance proceeds were payable to Joe’s “estate,” Mary couldn’t get to the insurance proceeds … at least not that way. So what to do?
When a person has been dead for over a year and no will was filed, in order to “probate” a decedent’s assets, you have to petition the court for a determination of heirship. To determine heirship, you have to petition the court to determine who are the heirs entitled to the assets. It’s a little more involved than probate in some ways, and it requires a hearing with a court appearance. Most people dread court appearances for some reason.
So for Mary, we had to proceed with a determination of heirship. Not the worst thing, but then I won’t be the one on the witness stand.
The moral of the story is that if a person dies with a will, you need to file the will with the Probate Court. If you discover an asset more than a year after their death, you can probate it. Believe it or not, under these circumstances, probate is probably the preferred solution. Who’d of thunk it?
SMALL PACKAGE; BIG PROBLEMS
Fred L. Vilbig © 2018
I recently got a call from another attorney saying she had a “difficult” probate case and wondered if we would mind taking it over from her. Since the beneficiary was the Catholic Cathedral Basilica, I agreed without really getting all the details. My paralegal warns me (maybe it’s abuse) not to do things like that. This may read a little like Abbot and Costello’s “Who’s on First” routine.
It turns out it was actually two estates. The first to die was the tenant (the “Tenant”) of a house owned by the second to die (the “Landlord”). Neither the Tenant nor the Landlord had any close family. The Tenant’s will provides that everything goes to the Landlord.The house was in the City, so the Tenant’s estate will have to be probated in the Probate Court there. The City Probate Court is really swamped, so this can present a problem. From what we’ve been able to determine so far, the Tenant’s estate has less than $40,000 worth of assets in it, so we should be able to do what is called a small estate administration, an easier process. The problem is that the house is a mess, so we’ll have to hire someone to clean it out. Are you confused yet?
The Landlord lived in the County. Since he owned the house, this will probably be a full estate. In order to probate an estate, we need a personal representative. In this case, the Landlord had a will that named a personal representative (the “PR”), but the PR is elderly with health issues. However, after talking about what’s involved, he did agree to serve. That was a relief since it can get really complicated when there isn’t a named PR willing to serve.
In addition to the house, the Landlord’s estate appears to include some life insurance proceeds. It turns out that the Tenant had a life insurance policy that was payable to the Landlord. Since the Landlord survived the Tenant, the uncollected life insurance proceeds are payable to the Landlord’s probate estate. Are you confused now?
The problem is we don’t know how much the life insurance policy was worth. We won’t know until we have a PR appointed. Life insurance companies (in fact any financial institution) won’t talk to anyone in an estate situation until a PR is appointed. I understand why; it’s just kind of a bother.
In the end, we were able to simplify all of this, and there will be a nice sum of money (but not a fortune) going to maintain one of the gems of our region. The Cathedral Basilica is the largest single collection of mosaics outside of Ravenna, Italy – the second largest in the world! And they’re beautiful! So I feel justified in taking on a couple of involved, albeit small, probate estates. But I’m sure I’ll hear different from my paralegal. Oh well.
AFTER MOM DIES?
Fred L. Vilbig © 2018
I recently met with a client whose mom had died. I’d written his mom’s trust almost 20 years ago, and now we had to administer it.
The first thing I always want to do is I want the named trustee to find out what assets were actually in the trust.When we do a trust plan, I always give clients a funding letter explaining how to transfer assets into their trust, but things get missed.This may or may not include joint assets which automatically pass to the surviving joint owner, if there is one.We are only interested in those assets that were only in the decedent’s name or where the decedent was the last surviving joint owner.
If there are assets outside the trust, then we need to determine whether we can do a small estate or we have to do a full estate. For instance, many people overlook their cars, as this client had, but as long as the total value of the probate assets is less than $40,000, we can administer those assets by simply filing an affidavit and the original will (if there is one). It’s simple and easy to do.If the probate assets are over $40,000, then we will need to do a full probate, and that discussion is beyond the scope of this article.
