Dunn & Hemphill, PA - Blog

Estate Planning Pitfalls to Avoid

Fri, 28 Mar 2025 07:55:51 GMT

In the world of estate planning, avoiding common pitfalls is crucial to safeguarding your assets and ensuring your wishes are carried out effectively. Navigating the complexities of estate planning can be daunting. This article dives into the essential missteps to sidestep and highlights the importance of seeking guidance from an experienced estate planning lawyer in Philadelphia, MS. Are you looking to secure your family's future? Call Dunn & Hemphill, PA, at (662) 327-4211 . We are the leading estate planning lawyers in Philadelphia, MS, to safeguard your legacy today. Avoid unnecessary stress and financial burdens by understanding the common mistakes in estate planning.

Procrastination Can Cost You

Delaying estate planning can lead to confusion and potential disputes among beneficiaries. To mitigate these risks, it's essential to commence the estate planning process promptly with the assistance of a reputable estate planning lawyer in Philadelphia, MS. An experienced lawyer can help ensure that your assets are distributed according to your wishes. We can make sure that your loved ones are taken care of in the event of your passing.

Failing to Update Your Plan

Life events such as marriages, births, or divorces can significantly impact your estate plan. To ensure your plan remains current and aligns with your intentions, regularly review and update your documents. Do this with the guidance of a skilled estate planning lawyer. It's important to communicate any changes in your personal or financial circumstances to your estate planning attorney. This is so they can make necessary adjustments to your estate plan.

Overlooking Tax Implications

Neglecting to consider tax implications can result in unforeseen financial burdens for your heirs. Collaborate with a knowledgeable estate planning lawyer in Philadelphia, MS, to develop strategies that minimize tax liabilities and maximize asset preservation. An experienced lawyer can help you navigate complex tax laws and ensure your estate plan is optimized to protect your assets for future generations.

Not Planning for Disability

Incapacity can strike unexpectedly, underscoring the importance of including provisions for managing your affairs in the event of disability. Working with an estate planning lawyer to address incapacity ensures your interests and wishes are protected during challenging times. Establishing a comprehensive power of attorney and healthcare directive can provide clear guidance for decision-making on your behalf if you become incapacitated.

Ignoring the Importance of Beneficiary Designations

Inaccurate or outdated beneficiary designations on accounts and policies can supersede your estate plan's directives. To prevent unintended consequences, consult with an estate planning lawyer to verify that all beneficiary designations align with your overarching estate planning goals. It's important to review and update your beneficiary designations regularly to ensure they reflect your current wishes and circumstances.

Contact Dunn & Hemphill, PA, Today!

Ensure your estate plan is comprehensive, up-to-date, and reflective of your wishes with the assistance of experienced professionals. By working with Dunn & Hemphill, PA, you can rest assured that your estate plan is carefully crafted to protect your assets and ensure your loved ones are provided for according to your wishes. Don't leave your estate planning to chance. Secure your future today with the help of our dedicated team. Safeguard your assets and loved ones by steering clear of these common estate planning pitfalls. For an expert estate planning lawyer in Philadelphia, MS, contact Dunn & Hemphill, PA, or call (662) 327-4211 .

5 Reasons to Hire an Estate Planning Attorney

Wed, 15 Jan 2025 16:10:32 GMT

When planning your estate, ensuring your wishes are fulfilled and your loved ones are provided for is essential. This is why consulting a local estate planning attorney can be invaluable. Estate planning involves complex legal considerations that often require professional assistance to navigate successfully.

5 Compelling Reasons to Consider Hiring a local Estate Planning Attorney

1. Expertise in Mississippi Estate Laws

Laws surrounding estates and inheritance can differ significantly by state. A local estate planning lawyer has a deep understanding of Mississippi laws governing wills, trusts, and other essential aspects of estate planning. This expertise ensures that your documents are not only compliant with local regulations but are also designed to protect your interests under Mississippi law.

2. Customized Planning for Different Life Stages

Estate planning needs vary greatly depending on age, family status, and financial situation. An experienced attorney can provide tailored advice based on your current life stage and goals, whether you’re:

A young professional starting to accumulate assets
A middle-aged parent wanting to secure your family’s future
A retiree focused on protecting and passing on your legacy

Your attorney can recommend strategies to meet the unique needs of each phase, ensuring a smooth transition of your estate as your priorities evolve.

