Author: Richmond Cariaga

Hands holding wooden blocks that spell out the word "GIVE"

5 Easy Tips to Simplify Your Charitable Giving

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Will you be donating to charities this year? The Internal Revenue Service (IRS) reminds us that you must itemize deductions on Schedule A of your tax return to claim a deduction for charitable gifts. The following five tips can also help ensure that your charitable gifts count.

Tip #1: Give to a qualified charity. Only gifts to a qualified charity are deductible on your income tax return. The IRS offers a handy website, the Tax Exempt Organization Search Tool, to determine whether your favorite organizations qualify. You can also deduct donations made to churches, synagogues, temples, mosques, and government agencies, even if they are not listed in this database.

Tip #2: Give some cash. Gifts of money can be made by check, electronic funds transfer, credit card, or payroll deduction. To claim a monetary gift as a deduction on your tax return, you must have specific documentation, which varies based on the amount donated, such as a bank record (e.g., canceled check, bank statement, credit card statement) or written document from the charity (listing the organization’s name and the date and amount that was given). For payroll deductions, keep a copy of your pay stub(s), W-2, or other employer-provided document showing the total amount withheld, along with the pledge card listing the name of the charity.

Tip #3: Donate some stuff. You can take a tax deduction by giving away your gently used household items (e.g., furniture, furnishings, electronics, appliances, linens) and clothing as long as they are in good or new condition. If possible, to substantiate your deduction, get a receipt from the charity that includes the organization’s name, date of the contribution, and a detailed description of the donated items. If you leave the items at an unattended drop site, make a written record of the donation with the same details.  

Tip #4: Give before the end of the year. Donations are deductible on your tax return in the year they are made. If you donate by check, the deduction applies in the year in which the check is mailed or postmarked. For credit card donations, the deduction applies in the year in which the charge was processed, even if you do not pay the credit card statement until the following year.

Tip #5: Keep good records. Always keep detailed records of any charitable gifts you make.  Your records should include the date of the donation, a description of the item or monetary amount given, the name and address of the organization, the fair market value of the property at the time of the donation, and the method used to determine the value. You must obtain a written acknowledgment from the charity if a donation (of either cash or stuff) is valued at $250 or more. If the donation consists of an automobile, boat, or airplane, special rules apply, which can be found on the IRS website.

Have Questions About Deducting Charitable Gifts?

If you have questions about making deductible charitable donations part of your estate plan, please call us.

5 Reasons Uncle Bill May Not Make a Good Trustee

5 Reasons Uncle Bill May Not Make a Good Trustee

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If you have created a trust that you intend to last for decades, choosing the right trustee is critical to ensuring the trust’s longevity and ultimate success. 

Initially, you may think that a family member (for example, Uncle Bill to your children, who are the initial beneficiaries of your trust) will be the best choice as trustee. After all, Uncle Bill understands your children’s personalities and varying needs, and since Bill has always been frugal, he will surely keep the costs of administering the trust down. These are good reasons to possibly select a family member like Bill to serve as trustee.

However, Uncle Bill may not make a good trustee for a long-lasting trust, as he may not be equipped to handle all of the obligations on his own. He may need to hire legal, investment, and tax advisors to ensure that the trust is distributed, managed, and invested as you intended. These expenses have the potential to be the same (and, on rare occasions, more) than the fees of a professional trustee or a corporate trustee, such as a bank or trust company. Many professional and corporate trustees can meet all of the fiduciary obligations of a trustee under one roof for one comprehensive fee. 

Below are five reasons you may want to consider choosing a professional or corporate trustee for your trust instead of Uncle Bill:

  1. Professional and corporate trustees do not have a potentially disruptive personal life. A professional or corporate trustee does not become ill or die, marry or divorce, have children or grandchildren, go on vacation, move abroad, or have day-to-day distractions that could get in the way of properly administering your trust. The named professional or corporate trustee will likely be a bank or private trust company. If the person designated by the bank or trust company to act as trustee is unavailable, someone else from the bank or trust company can step in without court or beneficiary involvement.
  2. Professional and corporate trustees are unbiased. A professional or corporate trustee will not favor one of your children over another (unless that is what you intended) and will act in an unbiased manner to make distributions that benefit both the current and remainder beneficiaries. They are not part of your family and therefore will not be tempted or swayed by unrelated drama between family members.
  3. Professional and corporate trustees avoid conflicts of interest and self-dealing.  Professional and corporate trustees will not sell the family company or vacation home (that you intended to eventually go to your grandchildren) to themselves or a friend at less than fair market value. Any sale or other transfers will be made according to the stated wishes in the trust and should not personally involve the professional corporate trustee.
  4. Professional and corporate trustees invest appropriately. Professional and corporate trustees are typically more skilled at managing and investing assets, with access to experienced financial advisors and divestment investment strategies. For example, a professional or corporate trustee may better understand that, subject to any specific instructions in the trust, they should not invest trust assets (accounts, property, etc.) in real estate or a high-risk hedge fund but should instead diversify the portfolio to benefit both the current and remainder beneficiaries (the ones entitled to benefit from the trust after the current beneficiary).
  5. Professional and corporate trustees have expert knowledge. A professional or corporate trustee will not need to hire a slew of attorneys and accountants to interpret the trust agreement and will keep current on changes in the laws governing trusts, fiduciaries, and taxes.

Final Considerations

From managing the current and remainder beneficiaries’ requests and expectations and providing them with periodic reports regarding trust assets, liabilities, receipts, and disbursements to prudently investing trust assets and preparing and filing all required tax forms, a trustee’s duties and responsibilities are extensive. 

A professional or corporate trustee, rather than Uncle Bill, may be the best option for your trust. Please contact our office if you have any questions about selecting a trustee or using professional or corporate trustees so that we can assist you in designating the right individual or entity to serve as your trustee.

Three Estate Planning Mistakes Farmers and Ranchers Make—and How to Avoid Them

Three Estate Planning Mistakes Farmers and Ranchers Make—and How to Avoid Them

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Farming and ranching is more than just a livelihood; it is about preserving a legacy and a way of life. Unfortunately, many farmers and ranchers fail to create a comprehensive estate plan—or any estate plan at all. Without a proper estate plan, the family farm or ranch, passed down for generations, can end up being sold and converted to nonagricultural use, cutting the family’s legacy short and ending their unique lifestyle.