I always recommend that we file a decedent’s will. In addition to a trust, I always have my clients execute what we call a “pour over will.” This works kind of like a safety net for probate assets. If we had to open a full probate estate, the pour over will would simply scoop up those assets and pour them over into the trust. Even when we think that there aren’t any non-trust assets, we file a will in case assets are discovered later. A will is void if it isn’t filed with the probate court within a year of a person’s death, so we want to just be careful.
I also suggest that we publish a notice of trust. This is a notice published in a legal paper just saying that the client died, and there is a trust. What that does is it notifies creditors that if they have a claim, they need to file it with the trustee within six months of the publication of the notice. Without a notice, the claims period is one year. If anyone has a claim against the decedent, they would have to file within six months (or one year without the notice) of the notice publication date or be barred from filing the claim.
We then talked about taxes. If there is a surviving spouse, then he or she just files a tax return including all of the couple’s joint income. If there’s not a surviving spouse, then the fiduciary has to file a tax return for the decedent reporting income and paying taxes incurred up to the date of death. That is filed using the decedent’s Social Security number. Whether there is a surviving spouse or not, if there is real estate to be sold or if it is anticipated that the trust or estate will earn more than $600 before things get wrapped up, the fiduciary needs to get an employer identification number (and “EIN”). Any amounts held by the trust after death will need to use that EIN. And when real estate is sold, the title company is going to insist on having an EIN. And if the trust has more than $600 of taxable income, then a Form 1041 will have to be filed.
One of the more complicated things in administering the trust is the need for an accounting. Missouri law requires it if a beneficiary asks for it, but it just makes sense anyway. You need to start with the date of death value on all of the assets; show all of the income, payments, and adjustments made during the course of administration; and then come up with the remaining balance at the end showing who gets what. A thorough accounting can avoid a lot of problems at the end.
As you can see, there is a lot to administering a trust. If you want some direction, give us a call.
You’ve heard the expression, “It’s better to be lucky than to be good?” Well, John was lucky. He was good too, but the lucky part was the biggest thing. But being a religious guy, he knew that luck had nothing to do with it. More on that later.
John was in advertising. He’d worked hard. Over time he had moved up in his company, and they had made him a partner. Not a big partner, but still a partner. That was the hard work part.
His firm had a good reputation, and when an advertising firm from London was looking for a St. Louis partner, they found John’s firm. They made John and John’s partners an offer they really couldn’t refuse. After taxes, John netted $5 million in the company shares. That was the lucky part.
Now for the religious part: he knew this was a gift. He knew that nothing just happens by chance, so the question was, what should he do with this gift? He couldn’t just give it away since he and his wife needed the income for retirement. He also had a pretty big tax liability he was facing, so he needed to do some planning.
He was working with a financial planner at the time. After talking this through, the planner recommended that John and his wife set up a charitable remainder unitrust, a CRUT. A CRUT allows a donor to make an irrevocable gift of a remainder interest while retaining the right to receive annual payments of a percentage of the value of the CRUT principal. Since there is an irrevocable gift involved, John and his wife were entitled to a charitable contribution deduction for a portion (though not all) of the value of the assets transferred to the CRUT. In addition, since the CRUT itself is tax exempt (unfortunately not the annual payments, though), they could at least to defer tax on the sale of his stock. Pretty nifty, eh?
When John was setting up the CRUT, he really hadn’t decided on what charities he wanted to benefit and how. I had warned him about just giving money outright to charities. I have seen congregations torn apart over money fights when they received a big gift. So we set up the CRUT, I included a provision so that he could designate the charitable beneficiaries in his will.
There a little trick to doing this. If you are making a gift to a public charity, for cash gifts, you can deduct up to 50% of your adjusted gross income (your “AGI”). If you’re giving real property, stocks, or bonds, then your deduction is limited to 30% of your AGI. However, if you are contributing to what is called a private foundation, then your deduction for cash gifts is limited to 30% of your AGI, and the deduction for non-cash gifts are limited to 20% of your AGI. There is a 5-year carry-forward for the unused charitable contribution deductions, so they’re not lost, but who wants to wait for a deduction.
