Posts Categorized: Estate Planning

Estate Planning Changes Should Keep Up with Your Life

Estate planning is never a once and done process and nothing highlights this more than someone who has failed to update their materials after a major change in their life. Your estate plan should always be reevaluated with any significant life changes such as divorce, a new marriage, births or other developments. Updating your will should always be a priority.

All of your documents including your life insurance policies and your wills should be evaluated carefully after these major events. If you fail to do this, for example, after a divorce, your spouse still could maintain the legal ability to make decisions on your behalf or may even inherit assets you did not intend for them to have.

Estate planning is your set of legal documents that spells out who gets your assets when you die as well as who is responsible for making critical medical decisions and financial decisions on your behalf if you are unable to do so.

Ideally, your estate plan will make things easier for your heirs if you suddenly pass away but your contingent beneficiaries on life insurance policies, retirement benefits and more, all need to be updated when you have big changes in your life, especially if your current spouse passes away. Divorce and the birth of a child are other major life events that should prompt you to update your estate planning materials with a lawyer.

Trillions of Dollars in Cash Windfall anticipated in Coming Years

A recent study completed by Accenture estimates that between $1 trillion and $3 trillion will be transferred to beneficiaries each year through 2050. Many people, however, may not be equipped with the appropriate way to handle such an inheritance. People may be questioning what they should do next after their life has been significantly changed.
There are emotional considerations to factor in as well since this is different from a winning lottery ticket and that the gift has been handed to you by someone who is no longer around. Many families have conflicts about how the money should be spent. Fights with siblings can lead to future problems. To avoid family conflicts, intergenerational meetings can be held prior to someone passing away in which a parent articulates their final wishes. This allows advisors to be the person intervening in family strife and minimizing conflicts after the fact.

There are four primary categories that should be considered by anyone who may be inheriting a significant amount of money. These include:
• Safety, such as insurance, personal transportation, medical expenses and home repair.
• Fun, like dinners and vacations.
• Future, such as money that will be untouched for a minimum of five years in investments.
• Cushion or cash for true emergencies.

Another optional category for some people may include gifting to charity. Talk to an estate planning lawyer to figure out what’s right for you.

Might You Unexpectedly Become Your Parents’ Caretaker?

Far too many families avoid talking about the process of estate planning and many people don’t even have a basic will. Problems may emerge when people are suddenly thrust into a position of managing someone’s care or organization of documents after an incapacitating event or death. Far too many people don’t realize that they are anticipated to be the primary caregiver for their aging parents.

Taking care of parents in old age can be an unexpected surprise that interrupts your savings. A recent study completed by Bay Alarm Medical showed that 55% of parents anticipate that their children will be the ones caring for them. This could lead parents to avoid taking on critical planning opportunities such as purchasing long term care insurance, relying on children instead.

But an adult child who does not know that he or she is going to be asked to step into this role will have significant disruptions in their life. These parents anticipate that their adult children will take care of them financially and physically. In certain areas of the United States, adult children were less likely to realize that they were the ones responsible to step in in this role.

For example, in the Midwest, only 36% of adult children anticipated that they would be the ones caring for their aging parents. Sitting down and talking through these difficult topics with your loved ones can make it much easier to navigate problematic situations as they emerge.

An estate planning lawyer can help you accomplish your own estate planning and see what options are available for helping your aging parents.

Is Medicaid Your Only Source of Payment for Long Term Care Planning?

As many people approach the subject of estate planning, they put together critical documents to pass on their assets after they pass away.

However, they may neglect the necessary planning tools and insurance policies that could be used for long term care planning. Considering the possible need for long term care is something that everyone in the United States could benefit from. However, for many people, Medicaid may be their only source of payment.

Medicaid qualification is required, which means that many or most of the person’s assets will be lost during life or after death if they don’t take advance planning opportunities. Decisions must be made early regarding the transfer of your assets in order to avoid triggering the Medicaid look-back provision.

Decisions regarding asset transfers are never easy and should always be discussed directly with an experienced estate planning lawyer. Many people can anticipate experiencing some form of mental or physical decline and needing assistance in the form of long term care.

Right now, 40 million individuals are over age 65 and one-quarter of those are expected to live beyond 90. 10% are anticipated to live beyond 95. This makes the importance of estate planning and long-term care planning something that everyone should carefully consider.

James Brown’s Estate Still in The Midst of Legal Disputes

James Brown passed away on Christmas Day in 2006 and yet disputes surrounding the settlement of his estate are still winding their way through the courts. Numerous different individuals have come forward to file disputes ranging from whether or not his widow may have truly been his wife and whether any copyrights for his songs were included in what some allege are illegal backroom agreements.

Several suits have also been brought forward by people who can test the will and won by a person who thought they should have been appointed as the estate’s trustee. James Brown’s will had $2 million set aside to underwrite scholarships for his grandchildren and to distribute his household effects and costumes to the six children he recognized before he passed away. However, after the will was challenged, the initial attorney recommended a settlement that was ultimately overturned by the Supreme Court. In that proposed settlement, the grandchildren and children would have received a quarter of the estate and the widower would receive another quarter.

The Supreme Court however, felt that this involved a dismemberment of the estate plan that James Brown put together. The value of the estate itself is also currently in contention. Some believe that it is less than $5 million but others have given estimates that all of the materials included in the estate and his assets articulated clearly in the will could be worth more than $100 million. The bulk of the value comes from the copyrights that he owned as the songwriter. If you would like to avoid challenges in your estate and give your family a clear plan for how to protect your assets in the future, set up a consultation with an experienced estate planning lawyer.

