The Social Security Fairness Act: What Retired Teachers in Kentucky (and Beyond) Need to Know 

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For decades, retired teachers and other public servants faced a hidden penalty when claiming Social Security. Two little-known provisions, the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), reduced or eliminated Social Security benefits for individuals who also received a pension from non-Social Security covered employment.

In early 2025, Congress passed the Social Security Fairness Act, eliminating WEP and GPO altogether. This landmark change restores Social Security benefits for millions of Americans, including many retired teachers. For Kentucky educators — whose pensions historically excluded them from Social Security coverage — the new law could significantly reshape retirement income.

This article explains:
– What the rules were before the Fairness Act
– How the new law changes Social Security benefits
– What retired teachers, particularly in Kentucky, should do now
– Why this change matters in broader retirement, estate planning, and asset protection strategies 

The Law Before the Fairness Act: WEP and GPO 

Congress introduced the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) in 1983. The stated purpose was to prevent “double dipping,” but the result was often an unfair penalty.

– Windfall Elimination Provision (WEP): Reduced Social Security retirement benefits for those who earned a public pension from non-covered employment and also qualified for Social Security through other work.
– Government Pension Offset (GPO): Reduced or eliminated spousal or survivor Social Security benefits if the recipient also had a government pension.

For teachers, firefighters, and other public employees, these rules created serious inequities. A Kentucky teacher who spent summers working in covered employment, for example, could see her Social Security benefit slashed by WEP. A surviving spouse of a Tennessee educator could find that GPO eliminated his survivor benefit. 

The Social Security Fairness Act: A Landmark Repeal 

With the Social Security Fairness Act of 2025, WEP and GPO are repealed. Effective for benefits payable after December 2023:

– No more WEP reductions: Retirees with Social Security credits from covered work now receive their full benefit.
– No more GPO offsets: Spouses and survivors of retirees with public pensions can claim full benefits.
– Retroactive adjustments: The SSA is recalculating benefits and issuing lump-sum back payments to those affected in 2024.

For many, the change represents not just a modest increase but a meaningful improvement in monthly retirement income. 

Kentucky Teachers: A Unique Situation 

Kentucky’s public-school teachers participate in the Teachers’ Retirement System of Kentucky (TRS), which does not pay into Social Security.

– No automatic Social Security coverage from teaching. A career Kentucky teacher who never worked in Social Security-covered employment outside the classroom still will not qualify.
– However, many teachers held other jobs. Summer work, second careers, or employment before or after teaching often contributed to Social Security. Those benefits are now restored without WEP penalties.
– Spousal and survivor benefits are key. GPO previously wiped out many of these benefits, but now they can be claimed in full.

The bottom line: If you or your spouse earned Social Security credits outside of teaching, you may see a significant increase in benefits. 

Indiana, Tennessee, and Other States 

While Kentucky teachers are among the most directly affected, educators in Indiana, Tennessee, and across the country also benefit. Some districts in these states had non-covered employment, while others did not. The repeal ensures fairness for all retirees who had been penalized. Because Social Security is federal law, this change applies nationwide. 

What Retired Teachers Should Do Now 

If you are a retired teacher or the spouse/survivor of one, here are recommended steps:

1. Review your Social Security record at SSA.gov.
2. Look for SSA notices explaining recalculated benefits and retroactive payments.
3. Confirm spousal or survivor eligibility if you were previously denied due to GPO.
4. Update your estate and retirement planning, considering taxes and Medicare premiums.
5. Seek professional guidance to integrate these changes into your financial plan. 

Why Estate Planning and Asset Protection Still Matter 

The repeal offers welcome relief, but it also introduces new planning considerations:

– Higher income may increase tax exposure.
– Medicare premiums may rise due to higher reported income.
– Survivor planning is more important with restored benefits.
– Asset protection remains critical for retirees balancing pensions, IRAs, and trusts.

At KT Williams Law PLLC, we help clients integrate changes like these into comprehensive estate and retirement strategies. 