If you reserve the right to name a charity in the future and say no more, then your deductions will be subject to the private foundation 30/20% limits. The trick is that the CRUT needs to provide that you can only designate qualified public charities as the beneficiaries of the CRUT. Then you contribution will be eligible for the 50/30% limits.
One last thing – John did not want to give up control. He didn’t want to be locked into a bank or a charitable foundation. He wanted to be his own trustee. So we named him and his wife as the initial co-trustees.
As you can see, CRUTs can be kind of complicated, but under the right circumstances, they are a tremendous way for charitably minded people to make a gift, get a deduction, defer taxes on capital gains, and earn tax deferred income like in an IRA.
To learn more or to analyze whether this is a good option for you, feel free to call and make an appointment. I look forward to hearing from you.
HIDING THE WILL
Fred l. Vilbig © 2017
Sarah (not her real name) has had a rather difficult life. She married a guy who turned out not to be Prince Charming. He divorced her and left her in financial difficulties. She’s had a number of jobs, but none of them really paid well.Just enough to pay her bills. She’s had a tough time.
When mom and dad were getting older, Sarah volunteered to move in to help them continue to live at home for as long as they could. Like most of us, mom and dad did not want to go into the nursing home. Sarah’s siblings were okay with this arrangement. It meant that someone would be in the home at least part of the time to help take care of their parents.
None of the other siblings know if Sarah had any conversations with their parents regarding compensation. She did get free room and board while she was living there, but there doesn’t appear to of been anything in writing with regard to any further arrangement. I think the siblings thought that Sarah was doing it to help out, but also to help her get back on her feet.
Dad died a few years ago, and mom died recently. After the funeral, Sarah’s siblings began asking some questions about what was going to happen to the house and their parents other assets. Sarah has suggested that it should all be hers since she took care of her parents. Her siblings are okay with Sarah getting something, but all? The siblings think that Sarah had her name added to their parents’ accounts, but we know that the house is in their parents’ names. Sarah says there’s a will, but she seems to be giving everyone the runaround regarding producing it. It probably says something that she doesn’t want it to say. The siblings now want to talk to an attorney.
If the will of a Missouri resident is not probated within a year of that person’s death, it cannot be admitted to probate. Filing a will for probate is important.
If anyone has the will of a Missouri decedent in their possession, the law says that they “shall” file it with the proper probate court. If the person having custody of the will doesn’t produce it, then the heirs need to petition the court to open an intestate estate – that is, an estate without a will. They then need to file a motion with the court to issue a summons and compel the person to produce the will. That means a visit by the sheriff. And if the person still refuses to produce the will, it could mean a stay in jail.
Needless to say, it’s not a good thing to hide a will.
SUCCESSOR TRUSTEE BOOT CAMP
Fred L. Vilbig © 2017
Maybe it’s a sign that my clients are “maturing.” I’m getting more calls now from their children. Mom and dad or both are acting a little strange; their bills are not getting paid; they have to go into the hospital or nursing home and decisions need to be made; or they have both died. Typically these calls come from the child who has been put in charge of things. Mom and dad may have written a will and/or a trust, and that child has been named as the person in charge (the “fiduciary”). And they don’t know what to do.
The duties of a fiduciary vary widely depending upon the situation. Mom and dad may just be losing mental capacity. We can all be forgetful, but sometimes people get dangerously forgetful. Bills can become seriously delinquent. They may get lost when out driving or walking around. They may not know how to dress for the weather. Prescribed medicines may become too complicated to administer. Although everyone wants to maintain their own independence, there comes a time when that isn’t reasonable. So what do you do?
And when mom and dad get to the end of their lives, someone may need to make difficult medical decisions. People cavalierly say, “just go on and pull the plug,” but actually doing it is another matter entirely. And then there is the funeral to handle.
After mom and dad have died, there is an asset cleanup to do. What do you do about jointly held assets? What about insurance policies, brokerage accounts, or bank accounts with beneficiary designations? What about the IRA? What about jointly held real estate? We’ve had clients ignore these things for years, and fixing them later can be a lot of work.