What You Need to Know About the Stretch-Out Approach for IRAs

One of the ways to make the most of an inherited IRA is to use what’s known as a stretch-out approach. Some people make a common error of naming their own estate as the beneficiary of their individual retirement account.

This means that rather than going to a person who could benefit from accumulated wealth over time and reduce taxation, your estate puts this in the position of passing this on to your beneficiaries in as little as five years, which can become problematic for you as well as the beneficiaries if you are not careful about it.

A stretch-out approach is one thing to consider and contemplate as you go forward with your estate planning. This allows you to let your beneficiary stretch the length of time over which they will eligible to collect money from an IRA. This means that more growth can accrue overtime without income taxes chipping away at it.

When you use a retirement trust and other powerful estate planning tools, the result for your beneficiary can be a long term and big inheritance, even if you believe that your IRA only has a modest amount inside. Working with the right estate planning attorneys is critical for identifying an IRA approach that has your best interests and your loved ones’ best interests in mind.

Have You Forgotten About the Intangibles in Your Estate Plan?

Many times, people think very specifically about the physical objects or other items they intend to pass on to their loved ones but if you forget about intangible assets, you could be depriving your loved ones of something they cherish greatly.

Your values, wisdom, important family traditions, stories and beliefs can all be articulated in a letter to your loved ones. Your possessions are not the only representations of your life.

It’s hard to include everything in your overall asset list- it often takes people days and weeks to come up with a comprehensive one because they own so many things, and many of these intangible items haven’t been clearly outlined in a will.

Your intangibles might not have significant monetary value, but it’s impossible to assess a cash number for what these might mean to your loved ones. That’s why they are well worth protecting.

Whether you decide to take on a big project like producing an autobiographical documentary or writing a memoir, or keep your documentation process relatively simple with a short letter about your feelings and principles, this information can easily become a very valuable piece of your estate. Your loved ones wish to remember many different things about you. These representations of your heritage, life journey and your thoughts can be extremely important to family members working through the grief process. They can even become the foundation upon which your family members build their lives.

As you develop a plan for your more tangible assets in the process of estate planning, do not neglect your legacy and other items that you wish to pass on in the form of your thoughts, feelings and hopes for your loved ones. Talk to a Massachusetts estate planning lawyer to learn more.

Make Sure You Don’t Leave a Mess Behind for Your Children with Your Estate Planning

The goal of most planning is to avoid leaving a mess behind for your children, be it financially, legally, or literally. A cluttered house, for example, is one literal issue that many people have to deal with.

Decluttering and getting rid of your worldly possessions that are no longer necessary are at the top of the list for eliminating or reducing the literal mess and your stress level. However, you may also need legal and financial protections put in place by a knowledgeable estate planning attorney.

Many people want their spouse or their children to take over in the event of a sudden disability but your children or spouse could be barred from doing so if you do not have the legal paperwork in place like a power of attorney and a living will.

These advance directives may allow you to choose the people in charge in your life and avoid costly and lengthy court proceedings for guardianship in which the court determines who will be responsible for helping you. You can save money, time and the invasion of privacy and complications associated with a court proceeding. You can consult with an experienced estate planning attorney to learn more about how this can help you and your loved ones.

Preventing Common Problems When a Person Unexpectedly Passes Away

Doing your best to put together a comprehensive estate plan is certainly an important component of protecting your beneficiaries and the assets you have worked so hard to accumulate and build over the course of your life.

However, people who may not have had a great relationship with you towards the end of your life might show up suddenly and make things more challenging for your family members.

There are a couple of different things you can do to minimize the difficulties your family members may face if you were to suddenly pass away. The first is to enable the executor of your estate to immediately change the locks and secure your residence. You may also ask the executor to contact neighbors and to tell them to report any activity that happens at the residence. A trust or a will is also beneficial for preventing someone you did not expect from taking your property.

A simple provision added to your will such as a no contest clause would disinherit anyone who contests the validity of a trust or a will. Furthermore, contest might be expanded to include any concealment of estate property or removal. If beneficiaries are told that the inappropriate removal or concealment of property could lead to disinheritance, they might be less likely to conceal these belongings.

Another good way to avoid difficulties for your loved ones after you pass away is to simply have a conversation with them that the executor is responsible for all of your property. Ensure that all of your family members realize that no one is entitled to any of your property until the executor has decided that distribution is appropriate. Your lawyer can help you put together the right strategy for avoiding these common issues.

 

Study Shows Elder Financial Fraud Tops $36 Billion

One recent study found that $36 billion may be a low estimate for the final total on elder fraud. Unfortunately, scams targeting the elderly have been on the rise in recent years, be it attempting to get their private information to open credit cards in their name, or to encourage them to list strangers or relatively recent acquaintances in their estate planning documents.

Many people are aware of some of the most popular elder fraud scams, but criminals are getting better at hiding their work under the guise of seemingly legitimate plans.

One 2015 report, targeted $36.5 billion as the amount of money lost in financial abuse and scams, however, that problem is growing and three out of ten state securities regulators report that they have seen an increase of complaints and cases involving senior financial fraud and exploitation.

Only 3% of regulators reported a decline. Thieves are often following the money and the most common types of abuse include exploitation, account distribution, power of attorney, trustee or family member taking advantage, diminished capacity, fraud and excessive withdrawals.

Declining condition is not the only issue that affects these severe problems. This in fact has only been associated with 33% increase in scam susceptibility. Many of the victims of financial elder fraud today are not disabled or demented at all. One out of every 18 cognitively intact older people is subject to abuse fraud or financial scams, according to an American Journal of Public Health study. To protect your assets and ensure you have appropriate documents that protect you and your loved ones for many years to come, schedule a consultation with an experienced estate planning lawyer.