Below are three common estate planning mistakes farmers and ranchers make and how to avoid them.

Mistake #1—Failing to Plan

As a farmer or rancher, you have distinct estate planning needs. You may have children who want—or do not want—to continue the farming or ranching business. You have to consider who should inherit your land, equipment, livestock, accounts, and other property, while trying to keep things fair and equal. As a result, you may be unable to decide what to do and end up doing nothing at all.

Fortunately, many estate planning options are available that will help you fulfill your ultimate goals for the future. To preserve what you have and leave it to the next generation, you need to work with a team of experts, including attorneys, accountants, bankers, insurance specialists, and financial advisors, who are familiar with the nuances of estate planning and its intersection with farming or ranching legacies to ensure that the plan will work as anticipated when it is needed.

Mistake #2—Relying on Joint Ownership

You may believe that the easiest way to avoid having your loved ones go through the probate process at your death is to own your property jointly with them. However, transferring all or part of your farm during your lifetime may have unintended consequences. For example, farmland or ranch property that is jointly owned and enrolled in programs administered by the United States Department of Agriculture may result in subsidies being left on the table. In addition, joint ownership causes you to give up total and unilateral control of your real estate. Someone added as a joint owner to your account or property can make decisions about it: They may withdraw money from the account without your knowledge or consent. They can also prevent the property’s sale if they disagree with your decision to sell. Your co-owner’s creditors may also be able to go after jointly owned accounts and property. Unlike other planning options, joint ownership may not be easy to change, since “undoing” joint ownership can have significant costs and tax implications.

Holding real estate in the name of a business entity (corporation, partnership, or limited liability company) or a trust is a better option, as it allows you to minimize liability and retain control.

Mistake #3—Overlooking Liquidity Needs

Incapacity (the inability to manage your own affairs) and death are expensive life events and often require cash to pay expenses. However, farmland and farming equipment are not easily converted to cash. Without properly planning for immediate and long-term cash needs, your family may be forced to quickly sell land and equipment for pennies on the dollar.

You have several options when creating a plan to manage debt and expenses during your incapacity or after your death. Financial advisors, bankers, and insurance professionals can assist with securing lines of credit and the proper amount of disability, long-term care, and life insurance to prepare for the unexpected. Attorneys can assist by creating life insurance trusts, business entities, and other, more complex plans.

Final Thoughts on Estate Planning for Farmers and Ranchers

We understand that farmers and ranchers require specialized estate planning solutions. A team of advisors, including attorneys, accountants, bankers, insurance professionals, and financial advisors, can assist you in creating and maintaining a plan that will preserve your legacy and unique way of life. Our firm is experienced in supporting farmers and ranchers with achieving their estate planning goals. Please call our office if you have any questions about this type of planning and to arrange for a consultation.

Smiling family of five standing in a sunny meadow.

It’s Planning Season

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To have a successful farm, thoughtful planning must be done every season. Your life is no different. To properly prepare for the next season in your life and the lives of your loved ones, you need a well-executed estate plan. When crafting a foundational plan to protect yourself, your loved ones, your business, and your legacy, consider the following planning tools.

Revocable living trust. A revocable living trust is a tool in which a trustee is appointed to manage the accounts and property that you transfer to the trust for the benefit of one or more beneficiaries. To fund the trust, you change the ownership of your accounts and property to your name as the trustee of the trust. Typically, you serve as the initial trustee while you are alive and well, and you are also the primary beneficiary. If you become incapacitated (unable to manage your affairs), the backup trustee steps in and manages the trust for your benefit with little interruption and less potential for costly court involvement. Upon your death, the backup trustee manages and distributes the money and property according to your instructions in the trust document, again, usually without court involvement. Because the accounts and property are deemed to be owned by the trust and you have already determined what will happen to them, probate is not needed. A specifically crafted trust has the additional benefit of protecting your precious asset (the farm) from your beneficiaries’ creditors.

IMPORTANT: Work with an experienced estate planning attorney to ensure that any trust created and funded with farming assets (real estate, equipment, etc.) is structured in a way that does not disqualify you from or reduce any government farming subsidies you could be receiving.

Financial power of attorney. A financial power of attorney is a written document in which you appoint a person to handle various financial and property transactions on your behalf when you are alive but cannot handle them yourself. This can include signing contracts for you, making deposits into your bank account, managing property, paying taxes, and opening new accounts for you. The specific powers granted to an agent under a power of attorney will depend upon your wishes and what you list in the document itself. Also, depending on your state law, you may be able to dictate when your chosen agent can step in and act on your behalf. If your land, equipment, and associated bank accounts are in your name only, it is incredibly important to have this tool in place so someone has the authority to maintain your business and associated transactions should you be unable to.

Medical power of attorney. Farming can be a very strenuous career. Having a medical power of attorney in place is, therefore, crucial. This document allows you to name an individual to make medical decisions on your behalf in the event you cannot. While this power is applicable only if you are incapacitated or otherwise unable to communicate your own wishes, it will save your family a great deal of time and money by avoiding the court process of having a judge appoint someone to make decisions for you.

More-advanced planning tools. Depending on the value of everything you own (including your farming operation), you may need to include more-advanced tools in your estate plan. We can craft a plan that may reduce the amount of state or federal estate tax owed at your death, offer additional liability protections, or provide liquidity to address your unique situation.

We understand how important your farm and family are to you. We want to help ensure that you are properly protected and that everything is in place to properly transition your farming legacy to the next generation. Call us to schedule an appointment so we can evaluate your unique situation and craft a plan to help ensure that your legacy will be a lasting one.

Ways to Keep a Loved One’s Memory Alive

Ways to Keep a Loved One’s Memory Alive After They Pass

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When somebody close to us passes away, we are left with constant reminders of them. Maybe it is a jacket hanging in the closet that still bears the scent of their cologne, a dog-eared book on their nightstand, their handwriting on a scrap of paper, a bench where they sat and fed the ducks, or the coffee cup they always used.

At times, something small—such as a phrase they used, the smell of their favorite flower, their empty place at the dinner table, or a song they loved—can trigger powerful memories and imbue the moment with their presence, reminding us that they are gone but never forgotten.

We all deal with death differently. Some of us are content with these private, persistent reminders that help keep a loved one’s memory alive. Others want to create a tangible item to remember them by that can be displayed and shared.