If a person only has a will and dies owning property in his or her name alone, then probate is necessary. Even when mom and dad have created a trust, assets sometimes get overlooked. Probate can be a scary idea for people, but sometimes it’s a necessary evil. One of the things that the fiduciary needs to do after mom and dad have died is to determine whether all of the assets were properly put into a trust if there was one. If any assets were held in a decedent’s name alone, then those assets are going to have to be probated. That can be overwhelming for some people.
If mom and dad did create a trust, there are a lot of questions that come up regarding trust administration. Under the law, a trustee has to provide beneficiaries with an accounting. The trustee needs to start with a beginning balance which requires an inventory. Most people don’t have an accounting background, so this can be quite a challenge. Just preparing the inventory can be overwhelming.
There is a lot involved when a son or daughter is named as the trustee, personal representative, or attorney-in-fact, under mom or dad’s estate planning documents. As I often tell clients, these are not normal things to deal with, although in our practice they tend to happen on an almost daily basis.
For that reason, I am putting together a seminar to discuss what’s involved in being a fiduciary. We are calling it the “SUCCESSOR TRUSTEE BOOT CAMP” (although we’ll cover other fiduciary roles as well). The seminar will be held on JUNE 15 at 7 PM at the SCHNUCKS MARKET on Kehrs Mill at Clarkson in Ballwin. Click here to register for the free Successor Trustee Boot Camp.
This seminar should be of interest to anyone who is named in estate planning documents as a personal representative or a successor trustee. We look forward to seeing you there.
Many baby boomers are finding themselves stuck between their children’s generation and that of their parents. We were recently caught in that dilemma with my in-laws. It turned out that the amount of their Social Security checks roughly equaled the premiums on their Medicare insurance. That didn’t strike me as such a good deal.
I think a lot of people are getting stuck in this conundrum. It’s a difficult place to be, and the rules governing Medicare and Medicaid are impossibly confusing. The US Supreme Court once referred to the Medicaid rules as “Byzantine construction… almost unintelligible to the uninitiated.”
Those are pretty harsh words from the Supreme Court. In my career I have done a lot of tax law. I can say that the Medicaid rules make tax law look fairly simple. However, without getting into the deep thicket of Medicaid details, I think we can break Medicaid down into two general categories.
When most people think of Medicaid, we think of the program implemented to assist financially distressed individuals to pay for their medical needs. It covers a limited number of treatments. In order to qualify, the applicant has to be financially needy in one of two ways.
The first classification of qualified applicants is those individuals who are “categorically needy.” People are “categorically needy” when they have less than $1,000 of “countable assets.” In addition, they cannot have monthly income equal to or greater than $834. Individuals who fall into this category are the people we would typically think of as Medicaid qualified.
There is, however, a second class of Medicaid beneficiaries. These individuals are referred to as “medically needy.” In Missouri (and the laws vary somewhat from state to state), “medically needy” applicants must have less than the $1,000 of countable assets. However, with regard to income, “medically needy” individuals simply must not have enough income to cover their qualified medical expenses. For instance, if the cost for a person in a nursing home is $6000 per month and they only earned $3,000 per month, Medicaid can make up the difference. That person would fall into the “medically needy” category.
In both of the classifications, there is a limitation on what are “countable assets.” Countable assets are any assets an applicant owns (or owned during the five years immediately preceding the application for Medicaid benefits where the assets were not exchanged for something of value – that is, gifts), but it excludes certain assets. For instance, a person’s house is not included in “countable assets” for qualification purposes, but the State will put a lien against the house for any Medicaid benefits paid. When the house is sold after the recipient’s death, then the State will collect any Medicaid amounts it paid out of the sales proceeds. So the exclusion of the house from countable assets is only temporary.
People for years have been trying to get around the Medicaid rules to have the government pay for their nursing home costs. When I started practicing law 35 years ago, it was pretty simple. Congress caught on, though. First, they made it illegal for grandma to transfer assets to qualify for Medicaid. If she broke the law, surely they’d put her in one of those nice prisons with good medical care. That seemed like a good option to some clients.