3. Minimizing Tax Liabilities

Tax implications are often a crucial part of estate planning. An estate planning lawyer can identify strategies to reduce the tax burden on your estate, allowing more assets to be passed on to your beneficiaries. Through careful planning, including the creation of trusts or other mechanisms, your attorney can help you make the most of federal and Mississippi tax laws to benefit your loved ones.

4. Protecting Your Loved Ones and Preventing Disputes

Without a well-structured plan, estates can become a source of stress and conflict among family members. A lawyer can help you establish clear terms, minimizing misunderstandings or legal disputes over inheritance. Whether it involves creating clear beneficiary designations, defining trust parameters, or setting up health directives, a lawyer can ensure your wishes are clearly articulated and legally binding.

5. Regular Reviews and Updates to Reflect Life Changes

Life is constantly evolving, and so should your estate plan. Significant changes such as marriage, divorce, births, or even changes in financial status require an updated plan. A lawyer will offer regular reviews of your plan, helping you adapt to life changes to ensure your assets are handled according to your latest wishes.

Key Takeaways

Hiring an estate planning lawyer can provide peace of mind through:

Legal Expertise:

In-depth knowledge of Mississippi estate laws

Tailored Guidance:

Custom plans for each life stage

Tax Optimization:

Strategies to minimize tax liabilities

Conflict Prevention:

Avoiding family disputes over inheritance

Proactive Management:

Regular updates reflecting life changes

Are you prepared to protect what matters most? Without a comprehensive estate plan, your loved ones future may be at risk. At Dunn & Hemphill, P.A., we specialize in securing your legacy with expert guidance tailored to your unique needs. Call us today at (662) 327-4211 or schedule a free consultation to start planning with confidence.

Planning Ahead: Part One

Fri, 04 Dec 2020 22:38:00 GMT

Planning Ahead Part 1: The Building Blocks of an Estate Plan

Welcome to “Planning Ahead,” a series of articles on estate planning and long-term care asset protection planning. In these articles I will share with you what you need to know as you begin your estate planning journey. Estate planning is the process of arranging for the use and transfer of your assets during lifetime and at death. You might think of your plan as how to get your assets from A to Z. A to Y represents your lifetime, and Z is the point at your death when what’s left of your assets are passed on to your family and/or charities.

A good plan will allow you to do this with the least amount of hassle and expense while still accomplishing your goals. Most plans require a minimum of three estate plan documents: a last will and testament, durable power of attorney and advance health care directive. These are our basic building blocks. Clients with more complicated situations require the use of additional estate planning “tools” such as testamentary trusts, revocable living trusts, irrevocable trusts, deeds and transfer-on-death deeds.

All estate planning must be personalized to your needs and goals. It requires careful consideration of what you own, in whose name your assets are titled, and what will happen to those assets at your death. That is why we ask our estate planning clients to complete an intake form before we meet with them.

Planning Ahead: Part Two

Thu, 03 Dec 2020 22:42:00 GMT

Planning Ahead Part 2: The Last Will and Testament

In Part 1 of “Planning Ahead,” we defined estate planning as the process of arranging for the use and transfer of your assets during your lifetime and at your death. This week we will focus on one of those basic estate plan documents, the last will and testament, and how to avoid probating it. In its simplest form, a last will and testament is a document that you create during your life to direct how your assets will be used and distributed at your death and place someone in charge of that distribution (the "executor" or "personal representative"). A will only controls property owned in your individual name at the time of your death, and it must be probated in the local Chancery Court before your executor can have authority over your assets.
If you are a couple and completely trust your partner, you could use joint ownership of real and personal assets and pay on death beneficiary designations to control the passing of your assets at death without probate of your will. You likely still need a will so that it can be probated when the surviving partner dies. Jointly owned accounts do have their risks. Any joint owner of a bank account can access the funds. Also a judgment or tax lien against a joint owner can result in loss of that bank account to that creditor. For a single person or partners who have differing interests or want their assets to pass at death to someone else, a will is even more important.
A last will and testament is effective when you sign it but not operative until death. In our next installment, we share important information about powers of attorney, a tool that empowers a trusted person to handle your financial affairs during your life.

