12 Months of Estate Planning: A Plan to Get Your Estate Plan Set up in 2020

12 Months of Estate Planning: A Plan to Get Your Estate Plan Set up in 2020

Estate planning can be one of the most important things you do for your family’s future, but it can also be overwhelming. Between heavy subjects you don’t want to think about, the need to do a lot of paperwork, and everything else going on in your life, it can be too easy to keep putting off your estate plan until later. The problem is you never know when you will need it. Get started before it’s too late by doing just a little bit at a time.

January: Determine Your Goals

Who do you need to take care of? Do you have a spouse that relies on your income? Children that still need an education? Grandchildren that you want to give a head start in life? Charities or other important causes that you wish to support?

Your estate plan isn’t a chore you have to check off to be a responsible adult. It’s something you want to do to achieve your goals. There are many types of estate planning tools available that work best in different situations. To pick the right tools, you need to begin with a plan for what you want to do — just like drawing up the blueprints for a house.

February: Take Inventory

After you know who you want to support, you need to know how you can. What assets do you have? Your home? Cash savings? Investments? A business? Family heirlooms?

When you divide your estate, you may wish to provide some loved ones with financial support and others emotional support in the form of specific items that will mean more to them. It’s also important to understand that if you have any debts, your creditors will take precedence over your heirs, so you need to account for those as well.

March: Create a Will

Wills are the most common estate planning tool because they are the simplest way to ensure that each of your loved ones is cared for in the way that you’ve chosen. You can create a will on your own, but there are some legal technicalities that could leave your will open to challenges or having some of your wishes not honored. An estate planning attorney can help you avoid those complexities. Even if you plan to use other estate planning tools, having a will is still a good catchall for things that may not otherwise be covered.

April: Name Beneficiaries

When you name beneficiaries on your bank accounts and investment accounts, those accounts automatically go to your chosen beneficiaries upon your death. This allows those beneficiaries to receive financial support without having to wait for your will to go through probate.

The main benefit to taking this step is so that any family members who need immediate financial support can receive it. For example, if they relied on your income to cover their living expenses, they may not have enough money to buy groceries or to make rent or mortgage payments on your home that they continue to live in.

May: Consider a Trust

A trust is another way to keep assets out of probate and transfer them directly to family members. Again, the goal is to skip the weeks or months of delays it takes to execute your will in probate.

A trust can also be used to ensure that the funds you leave go towards your intended purpose. You may leave a trust for your spouse’s living expenses or your children’s schooling. You may also restrict your children’s or grandchildren’s access to their inheritance until they are older and wiser and will hopefully put it to good use.

June: Plan for Your Healthcare

In addition to planning for what happens after you’re gone, you also need to have plans for what happens if you can’t make decisions for yourself while you’re hospitalized for a serious accident or illness. Even in close families, family members may disagree about what you want, and doctors may not be able to legally follow their instructions.

To ensure your wishes are honored, consider a living will, advanced healthcare directive, or medical power of attorney. These documents allow you to designate a trusted loved one to make decisions on your behalf with full authority. You can also include any specific treatments or end-of-life options that you want your agent to request on your behalf.

July: Designate a Financial Power of Attorney

Like the person you select to make your healthcare decisions, your financial power of attorney will step in if you’re unable to manage your finances. A full durable financial power of attorney gives your agent the ability to manage your bills and assets if you’re ever temporarily or permanently incapacitated.

You can also use a financial power of attorney when you’re still able to care for yourself to some degree but need extra help with certain tasks. For example, you might sign a limited scope power of attorney allowing a loved one to manage your checking account and pay your bills.

August: Look Into Life Insurance

Life insurance is another tool you can use to provide for your family financially when you’re unable to. Many working people opt to buy a policy large enough to replace their expected future income to protect their spouse’s and children’s lifestyles that were planned around that income. You can also use life insurance to guard against things like medical debts from reducing what you can leave to your family.

As with your other assets, you will need to name one or more beneficiaries in your life insurance policy or provide for the cash value of the policy when you write your will.

September: Plan for Estate Taxes

Estate taxes generally only affect families with multi-million dollar net worths, but you still need to be aware of them. Estate taxes can be particularly devastating when your net worth is mostly in real estate, a business, or other non-liquid assets. This type of situation often forces a family to sell a treasured home or multi-generational business to pay the tax bill. By planning how you structure your estate ahead of time, you can avoid taxes or at least make sure your family will have the ability to pay them.

October: Protect Your Business

In one sense, a business is like any other asset. You can leave it in your will to a loved one, or it can be part of your general estate to be divided up between your heirs.

However, businesses also have to be maintained if they are to continue to provide for your family. The death of an owner or key employee can be highly disruptive to the business and possibly even put it out of business. You should create a succession plan that provides for continuity of operations no matter what happens and that also gradually prepares your loved ones to follow in your footsteps if that’s your goal.

November: Organize Everything

Your estate plan is no good if no one knows about it to put it into action. Keep all of your important documents together in a fireproof safe that your family knows the location of. You may also wish to leave copies with your attorney or in a bank safe deposit box. Again, tell your family.

When you have a medical power of attorney or financial power of attorney, give copies to your doctors or banks in advance. Don’t forget to give them updated documents if you change or cancel your existing plans.

December: Review Everything Each Year

When you stop to reflect on another year gone by, think about how the changes during the year will affect your family’s future. New children may be born, others may grow up and no longer need as much help, and you may have new wealth to consider. While you don’t need to redo your estate plan every year, you should update the relevant portions of it after major life changes so that it continues to meet your goals for your family.