Conclusion 

The Social Security Fairness Act of 2025 repeals decades-old provisions that penalized teachers and other public servants. For Kentucky educators in particular, this change could mean thousands of dollars more in benefits, both monthly and retroactive.

If you are a retired teacher, spouse, or survivor:
– Review your Social Security record
– Watch for notices from SSA
– Contact SSA if your benefits were previously reduced
– Revisit your estate and asset protection plan

KT Williams Law PLLC | Serving Families in Estate Planning, Probate, and Estate Administration 

This article is for informational purposes only and does not constitute legal advice. Each person’s circumstances are unique. For advice specific to your situation, please contact our office. 

Blended Families and Estate Planning: How to Protect Everyone You Love 

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Blended Families and Estate Planning: When Love and Law Collide 

Imagine this: A husband and wife, both in their 50s, each bring children from prior marriages into their new blended family. They build a life together, share a home, and assume that if something happened, their property would naturally benefit all of their children. But without the right legal planning, that’s not what the law guarantees. In fact, depending on state law, one spouse’s biological children could inherit everything, leaving the other spouse’s children excluded entirely.

And here’s a twist many people don’t think about: even in a so-called “traditional” family—where all children are shared—if one spouse passes away and the survivor remarries, the estate could unintentionally be diverted. If the surviving spouse leaves everything to the new spouse, and the new spouse later leaves it all to their own children, the original family’s children may be left with nothing. This is a nightmare. Generation family legacies, such as a multi-generational farm, lost to non-family beneficiaries. We plan with you to prevent these unintended consequences. No one wants to leave their family uncertain and in such turmoil.

These scenarios illustrate why estate planning is so critical for blended families and intact families alike. 

Why Blended Families Face Special Estate Planning Challenges 

Traditional families often share the same long-term goals: take care of the surviving spouse and then pass assets to children equally. Blended families, however, often face competing priorities:

– Providing for a new spouse while also protecting children from a prior marriage.
– Avoiding conflicts between biological children and stepchildren.
– Balancing fairness with practicality when families merge assets.

Without proper planning, state law steps in—and it may not reflect your values.

Example: In Kentucky, if you die without a will (called “intestate”), your spouse may not automatically inherit everything. Instead, assets could be divided among your spouse and your children—including children from prior marriages. Indiana and Tennessee follow similar intestacy laws, with slight variations. The bottom line: if you don’t choose, the law will choose for you. 

Common Pitfalls in Blended Family Estate Planning 

  1. Assuming a Will is Enough – Wills are essential, but alone they may not prevent disputes. They also do not avoid probate—a public, court-supervised process that can magnify conflict between stepchildren and stepparents.
  2. Naming Only the New Spouse as Beneficiary – Many people update life insurance, retirement accounts, or deeds to name only their new spouse and unintentionally leave children from a prior marriage with nothing.
  3. Failing to Update Estate Planning (Wills, Trusts, and Beneficiary Designations) After Remarriage – Outdated wills, powers of attorney, or beneficiary designations can send assets to an ex-spouse or exclude new stepchildren.
  4. Not Planning for Incapacity – Who makes healthcare and financial decisions if you become incapacitated? Without updated documents, the wrong person may be making life-altering decisions.
  5. The Intact Family Trap – Even in families where both spouses share the same children, problems arise if the surviving spouse remarries without careful planning. Imagine a widow who inherits all property from her husband, then later remarries. If she leaves everything outright to her new spouse, her late husband’s children may never receive any of the family assets. The new spouse could leave everything to their own children instead. 

Tools to Protect Families 

Fortunately, there are powerful tools available to protect everyone involved:

Revocable Living Trusts – A living trust allows you to provide for a spouse during their lifetime, while ensuring that remaining assets go to your children afterward. This avoids probate and gives you control over the timeline of distributions.

Marital Trusts (QTIP Trusts) – These trusts allow income (and sometimes principal) to support a surviving spouse during their lifetime, with the remainder guaranteed to pass to your children. This structure is especially helpful when there’s a potential for remarriage.

