Why Review Your Estate Plan?

February 13, 2019

Life rarely remains the same and those changes mean it is time to take a fresh look at your estate plan. Time marches on and a person’s life changes. That creates the situation of there not being a doubt of whether an estate review is necessary but simply becomes a questions of when it will be reviewed, according to the New Hampshire Union Leader in “It’s important to periodically review your estate plan” Most people get their original wills and other documents from their estate planning attorney, put them into their safe deposit box or a fire-safe file drawer and forget about them. There are no laws governing when these documents should be reviewed, so whether or when to review the estate is completely up to the individual. That often leads to unintended consequences that can cause the wrong person to inherit, fracture the family and leave heirs with a large tax liability. A better idea: review the estate plan on a regular basis. For some people with complicated lives and assets, that means once a year. For others, every three or four years works. Some reviews are triggered by changes in life, including: Marriage or divorce Name Changes Death Large changes in the size of the estate A significant increase in debt The death of an executor, guardian or trustee Birth or adoption of children or grandchildren Change in career, good or bad Retirement Health crisis Changes in tax laws Changes in relationships to beneficiaries and heirs Moving to another state or purchasing property in another state Receiving a sizable inheritance Beneficiaries in need of protection due to Special Needs, creditors, or Tax Problems. What should you be thinking about, as you review your estate plan? Here are some suggestions: Have there been any changes to your relationships with family members? Are any family members facing challenges or does anyone have special needs? Are there children from a previous marriage and what do their lives look like? Are the people you named for various roles—power of attorney, executor, guardian and trustees—still the people you want making decisions and acting on your behalf? Does your estate plan include a durable power of attorney for healthcare, a valid living will, or if you want this, a DNR (Do Not Resuscitate) order? Has your estate plan addressed the possible need for Medicaid? Do you know who your beneficiary designations are for your accounts and are your beneficiary designations still correct? Your beneficiaries will receive assets outside of the will and nothing you put in the will can change the distribution of those assets. Have you aligned your assets with your estate plan? Do certain accounts pass directly to a spouse or an heir? Have you funded any trusts? Finally, have changes in the tax laws changed your estate plan? Your estate planning attorney should probably take a look at the impact of state law changes, as well as federal. Reference: New Hampshire Union Leader (Jan. 12, 2019) “It’s important to periodically review

An Estate Plan Should be in Writing

January 25, 2019

Make plans for handling an issue, before it becomes an issue. A plan not written down is really just a wish. I wish my son could handle my affairs. I wish my friend could speak for me in the hospital if need. I wish my special needs child would be eligible for needed government aid. Without committing something property to writing, these become more of what paves the road to hell. The legal issues that may surround a health problem, can go from bad to worse if you are not protected by legal documents expressing your wishes, according to the New Jersey Herald in “The importance of putting plans in writing.” The message hits home especially hard, when the friends experience problems that could have been resolved earlier with correct planning. In one example, a woman’s friend began to experience unexpected health problems. Her husband is incapacitated and there are no children to step in and help. The couple’s lack of legal documents has made a difficult situation even worse. Although discussing concepts like end-of-life care can be challenging, all adults should have specific plans in place, even if their estate plan is basic: a last will and testament, a living will and a power of attorney. It is never to early to put these documents into place. If you are a student about to enter college, your parents ability to help or get information may disappear legally at age 18. That newly minted adult should at least have a designated power of attorney and a medical directive, in case they are unable to manage their own affairs or make healthcare decisions. Unfortunately, many people still think estate planning is only for wealthy people who want to pay less taxes. Tax planning can help lighten tax liability for some. However, there are far more important reasons to do estate planning. The main reason for estate planning is to set down expectations and wishes, while you are alive and after you pass. An estate planning attorney will help review the benefits of having a power of attorney and a healthcare directive. They can help, if the situation occurs where your loved ones have to make decisions for you. The amount of time, expense and frustration of going through a guardianship process can be avoided, if these items are in place. An estate planning attorney can also help you with completing beneficiary forms for non-probate assets, preparing a funeral plan, planning a personal property memorandum and discussing elder care and planning for incapacity. Making decisions in advance regarding who will care for minor children, if young parents cannot and who will be the person’s executor and handle all the details of their estate, are all necessary. Many couples choose joint ownership and consider that their estate planning. However, that’s not enough. What happens when the last “surviving” joint owner passes? There are many other issues that need to be addressed. An estate planning attorney can advise you in creating an estate plan

