When Should I Update My Estate Plan?

When Should I Update My Estate Plan? Forbes’ recent article entitled “Do You Need A Trust? 8 Important Goals A Trust Can Help You Achieve” discusses eight ways a trust can help you achieve specific legacy planning goals. The first step is to meet with an experienced estate planning attorney.

Everybody needs a will, but not everyone requires a trust. A trust provides greater flexibility and control over how your property and assets are distributed. Many people create a trust to avoid probate. As a result, it’s faster and easier for your named trustee(s) to distribute your assets to your heirs. There are a many different types of trusts with advantages and disadvantages. Talk about what will be best for you with your estate planning attorney.

  1. No probate. This process can take months or more to complete, and it can be very expensive. A trust is designed to settle your estate in a timely and relatively inexpensive manner.
  2. Privacy and confidentiality. Probate is public, so your will and other private financial and business info is available to everyone. However, a trust maintains privacy and confidentiality.
  3. Protection for beneficiaries. A trust can shield beneficiaries from lawsuits, creditors, or divorce. A trust can also protect the interests of a minor, by including direction for when distributions are made.
  4. Provide for children with special needs. This type of trust provides for the health care and personal needs of a minor child or adult who has special needs and won’t impact their eligibility for Medicaid benefits.
  5. Flexibility. As the creator of the trust, you determine the terms of the trust, and can put restrictions on how trust assets are managed. For instance, the trust could state that assets may only be used by the beneficiary to purchase a home or to pay medical bills but may not be distributed directly to the beneficiary.
  6. Preserve family wealth. Divorce and remarriage can result in assets that were supposed to stay in the family wind up leaving with the ex-spouse. A trust can make certain that your estate is preserved for grandchildren.
  7. Family values. A trust can be a wonderful way to pass down family values concerning education, home ownership, land conservation, community service, religious beliefs and other topics.
  8. Lessening family conflict. Challenging a trust is difficult and costly. Having a trust in place that clearly articulates your wishes for your family, reduces the potential for misunderstanding.

Whether you have a trust in place or are thinking about creating one, it’s important to meet regularly with your estate planning attorney to be certain your strategy and estate planning documents reflect any new state and federal tax laws, as well as any changes in your goals and circumstances.

Reference: Forbes (Feb. 24, 2020) “Do You Need A Trust? 8 Important Goals A Trust Can Help You Achieve”

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

 

Your Estate Plan is a “Dynamic Document”

Your Estate Plan is a “Dynamic Document”: One of the most common mistakes people make about their estate planning is neglecting to coordinate all of the moving parts, reports the Dayton Business Journal’s article “Baird expert gives estate planning advice.” The second most common mistake is not thinking of your estate plan as a dynamic document. Many people believe that once their estate plan is done, it’s done forever. That creates a lot of problems for the families and their heirs.

In the last few years, we have seen three major federal tax law changes, including an increase in the federal estate tax exemption amount from $3,500,000 to an enormous $11,580,000. The estate tax exemption is also now portable. Most recently, the SECURE Act has changed how IRAs are distributed to heirs. All of these changes require a fresh look at estate plans. The same holds true for changes within families: births, deaths, marriages and divorces all call for a review of estate plans.

For younger adults in their 20s, an estate plan includes a last will and testament, financial power of attorney, healthcare power of attorney and a HIPAA authorization form. People in their 40s need a deeper dive into an estate plan, with discussions on planning for minor children, preparing to leave assets for children in trusts, ensuring that the family has the correct amount of life insurance in place, and planning for unexpected incapacitation. This is also the time when people have to start planning for their parents, with discussions about challenging topics, like their wishes for end-of-life care and long-term care insurance.

In their 60s, the estate plan needs to reflect the goals of the couple, and expectations of what you both want to happen on your passing. Do you want to create a legacy of giving, and what tools will be best to accomplish this: a charitable remainder trust, or other estate planning tools? Ensuring that your assets are properly titled, that beneficiaries are properly named on assets like life insurance, investment accounts, etc., becomes more important as we age.

This is also the time to plan for how your assets will be passed to your children. Are your children prepared to manage an inheritance, or would they be better off having their inheritance be given to them over the course of several years via a trust? If that is the case, who should be the trustee?