Beneficiary Designations – Life insurance and retirement accounts should be reviewed and coordinated with your estate plan.

Prenuptial and Postnuptial Agreements – While not romantic, these agreements clarify expectations and protect children’s inheritance rights.

Updated Powers of Attorney and Healthcare Directives – These ensure the right spouse or child can make decisions if you cannot. 

Example: The Johnsons’ Second Chance 

Consider The Johnsons. After both experiencing divorce, David and Linda remarried in their late 40s. David had two daughters. Linda had a son.

David assumed his daughters would inherit the family farm he owned before marriage. Linda assumed her son would inherit the savings account she had built over years. But they did no planning to confirm their assumptions or to ensure that their goals were accomplished. After David suddenly passed away, without a trust or updated will, the farm passed to Linda—and when she later remarried, her new husband became part of the chain of inheritance. David’s daughters were left fighting for a share of their own father’s land.

Now imagine the same outcome in a so-called “intact” family -that is, if David and Linda were in their first marriage and shared all three children together. Linda’s remarriage and failure to protect the children’s inheritance could lead to the same problem. The family farm could end up with a stranger’s children instead of their own.

This is not unusual. Without a clear plan, families often face unintended consequences, strained relationships, and expensive litigation. 

How Kentucky, Indiana, and Tennessee Families Can Get it Right 

Estate planning isn’t “one size fits all.” Each family, blended or not, is unique. But here are a few guiding principles:

– Have open conversations with your spouse (and perhaps your children) about expectations.
– Update documents after remarriage—don’t rely on old wills or beneficiary forms.
– Use trusts to balance fairness between spouse and children.
– Think ahead about remarriage risks—plan so children inherit even if a surviving spouse later remarries.
– Consult an experienced attorney familiar with state-specific laws. 

Conclusion

Blended families and intact families alike are built on love, but without planning the law can create division and generational disappointment. Don’t let your family’s legacy be decided by intestacy rules, outdated documents, or remarriage.

At KT Williams Law, we help families across Kentucky, Indiana, and Tennessee create customized estate plans that avoid the loss and unintended consequences that we all fear. And we can do this while protecting spouses, children, and stepchildren alike. Whether you’re in a second marriage, planning for retirement, or simply want peace of mind, we’re here to guide you.

Call us today to schedule a consultation, and take the first step toward protecting your loved ones. 

KT Williams Law PLLC | Serving Families in Estate Planning, Probate, and Estate Administration 

Your College Student Is 18: Why Parents Need Legal Authorizations Now 

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As parents, we spend nearly two decades making every important decision for our children—doctors’ appointments, school enrollment, financial planning, you name it. But something surprising happens the day your child turns 18: in the eyes of the law, they are an adult. 

That means hospitals, colleges, and financial institutions no longer recognize your authority as a parent. You may want to help, but without your child’s written authorization, your hands are tied. What happens if they can’t give verbal permission? 

Imagine this: your college freshman is in an accident and rushed to the hospital. You call for updates, only to be told, “I’m sorry, we can’t release that information.” It’s a nightmare no parent wants to face. The good news? There are simple steps you and your child can take now to make sure you can still help when it matters most. 

Key Authorizations Every Parent Should Know 

Healthcare Power of Attorney (Medical POA) 

Allows your child to name you as the person who can make medical decisions if they can’t. Without it, you could be sidelined in an emergency. 

HIPAA Authorization 

Grants you access to your child’s medical information. Doctors cannot legally share details—even with parents—unless this form is signed. 

FERPA Release (Education Records) 

Permits you to speak with your child’s college about grades, financial aid, or disciplinary matters. Without it, you’re locked out. 

Durable Power of Attorney (Financial & Legal Matters) 

Enables you to handle practical issues like paying rent, managing bank accounts, or dealing with insurance if your child becomes incapacitated. 

Living Will / Advance Directive 

While rarely thought of for young adults, this ensures your child’s wishes are honored if they cannot speak for themselves. 