Advanced Directives Help Loved Ones Making Tough Choices

January 17, 2019

An advanced directive can give you as well as your loved ones peace of mind. Do you want your preferences known, even if you are lack the capacity to communicate them? Then you need to create an advanced directive, according to the Valley News in “Advance Directives Provide Clear Guidance for Care.” The two components that make up an advance directive are a durable power of attorney and a treatment preferences section. The durable power of attorney for health care allows you to appoint someone to make medical decisions, if you lack the capacity to make those decisions for yourself. The treatment preference, which is sometimes referred to as a living will, lets you specify what kind of treatment you would want in a difficult circumstance. Treatment and care preferences usually focus on what you would want at the end of life or if you were in a permanently unconscious state. There are other preferences that can be expressed, including pain control, blood transfusions, mental health care and spiritual care. Another preference: who should—and should not—be involved in discussions about treatment. Most people want to express their wishes to avoid aggressive measures being taken to extend their lives, when the end result will be suffering and a delay of their passing. Others chose to avoid the financial burdens that may or may not result in any kind of change in their health or the quality of their life. Some have these documents prepared to make it clear that they want to spend their final months, weeks or days at home with loved ones with care only to relieve pain or care, so they can be conscious and able to speak with those around them. Advance directives are a blessing to loved ones, since they do not have to make hard choices in a crisis situation. They know what their aging parent or spouses wishes. It’s important to choose the person you want to be responsible for your care well in advance. Make sure it’s someone you trust, who knows you well and will be able to make hard decisions in a highly emotional time. They’ll also have to be able to communicate with your doctors and family members. It’s also important that you deliver the documents to your decision makers in a way they can be easily retrieved. We will scan and email the documents to our clients and suggest they forward the email to their decision makers. With smart phones today, they can be at a persons fingertips when needed. Also, telling young adult children that they are not the decision makers, or at least not yet, is also necessary. If an 18 year old is not aware that an aunt or uncle is to make these decisions, they may be thrust into the role simply because they don’t know better. An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and can include an advanced directive. Reference: Valley News (Sep. 1,

Reviewing Your Estate Plan in January

January 2, 2019

Put away the estate plan when it is completed. However, take a good look at it frequently. There are many reasons why an estate plan needs changing, because your life changes as do your goals, according to the Times Herald-Record in “5 steps to securing your elder estate plan.” What might be some of those changes? It could include your divorce, your marriage or even the marriage or divorce of your children. It can also be that your financial situation has changed, and you need to make changes. A ten-minute review at the beginning of a New Year will be an annual reminder, and can verify that you are still on the right course. The process of review may seem challenging but here are some steps to consider: Step One: gather up all your documents, which may take some time. This includes your will, powers of attorney, health care proxies, living wills, any trusts and any other documents. For clarity, here are some definitions. A will is the document that states where you want your assets to go when you die. It is reviewed by the court in a proceeding called probate, but only after your death. Assets in a living trust (or other types of trusts, depending on your situation) do not go through this process. Creating a trust results in a legal entity that owns the assets it contains. The trust assets go to beneficiaries upon death, as directed by you to the trustee. In many instances, trusts save time, money and avoid litigation over inheritances. Powers of attorney name the person you appoint to make any legal, business or financial decisions for you, should you become incapacitated. A health-care proxy names the person to make your medical decisions, if you are unable to do so. Living wills are used to express your wishes for end-of-life care. Step Two: review your documents. Make sure that everything is signed. You would be surprised how many important documents aren’t signed. Read the documents to see who was named as the executor of your will and who is the trustee of your trusts. Are those people still able to undertake these responsibilities? Do you still want them making decisions for you? Step Three: make a list of all of your assets. Note how they are titled—what names are on the accounts—and what are the values of each. Include retirement accounts like IRAs, 401(k)s, insurance policies and annuities and check to see if you named a beneficiary. Do you still want that person to be the recipient of the asset? Make sure that you have also named a contingent beneficiary. Step Four: what information would your loved ones need should you become unable to communicate? They’ll need information about your medications, the name and contact information for your primary care physician, your estate planning attorney, your CPA and your financial advisor. You may want to arrange for a “family meeting” with your healthcare team and your legal and financial team (two separate