There are many ways to turn memories into mementos and honor a beloved friend’s or family member’s passing. These tributes can also be a creative and strategic way to use estate assets. Planning ahead provides your loved ones with more flexibility in using your money and property for dedications and memorials. A well-thought-out plan can even set aside money for such purposes.

Personalizing Death

Where—and how—Americans find meaning in life has changed in recent years. These shifts can be seen not only in how we live but also in how we choose to say goodbye.

A growing number of families are seeking alternatives to traditional funerals, which they may see as dark or gloomy. According to the National Funeral Directors Association, rates of cremation are rising, burial rates are declining, and more families are opting for “innovative and personalized services.”[1]

People increasingly want funerals that reflect the unique life of the deceased. This includes incorporating hobbies, passions, and personal preferences into the service, such as green and alternative funeral options and nontraditional funeral locations. Choice Mutual says that the trend toward eco-friendly and alternative funeral options “reflects a growing environmental consciousness and a desire for more . . . meaningful end-of-life ceremonies.”[2]

With religion and religious observances on the decline, many people do not want a funeral. Celebration of life services that emphasize personal stories and memories are gaining traction. These services often incorporate touches such as the deceased’s favorite music, photos, hobbies, and shared stories.

Even among those who prefer a more traditional burial, there is a shift toward personalized memorials, including headstones etched with portraits and even virtual tombstones and QR codes linked to digital stories.

Cost may also influence some of these choices. The median cost of a funeral with a casket and burial is around $8,000, while an alternative cremation casket and urn can cost around $6,000.[3] A majority of Americans told Choice Mutual that they rely on life insurance or burial insurance to cover funeral costs.[4] Fewer rely on personal funds or prepaid burial plan options.[5]

Beyond the Gravestone: Thoughtful Tributes to Memorialize a Loved One

If you ever sit on a park bench that bears an inscription memorializing a nature-loving local, you may find yourself wondering about them and their life. The inscription might also inspire you to do something special for someone you love.

Here are some heartfelt and creative ways to celebrate a loved one’s memory:

  • Display photos. Photos on your phone can be given a newfound meaning and purpose in a display that tells the story of a dearly departed. Use a traditional picture frame, set up a digital frame that displays multiple photos as a slideshow, or create a gallery wall with multiple shots from your loved one’s travels, family milestones, and quiet everyday moments that defined them.
  • Make a donation. Buildings and exhibitions that bear the names of affluent, generous citizens are beyond the financial means of most families, but there are other meaningful—and affordable—ways to honor a loved one’s memory. Consider a donation in their name to a place they loved visiting or volunteering at, such as a zoo, animal shelter, or place of worship.
  • Volunteer your time. You might not know much about Mom’s weekly shifts at the shelter, but now that she is gone, you can reconnect with her—and build new connections—by volunteering yourself and carrying on the work she cared deeply about.
  • Plant a tree or garden. In lieu of sending flowers, plant some instead. A memorial garden or tree planted in honor of a loved one, perhaps on family land or in a community park they frequented, creates a living legacy. Add a plaque with their name or a quote they lived by and choose plants tied to their personality or specific memories.
  • Create a memory book or scrapbook. Sorting through and cleaning out the belongings of a deceased loved one can be physically burdensome and emotionally draining. To help process your grief and turn these leftover items into meaningful reminders, collect photos, letters, and other odds and ends for a memory book or scrapbook.
  • Transform ashes into keepsakes. Scattering your loved one’s ashes in a special location is one way to experience closure. Another option is to have their ashes turned into a keepsake, such as cremation jewelry, an ornament, a paperweight, artwork, or a cremation tattoo.
  • Start a scholarship fund in their name. For a loved one who championed education or a specific cause, a scholarship or grant funded in their name lets them continue to make a positive impact on the lives of others.
  • Cook up a recipe book. The sense of smell is uniquely linked to memory and can spark a strong emotional reaction. Pay homage to a loved one who cherished special meals by compiling their favorite recipes into a book to share with family and friends that makes reconnecting as easy as following the steps and measurements.
  • Commission custom artwork. Turn their intangible essence into a tangible work of art. It could be a portrait or poem reflecting their love of nature that you attach to a favorite tree; a piece dedicated to a local library they visited; a book crafted from letters and recordings; a painting, sculpture, or digital artwork inspired by their life; or photos woven into a slideshow that tells their story.
  • Create mementos from their belongings. When your loved one passes away, they leave behind all of their worldly possessions, including their clothes. Instead of throwing away or donating all of their clothing, consider repurposing a few meaningful pieces as blankets or stuffed animals that can be given to loved ones.

For additional inspiration and discussion on how to remember your loved one, schedule a meeting with us today. We can also work together to create an estate plan that will allow your memory to live on for generations to come.

  1. U.S. Cremation Rate Is Projectd to Climb to 61.9% in 2024, NFDA (July 25, 2024), https://nfda.org/news/media-center/nfda-news-releases/id/8944/us-cremation-rate-is-projected-to-climb-to-619-in-2024. ↩︎
  2. Anthony Martin, 2024 Survey Results: Alternative Burial Options & Preferences Across America, Choice Mutual (Jan. 10, 2025), https://choicemutual.com/blog/funeral-preferences. ↩︎
  3. Statistics, NFDA (Sept. 24, 2024), https://nfda.org/news/statistics. ↩︎
  4. Martin, supra note 2. ↩︎
  5. Id. ↩︎
How an Inheritance Can Enhance Your Loved One’s Educational Experience

How an Inheritance Can Enhance Your Loved One’s Educational Experience

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A primary goal of estate planning is to financially provide for your loved ones. One way to ensure that they are set up for lifelong success is with an inheritance that pays for their education.

Higher levels of education are positively correlated with better life outcomes, including improved health, longer lifespans, and higher incomes.[1] However, education costs across all levels have risen significantly, pushing a good education out of reach for many families and saddling students with debt that can take decades to pay off.[2]

From primary school to postgraduate studies, you can invest in a loved one’s education and maximize their potential through your estate plan. Options include direct payments, 529 plans, and money from a will or trust, often with associated tax breaks.

While educational gift options abound, their legal mechanics, tax implications, and benefits differ depending on when and how they are given, and restrictions may apply.

Higher Education = Greater Well-Being—but at What Cost?