Some additional pointers:

  • Revise your estate plan every three or five years with your estate planning attorney.
  • Evaluate solutions to provide tax advantages to your estate.
  • Review asset titling and beneficiary designations.
  • Make sure your charitable giving is done in a tax efficient way.
  • Plan for the potential tax challenges that may impact your estate

Regardless of your age and state, your estate planning attorney will be able to guide you through the process of creating and then reviewing your estate plan.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: Dayton Business Journal (February 4, 2020) “Baird expert gives estate planning advice”

 

I’m Rich! What Should I Do Now?

I’m Rich! What Should I Do Now? WMUR.com’s recent article, “Handling unexpected wealth,” says the first thing to do is to really step back and review your finances.

Depending on how much you have received, you could be in a very different place financially. You should take a look at your net worth and cash flow.

What these items show you and how much access you have to your new funds will affect the extent to which your finances might change.

You might have received your assets through a trust, and the trust provisions will dictate how you get those assets. Depending on these instructions, you might not have control over the funds. It’s the trustee who will decide this based on the trust document.

Get a copy of the trust and review the terms with an estate planning attorney. This will give you some idea of the income the trust will provide you.

It’s a different set of issues when inheriting or receiving stock as a gift. Look at your investment strategy to see if the stock has a place in it.

This will help you decide whether to keep the stock or sell it. Instead of stock, you might have inherited real estate. The decision here is the same as to whether to sell the property or keep it.

Your inheritance may also be plain old cash. Think about your future needs and how long your money must last.

Take the time to come up with a well-thought-out plan for both your current needs and your future goals.

Finally, any newly acquired money can also affect your estate plans. Go through your plan and strategies with an estate planning attorney.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: WMUR.com (December 12, 2019) “Handling unexpected wealth”

 

Gray Divorces Changing the Future for Many Senior Americans

Gray Divorces Changing the Future for Many Senior Americans: Add “gray divorce” to the factors leading to strife in estate planning. Minimizing discord among beneficiaries is one of the top three reasons people decide to have estate plans created, but with more gray divorces, things become complicated.

A survey at the 54th Annual Heckerling Institute on Estate Planning conducted by TD Bank asked elder law attorneys, insurance advisors, wealth managers and other professionals on the biggest challenge to estate planning. An article in the Clare County Review titled “Rising Gray Divorce Rates Are Making Estate Planning Problems More Complicated” explains the problem, and presents some solutions.

Gray divorce, blended families, naming heirs and changing family structures are making it more complicated—and more necessary—to create an estate plan and review it with an estate planning attorney on a regular basis.

More than a third of the 112 professionals participating in the survey said that gray divorce has the biggest impact on retirement planning and funding. It also impacts naming who becomes a person’s power of attorney and how Social Security benefits are determined.

The biggest way to help avoid family conflict in a gray divorce is the same as in any other divorce: regular communication. The family members need to know what is being planned, including who will be the designated beneficiaries and who will be named as executor.

The divorce process is complicated at any age, but after 50, there are usually more assets involved. The spouse is usually listed as the beneficiary on most, if not all, assets. Each asset document must be changed to reflect the new beneficiaries. Dividing pension plans, IRAs, and other retirement funds entails more work than simply changing names on bank accounts (although that also has to happen).

Wills, trusts, life insurance, and titles on real estate must also be changed. Institutions and companies that have accounts must be contacted, with information updated and verified.

Trusts are growing in popularity as a means of leaving assets to heirs, since they can minimize costs and delays when property is transferred. Trusts make it easier to pass assets, if family conflict is expected.

Even when beneficiaries aren’t expecting any cash assets to be left to them, controversies can still erupt over other assets. Adult children may not care about IRAs or trusts, but often the family home has great sentimental value. Deciding what to do with it can lead to fighting among siblings.

For those considering a gray divorce, talking with an estate planning attorney, in addition to a matrimonial attorney, could make this large life change less stressful. The estate planning attorney will be able to work with the matrimonial attorney, to ensure that estate issues are handled properly.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: Clare County Review (February 10, 2020) “Rising Gray Divorce Rates Are Making Estate Planning Problems More Complicated”

 

Why Is a Power of Attorney Important?