Congress caught on, though. So they made it a crime for family or advisors to help mom or dad plan to qualify for Medicaid. As you can imagine, this was disturbing to a lot of influential people. The concern was that it would paralyze legitimate planning for fear of violating the law. So once again, Congress caught on.
Beginning in 2006, when an individual applies for Medicaid, he or she has to add back the value of any assets transferred for less than fair market value during the immediately preceding five-year period (the “look back.”). If an asset was transferred for less than fair market value during the look back period, then the government calculates a penalty by dividing the value of the gift by a Medicaid factor. This calculation determines the number of months that the applicant will be disqualified. The disqualification basically runs from the date when the value of the applicant’s countable assets drops below the maximum permitted amount. It turns out that the disqualification can run for longer than five years. Timing an application is critical!
We recently ran into an estate where the decedent (a successful business man) had created an LLC, transferred an asset into it, and ran the business through
the LLC for several years. He had done his estate planning and had a trust, but it turns out that he never actually transferred the business into the
trust. The reason was that he never completed the process of organizing the LLC.
A Little LLC Law
There are two steps you have to take in order to set up a limited liability company in Missouri. The first step is filing articles of organization. This is kind of a public notice sort of thing. You declare that you (the “organizer”) are setting up the LLC. You say what its name is. You state the purpose of the LLC, which can be very general. You say whether it will be managed by the members (kind of like partners) or a manager (kind of like a president). You say how long it is going to exist (LLCs can actually exist for only a limited time, although most are perpetual). And you name an agent who is the person to contact on behalf of the LLC.
That is only the first step. These articles say nothing about who owns the LLC or how it will operate (besides just saying whether it will be managed by a member or a manager).
The second step is the operating agreement, which is kind of like corporate bylaws. Missouri law says that the member(s) of an LLC “shall” adopt an operating agreement. The law does not provide a specific form and generally leaves the contents of the operating agreement up to the LLC members, but especially with a “manager-managed” LLC, certain things need to be covered.
For instance, here are some of the things that are generally covered in an operating agreement:
- the members should be named;
- the members’ profit interests should be stated;
- the agreement should state how the managers are elected or appointed;
- the agreement should state how the members (if more than one) will vote on company business; and
- the agreement should state whether the LLC is taxed as a partnership or as a corporation, if that is important to the members.
One other topic that is generally covered by an operating agreement (which is very important for our purposes) is to say what happens to the ownership of the LLC upon the death of a member.
The Incomplete LLC
In the case of our case, the decedent had filed the Articles of Organization for the LLC. He named the LLC; he designated himself as the agent; he gave it a general purpose; and he said it would be managed by “managers.” Although unrelated to the operating agreement question, it clearly looked as if the business property was owned by the LLC based on a title certificate that the accountant has sent to us.
There was a loan from on the business asset, so I thought the bank might have had an operating agreement. It wasn’t in the material that they sent over. The accountant didn’t have an operating agreement, either. That led me to believe that no operating agreement was ever created for the business. This is not unusual when people set up their own LLCs, although it does create some complications.
What this means is that we had a little bit of an unusual situation on our hands. The LLC was sort of in limbo, and there was a bank loan still outstanding on it. This could cause some concern on the part of the bank, and they could have decided to call the loan. Since the business asset generated a nice stream of income for the surviving spouse, I thought they would want to keep it.
Some time ago, an older couple came into my office to do their estate planning. She was 85, and he was 86.
As with all of my clients, I had sent them an estate planning questionnaire that helps me to gather information I’ll need to make a recommendation on a plan that would work for them. It asks for family information, financial information, and the names of the people they would want to take care of things when they are no longer able to do things for themselves either due to disability or death.
Right in the middle of the questionnaire is a page that is mainly blank. It asks the client to tell me what they want to have happen to their property on their death. The can write it out; they can do a diagram; or they can draw pictures. Based on that, I develop a plan.
When I was meeting with this older couple, they had brought in their questionnaire. They had completed the family information. The financial information was pretty detailed and told me what I needed to know. They also had listed the people they wanted to handle things when they couldn’t. However, they had left the center page completely blank. This was kind of odd.
