There are many complex legal requirements associated with being a trustee or administering an estate. We help our clients create an estate plan where they can handle the affairs of an estate without major challenges.

Top 3 Estate Planning Myths to Know About

Like any other complex subject, estate planning has its share of myths and misconceptions.  Understanding the top three estate planning myths will help you to create and maintain a plan that will work the way you expect it to work when it’s needed.

Estate Planning Myth #1

You Don’t Need an Estate Plan Because Your Spouse Will Inherit Everything

A common belief is that if you’re married and you don’t have a will or a trust, your spouse will still inherit everything.  Unfortunately, this is not always the case.

Who will inherit your estate even if you’re married depends on many different factors, including how your property is titled, who you have named on your beneficiary designations, and the laws of the state where you live and any other state where you own property.  

The only way to ensure that your spouse will inherit everything is to sit down with an experienced estate planning attorney who will help you create an estate plan that will meet all of your goals.

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Estate Planning Myth #2 

You Don’t Need an Estate Plan Because Your Family Knows Your Final Wishes

You’ve shared your final wishes with your family and you’re confident that they’ll “do the right thing” after you die.  Unfortunately, without having these wishes written down in a valid will or a valid trust, your family may not be able to fulfill your intentions for several reasons.  

First, how your property is titled will determine who inherits it, not who you’ve told your family you want to inherit it.

In addition, if you fail to complete or update the beneficiary designations for assets such as bank accounts and life insurance policies, your family won’t have any authority to tell the bank or insurance company who should inherit the proceeds.  

Finally, without an estate plan, the laws of the state where you live and any other state where you own property will dictate who inherits your probate estate, not your family. The only way to ensure that your property will go to your intended heirs is to sit down with an experienced estate planning attorney who will help you create an estate plan that will meet all of your goals.

Estate Planning Myth #3 

Once You’ve Created Your Estate Plan, It’s Done

Suppose that you’ve taken the time to sit down with an experienced estate planning attorney and create an estate plan that meets all of your goals.  You may think that now you can sit back and relax because your estate plan is done.

While this attitude may seem reasonable, unfortunately as the years go by your life and the laws governing wills, estates, probate, trusts, and death taxes will continue to change, which means that eventually, your estate plan will become out of date.  

The only way to ensure that your plan will work the way you intend it to work is to pull it out of the drawer every few years and have it looked over by your estate planning attorney.

Final Thoughts About Estate Planning Myths

These are only three of the top estate planning myths.  Unfortunately, there are many more. The only way to separate the myths from reality and get a plan that will work for you and for your family is to retain the services of an experienced estate planning attorney.

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Declare your Independence from Court Interference!

While the rest of the nation celebrates its independence on July 4th, you can rest assured that you too can declare independence for your family — from court interference. Life can be unpredictable. Whether it is a financial issue, the birth or adoption of a child, sickness, or incapacity, it is important to be prepared with proper estate planning. In fact, failure to put together a comprehensive estate plan can leave you and your loved ones at the mercy of the court when it comes to distributing assets or caring for a minor or sick family member.

Estate Planning Basics

Simply put, estate planning addresses how to manage your property in the event of your death or incapacity. Some estate planning tools you have likely heard of before including last will and testaments, living wills, trusts, powers of attorney, and healthcare directives. Estate planning is a great method not only to plan your family’s financial security, but to use tools to keep your family’s personal business outside of the courtroom.

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Avoiding Probate

When someone passes away without a will it is referred to as being intestate. A person who dies intestate will have his or her assets distributed according to local intestacy rules. Probate is the legal mechanism by which your assets are distributed upon your death. The process of probate takes time, costs money, and can be a hassle and burden for the family you left behind. One important estate planning tool that will help avoid a drawn-out legal process includes a fully funded trust with up-to-date beneficiary designations. By having a fully funded trust and/or up-to-date beneficiary designations when you die, there are no assets in your estate, and therefore no need for probate.

Death is not the only time a court may become involved in your and your family’s personal lives. The court may also intervene in the event you become incapacitated. The court may appoint a guardian or conservator to handle your personal and financial matters, essentially pushing out your loved ones and stripping their ability to help and make important decisions on your behalf. There are several estate planning tools that can help you determine who you want to be in charge of should you become incapacitated. These include using a power of attorney, a fully funded trust, as well as a healthcare directive to appoint and give instructions to those you trust to make these difficult decisions for you when you need it most.