Why These Documents Matter 

– Peace of Mind: Both you and your student can feel confident knowing you can act in a crisis.
– Avoid Delays and Costs: Without authorizations, families face court proceedings to gain guardianship.
– Protect Independence: These documents don’t take away your child’s freedom, they simply provide a safety net. 

The Consequences of Doing Nothing 

If these authorizations aren’t in place, you may be:
– Blocked from speaking with doctors during a medical emergency.
– Shut out from school communication about grades or finances.
– Unable to pay your child’s bills or handle urgent matters.
– Forced into costly, time-consuming court proceedings. 

A Call to Action for Parents 

If your child is preparing to head off to college—or already there—the time to act is now. Don’t wait until a crisis makes you realize what you can’t do. 

We can help. The process is straightforward, affordable, and could make all the difference when life takes an unexpected turn. 

College is a season of independence—but with the right authorizations in place, you can stay connected, supportive, and ready to protect your child when it matters most. Contact us to learn more. 

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KT Williams Law PLLC | Serving Families in Estate Planning, Probate, and Estate Administration 

Breaking a Trust: What Does That Mean and Can It Be Done? 

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Trusts serve several important purposes such as protecting assets, minimizing taxes, and providing benefits over both the short and long term. While there are many advantages to setting up a trust, that’s not my focus today. Instead, I want to address a question I’m often asked: Can a trust be broken? And if so, how easy is it? Let’s dive in. 

Different Perspectives: Creator vs. Beneficiary 

When someone asks me whether a trust can be broken, their perspective often reveals what they really mean. For example, if the question comes from the person creating the trust, they’re usually concerned about being locked into something without flexibility, either in the short term or the long term. And they want to be confident their goals will be achieved. 

“Short term” often refers to the next few years or even the rest of the creator’s lifetime. On the other hand, “long term” usually means the next generation and beyond. Ultimately, the creator wants to feel confident that the trust will fulfill their goals, both now and in the future. 

When a beneficiary asks whether a trust can be broken, it’s often because the trust no longer achieves the goals of the person who created it. Or, at least, that’s how the beneficiary feels. And that is likely the case if the trust is creating unnecessary burdens or complications for those it was meant to benefit. While the perspectives of the creator and the beneficiary may differ, the heart of the question is the same: How can we ensure that the trust continues to fulfill the creator’s goals? 

When a Trust No Longer Works 

So when we’re faced with problems in a trust, the first question we must ask is: What were the goals of the person who created it? Can we determine what they truly intended? Did they want to maintain control even after death? Were they hoping to create a lasting legacy? Perhaps they wanted to protect an inheritance for future generations or were concerned about a specific beneficiary who might misuse assets. Or maybe their goal was something else entirely. 

Although the answer to those questions may vary from situation to situation, one thing is clear: when a trust is no longer working as it should, it needs to be fixed. And we can fix it. 

An unwavering principle of trust and estate law is honoring the intent of the person who created the trust. So if a trust is no longer fulfilling its purpose or achieving the creator’s goals, are we truly serving them by letting it continue unchanged? In fact, if a trust no longer carries out the wishes of its creator, can we really say it’s still functioning as a valid trust? In that sense, when someone asks whether a trust can be broken, I often ask myself if breaking the trust is actually fixing it so that it once again serves its original purpose. Ultimately, isn’t that what we all want—for our plans to work, our goals to be achieved, and our wishes to be honored? When someone takes the time to create a trust, our mission should be to ensure that their intentions are fulfilled, even if that means we must make changes along the way. 

Pathways to Fix or Terminate a Trust 

As you can tell, there is much to the question of whether a trust can be “broken” or, as I might put it, fixed. And the good news is, there are pathways to do just that. When considering how to fix a trust, the goals and wishes of its creator must be considered. We want to know what they hoped to achieve. Understanding that intent helps us evaluate whether the trust, as it stands, is still doing what it was meant to do. 