Why Is a Power of Attorney Important? A son who is preparing to help his mother with her legal and financial affairs asks what legal documents he needs to obtain in the article “Tips for becoming a power of attorney” in Hometown Life. He is concerned about a sibling who is estranged from the family and could cause problems in the future. Can he protect his mother and himself?

The first thing he needs to do is obtain a medical power of attorney for the mother, and a durable power of attorney. These are two separate powers of attorney that will give the son the legal right to handle both her financial affairs and her medical care.

With the documents, he will be able to speak directly to her healthcare providers, including her doctors, and to make end-of-life decisions on her behalf. An unhappy family member could indeed cause problems, especially when it comes to major decisions.

The durable power of attorney is geared for legal or financial issues, including handling the mother’s day-to-day money tasks and making decisions about her investments and assets, including the family home.

Having both of these documents, gives the son the ability to do what is necessary for his mother, while also protecting him from an uncooperative family member. However, there are more tasks to be done.

First, he needs to find out if she has an estate plan, including a will, a trust or even any other powers of attorney. He should find out if they are current, and if they still reflect her wishes.

If she has an estate plan, he’ll need to find out when it was last updated and see if it needs to be revised. If she does not, she needs to meet with an experienced estate planning attorney to create a plan to distribute assets according to her wishes and create any needed trusts.

He should also collect her medical information, so he knows who her doctors are and what medications she is taking. He also needs to understand her medical insurance coverage and see if she has the protection that she needs from health care costs.

For her financial affairs, the son needs to gather up information about her accounts, including passwords and login information. The mother should add the son as a signatory to her bank accounts and brokerage houses.

He should also get the names and contact information of any financial professionals she works with. That includes financial advisors, insurance agents and CPAs. It would be wise to get the last two years of her tax returns. This could be invaluable in helping to understand her assets.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: Hometown Life (Dec. 6, 2019) “Tips for becoming a power of attorney”

 

Business Owners Should Start End-Game Planning Now

Business Owners Should Start End-Game Planning Now: Most parents understand that the ultimate goal of child-rearing is to help a child become an independent adult. For the business owner, this means building a business that would continue after they have retired or passed away. However, when it comes to estate planning, says the article “Why Business Owners Should Think About Estate Planning Sooner Than Later,” from Forbes, many business owners think only about their personal assets and their children.

For a successful business owner who wants to see their business continue long after they have moved on to the next chapter in their lives, the best time to start succession planning is now.

Succession and estate planning should not be something you wait to do until the end of your life. Most people make this mistake. They don’t want to think about their own mortality or what will happen after they’ve died. Very rarely do people realize the value of estate planning and succession planning when they are engaged in a start-up or when their companies are just getting solid footing. They are too busy with the day-to-day concerns of running a business than they are with developing a succession plan.

However, any estate planning attorney who has been practicing for more than a few years knows that this is a big mistake. Securing assets and business planning sooner, not later, is a far better way to go.

Business continuity is the first concern for entrepreneurs. It’s not an easy topic. It’s far better to have this addressed when the owner is well and the business is flourishing. Therefore, the business owner is making decisions and not others, who may be emotionally invested but not knowledgeable about the business.

A living trust and will can put in place certain parameters that a trustee can carry out. This should include naming the individuals who are trusted to make decisions. Having those names and decisions made will minimize the amount of arguing between recipients of assets. Let them be mad at you for your choices, rather than squabbling between each other.

Create a business succession plan that designates successor trustees who will be in charge of managing the business, in the event of the owner’s incapacity or death. A power of attorney document is used to nominate a fiduciary agent to act on your behalf if you should become incapacitated, but a trust should be considered to provide for a smoother transition of the business to successor trustees.

By transferring a business to a trust, the inconvenience and costs of probate may be avoided and assets will be passed along to chosen beneficiaries. Timely planning also preserves business assets, since they can take advantage of advanced tax planning strategies.