Snowbirds Checklist to Consider

December 28, 2018

Snowbirds Checklist Heading is a good idea but consider legal issues before leaving. If you are a retiree who heads south after the holidays, it might be wise to create a checklist of at least four personal legal business items, according to LimaOhio.com in “Extra checklist before heading south for the winter.” Not that January and February aren’t delightful here in the Baltimore-Washington area… First, make sure that your living will and healthcare power of attorney documents have been updated. Does your family have copies of these documents? Or do you emailed copies to them ? If you have these documents with us, we now scan them and forward a copy to you to send on to your decision makers. If they save that email, they will also have our contact information to access your Property Power of Attorney if needed. Second, discuss the location of your estate planning portfolio with them, and how to contact your estate planning attorney. Update them if changes need to be made and get copies to your children and/or friends. Third, make sure that your last will and testament is updated. Have you had any big changes in your life since the last time it was reviewed? Marriages, deaths, divorces, births, and adoptions are the typical “trigger” events that signal a need for review. Being out of town for an extended time is a good prompt to review how current your documents are, and how they address your concerns. Who will have that document? If your estate planning attorney maintains original copies for clients, then make sure to have another original on your person or safely secured with a loved one. Lastly, and this takes a little time but is well worth doing, create a list of all your assets. Make sure they are properly titled for your situation. Should you have all your bank accounts become Payable on Death to your spouse? When was the last time you checked your beneficiary designations? Chances are good there are beneficiary designations on your bank, investment, and retirement accounts and on your life insurance policies. Wherever you have a beneficiary designation, you should also have a contingent beneficiary. An estate planning attorney can advise you snowbirds on creating an estate plan that fits your unique circumstances and may include a trip in a southerly direction. Reference: LimaOhio.com (Oct. 13, 2018) “Extra checklist before heading south for the winter”

Your Estate Plan’s Right Documents

December 10, 2018

There are some important documents that should always be in your estate plan to protect your family. However, some people still leave them out, according to Consumer Reports in “8 Essential Steps for Estate Planning.” A survey from Caring.com showed that as many as 60% of adults don’t have estate planning documents. When they asked families with young children, fewer than one in ten have even designated a guardian to take care of their children, if both parents should die. Worse yet, we have worked with numerous cases where people thought they had documents in place, but due to their own misunderstanding of the law or requirements, their plans were agonizing disappointments of what should, and could have been… What happens when there’s no planning in place? Even the simplest things become more complicated, and complicated things become financial and legal nightmares. When there’s an emergency and decisions need to be made, the entire family is subjected to more stress and costs than would otherwise be necessary. Here are the eight steps you need to take, right now, to protect your family: Get the professional help you need. The change to the tax law may or may not impact your family and your estate plan, but you won’t know until you sit down with an estate planning attorney. Trying to do this online, may seem like a simpler way, but you will not have the same peace of mind as when you sit down with an experienced attorney—and one who knows your state’s laws. Create a will. This is a legal document that explains how you want your assets to be distributed after you die. It names an executor to carry out your instructions. If you have minor children, this is an especially important document, since it is used to name their guardian. If you have no will when you die (called dying “intestate”), then the laws of your state determine how your assets are distributed and who rears your children. Depending on where you live, your spouse might not automatically inherit everything. Discuss whether you need a Revocable Living Trust. In most states, when you pass away, your estate goes through a process called “probate.” The courts basically review your estate plan and determine whether everything looks right. The problem is that your will becomes a public document—and so does information about your assets. Some people prefer to keep their lives private by transferring assets to a revocable living trust, which distributes assets according to your instructions at your death. Titles to the assets must be changed so they are “owned” by the trust. This is known as “funding” the trust. You still retain complete control of your assets, since you are the trustee. However, if you fail to retitle assets, the estate goes through probate. You will also still need a will to protect your minor children. Review your beneficiaries. Whether you remember it or not, when you open many different kinds of accounts—banking, investment—you assign a beneficiary

With Estate Plans What is the Most Important Ability?

March 20, 2018

The most important ability in an estate plan is- Availability.

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