The economic and noneconomic benefits associated with a college degree are well established.

Compared with people who completed only a high school diploma, those with undergraduate degrees not only earn significantly more on average over their lifetimes and are less likely to be unemployed but also tend to enjoy better health and a higher quality of life, including higher job satisfaction, improved self-esteem, improved access to healthcare, and increased civic engagement.[3]

According to the United States Bureau of Labor Statistics, people with a bachelor’s degree earn two-thirds more than high school graduates.[4] Over the course of their working years, college graduates typically earn around $1 million more than their degreeless peers.[5]

Although the economic advantages of a college degree vary based on the degree earned[6]—and despite the rising costs of postsecondary education—most Americans recognize the value of college and view a degree as a “golden ticket” to prosperity.[7]

However, earning a college degree has never been more expensive, and these costs are forcing some Americans to rethink whether it is worth the investment.

Tuition and fees have tripled since the 1960s, jumping by 60 percent between 2000 and 2022, from around $9,000 to nearly $15,000 per year.[8] From 2010 to 2022, average annual tuition and fees went from $12,979 to $14,688—a 13 percent increase.[9]

These rising costs, which include room and board, books, and other supplies in addition to tuition, are discouraging many students from attending college and contributing to enrollment declines.[10]

The average federal student loan debt balance in 2024 was nearly $40,000, while the total average balance (including private loan debt) is even larger.[11] Today, the typical public university student borrows almost $32,000 to earn a bachelor’s degree.[12] Far from the “golden ticket” of a degree, student loan debt can limit wealth building and upward mobility instead of opening doors.

Costs are also rising at K–12 private schools, which are generally considered a gateway to higher education. Research shows that private schools are better than public schools at preparing students to enter college, most likely due to their higher scores on standardized tests and more-demanding graduation requirements.[13] However, the average annual private school tuition is $12,000–$13,000, including about $9,000 for private elementary school and roughly $16,000 for private high school.[14]

Today, a student who attends private schools from kindergarten through four years of postsecondary study can expect to pay more than $300,000.[15]

As college enrollment declines, trade programs are picking up the slack. Trade and vocational schools are usually a much cheaper option than a traditional four-year college. Programs cost approximately $5,000 to $20,000 and are often completed within two years.[16] Enrollment in these programs, which many young people see as a quicker and more affordable path to a good job, has seen strong growth, including double-digit increases in some fields.[17]

In addition, students who take advantage of internships and externships while in college have improved employment prospects.[18] However, even a paid internship can impose costs on students, such as housing, transportation, and other living expenses.

Family Contributions Are Vital to Achieving Educational Goals

Families are a significant funding source for education at all levels. For example, parents contributed an average of $13,000 per year toward undergraduate education costs.[19] Family financial help can also play a major role in paying for trade school, private K–12 school, and internship-related expenses.

Every dollar a family invests in a loved one’s education alleviates their potential debt burden and fast-tracks their future success. To make your legacy a launchpad for their achievements, consider the following educational gifts and their potential tax benefits:

  • Direct tuition payments. Tuition paid directly to an educational institution is not considered a taxable gift.[20] This exemption applies to K–12 schools, colleges, and trade schools but covers only tuition—not room and board, books, or other expenses. It allows parents, grandparents, or other relatives to contribute without using their annual or lifetime gift tax exclusion.
  • 529 plans. Contributions grow tax-free, and withdrawals for qualified educational expenses (tuition, fees, books, room and board, computers) are also tax-free at the federal level. Since 2018, funds from 529 plans can be used for K–12 tuition (up to $10,000 per year). Some states offer tax deductions or credits for contributions, and, starting in 2024, unused funds can be rolled into a Roth IRA for the beneficiary (subject to limits).
  • Coverdell education savings accounts (ESAs). Contributions (subject to limitations and capped at $2,000 per year per beneficiary) are not tax-deductible, but earnings grow tax-free if used for qualified educational expenses, from kindergarten to higher education, including tuition, fees, books, supplies, tutoring, and certain technology needs, and they provide flexible investing options.

While tax benefits make it appealing to use those savings for a loved one’s education, not all education-related expenses fit the rules laid out above. Some expenses happen outside the classroom and may impose additional student costs that families can help cover. For example:

  • Internships and externships. Even if the program pays the participant a small sum, the amount may not cover the expenses associated with participating in the program, such as rent (if the program is in a different city or state), food, insurance, etc.
  • School field trips. Depending on the trip, the cost to participate can be expensive. Setting aside money for your loved one to participate in such activities can allow them to have additional life experiences that will shape them even after you have passed away.

You can support your loved one’s future by setting aside funds in a trust specifically for these types of expenses.

Gift Timing

Education funding can take place during your lifetime or after you die. Lifetime gifts use gift tax rules. Postdeath gifts fall under estate tax rules that are applied at death.

However, because the lifetime gift and estate tax are unified, using one affects the other, and lifetime and postdeath estate planning strategies should not be viewed separately. You might, therefore, use a mix of lifetime and posthumous educational gift strategies. Consider these common scenarios:

During Life

  • Direct tuition payments. You can pay tuition to an educational institution at any time while you are alive, and it is immediately exempt from gift tax.
  • 529 plans. You can establish and fund a 529 plan while alive, taking advantage of tax-free growth over time and the ability to front-load five years’ worth of annual exclusions ($95,000 in 2025). You control the account and can adjust beneficiaries as needed.
  • Payments to loved ones for a specific purpose. Currently, you can give $19,000 per year per recipient tax-free during your life for any purpose, including nontuition expenses such as internship costs or field trips, reducing your taxable estate while you are alive.

After Death (via Will or Trust)

  • Direct tuition payments. You can set up a will or trust to allocate funds for tuition, directing your executor or trustee to pay educational institutions on behalf of a loved one.
  • 529 plans. You cannot fund a 529 posthumously through a will because it is a lifetime savings vehicle tied to a living account owner. However, you could name a successor owner (e.g., a spouse or child) for an existing 529, or your estate could distribute funds to a beneficiary who then opens a 529, though this option loses the predeath tax-free growth benefit. After your death, the executor of your estate or the successor trustee of your trust can distribute the funds to an existing 529 plan, depending on what your will or trust instructs and what funds are available. Note that the contributions from a will or trust will not qualify for the gift tax exclusion and will still be part of the taxable estate. It is also important to clearly name the account beneficiary and owner, since the account owner will control how the funds are used.