Planning Ahead: Part Three

Wed, 02 Dec 2020 22:45:00 GMT

Planning Ahead Part 3: The Durable Power of Attorney

In Part 2 of “Planning Ahead,” we talked about the last will and testament and ways to avoid probating it at your death. Here, we dive into the estate planning tool that allows someone you trust to help you manage your affairs during your life: the general durable power of attorney.
A general durable power of attorney (POA) gives broad powers to your agent because you cannot know now exactly what they might need to do on your behalf. For this reason, you should only name an agent who you trust completely. Ask yourself: "If I became totally incapacitated today, are there decisions that would need to be made, documents that would need to be signed, and actions that would need to be taken on my behalf? Is there someone who I trust to do these things for me?" If the answer to both questions is yes, you could benefit from making a durable POA part of your estate plan.
Using a general durable POA, you can designate a trusted family member or friend to be your agent (also called “attorney-in-fact”) and empower your agent to do nearly anything that you could do yourself. A POA is “durable” when it continues to be effective even after you become incompetent. We almost always recommend making POAs durable because when you become incompetent is the time you will most likely need your agent's help. Having a durable POA may help your family avoid establishing a conservatorship for you in the Chancery Court if you become in competent, which is a complicated and expensive process.
In our next installment, we return to explain Mississippi's new transfer-on-death deed and other estate planning tools.

Planning Ahead: Part Four

Tue, 01 Dec 2020 22:48:00 GMT

Mississippi's New Transfer-on-Death Deed

So far in “Planning Ahead,” we have defined estate planning, last will and testaments, and durable powers of attorney. This week we talk about a way to transfer ownership of your “real property” (meaning your land and anything attached to it) to someone without the need for your will to be probated. Probate is the legal process of filing your will in court to prove it is your true last will and testament and to wind down your financial affairs. It is not a four-letter word, but it is an expense that most of our clients want to avoid.
Mississippi’s newest estate planning tool is called a Transfer-on-Death Deed (TODD), which became available on July 1, 2020. Using a TODD you (the “transferor”) can execute and record a deed now that will transfer your real property upon your death. During your lifetime, you retain all interests and rights in the property, including homestead rights and the right to otherwise transfer or even mortgage that land in any way you wish. Upon your death, the person to whom you deeded the property (the “beneficiary”) will become the owner of that property automatically without probate, but while you are living and competent you can revoke the TODD or file a new one.
In our next post, we will begin to look at “long-term care asset protection planning” and Medicaid qualification by discussing another useful deed: a deed with reservation of life estate. Many of our clients are desperately concerned about the high cost of skilled nursing care, which can be roughly $90,000 per year in our area, so this type of planning is highly important.

Planning Ahead: Part Five

Mon, 30 Nov 2020 22:50:00 GMT

Deed with Reservation of a Life Estate

What does it mean to deed your property but reserve a life estate for yourself? In Planning Ahead: Part 5, we answer this question and explain why a deed reserving a life estate (RLE) might be helpful for your long-term care planning.
A deed RLE gives the grantee something called the remainder interest, which means that the grantee will own your real property outright (without the need for probate) upon your death while you continue to enjoy the land during your life. A deed RLE lets you keep homestead exemption for land tax purposes, and it allows your grantee to receive stepped up capital gains tax basis equal to the fair market value of the property at your death. This means if the grantee sells the property after your death for its FMV he or she will pay no capital gains taxes. These are significant benefits for you and your grantee.
A key advantage of a deed reserving a life estate for long-term care planning purposes is that Medicaid considers it to be a completed gift of that property, which starts running Medicaid’s 5-year look-back period for gifts. Once you deed your property reserving a life estate, if you can wait 61 months before applying for nursing home Medicaid, your property could be excluded from your countable resources for qualification purposes and/or protected from a claim by Medicaid after your death. In our next post, we will give more context as to why these benefits are crucial when we discuss resource and income limits for nursing home Medicaid coverage.