So I asked, “What do you want to have happen to your property when you’re gone?” And the wife burst into tears. I don’t mean that she just started weeping. It was kind of like wailing.
I was really surprised. I had never had a client do that before. So I turned to the husband and said, “I’m sorry. What did I say?” He leaned forward a little and in a very gravelly voice, he said, “Aw, don’t worry. She just doesn’t want to admit we’re gonna die.” Talk about denial. Now to her credit, the only time she had even been in a hospital was when her two boys had been born, but still.
People often tell me that they are going to come see me to get a will or a trust done. My standard response is, “OK, but just don’t die in the meantime.” I know it’s a little insensitive, but it is the hard truth.
Nobody wants to think about death, much less their own. It’s hard to comprehend for one thing: one minute you’re here, and the next, you’re gone. It can be pretty depressing.
However, not planning seems kind of irresponsible to me. If you have minor children, you don’t want them to end up in foster care or have your life insurance be administered by the probate court. You don’t want your estate to be probated generally. I would think you want to be able to name the person who is going to take care of your kids and administer your assets.
So when is the best time to plan your estate? Honestly, it’s right before you die. But no one knows when that day will come except maybe when it’s already upon you. We all know people who have died suddenly from a heart attack or some freak accident. We know other people who were struck with a debilitating disease in the prime of life. We never know when our time will come.
So when is the right time to plan your estate? Now. Don’t wait until it’s too late.
I spend a lot of time talking to people about the benefits of trusts. The bottom line is that they avoid probate. As I’ve explained in other articles (columns), probate can be slow, freezing cash and other accounts, so the mortgage, utilities, and other necessary expenses can’t be paid; probate is a public process that can open your private business for general inspection; and probate can be expensive. So why would anyone forgo a trust and only use a will?
There are a few instances when a will is the way. Trusts cost a little more than wills, and for young families, a little added expense can be a large burden. In that case, a will would be far better than to ignore estate planning altogether.
If a young couple with children die without doing any planning, their children’s lives will be caught up in the court system. First, there is the question of who will take care of the children. When working with couples with young children, this may be the most hotly debated (if not contested) issues. She never really liked or trusted his brother, Billy, who is his best buddy. He never really thought much of her sister, Lucy, to whom she is deeply devoted. Even so, I’ve never met a couple who wanted their children to become wards of the state and possibly bounced from home to home. By means of a will, they can name guardians for their children.
In addition, couples don’t really want their assets managed by the probate court, or public administrator. With young families, these assets are typically life insurance proceeds, but they can be substantial. Young children cannot open a bank account; they cannot make investments; they can’t even pay bills. Someone has to be put in charge. Without a will, that would end up being the public administrator and the assets would be in what is called a conservatorship.
Once a conservatorship is set up and the assets are transferred to it, there is the question of how to invest the assets for the good of the children. Most parents would want the assets to be invested for a total maximum return within some conservative limits: nothing very risky – maybe some blue-chip stocks; maybe some bonds.
With a conservatorship, that won’t happen. The assets will be invested in CDs and money market funds; all government insured. Typically, those investments don’t even keep up with inflation. The assets may actually be losing money against inflation.
And then there are expenses. The conservator cannot pay for food, housing, utilities, or anything without a court order, and the court will minimize expenses to conserve assets.
Finally when each child reaches 18, they will get their separate share outright. That rarely seems to be a good idea. Even a relatively small amount to an 18-year-old is a fortune. As I’ve discussed in other articles (columns), too much money too soon can ruin a child. Mercifully, I was saved from that burden.
Parents can avoid the consequences of a conservatorship by having a will. A will allows them to provide for a trust to take care of their children. Until the youngest reaches a certain age, the assets can go into a common trust. Once the youngest has reached the age where they should have completed college, then the common trust assets can be divided and distributed to separate trusts for the benefit of each child. Problem solved.
So one situation where a will might be appropriate (or sufficient) is when a young family needs to do some planning but is on a tight budget. Sometimes a will might be the best planning tool for the elderly as well. In any event, a general power of appointment, and a medical directive should be included in the mix. It would be a very rare instance when no estate planning is the solution. Rather, no planning is first step to problems.