Estate and succession planning is usually not top-of-mind for young business owners, but it is essential planning. Talk with an experienced estate planning attorney to get yourself and your business ahead of the game.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: Forbes (Dec. 30, 2019) “Why Business Owners Should Think About Estate Planning Sooner Than Later”

 

Mistakes to Avoid when Planning Estates

Mistakes to Avoid when Planning Estates: Because estate planning has plenty of legal jargon, it can make some people think twice about planning their estates, especially people who believe that they have too little property to bother with this important task.

Comstock’s Magazine’s recent article entitled “Five Mistakes to Avoid When Planning Your Estate” warns that without planning, even small estates under a certain dollar amount (which can pass without probate, according the probate laws in some states) may cause headaches for heirs and family members. Here are five mistakes you can avoid with the help of an experienced estate planning attorney:

Getting Bad Advice. If you want to plan an estate, start with a qualified estate planning attorney. There are plenty of other “experts” out there ready to take your money, who don’t know how to apply the law and strategies to your specific situation.

Naming Yourself as a Sole Trustee. You might think that the most trustworthy trustee is yourself, the testator. However, the estate plans can break down, if dementia and Alzheimer’s disease leave a senior susceptible to outside influences. In California, the law requires a certificate of independent review for some changes to trusts, like adding a nurse or an attorney as a beneficiary. However, this also allows family members to take advantage of the situation. It’s wise to designate a co-trustee who must sign off on any changes — like a trusted adult child, financial adviser, or licensed professional trustee, providing an extra layer of oversight.

Misplacing Assets. It’s not uncommon for some assets to be lost in a will or trust. Some assets, such as 401(k) plans, IRAs, and life insurance plans have designated beneficiaries which are outside of a last will and testament or trust document. Stocks and securities accounts may pass differently than other assets, based upon the names on the account. Sometimes people forget to change the beneficiaries on these accounts, like keeping a divorced spouse on a life insurance policy. When updating your will or trust, make certain to also update the beneficiaries of these types of assets.

Committing to a Plan Without Thinking of Others. When it comes to estate planning, there’s no one-size-fits-all solution. For example, for entitlement or tax reasons, it may make sense to transfer assets to beneficiaries, while the testator is still living. This might also be a terrible idea, depending on the beneficiaries’ situation and ability to handle a sum of money. He or she may have poor spending habits. Remember that estate planning is a personal process that depends on each family’s assets, needs and values. Work with an experienced estate planning attorney to be sure to consider all the angles.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: Comstock’s Magazine “Five Mistakes to Avoid When Planning Your Estate”

 

What Estate Planning Documents Do You Need?

What Estate Planning Documents Do You Need? Wouldn’t your children be relieved to learn that you’ve done all the necessary advance planning so that if you should become incapacitated, someone has been properly appointed to help with health care and financial decisions? The Tennessean suggests that you “Give your loved ones peace of mind with legal documents” so that your spouse and your family will be able to take the necessary steps to give you the care and dignity you (and they) deserve.

Here’s a checklist of the documents that everyone should have in place:

Power of Attorney for Health Care. When you have mental capacity, you can make your own decisions. When you do not, you need someone to be appointed who knows your beliefs and wishes and has the ability to advocate for you. Ideally, you should name one person to be your agent to minimize arguments. Talk with your family to explain who has been named your power of attorney for health care, and if need be, explain why that person was chosen.

Power of Attorney for Finances. There are different kinds of POA for finances. The goal of the POA for finances is so they can make decisions on your behalf, when you become incapacitated. Some states use “springing” POA—but that may mean your family has to go through a process to prove you are incapacitated. Check with an estate planning elder law attorney in your state to see what the laws are.

Advance Directive. This describes what kind of life sustaining treatment you do or do not want if you are in a coma, are terminally ill or have dementia. You can direct whether you want CPR, tube feeding, and other life-sustaining procedures to be withheld, if your quality of life is diminished and there is no hope of improvement. This will help your family to know what you want in a time when emotions are running high.

Last Will and Testament. Have a will created, if you don’t already have one. This directs distribution of your assets to your wishes and does not leave them to the laws of your state. Not having a will means your family will have to go through many more court proceedings and people you may not want to receive your worldly possessions may get them.

Trusts. Talk with your estate planning attorney about placing assets in trust, so they are not subject to the public process of probate. Your wishes will be followed, and they will remain private.