You might also consider using a trust created via your will (testamentary trust) or funded during your life (revocable living trust) that offers gifting flexibility. You can instruct the trustee to pay for tuition, tech, or living expenses, mimicking lifetime strategies. Trusts can also be tailored (e.g., “pay tuition directly to schools” or “distribute $10,000 yearly for education”).

Whether it incorporates a gifting-while-living strategy or a standard inheritance, your estate plan can unlock the power of education while leveraging tax breaks. Schedule a meeting with us today to discuss specific strategies and which one is best for you and the student in your life.

  1. Anna Zajacova & Elizabeth M. Lawrence, The relationship between education and health: reducing disparities through a contextual approach, Annual Rev. of Pub. Health vol. 39 (Jan. 12, 2018), https://pmc.ncbi.nlm.nih.gov/articles/PMC5880718. ↩︎
  2. Adam Looney, How Much Does College Cost, and How Does It Relate to Student Borrowing? Tuition Growth and Borrowing Over the Past 30 Years, Higher Educ. Today (Sept. 9, 2024), https://www.higheredtoday.org/2024/09/09/surprising-trends-in-college-costs-and-student-debt. ↩︎
  3. Shayna Joubert, 10 Benefits of Having a College Degree, Northeastern Univ. (Nov. 15, 2024), https://bachelors-completion.northeastern.edu/news/is-a-bachelors-degree-worth-it. ↩︎
  4. Employment Projections, U.S. Bureau of Labor Statistics (Aug. 29, 2024), https://www.bls.gov/emp/chart-unemployment-earnings-education.htm. ↩︎
  5. How does a college degree improve graduates’ employment and earnings potential?, Ass’n of Pub. and Land-Grant Univs., https://www.aplu.org/our-work/4-policy-and-advocacy/publicuvalues/employment-earnings (last visited Apr. 22, 2025). ↩︎
  6. Economic Benefits: How College Graduates Earn More Over a Lifetime, Baker Coll. (Nov. 27, 2024), https://www.baker.edu/about/get-to-know-us/blog/is-college-worth-it-benefits-of-going-to-college/#:~:text=For%20example%2C%20certain%20tech%2Doriented,not%20kept%20up%20with%20inflation. ↩︎
  7. Preston Cooper, Does College Pay Off? A Comprehensive Return on Investment Analysis, Freopp (May 8, 2024), https://freopp.org/whitepapers/does-college-pay-off-a-comprehensive-return-on-investment-analysis. ↩︎
  8. Jessica Bryant, Cost of College Over Time, Best Colls. (Feb. 25, 2025), https://www.bestcolleges.com/research/college-costs-over-time. ↩︎
  9. Id. ↩︎
  10. Id. ↩︎
  11. Melanie Hanson, Student Loan Debt Statistics, Educ. Data Initiative (Mar. 16, 2025), https://educationdata.org/student-loan-debt-statistics. ↩︎
  12. Id. ↩︎
  13. Marthy Naomi Alt & Katharin Peter, Private Schools: A Brief Portrait, p. 26, Nat’l Ctr. for Educ. Stat. (Aug. 2022), https://nces.ed.gov/pubs2002/2002013.pdf. ↩︎
  14. Melanie Hanson, Average Cost of Private School, Educ. Data Initiative (Aug. 29, 2024), https://educationdata.org/average-cost-of-private-school. ↩︎
  15. Id. ↩︎
  16. Lyss Welding, How Much Does Trade School Cost?, Best Colls., (May 23, 2024), https://www.bestcolleges.com/research/how-much-does-trade-school-cost. ↩︎
  17. Olivia Sanchez, Trade programs—unlike other areas of higher education—are in hot demand, The Hechinger Rep. (Apr. 17, 2023), https://hechingerreport.org/trade-programs-unlike-other-areas-of-higher-education-are-in-hot-demand. ↩︎
  18. Diane Galbraith, Ph.D. & Sunita Mondal, Ph.D., The Potential Power of Internships and The Impact on Career Preparation, 38 Rsch. in Higher Educ. J. 3, https://files.eric.ed.gov/fulltext/EJ1263677.pdf (last visited Apr. 22, 2025). ↩︎
  19. What Percentage of Parents Pay for College?, Going Merry (May 30, 2024), https://goingmerry.com/blog/what-percentage-of-parents-pay-for-college. ↩︎
  20. I.R.C. § 2503(e), https://www.govinfo.gov/content/pkg/CFR-2010-title26-vol14/pdf/CFR-2010-title26-vol14-sec25-2503-6.pdf. ↩︎
Explainer slide on escheatment and unclaimed property rules.

Do Not Let Your Money and Property Go to the State: Why You Need an Estate Plan

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Americans tend to bristle when any level of the government meddles in their private lives, especially with their money. Look no further than the famous “death and taxes” quote for a sense of how Americans feel about bureaucratic creep and government’s sticky fingers.

You may take pains to minimize government meddling in your personal affairs during your lifetime, but if you do not have an estate plan, you may die intestate, and state law will become heavily involved in what happens to your money and property—and may even end up claiming it for itself through a process called escheat.

To avoid these outcomes, you need an up-to-date estate plan that lets you exercise maximum control and autonomy, both in life and in death.

Escheatment and the State’s Taking Power

Escheat is a term that dates to feudal times when, if a tenant died with no blood relatives, their estate reverted to the lord of the manor as the ultimate landowner. Middle English referred to this practice as eschete, which evolved into our modern state escheatment laws.

Today, every US state has laws requiring that unclaimed or abandoned property be turned over to the state after a designated period of inactivity—called the dormancy period—which typically ranges from one year to five years, depending on the state.

Unclaimed property can be tangible or intangible and includes assets such as 401(k)s, inherited individual retirement accounts (IRAs), taxable investments, bank savings, and other financial assets in accounts that have been inactive for a while and are legally deemed to be dormant.[1]

Unclaimed property also includes life insurance proceeds and assets such as gift certificates, uncashed checks, and personal property held in safe deposit boxes.[2]

States hold billions of dollars in unclaimed property taken by escheatment.[3] Unclaimed property is a major source of revenue for some states.[4] It is the fifth largest funding source for California, for example, and the third largest source for Delaware.[5]

As of 2025, California alone holds about $14 billion in unclaimed assets.[6] It and other states are taking more measures to enforce escheat laws to claim unclaimed property, often shortening dormancy periods and reducing notification requirements to capture more assets, according to NPR.[7] 

Escheat and Intestacy

A 2025 Caring.com survey found that just 24 percent of Americans have a will.[8] Put another way, three out of four Americans are likely to die intestate because of their lack of preparation.