Sometimes, minor alterations and adjustments are the pathway to fixing a trust. But in other cases, minor alterations and adjustments are insufficient. The problems may be too significant, and the only effective solution may be a complete termination of the trust and distribution of its assets to the beneficiaries identified in the trust. Although it may seem a drastic measure, that option should never be ignored. In fact, it may be the best and only solution to achieve the creator’s goals. So, full termination must always be on the table and considered an available option, especially when it doesn’t cause undue harm to the beneficiaries or the creator’s goals. 

So, if a trust needs to be fixed, how do we do it? Is it easy? Does it take a lot of time? Does it require going to court? Is it costly? 

These are all reasonable questions, and the answers will vary depending on the specific trust, its purpose, the state’s law, and the wishes of the person who created it. But ultimately, whether the process is simple or complex, fast or time-consuming, inexpensive or costly—fixing a trust will be worth it. 

If you’re the trustee of a trust that needs fixing, let’s talk. If you’re a beneficiary of a trust that needs fixing, let’s talk. If you’re aware of a trust that needs fixing, let’s talk. You’re not stuck. Contact us. We can help.  

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KT Williams Law PLLC | Serving Families in Estate Planning, Probate, and Estate Administration 

Understanding Trusts: An Overview

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Understanding Trusts: An Overview 

Trusts are essential legal instruments that play a crucial role in estate planning, providing a structured way to manage and distribute assets according to your wishes and to the beneficiaries you designate. This article aims to offer an overview of several types of trusts, their benefits, and considerations when creating them. In later articles, I will highlight specific types of trusts. Always seek expert guidance when dealing with trust-related questions. The consequences of proceeding otherwise are much too costly.  

What is a Trust? 

A trust is a legal arrangement where one party, known as the trustee, holds and manages assets on behalf of another party, the beneficiary. Trusts can be tailored to meet specific needs and goals, making them versatile tools for estate planning. In fact, I often describe trusts as one tool in the estate planning toolbox. Yes, many options exist in the toolbox. The aim is to choose the right estate planning tool for the goal we want to achieve. Usually, a trust is the best option.  

Types of Trusts: 

A common misconception is that every trust is alike. But that’s far from the truth. Vast differences exist from one trust to another. This versatility and flexibility allow us to structure a trust to meet our needs, which makes them the right tool in our estate planning toolbox. A description of the most common trust types is below. 

Revocable Living Trusts 

A Revocable Living Trust, commonly referred to as a Living Trust, is established during the creator’s lifetime and can be altered or revoked at any time. It provides flexibility and control over assets, allowing the creator to manage their assets without the need for probate —a lengthy and expensive court process. Additionally, with a Living Trust, we can accomplish tax saving and asset protection for current and future generations.  

Irrevocable Trusts 

In contrast to a Living Trust, which allows for regular and unrestricted changes, an Irrevocable Trust offers less flexibility, as it generally cannot be modified or revoked once created. When contrasted with a Living Trust, an Irrevocable Trust is unchangeable. That characterizes an important difference that should always be kept in mind when considering which trust type best fits our goal. But an Irrevocable Trust isn’t entirely carved in stone. In fact, we can build a pathway for making changes to the Irrevocable Trust. Additionally, state law provides alternative pathways to change an Irrevocable Trust. They are usually more restrictive, but still available. 

Special Needs Trusts 

Another type of trust is a Special Needs Trusts, sometimes called a Supplemental Needs Trust. A Special Needs Trust is designed to provide benefits for individuals who have limitations or disabilities without affecting their eligibility for government benefits like Medicaid and SSI. There are a few different types of special needs trust: 

  • First Party Special Needs Trusts: Funded with the beneficiary’s own assets, these trusts allow the beneficiary to receive benefits from the trust without losing government assistance. However, any remaining assets at the beneficiary’s death must reimburse Medicaid for what Medicaid paid on the beneficiary’s behalf. 
  • Third Party Special Needs Trusts: Funded by someone other than the beneficiary, these trusts do not require reimbursement to Medicaid and can distribute remaining assets to other beneficiaries. As you might imagine, this type of Special Needs Trust is preferred whenever it can be used. With proper planning, it is possible to avoid the need for a First Party Special Needs Trust, allowing the creation of a Third Party Special Needs Trust instead. 