Protecting Your Loved Ones

Another important benefit of a solid estate plan is protecting those who are most precious to you — your minor children. It is important to understand that simply naming guardians in your will for any minor children you may have is not enough in and of itself. While a will does ensure your children will be properly cared for in the long term, often there are significant lapses of time between when the need arises to care for your children and when your wishes are actually carried out. Making sure your estate plan accounts for this gap is vital in preventing the state from taking over and allowing someone you do not want to raise your children from having a chance to take control of their lives and inheritance.

Declare Your Family’s Independence

There are many moving parts to a concise estate plan that must be considered in order to properly protect yourself and your loved ones. An estate planning attorney can explain your options under applicable law and craft a plan that best suits your family’s needs. There is no need to wait and leave your family’s future to chance. Contact us today so we can get you on the road to independence.

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Designating Beneficiaries in Blended Families

Whether you are in your first marriage or have remarried after a divorce, blended families are a common part of modern society. That being said, it is important to understand that blended families and subsequent marriages create important and unique issues when it comes to estate planning. This comes into play mostly with blended family beneficiary designations.

You may need to account for a prior spouse who is still caring for minor or disabled children, and also possibly make sure your current spouse and any children you had together – and any stepchildren – are also taken care of after you pass away. The good news is that estate planning can take all of these factors into account. This is true whether you are putting together your estate plan for the very first time or if you need to update your current estate plan due to a change in your circumstances.

Setting Up a Trust For A Blended Family

It is common for married couples to leave everything to one another in their wills, or list their spouse as the sole beneficiary of any assets that allow for this designation. The result is that if one spouse passes away before the other, the surviving spouse will own all of the assets left behind outright. While this may work for some families, when it comes to blended families this strategy may inadvertently disinherit children or spouses from a prior marriage.

One way to provide for a current spouse without leaving out children from a prior marriage is to place some or all of your assets in a trust that the spouse can use during his or her lifetime. Once the spouse dies, all of the property in the trust can go to the children from your current and prior marriage, or to other intended beneficiaries.

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Beyond Simple Beneficiary Designation

The plain and simple beneficiary designation on assets (like life insurance, bank and investment accounts, etc.) that allow for outright distribution to the surviving spouse can inadvertently wreak havoc on an estate plan when a blended family is involved. These complications can apply to a couple who has children from prior marriages, someone who remarries late in life, or someone on their second or third marriage and beyond.

For example, you may purchase a large life insurance policy and designate your current spouse as the sole beneficiary and pass away shortly thereafter. Since the beneficiary designation takes precedence over your estate planning documents, the proceeds of the life insurance will not be placed in that trust and will be distributed outright to your current spouse. If you had instead named the trust as beneficiary, you could have determined when and how the funds would be spent for the benefit of your heirs.

As an example, the funds could be used to provide support for your surviving spouse during his or her lifetime while also allocating a portion to help your children to pay for college, finance a down payment on a first home, and pay for a wedding, or start a business. The key is that the money can be available for your spouse, but not with unfettered control, and still available for your children.

Ensuring Your Wishes Are Followed

While you hope that a surviving spouse with honor your wishes even if they are not in writing, you may accidentally disinherit your children. Instead, a knowledgeable estate planner will use your trust as the centerpiece of your estate plan and make sure to coordinate and align the beneficiaries on your assets so that your intent will become the reality once you have passed away.

We can explain all of the options available to you and put together a plan and beneficiary designation that best suits your family’s needs. Contact us today to schedule a free consultation.

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4 Reasons Why Estate Planning Isn’t Just for Rich People

There is a common misconception that estate plans are only for the ultra-rich. This includes the top 1 percent, 10%, 20%, or some other arbitrary determination of “enough” money.  In reality, nothing could be further from the truth. People at all income and wealth levels can benefit from a comprehensive estate plan. Sadly, many have not sat down to put their legal house in order. That is why it’s important to know that estate plans are not only for the rich.

According to a 2016 Gallup News Poll more than half of all Americans do not have a will, let alone a comprehensive estate plan. These same results were identified by WealthCounsel in its Estate Planning Awareness Survey. Gallup noted that 44 percent of people surveyed in 2016 had a will in place, compared to 51 percent in 2005 and 48 percent in 1990.  Also, over the years, there appears to be a trend of fewer people even thinking about estate planning.

Top Four Reasons

When it comes to estate planning, the sooner you start the better. Below are four reasons why everyone – no matter what income or wealth level – can benefit from a comprehensive estate plan:

1. Forward Thinking Family Goals

Proper estate planning can accomplish many things. The first step is to ask what your goals are. They may include caring for a minor child, an elderly parent, a disabled relative, or distributing real and personal property to individuals who will appreciate and maintain these assets prudently.  