Planning Ahead: Part Six

Sun, 29 Nov 2020 22:52:00 GMT

An Introduction to Long-term Care Planning

When we ask our clients how they will pay for their long-term care, many quickly respond saying, “I’m not going to the nursing home!” The reality is that a majority of Americans will spend some time in the nursing home, and for more than ten percent of us that stay will be for five years or longer.
A semi-private room in local nursing homes costs roughly $90,000 per year! This expense will break the bank even for hard working, smart saving people. In Mississippi, Medicaid can pay for your nursing home care if you are over 65, blind, or disabled and you are eligible based on your medical needs, income, and resources. To qualify for “nursing home” Medicaid, you can have no more than $4,000 of countable resources and $2,349 of monthly income. A married couple, one who needs skilled nursing care and the other able to live at home (“community spouse”), can have combined countable resources of $128,640. There is no limit to the community spouse’s personal income, and if the community spouse’s income is less than $3,216/month, a portion of the nursing home spouse’s income will be allocated to the community spouse so that his or her income equals $3,216/month. For married couples in which both spouses are in a nursing home, the couple can have only $6,000 of countable resources between them. These resource and income limits are applicable in 2020 but may be adjusted annually.
The key to qualification for most people is converting countable resources to exempt or non-countable resources. In our next post, we will share asset protection planning strategies.

Planning Ahead: Part Seven

Sun, 29 Nov 2020 16:04:00 GMT

Defining Exempt and Non-Countable Resources

In Part 6, we explained resource limits for “nursing home” Medicaid qualification. Often, the key to meeting those limits is converting assets that you own into resources that Medicaid considers exempt or non-countable. In order to take advantage of this simple asset protection planning strategy, it is helpful to know which resources are exempt and which are non-countable. Exempt resources include one’s homestead (up to $595,000 in equity in 2020); all of one’s furniture, household goods, and other personal property; one motor vehicle; burial spaces for you and your immediate family; an irrevocable, prepaid funeral contract; and permanent life insurance if the face value of all policies is $10,000 or less. You can convert cash into a non-countable resource by loaning it to trusted family members and taking back a Medicaid compliant promissory note that yields a minimum annual return on principal of 6%. You can even convert a retirement account into a non-countable resource if you begin withdrawing a certain amount each month. Of course this list is not all-inclusive, so it is important to consult with an experienced estate planner who can look at all of your assets and determine what the Mississippi Division of Medicaid will consider countable resources and assist you with a planned spend-down. If you believe you have five years to plan, you can reduce exempt and countable resources by gifting them to trustworthy family members or putting them into an irrevocable Medicaid Asset Protection Trust. We will discuss these options next week.

Planning Ahead: Part Eight

Fri, 27 Nov 2020 12:00:00 GMT

Gifting Assets and Medicaid Asset Protection Trusts

Previously we discussed qualifying for “nursing home” Medicaid. This is important because most of us cannot afford to pay $90,000/year to the nursing home. You have more planning options when you have at least five years to plan before you enter a skilled nursing facility, which is the current look-back period for gifts made before you apply for Medicaid. If you have made gifts within the look-back period before applying, Medicaid will assess a penalty calculated by dividing the total value of your gifts by the penalty period divisor $6,832 (2020) to determine months of ineligibility for nursing home room and board Medicaid. For example, a gift of $68,320 would result in 10 months of ineligibility.
When you have five years to plan, you could gift real or personal assets to someone you trust completely (the donee). Your hope would be that the donee would use those gifted assets for things that Medicaid will not provide and your family will have what is left when you die. This is a complicated topic. Gifts to family members are risky. Gifts to an irrevocable Medicaid Asset Protection Trust can significantly reduce those risks.
To put it simply, a trust is a contract between the “settlor” (the person who creates the trust), the “trustee” (the person who manages the trust), and the “beneficiary” (the person who receives the benefit of the trust’s income or principal). When creating an irrevocable Medicaid Asset Protection Trust (MAPT), the person planning for Medicaid qualification is the settlor who creates the trust and puts assets into it. He or she names a trustee to manage the assets and names himself or herself beneficiary of only the income from the trust. If you are able to wait out the five-year look-back period after transferring your assets to a Medicaid Asset Protection Trust, the assets you put into the trust will not be counted as your resources and Medicaid will have no claim for recovery against them upon your death.
If you remember only one thing it needs to be this: It is almost never too late to plan. Call us for a no-obligation consultation.