Conclusion 

Trusts are powerful tools in the estate planning toolbox, offering flexibility, control, and protection of assets. Whether you’re well-versed in trusts or just beginning to explore them, understanding the different types—such as a Revocable Living Trust, an Irrevocable Trust, a Special Needs Trust, or naming a trust as an IRA beneficiary—is essential for their proper use and effective implementation. Contact Us  to determine the best trust arrangement for your needs. 

Are Major Tax Changes Ahead?

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Gazing Into The Crystal Ball . . . Tax Increases In Our Future

The new administration is off and running in 2021.  There are many changes coming our way, and higher taxes are among them.  I discuss some of the proposed changes in this article.  In the next article, I discuss options for handling the tax changes.

Cause and Effect

The US Government borrowed vast amounts of money to provide stimulus because of the COVID-19 pandemic. This borrowing occurred at the same time the government collected less in taxes.  Sooner rather than later, we will have to pay for the borrowing.  There has been a litany of proposals for new taxes and for tax increases.  So what can we expect?

Estate Taxes

Currently, estate taxes don’t affect estates unless they reach at least $11,700,000.  For estates that exceed this size, the tax on the excess reaches 40%.  Proposals include reducing the estate tax exemption from $11,700,000 so that many more estates will be taxed.  For example, one proposal would tax estates in excess of $3,500,000.  Proposals also include increasing the estate tax rate from 40% to 45%.  But that’s not all.  We may see new and increased capital gains taxes, too.

Capital Gains Taxes

Currently, long term capital gains are taxed at a 20% rate.  Tax proposals include increasing the capital gains tax rates for long-term and short-term capital gains.  Additionally, some proposals include a capital gains tax that will be paid at death.  This is not the estate tax as we traditional think of it.  It is a new tax, independent of the estate tax.  And it allows the government to capture tax revenue from gains experienced during the deceased’s lifetime.  The tax rate proposed for this new tax ranges from 28% to 36% depending on the decedent’s income.  This estate-based capital gains tax relates to the tax-basis proposals discussed next.

Stepped-Up Tax Basis and Elimination of 1031 Like-Kind Exchanges

Currently, an inherited asset comes with a tax basis that is equal to the asset’s fair market value.  This is referred to as its “stepped-up basis.”  Recent tax proposals include limiting or even eliminating the stepped-up basis following someone’s death.  If the step-up is eliminated, the inherited asset will come with the deceased’s tax basis which is typically what the deceased paid for the asset.

If the IRS doesn’t eliminate the basis step-up, but limits the basis step-up to $1 million per estate, the limit will be applied this way.  The basis of inherited assets will be increased to their fair market value until the total basis increase for assets in an estate reaches the $1 million limit.  When the limit is reached, additional inherited assets will not receive any further basis step-up even if the deceased’s basis was lower than the fair market value at their death.   And the heir will face a larger capital gains tax when they sell the inherited asset.

Another proposal eliminates the 1031 like-kind exchange. A 1031 like-kind exchange allows property owners to sell property without paying capital gains if they quickly replace it.  This process postpones capital gains taxes until the replacement property is sold without being replaced quickly.  Eliminating the 1031 like-kind exchange will result in more immediate taxation of capital gains and potentially slow down economic growth that occurs when payment of capital gains taxes can be postponed.

Higher income taxes

We’ll also see higher income taxes.  Proposals include higher income tax rates which means we’ll pay more taxes on our taxable income.  Also, proposals include reducing or eliminating income tax deductions which means more of our income will be taxed.

Uncharted Territory

We’re facing an uncertain landscape, but like all other uncertainties, we’ve got options.  We can ignore it and just stick our head in the sand.  Or we can embrace the uncertainty, confident that we’ll find a way to navigate it as we’ve navigated uncertainty and challenges in the past.  I choose the second option. As we look ahead, I’ll remain vigilant and keep you updated.  In my next article, I present options for handling some of the proposed tax changes.  Contact us if you have any questions about this evolving landscape.