Reference: Tennessean (Nov. 16, 2019) “Give your loved ones peace of mind with legal documents”

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

 

Blended Families Need More Thoughtful Estate Plans

Estate planning for blended families is like playing chess in three dimensions: even those who are very good at chess can struggle with so many moving parts in so many dimensions. Preparing an estate plan requires careful consideration of family dynamics, and those are multiplied in blended families. This is another reason why estate plans need to be tailored for each family’s circumstances, as described in the article “Blended families have unique considerations in estate planning” from The News Enterprise.

The last will and testament is often considered the key document in an estate plan. But while the will is very important, it has certain limitations and a few commonly used estate planning strategies can result in unpleasant endings, if this is the only document used.

Spouses often leave everything to each other as the primary beneficiary on death, with all of their children as contingent beneficiaries. This is based on the assumption that the second spouse will remain in the family home, then will distribute any proceeds equally between the children, if and when they move or die. However, the will can be changed at any time before death, as long as the person making the will has mental capacity. If when the first spouse dies, the relationship with the surviving children is not strong, it is possible that the surviving spouse may have their will changed.

If stepchildren don’t have a strong connection with the surviving spouse, which occurs frequently when the second marriage occurs after the children are adults, things can go wrong. Their mutual grief at the passing of the first spouse does not always draw stepchildren and stepparents together. Often, it divides them.

The couple may also select different successor beneficiaries. The husband may name his wife first, then only his children in his will, while the wife may name her husband and then her children in her will. This creates a “survival race.” The surviving spouse receives the property and the children of the spouse who passed won’t know when or if they will receive any assets.

Some couples plan on using trusts for property distribution upon death. This can be more successful, if planned properly. It can also be just as bad as a will.

Trust provisions can be categorized according to the level of control the surviving spouse has after the death of the first spouse. A trust can be structured to lock down half of the trust assets on the death of the first spouse. The surviving spouse remains as a beneficiary but does not have the ability to change the ultimate distribution of the decedent’s portion. This allows the survivor the financial support they need, giving flexibility for the survivor to change their beneficiaries for their remaining share.

Not all blended families actually “blend,” but for those who do, a candid discussion with all, possibly in the office of the estate planning attorney, to plan for the future, is one way to ensure that the family remains a family, when both parents are gone.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable TrustsEstate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-418-0169 to schedule your free consultation.

Reference: The News Enterprise (November 4, 2019) “Blended families have unique considerations in estate planning”

 

How Current is Your Estate Plan?

How Current is Your Estate Plan? If “nothing has changed” in your life, then you shouldn’t need to update your will. However, estate planning is more than your will. The chances that “nothing” truly has changed after even a few years is unlikely.

Forbes’ recent article, “Old Estate Plans May Be Harmful To Your Wealth,” explains that if you haven’t updated your planning after the 2017 Tax Act, a more accurate comment would be to say that “everything” has changed. That legislation made significant changes by increasing the estate tax exemption, eliminating personal itemized deductions and many other details.

There could be another change in the state or federal tax or probate law.

On your end, you or an heir may experience marriage or divorce—or a death in the family or of a vital person named in documents. Maybe you moved to a new state or welcomed a new child or grandchild. Another change is a substantial change in economic circumstances, like a change in jobs or careers. You may now have new or worsening health issues. Finally, you may have second thoughts about a bequest, or there’s been a change in relationship with a fiduciary or beneficiary.

Don’t focus on a list of the changes that should trigger an update to your estate plan. Those types of changes are often obvious. It’s the less obvious changes that don’t make the lists and that you might not even consider as requiring you to update your planning and documents.

You might not even be aware of a major change in your state’s tax laws or whether it applies to your circumstances.

It’s best to meet with your estate planning attorney any time you believe something important has occurred, like one of the events listed above. However, regardless of having a particular reason, you should meet every few years.

The bigger and more complex your estate is, the more complex your family, the more often that should be. For many, meeting every year is very prudent, certainly every year or two makes sense.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-418-0169 to schedule your free consultation.

Reference: Forbes (September 27, 2019) “Old Estate Plans May Be Harmful To Your Wealth”

 

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