Also, many Americans who have estate plans have not updated them in years, which puts assets at risk of being unidentified and unclaimed.[9]

Both scenarios can ultimately lead to the state claiming your money and property after your death through escheatment proceedings in probate court. If you pass away and do not have a legal document such as a will or a trust that clearly identifies who should receive your money and property, you are said to have died intestate. If you die intestate, state laws—called intestacy statutes—will determine who inherits from you.These laws generally start with next of kin, but if there are no family members to receive your money and property, your money and property could end up going to the state instead of supporting your nonfamily loved ones or a favorite charity.

This practice, a throwback to feudal times, essentially makes the state the default heir—the lord of the manor—and you a mere tenant.

Another possibility is partial intestacy, which occurs if you die with a valid will but the will does not fully address everything you own. Intestacy rules will apply to those remaining accounts and property. 

If You Want Something Different, Update Your Plan

It is not only dying intestate that can trigger state escheat and intestacy laws. You could have an out-of-date or incomplete plan that fails to include a comprehensive inventory of everything you own. Because loved ones might not have a full picture of what you own or where to find it, those accounts and property could be unclaimed for several years and ultimately end up in state custody.In other words, a good estate plan leaves a trail of breadcrumbs for your executor or trustee to follow so they can identify, gather, and distribute everything you own, leaving nothing behind for the state.

A comprehensive estate plan also lets you take control and decide exactly who inherits what. Estate planning allows for nuances that state laws do not and can make all the difference between crafting an intentional legacy and being subject to the state’s default legacy for you.

Some scenarios that an estate plan can address—and state law cannot—include the following:

  • Stepchildren. Under most intestacy laws, stepchildren do not automatically inherit anything unless you have legally adopted them. If you raised a stepchild as your own and want them to inherit, you will need a will or trust to make that happen in most states.
  • Unmarried partner. In most states, unmarried partners have no legal right to each other’s money and property under intestacy laws, regardless of how long they have been together. This can result in a situation where a long-term partner is left with nothing, while estranged relatives or the state claim the money and property left behind.
  • Close friend. Intestacy laws do not recognize friendships. To leave something to these very important people in your life, you must spell it out in your estate plan.
  • Charity. You may prefer that your money go to a cause you are passionate about, such as animal welfare, education, or medical research. Charities will not see a dime unless you explicitly designate them as beneficiaries.
  • Specific bequests. Want to leave your antique watch to your nephew or your art collection to your niece? Intestacy laws distribute money and property generally and do not carve out gifts of specific items.
  • Control over guardianship. A will allows you to nominate a guardian to care for your minor children. Lacking this crucial designation, the court will decide without input from you, and the person they select may not be your preferred choice.

Take Control with an Estate Plan

Legal jargon such as escheat and intestate may put people off from the estate planning process entirely. Even the term estate can suggest an exclusive service only for the wealthy.

In reality, estate planning is for anyone who owns anything of value—monetary, sentimental, or otherwise—and who cares about what happens to it. Delaying estate planning can cause conflicts in your family.

If you want to exercise maximum control over your hard-earned money and property and ensure that the state does not end up claiming it, you should have at least a basic will. However, you can exercise even greater control and likely avoid probate court altogether with a trust-based estate plan. Do not settle for the state’s default rules and leave things to chance—or the government. Take charge of your legacy today: call us so we can craft a plan unique to you or update your existing plan.

  1. What Is Unclaimed Property, Nat’l Ass’n of Unclaimed Prop. Adm’rs, https://unclaimed.org/what-is-unclaimed-property (last visited Apr. 17, 2025). ↩︎
  2. Id. ↩︎
  3. Report Shows Unclaimed Property Administrators Returned over $2.8B to Americans During FY 2020, Nat’l Ass’n of Unclaimed Prop. Adm’rs, https://unclaimed.org/fy20-annual-report (last visited Apr. 17, 2025). ↩︎
  4. Unclaimed Property FAQ, Unclaimed Prop. Pros. Org., https://www.uppo.org/page/UnclaimedPropFAQ (last visited Apr. 17, 2025). ↩︎
  5. Escheat Show, NPR (Jan. 24, 2020), https://www.npr.org/transcripts/799345159. ↩︎
  6. Kendrick Marshall, California Is Holding $14 Billion in Unclaimed Property. Here’s How to Get Your Share, Sacramento Bee (Mar. 28, 2025), https://www.sacbee.com/news/california/article301817649.html. ↩︎
  7. Audrey Quinn, When Your Abandoned Estate Is Possessed by A State, That’s Escheat, NPR (Feb. 13, 2020), https://www.npr.org/2020/02/13/805760508/when-your-abandoned-estate-is-possessed-by-a-state-thats-escheat. ↩︎
  8. Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Feb. 18, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey. ↩︎
  9. Id. ↩︎

Small gray home with brick chimney and colorful spring flowers.

Should I Buy a Home with Someone Other than a Spouse?

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Rising housing costs, the desire for companionship, and the need to share resources are increasingly leading buyers to consider co-owning a home with someone other than a spouse, such as a friend, relative, or significant other.

Although this arrangement can be beneficial on several levels, it should be approached with open communication, careful planning, and a clear understanding of the financial and legal implications.

Co-Ownership on the Rise

Whether the reason for home co-ownership is affordability, companionship, shared responsibilities, investment opportunity, or some mix of these, the numbers tell the story of how nonspouse co-ownership is increasing.

Data from Zillow shows that 62 percent of buyers share ownership of their home with at least one other person, but just 50 percent co-bought with a partner or spouse.[1] Fourteen percent co-bought a home with a friend, and 12 percent co-bought with a relative.[2] Affordability was a top reason cited for buying a home together.[3]

Co-Ownership Challenges and Legal Considerations

While co-ownership offers many benefits, it also comes with potential challenges.

Even the strongest relationships can be strained by the pressures of shared living and financial responsibilities. In addition to disagreements over lifestyle choices, finances, and property maintenance that may arise in a co-ownership situation, owning a home with a nonspouse can raise legal issues.