Estate Planning Awareness Week Takes on More Significance than Ever During COVID-19

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Have you heard that Estate Planning Awareness Week is recognized in October? Estate planning can be an essential part of your financial health no matter your age or how much money you have. Estate planning can be critical for anyone who wants to help ensure their wishes are respected in the event of temporary incapacitation or upon their death. That should apply to everyone, especially during the Covid-19 pandemic. Knowing the uncertainty of what tomorrow might bring, having an estate plan in place provides some security, and regularly updating what you have put in place can help ensure that security will continue.

Depending on your age, marital and parental status, and what kind of assets you have, estate planning can be simple or a bit more complex. For most people, having a written will, choosing a power of attorney and health care surrogate, and designating specific beneficiaries for bank and retirement accounts will go a long way to protecting the future they want for themselves and their loved ones.

Writing a will is often the first step. You can decide to whom you would like to leave any prized possessions, how to divide your eventual estate, and whether you want to set up any kind of trust that would allow your spouse or partner to live comfortably while preserving assets for children and grandchildren down the road. It can be equally important to designate specific account beneficiaries for bank and retirement accounts, and make sure the beneficiary you have chosen falls in line with your will.

A power of attorney can allow someone else to make financial or legal decisions on your behalf. If durable, this power will survive, even in the event you become incapacitated. A healthcare surrogate will allow someone else to make medical decisions on your behalf should you become incapacitated. You can choose a trusted loved one to fill both roles or choose two different people who may be better suited to one or the other. The important part is that, by planning ahead now, you get to make your own choices.

It can also be important to check in regularly with your estate plan and to make any changes that may be necessary due to life events, changes in law, or under other circumstances. In addition, regularly updating your account beneficiaries ensures they stay in line with what you have in your will and broader estate plan.

This Estate Planning Awareness Week, let us all take the time to learn more about the importance of estate planning and the steps we need to take in order to establish a strong estate plan. In times of great uncertainty, an estate plan can bring much needed peace. For more information, please reach out to our office and schedule a time to meet.

Spendthrift Trusts and Leaving Assets to Children with a Substance Abuse Disorder

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As September is National Recovery Month, sponsored by the Substance Abuse and Mental Health Services Administration, it can be a good time to discuss estate planning for parents of children with substance abuse disorders. One of the important concepts highlighted by national recovery month is that substance abuse disorders are a recognized medical disease, requiring medical treatment. There is no cure per se. A person with a substance abuse disorder will work their whole lifetime to achieve and maintain sobriety, likely including alternating periods of both.

When parents of a child with a substance abuse disorder create an estate plan, have you considered that one of their primary concerns may be that the money will be blown during a relapse, or in a more macabre light, possibly result in an overdose? On the other hand, a child with a substance abuse disorder can typically be the one who needs the most financial assistance, and a parent may wish to leave him or her resources. Creating a spendthrift trust can allow for the balancing of these concerns in the following ways:

  • Require approval of disbursements: A spendthrift trust designates a trustee, who must approve all disbursements from the trust. Accordingly, if a child beneficiary with a substance abuse disorder is in relapse, the trustee can deny access to the funds.
  • Does not allow transfer of interest: The child beneficiary will be blocked from transferring interest.
  • Creditors cannot reach the assets of the trust: If the child beneficiary has a judgment against them or gets into financial trouble, creditors cannot reach the trust. The trustee can discontinue disbursements from the trust, so long as the judgment is out there.
  • Allow child beneficiary to maintain eligibility for government programs: Assets in a spendthrift trust will not be considered, when the child beneficiary applies for government benefits, such as Medicare or Medicaid, which may be a vital resource to obtain treatment services.

Our office can assist you in the drafting of a spendthrift trust, which can provide for your child with a substance abuse disorder, while providing peace of mind. Contact us today to schedule a time to meet.