Understanding what your family wants and needs are for the future is a great starting point for any estate plan. If you can sit down and spend time planning your vacation, you can do the same for your estate. Your future self, and your loved ones, will thank you.

 

2. Financial Confidence Now and After You Are Gone

One immediate benefit of having a finished estate plan in place is that you will likely feel in control of your finances, possibly for the first time ever. Many people experience a new sense of discipline in maintaining their finances. This can help with saving for retirement, a big purchase, or other goal.

 In addition to the personal benefit of financial control, an estate plan allows you to dictate exactly how and when your heirs receive an inheritance. This is particularly important for minor heir or those who need additional guidance to manage their inheritance, like a disabled child.

 

3. Identify Risks

An important aspect of a good estate plan is to mitigate against future and current risks. One example is becoming disabled and unable to support your family. Another is the possibility of dying early.

Through an estate plan you can chose who will be in control of your personal assets, instead of the court appointing a legal guardian who will cost money and be a distraction for your family.  While contemplating these types of risks is never fun, preparing ahead of time ensures your loved ones will be prepared if an unfortunate tragedy occurs.

 

4. To Maintain Your Privacy

In the absence of a fully funded, trust-based estate plan, a list one’s assets are available for public view upon death. This occurs when a probate court needs to step in. Probate is the legal process by which a court administers the deceased person’s estate. A solid estate plan should generally avoid the need for involvement by the probate court, so your family’s privacy can be maintained.

 

The Bottom Line: Seek Professional Advice

There are numerous benefits to working with a professional team when it comes to estate planning. Estate planning attorneys, financial advisor, insurance agents, and others have a broader and deeper knowledge of money management, financial implications, and the law.

When you work with a qualified team to implement an estate plan you can rest easy knowing your family will be taken care of no matter what happens in the future. Contact us today to learn more about how we can help with your estate plan.

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3 Tips For Every New Homeowner

Congratulations on the purchase of your new home.  Whether this is your first home or an upgrade/downsize, the purchasing of a home is a big event in your life.  When these major life changes occur, it is important that you are properly prepared. Below are a few things for you to consider now that you finally have the keys to your new home!

Update Your Address

Now that you are in your new home, it is very important that you update your address with the appropriate entities. Your local United States Postal Office will have a form you can fill out. If you cannot make it to the post office, you can also update this information on their website. This will assist them in forwarding your mail to you.  

To ensure that you don’t miss any important tax notices or refunds, you will also want to update this information with the Internal Revenue Service, using Form 8822, and your local state tax agency.

Make Sure Your House Title Coordinates With Your Estate Plan

While it is still fresh in your mind, reference your new deed to see how the property is titled.  Then, you will want to reference your estate planning documents to make sure that your property has been titled properly to achieve your estate planning goals.

For example, suppose your previous plan had a specific provision distributing your old property. In that case, you will want to make sure that you update this provision since you no longer own the previous property. On the other hand, if this is your first home and your estate plan includes a trust to avoid probate, you will need to make sure that your home was titled in the name of the trust and not in your name individually.

Check Your Life Insurance Coverage and Beneficiary Designations

Unless you were fortunate enough to pay cash for your new home, you now have a large monthly mortgage expense. In order to protect your loved ones, it is important that you check your life insurance coverage. Should you die before paying off the mortgage, it is a good idea you have enough life insurance to meet that obligation should you have a surviving spouse or children that will likely continue to reside in the home. Even if they choose to not remain in the home, life insurance can provide valuable assets during what is usually an emotionally difficult time.

This is also a great opportunity to double-check your beneficiary designations. Life changes happen so quickly that sometimes this can be overlooked. If your designations do not match up with the rest of your estate plan, you may end up inadvertently disinheriting a family member or having the money fall directly into the hands of an individual without any guidance.

Lastly, now that you have home and homeowner’s insurance, call your insurance agent to make sure that you are getting all of the discounts that you are entitled to.  Many insurance companies will offer discounts when you bundle services. If you already have car insurance through a carrier and use the same company for your homeowner’s insurance, you may be entitled to a better rate than if you had both policies separately. In addition, homeowners often get discounts that renters don’t.

Buying a new home is a big step and we are here to help. Contact us or give us a call and we can help make sure that your new purchase and estate planning are working together to carry out your goals.

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