Expectations should be set from the start of the co-owning relationship—ideally, in a written agreement—and regularly communicated throughout it. To ensure a successful co-ownership experience, it is essential to have open and honest discussions with your potential co-owner(s) about the following:

  • Financial contributions. How will the down payment, mortgage, taxes, insurance, and maintenance costs be divided? Will there be a joint account for these expenses? What will happen if one person cannot meet their financial obligations?
  • Exit strategy. What happens if one co-owner wants to sell their share of the property? Will the other owner(s) have a right of first refusal? How will the property be valued?
  • Death or incapacity. How will the property be handled if one co-owner dies or becomes incapacitated (unable to manage their affairs)? Does the ownership structure align with each co-owner’s estate plan goals?
  • Usage and responsibilities. What is the property’s intended use? Will it be a primary residence, a vacation home, or an investment property? How will household chores, maintenance, and repairs be divided?
  • Dispute resolution. What mechanisms will be in place to resolve disagreements or conflicts?

How to Address Potential Co-Ownership Issues

The deed to a property is a legal document that can be instrumental in addressing possible legal and other issues in a co-ownership scenario. It names the co-owners and how they hold title to the property, but it might not address more complex co-ownership issues, such as rights and responsibilities for maintenance costs, how decisions about the property will be made, and a dispute resolution process.

A deed, combined with a more comprehensive co-ownership agreement, should be written to mitigate foreseeable conflicts and protect your interests. The agreement should also be reviewed frequently and updated whenever a co-owner’s circumstances change.

Establishing Ownership Structure

Before buying a home with someone other than a spouse, understanding your options for joint ownership is important. The rules can vary by state, so consulting an experienced attorney can help you make the best choice for your situation. Once selected, the ownership structure needs to be reflected on the property deed.

  • Joint tenancy with rights of survivorship. Under joint tenancy, each co-owner has an equal and undivided interest in the property. Upon the death of one owner, their share automatically passes to the surviving owner. This arrangement is common among married couples and close family members.
  • Tenancy in common. Each co-owner in a tenancy in common holds a certain share of the property, which can be equal or unequal. If the deed does not specify percentages, the co-owners are considered to have equal ownership. When one owner dies, their share passes to their beneficiaries based on their will or to their family members according to state intestacy laws. Tenancy in common offers more flexibility, in particular for co-owners who are not spouses or close relatives, such as two families purchasing a second home together.

Defining Responsibilities and Rights

Clearly defining each owner’s rights and responsibilities is crucial to avoid future conflicts and ensure smooth property management.

  • Financial obligations. To avoid disputes over who pays for what, a co-ownership agreement should outline each co-owner’s financial responsibilities, such as contributions to mortgage payments, property taxes, insurance, and maintenance costs.
  • Usage and access. If the property is a vacation home or investment property, the agreement can specify how the co-owners will share usage and access. Points to address include scheduling, allocation of time, and rules regarding guests.
  • Maintenance and repairs. The agreement may outline division and management of maintenance and repair responsibilities. Each co-owner can be assigned specific tasks, and the agreement can establish a joint fund for these expenses.

Addressing Potential Conflicts

A strong co-ownership agreement should also outline how to resolve disputes.

  • Dispute resolution. A dispute resolution clause can require the co-owners to attempt mediation or arbitration to resolve disputes before resorting to contentious and costly litigation.
  • Buyout provisions. The agreement can outline a process for one co-owner to buy out the other’s share if the other owner wishes to exit the co-ownership arrangement. Key terms to include in a buyout provision are right of first refusal, valuation methods, and payment terms.
  • Sale or transfer of ownership. Conditions for selling the property, such as requiring unanimous consent from the co-owners or establishing a process for handling disagreements about selling, are best addressed before purchasing the home.

Protecting Individual Interests

Consider adding provisions to your co-ownership agreement that safeguard each person’s individual interests.

  • Liens and encumbrances. The agreement should clearly state that each co-owner is responsible for their own debts and that the ownership interest of one co-owner cannot be used as collateral for the other co-owner’s individual loans. This provision helps to protect co-owners from being held liable for others’ financial obligations.
  • Partition action. In cases where co-owners cannot agree on major decisions (e.g., selling the property), the agreement can contain a provision allowing for a partition action, a legal process that allows the court to divide the property or order its sale, providing a resolution when co-owners reach an impasse.

After a deed has been recorded, it cannot be easily changed. To change the contents (e.g., names, ownership structure, ownership percentage) of the original deed, it is necessary to prepare and record a new deed, which requires the consent of all parties involved.

Home Co-Ownership and Estate Planning

Estate planning takes on added importance when you buy a home. Your estate plan should take the long view on homeownership and address the following points:

  • If you own the property as tenants in common, your will should explicitly state who inherits your share of the property. You should also discuss with your co-owner to whom their share of the property will pass at their death.
  • In the case of joint tenancy with rights of survivorship, your share automatically transfers to the surviving co-owner. However, it is still advisable to address the property in your will and clarify your intentions in case of simultaneous death or other unforeseen circumstances.
  • Placing your interest in the property in a trust can avoid the court process known as probate, create a smoother transfer of ownership, and allow greater control over how the property is handled after your death. You can specify conditions in your trust, such as requiring the surviving co-owner to buy out your share from the trust or dictating how the property should be used or managed.
  • Your estate plan can include provisions to address potential disputes among co-owners after your death. For example, you could designate a neutral third party to mediate disagreements or outline a process for selling the property if co-owners cannot reach an agreement.
  • If you own the property as tenants in common and leave your share to multiple beneficiaries, your estate plan should describe how that share will be divided or managed to avoid conflicts among your beneficiaries.
  • Life insurance can give financial security to your co-owner in the event of your death. The death benefit can be used to cover your share of the mortgage, buy out your share of the property, or serve as a source of income or collateral for a loan.
  • Discuss your estate plans with your co-owner so they understand your wishes and you can coordinate your plans as much as possible to prevent surprises and minimize potential conflicts after your death or incapacity. Regularly review and update your estate plan, especially after major life events or changes in your co-ownership agreement.

Homeownership continues to be a key component of the American dream, but it can become more complicated when you own a home with someone other than a spouse. Addressing co-owned property in legal documents removes as much risk as possible from the homebuying equation and sets the stage for a partnership that can benefit you now and your beneficiaries later.

