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

Intestate Law is the State Writing a Will for You

January 18, 2019

Do you really want the state to determine where your assets end up? A key concept to planning your estate is that you already have a plan in place, whether you know it or not. If you die without a will, or die “intestacy”, meaning “without a Will”, the laws of your state essentially write a will for you. That may not result in your assets going where your would have preferred, according to The Daily News in “’Are You My Heir?’-Who Inherits When You Die Without a Will,” Each state has laws called “intestacy laws” that govern how probate assets are distributed, if someone dies without having a will and establishes the inheritance hierarchy based on a person’s family structure. For example, if you are married but have no children and no grandchildren, your estate will be passed to your spouse. If two people die and there are no descendants (children or grandchildren), their parents, if living, will inherit their assets. A child who is legally adopted has the same rights of inheritance as biological children. Children born outside of the marriage may not. If a child should predecease a parent, the living descendants of the child (if there are any) will inherit their share. In some states, heirs are limited to family members who share the same grandparents. If your family is not geographically or otherwise close, you may have heirs you have never met. Intestacy can become extremely complex, when there are children and grandchildren. Descendants inherit from their parents and grandparents in percentages dependent upon the total number of children and the number of children in each generation that follows. If a grandfather has three adult children who are living and one adult child who has passed, then the estate will be divided by three—a third each to each of the two living children and the final third to the grandchildren of the third (deceased) child. The children of the deceased child are heirs, even if the parent has died. Add non-marital children—children born outside of a legal marriage or step-children—and things start to get complicated. A court will have to determine the intestate inheritance, based on proof that the child is a descendant and if that relationship is established in a timely manner. If the father’s name is on the child’s birth certificate, that is generally enough proof of the relationship. It doesn’t matter if they have a close relationship or have never met. The same applies to marital children—whether they have been close and caring or are estranged. An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and makes reliance on state law unnecessary.Reference: The Daily News (Sep. 7, 2018) “’Are You My Heir?’-Who Inherits When You Die Without a Will”

Estate Plan? Don’t Forget Digital Assets!

January 16, 2019

The world has changed, and it really isn’t a good idea to ignore your digital assets when estate planning. Estate planning has generally been about tangible assets through the years. However, now attention needs to be also focused on the digital world in order to be thorough, according to the North Bay Business Journal in “Your digital life likely will outlive you, so here’s how to bring your estate plan into the modern age.” Don’t think you have a digital identity and digital assets? For most of us, we need to take a closer look. Here are a few of your digital assets to consider: bank accounts, email accounts, Facebook page, Linked In profile, online photo albums, blogs and websites. They’re likely to be around long after you are gone. This is still a relatively new area of estate planning. What often happens is that heirs think they can simply find and use the decedent’s user name and passwords to access their accounts. However, what they learn, is that they are legally not permitted to do so. A new law was passed in 2017 in California that attempted to bring order to this chaos. The Revised Fiduciary Access to Digital Assets Act allows executors and trustees to obtain disclosure of a person’s digital assets, after the original owner dies but only under certain conditions. In the recent past, federal and state laws have made it hard for executors and trustees to gain access to these assets without a court order. Just being the executor or trustee does not automatically give you the right to access assets. There must be evidence that the decedent consented to disclosure. Having these access provisions in wills, trusts and powers of attorney is an evolving area. The new law mainly gave social media platforms and privacy advocates what they wanted: a requirement of prior consent before disclosure. However, the end result is that it is easier to gain access to digital assets, if executors and trustees can show that the decedent did consent to disclosure. However, it’s still not that simple. Here are a few steps to help your loved ones deal with your digital assets: Inventory every digital asset that you have. Create a list of log-in and password information, plus any “secret questions/answers.” Having a password program like “Lastpass” can be a great tool to allow for access and control for your decision maker. Tell your trusted family member or friend where that list is. Store it with your other estate planning documents, possibly in your attorney’s vault. Do not include your digital asset inventory, as part of your will. If your estate goes through probate, all of your account information will become part of the public record. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and will most likely include digital assets. If you already have an estate plan, revisit the package with your estate planning attorney and take your digital assets

Power of Attorney a Permanent Decision?