    

3 Health Care Documents Every College Student May Need, Especially During COVID-19

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Most parents are used to taking care of their children’s medical needs. They might even assume that they can continue caring for a child once he or she leaves for college. Did you know that this may not always be the case? In fact, parents who fail to secure certain health care estate documents may be in for a terrifying surprise in the event of an emergency.

Once a child reaches age 18, he or she is legally considered an adult. That means all bets are off as far as how parents may have previously dealt with their child’s health needs. Without certain legal documents, parents could be locked out of an adult child’s medical information and be prevented from making important health decisions. With COVID-19 surging and colleges expected to reopen in the fall, the risk of an infection and hospitalization makes health care planning imperative. 

Let us take some time to discuss three critical health care estate items to have in place for your college kid:

 1. HIPAA Release. Pursuant to the Health Insurance Portability and Accountability Act of 1996, or HIPAA, a person’s medical information must be kept private unless an authorization form grants access to specific individuals. The form, known as a HIPAA release, is essentially a permission slip for disclosing sensitive medical information. If a college student designates his or her parents, they can be kept abreast of important medical developments and communicate with their adult child’s doctors. Limiting conditions can also be implemented to certain information, such as mental health counseling or reproductive health records.

 2. Health Care Surrogate. While a HIPAA release can keep parents in the loop about important medical information, it does not provide the authority to make medical decisions on behalf of an adult child. That power would come from a separate document called a health care surrogate. This would allow the parent to make health decisions if the adult child was incapacitated or unable to make competent decisions. 

 3. Living Will. A living will is a form of an advance medical directive. It is a legal document that specifies the actions that should be taken under specific circumstances such as a terminal of end-stage condition. It specifies, specifically, what medical treatment should or should not be withheld.   

A college health emergency may be a nightmare scenario under any circumstance. With COVID-19 surging, however, particularly among young adults, securing these estate documents will help parents and students be prepared. Contact our office for help navigate these challenges. 

Questions to Ask Your Aging Parents: Do You Have a Power of Attorney?

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Planning for the future is never easy, especially when that involves thinking about end-of-life issues. Did you know, however, that discussing these concerns now can help you and your aging parents pave a clear path for the future? 

Your parents should know about the importance of a power of attorney (POA). It is a crucial aspect of estate planning, albeit a complicated one. Let us discuss a few questions you can ask your parents, so you will know what to expect.

  • When does your power of attorney take effect? A power of attorney transfers responsibility and decision-making powers from the grantor to an agent. When establishing the POA, your parent can specify when he or she wants the document to take effect. For instance, your parent has the ability to specify that it should only go into effect after he or she has become mentally incapacitated. This is called a durable power of attorney (DPOA). 
  • What responsibilities does the POA cover? If your parents have established a POA, you will want to discuss with them what authority they have granted the agent(s). There are different types of POAs, each with unique attributes. For instance, a POA for health care, otherwise known as a health care surrogate, assigns the right to make health care decisions. A financial POA covers the management of financial accounts and transactions specified in the document.
  • Have you selected a trustworthy individual as your agent? Those tasked with the role of agent in a POA are empowered to address important matters on behalf of the grantor. Selecting an agent is not a decision to be taken lightly. Discuss with your parents who they have selected as a POA agent and really flesh out why they believe this person is qualified and trustworthy.

 A power of attorney can only be granted by someone who is mentally sound. If there is any doubt that the grantor is unsound, the POA can be called into question. This is one of the many reasons that time is of the essence in estate planning. Have your parents put a POA and other legal protections in place before the need for them actually arises. For all of your estate planning questions, our office is here to help provide you with answers. 

K.T. Williams Law PLLC

324 A North Elm, Henderson, KY 42420

P.O. Box 561, Henderson, KY 42419-0561

270-212-3669

Office Hours

Monday – Thursday: 8:00-5:00
Friday: 8:00-4:00
Saturday & Sunday: Closed

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