Get in touch with our legal team to discuss how we can help you realize the dream of homeownership.

  1. Manny Garcia, Buyers: Results from the Zillow Consumer Housing Trends Report 2023, Zillow (Aug. 23, 2023), https://www.zillow.com/research/buyers-housing-trends-report-2023-32978. ↩︎
  2. Id. ↩︎
  3. Id. ↩︎
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3 Asset Protection Tips You Can Use Now

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A common misconception is that only wealthy individuals and people in high-risk professions, such as doctors or lawyers, need an asset protection plan. However, anyone can be sued. A car accident, foreclosure, unpaid medical bills, or an injured tenant can result in a monetary judgment that could crush your finances.

What Is Asset Protection Planning?

Asset protection planning uses legal structures and strategies to safeguard assets (accounts and property) from creditors by completely or partially protecting them from a creditor’s reach.

Unfortunately, this type of planning cannot be done as a quick fix for your existing legal problems. In fact, transferring assets to an individual or entity to shield them from existing creditors could be considered fraudulent, resulting in legal penalties. You must instead put an asset protection plan in place before you know about a lawsuit. So, now is the time to consider implementing one or more of the following tips to protect your hard-earned money and property from creditors, predators, and lawsuits.

Asset Protection Tip #1: Load Up on Liability Insurance 

The first line of defense is insurance, including homeowner’s or renter’s, automobile, business, professional, malpractice, long-term care, and umbrella policies. Liability insurance not only provides a means to pay money damages but can often include payment of all or part of the legal fees associated with a lawsuit. If you do not have an umbrella policy, speak with an insurance agent to see whether one is right for you and your situation, as these types of policies are relatively inexpensive compared with more advanced asset protection strategies. Also, check your current insurance policies to determine whether your policy limits align with the value of what you own, and make adjustments as appropriate. You should then review all your policies annually to confirm that the coverage is still adequate and the benefits have not been reduced or changed. 

Asset Protection Tip #2: Maximize Contributions to Your 401(k) or IRA

Under federal law, tax-favored retirement accounts, including 401(k)s and individual retirement accounts (IRAs), are protected from creditors in bankruptcy (with certain limitations). Therefore, maximizing contributions to your company’s 401(k) plan is not only a smart way to increase your retirement savings but also a safeguard against creditors, predators, and lawsuits. If your company does not offer a 401(k) plan, consider investing in an IRA for the same reasons.

Asset Protection Tip #3: Move Rental or Investment Real Estate into an LLC

If you are a landlord or a real estate flipper or investor, then aside from having good liability insurance, moving your real estate holdings into a limited liability company (LLC) can be an effective way to protect your assets from the business’s creditors, predators, and lawsuits. 

There are two types of liability that you should be concerned about with rental or investment property:

(a) inside liability (the rental or investment property is the source of the liability, such as a slip and fall on the property, and the creditor wants to seize an LLC member’s personal (i.e., nonbusiness-related) money and property to satisfy the business’s debt)

(b) outside liability (the debt of the member of the LLC and not the debt of the LLC itself, where the creditor wants to seize accounts and property owned by the business to satisfy the member’s nonbusiness debt)

A properly formed and operated LLC limits inside liability related to the real estate to the value of what the LLC owns. In most states, creating an LLC also means that a creditor of an LLC member cannot access the accounts and property inside the LLC to satisfy a judgment against the member for the member’s personal debts. The LLC member’s personal creditors may also be unable to take the member’s ownership interest in the company (in some states, this will work only for multimember LLCs, while in others, it will also work for a single-member LLC). At a maximum, if a member’s personal creditor could seize the member’s LLC interest, that creditor would be entitled to only the member’s share of the distributions and would have no voting or management rights in the LLC. This type of outside creditor protection is often referred to as charging order protection. If the LLC is properly protected, a creditor will have to look to your liability insurance and any unprotected accounts and property, not the LLC, to collect on their claim. 

If you are interested in using an LLC to protect your real estate investments, work with an attorney who understands the LLC laws of the state where your property is located to ensure that your LLC will protect you from both inside and outside liability. You have worked hard to accumulate the money and property you have. Do not let a lawsuit take it all away. Call us today so we can evaluate your situation and craft an asset protection plan that best serves you and your loved ones.

Person stands at a fork in the road between fact and myth.

The Trust Protection Myth: Your Revocable Trust Protects Against Lawsuits

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Many people believe that once they set up a revocable living trust and change the ownership of their accounts and property from themselves as individuals to their trust, those accounts and property are protected from lawsuits. This is not true. 

While trusts commonly protect a beneficiary’s inheritance, few trusts protect assets (accounts and property) previously owned by the trustmaker from the trustmaker’s creditors. Because the trustmaker can revoke the revocable living trust and often serves as the trustee, courts may determine that creditors can still access the trust’s assets, as the trustmaker’s control over them remains largely unchanged.

No Immediate Asset Protection? Why Should You Create a Revocable Living Trust?

Fully funded revocable living trusts are still excellent tools. Here’s why: 

  1. You can protect assets passing to your spouse, children, or other loved ones by placing any desired restrictions on the inheritances to ensure that your beneficiaries can still benefit without being in danger of having their inheritance accessible by creditors, predators, or divorcing spouses.  
  1. Your trust can include a plan for managing your assets during your incapacity (when you cannot manage your own affairs), avoiding court interference, ensuring your wishes are carried out, and saving your loved ones time, money, and stress.
  1. A properly funded trust allows trust assets to pass to beneficiaries without going through probate court. This, in turn, can minimize the time, stress, and cost of settling your final affairs.
  1. By avoiding the public probate court process during your incapacity or at death, details about who is getting what will remain private.

Strategies to Protect Your Assets Without a Living Trust

Comprehensive estate planning can be complemented with a solid foundation of insurance, including homeowner’s or renter’s, personal property, umbrella, auto, business, life, disability, and the like. For business owners and real estate investors, business entities such as limited liability companies can provide additional asset protection. In addition, domestic asset protection trusts can sometimes be used, depending on your unique circumstances. Your revocable living trust is a powerful tool for protecting your loved ones. If you have questions about asset protection planning, call us. We can review your existing plan and determine what additional steps need to be taken to ensure that you and your loved ones have a secure financial future.