January 8, 2019

The position of POA can be revoked. It would be wise for everyone to have thought things through carefully and chosen a Power of Attorney (POA). It is important to remember that the decision can be changed in the future, according to nwi.com in “Estate Planning: Revoking a power of attorney.” One aspect of a Power of Attorney to carefully consider is, when does the authority granted in the document come into existence. A Power of Attorney can be an immediate document, which grants the full powers NOW. It can be a “Springing Power”, meaning that the authority comes into existence during events spelled out in the document, such as two doctors certifying incapacity. One the Power is in place, the terms of the document control what the authority is: you can give limited powers, full powers, or something in between. The person in charge does not own the assets, but is managing them as a “Fiduciary” which means as a highly trusted person, bring with it the responsibility of high loyalty to the person granting the power. When and how does the power end? There are three basic ways that a Power of Attorney can be terminated and the first is the date and time that it specifies, if it contains such language. POAs rarely have termination dates, because they are intended to be “durable” over an extended period of time. However, in certain circumstances, they can have a termination date. The second way a POA terminates, is at the death of the principal. Once the person in the POA dies, the attorney-in-fact authority ends, with the possible exceptions of making anatomical gifts on behalf of the principal, or the authority to make final arrangements or the authority to request an autopsy. Except for these unusual exceptions, the POA ends when the principal dies. The third way a POA terminates is when the principal executes a written revocation identifying the POA. For it to be effective, the attorney-in-fact has to receive actual knowledge of the revocation. Until they receive that actual knowledge, the POA revocation is not effective. To ensure that this is done properly, it is recommended that an estate planning attorney be involved, just to make sure there are no mistakes. A letter informing the POA of the revocation must be sent via certified mail, return receipt requested, using U.S. first-class mail. An email and a text follow up could take place, and a phone call would be a good idea. To make sure there are no deliberate misunderstandings, send a copy of the revocation to financial institutions that would be potentially targeted by the now former POA—if that is a concern. This includes the bank, financial advisor or any institution that is of particular concern. You want to make sure that these institutions are notified that the POA is no longer in effect. If the person refuses to sign the certified letter, you will need to prove that notice was given and that the person refused

What Happens if I die without a will?

January 7, 2019

Estate problems can sometimes lead to a fractured family. We speak to many people who believe that if they die without a will, everything goes to the State. This is almost never the case. “Dying intestate” is the term used to describe the legal status of someone who has died without a will. The laws of your state law will then dictate what happens to your assets. Most of your tangible possessions will be distributed following probate. If your estate is complex, for example, and you own property in more than one state, the process will take a long time and the costs can be high. With a will, you can control who gets what, when they get it, and who is in control of the process. Without a will (or possibly a Revocable Living Trust), you have a plan, drafted by your legislature, but forfeit the right to decide these things. Some of your assets do not pass to heirs through a will. Jointly titled assets pass by title regardless of what your will might say. Other assets usually transfer at death by the contract that controls the asset, such as retirement accounts, life insurance policies and annuities. All accounts that have named beneficiaries go directly to the people who are named. If they predecease you, then the contingent beneficiary receives the asset. The companies do not care what your will instructs. Reconsidering your joint ownership decisions and beneficiary designations are important parts of reviewing your entire estate plan. If you name only your son as the beneficiary for your insurance policy, then later welcome a daughter into your family by birth or adoption, you’ll want to add her as a named beneficiary as well. Otherwise, when you die, only your son will receive the proceeds. Anytime a life event occurs—births, deaths, divorces, marriages—is the right time to review your beneficiary designations. You can make these changes when you are living. When you die, the designation is irrevocable. A will—and an estate plan that is updated regularly—can prevent surprises and ensure that your choices are honored. Family members can end up feeling mistreated by the distribution of an estate. However, a good estate plan can help prevent those hard feelings from developing, according to the Observer-Reporter in “Improper estate planning can lead to familial conflict.” Keeping that plan current can lessen the trauma of something happening by oversight instead of intention. Here’s a celebrity story that serves as a perfect example. A famous father made his third wife his executor and gave her total control over his business, despite the fact that his son was equally famous and the top executive in that business, as well as its public face. The son was baffled when he learned that the third wife now controlled the business, including the rights to his own name. When the father died, a long, expensive and unpleasant estate battle began. The son was Dale Earnhardt Jr. An estate planning attorney can advise you in creating

Stan Lee Faced Challenges in Last Years of His Life

December 19, 2018

A solid estate plan can help avoid many of the challenges presented in the news lately. There have been a number of celebrities such as Stan Lee, Aretha Franklin and Prince in the news in recent years, who have passed away with controversies surrounding either estate plans or lack of estate plans. However, that does not have to be the case as long as a few steps are followed, according to MarketWatch’s article “Stan Lee’s tangled web of estate planning and how to avoid this mess.” Lee, publisher, and chairman of Marvel Comics, died at age 95 after a year-long illness. He is survived by his 68-year-old daughter, J.C., and has faced a number of unpleasant and public challenges in the last few years. His wife of nearly 70 years died in 2017, and earlier this year he was accused of sexually harassing nurses and home aides. Lee also reported that about $1.4 million were missing from his bank accounts and that $850,000 was stolen to purchase a condo. Lee had also retained and fired a number of business managers and attorneys in recent times. He said he had handled most of his money management by himself in his early years but then realized he needed help. Unfortunately, some of the people he trusted were people who later proved to be untrustworthy. This is the sad realization that many families face as the leader ages and capacities falter. It is yet unclear whether Lee had a will or any trusts in place. Many celebrities do not have these documents, putting heirs and potential beneficiaries in a position where they have to battle it out in a courtroom setting. Aretha Franklin and Prince are just two examples of high-profile, mega-million estate disasters. For the rest of us, estate planning is fairly straight-forward, as long as we get it done. There are a few steps everyone needs to take, including planning for incapacity or disability, getting important documents prepared, such as a will and power of attorney, and reviewing beneficiaries. What often happens is that as people age, they suffer cognitive decline in varying degrees and there’s a professional or a family member who believes this is occurring. In Stan Lee’s case, he signed a document stating that his daughter spent too much money, yelled and screamed at him and had befriended three men with intentions to take advantage of him (from the Hollywood Reporter). A few days after the document was notarized, Lee took it back. As people become less confident in what they’re doing, they are susceptible to being manipulated by other people. Having an estate plan set up years in advance of any cognitive decline, is one way to protect against these kinds of situations. For Lee’s estate, the sheer volume of documents will be a challenge. There may be many lawyers and business managers and accountants showing up, all claiming to have been brought onto the team with specific directions upon his death. Regular people can avoid a

Getting the Best Results from Charity Giving

December 17, 2018

End of the year is the busiest time for charities. As the holidays near and the New Year approaches, people often think of charitable giving. Charities certainly do. There are ways to have your donations get the best results, according to the Lebanon Democrat in “A few thoughts on charitable giving, taxes.” Here are a few ways that your generosity can maximize the benefit you and your charity of choice: Bundle your itemized deductions, if possible. If you can time the payment of qualifying deductible expenses, including charitable donations, do so in alternate years. This increases the chances that you’ll be able to itemize your deductions. You may want to notify the charity that you are giving this year is a larger gift, because it will be covering a two-year period. Select the right assets to contribute to a charity. For outright gifts made in your lifetime, consider using highly appreciated assets, like stocks. This will allow you to bypass owing capital gains taxes on the appreciation and claim the entire value of the assets, as a charitable contribution. If you make a donation using this method to fund an income-returning gift or a charitable gift annuity or charitable remainder trust, you delay the recognition of the capital gain. In most cases, you can pay this in smaller amounts, over a period of years. What if you want to make a gift that also generates income? Use a charitable gift annuity or a charitable remainder trust. These gifts typically require significantly higher values, so you may be able to itemize in the year they are funded. However, only a portion of the contribution is deductible. That is because the donor receives income for life or for a certain amount of time. These gifts are usually funded with stock, cash or real estate. Taxpayers who are 70½ years old or older and required to take minimum distributions from retirement accounts, may have distributions made directly from their account to a qualified charity. If this transaction is done properly, the amount of the distribution is not added to taxable income. You will not receive a charitable deduction using this method, but you can lower your taxable income for the year and give your charity of choice a much-needed donation. Lastly, consider adding bequests and beneficiary designations in your end-of-life planning. Part of your legacy can include charitable gifts. There are a few ways to do this: designate a percentage of your estate to be donated to charity, specify a charitable organization as the full or partial beneficiary of a life insurance policy, an investment or bank account or any account that transfers by designation or leave a dollar amount or property to a charity. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can include charitable giving. Reference: Lebanon Democrat (Nov. 21, 2018) “A few thoughts on charitable giving, taxes”

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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