Estate Planning with Lilac City Law

Lilac City provides a full range of estate planning services and can help you develop a comprehensive plan for you and your family. We can help you put it together over the next year or help you get it done even faster. To learn more, contact us now to schedule a consultation.

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Is Your Last Will and Testament Legally Binding?

According to a recent survey, 60% of people in the US do not have a will or a plan to make one. 

Accidents happen and you do not want to leave your loved ones with nothing. But your will must be legally binding if it is to be enforced.

You are no lawyer, though, so it can be difficult to determine whether your will is enforceable in a court of law.

Is your last will and testament legally binding? Here are 4 questions to ask yourself.

Do You Have Witnesses?

Perhaps the most important part of making your will legally binding is having witnesses. In most states, you are required to have at least 2 witnesses, while some states require 3.

Additional witness requirements include:

  • Witnesses must be disinterested parties, meaning they are not named in your will
  • Witnesses must be 18 or older
  • The lawyer who drafts your will cannot be a witness

Some states, including Massachusetts and California, allow you to invite witnesses who are named in your will. Further, some states allow you to execute a legally binding will in the complete absence of witnesses. Make sure you know what your state requires.

Are You of Sound Mind?

You must be of sound mind when you sign your will for it be enforceable by law. Being of sound mind implies that you were not coerced into creating the document. It also means that you can understand what you are signing away upon your death–and who you’re signing it away to.

Keep in mind that this requirement does not rule out individuals who currently suffer or have suffered from mental illness. As long as witnesses can attest to your lucidity during the making and signing of your will, it will be legally binding.

Have You Signed?

For your last will and testament to be legally binding, it must contain the testator’s signature. Your signature must be in your own handwriting and appear at the very end of the document. Additionally, you should date the document as the day you added your signature.

If you are physically incapable of adding your signature to your will, no worries. You can have someone else sign your will in your place. But some courts will require notarization via witnesses to prove the alternate signatory acted in good faith and with your permission.

Are You 18 or Older? 

You must be 18 or older to file a legally binding will. However, emancipated minors may file a will. Emancipation usually applies to individuals of 16 or 17 years of age and implies that you are no longer dependent on your parents. 

Other exceptions to this rule may apply to:

  • Individuals younger than 18 who are married to a partner who is 18 or older
  • Individual younger than 18 who joined the military
  • Individuals younger than 18 who are of positive net worth and own considerable assets

None of these exceptions apply to you? Then you will have to wait until you turn 18 or file for emancipation from your parents to file a legally binding will. Unless you live in Georgia or Louisiana, where you can file a will if you are under the age of 18.

Where to Make Your Last Will and Testament 

Do not want to take the risk of a last will and testament that is not legally enforceable? You need an estate planning attorney who understands your needs.

That is where Lilac City Law comes in.

Do you live in the Spokane, WA State, or Northern Idaho and need to file a will? Request a consult with Lilac City Law today to get started. 

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Do Not Forget Fido: What to Know About Including Pets in Your Will

Did you know about 85 million families own a pet in the United States?

It is no wonder that with so many fur babies people are looking at ways to make sure their pets are taken care of in case of sudden death.

A common question from pet owners can you include pets in your will?

What happens to my fur baby when I pass on?

Keep reading to learn all about including pets in your will.

What to Know About Including Pets in Your Will

Pets have shorter life spans than humans which is a reason not many people plan in case of sudden death, or illness from the owner. What if you end up with a sudden sickness and pass away before your fur baby? 

Plan Ahead

Planning ahead will give you peace of mind just in case something were to happen you have them taken care of and cared for. If your pet is not in your will or estate planning, they might be left without a loving home or might suffer.

While a pet owner does not consider their pet a piece of property that is what the law recognizes them to be. Some people do a verbal agreement, but this might not assure you that it will be followed through.

Include Your Fur Baby in Your Will

Legally drafting specific instructions on your will is the only assurance that your fur baby will be taken care of. The first thing to know is that since pets are considered property you cannot leave any money or property directly in your pet’s name. You should leave funds to the person you choose to take care of your pet with specific instructions that the money is to be used to care for your pet.

You can choose a sum amount to give the person along with a request to please use the funds to take care of your pet. Keep in mind that even with requests to please take care of the pet the person will not be under legal obligation to take care of the pet. For this reason, make sure you select someone you trust.

Pet Trust

Every state in the United States including Washington DC has a law for establishing a trust for their pet. A trust will allow for monitoring pet owners requests and enforcing those requests.

You would create a trust where you establish who the trustee and the beneficiary are. The trustee will be the person that you give the assets to care for your pet and the beneficiary will be your fur baby.

Make sure you consult an attorney that deals with estate planning to make sure you fill the paperwork out correctly and also for their advice on the amount you choose so that other family members do not request to modify the trust if they feel it is too much.

Have Peace of Mind

Setting up your will while you are still healthy and including your pet will give you peace of mind. You will be grateful in the event of a sudden terminal illness that you have one less thing to worry about.

Are you looking for help from an attorney knowledgeable in estate planning? Contact our office today for a consultation and more information

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Living Trusts vs Wills: What is the Difference And What is Best for You?

You have worked hard to secure your future and those of the people you love. You want to control what happens to your assets after you die.

There are several approaches to making sure your assets are dispersed consistently with your requests.

Maybe you have heard of these two legal instruments, but no one ever explained how they are different to you.

So, what is the difference between a living trust vs. will? 

Read further to find out which approach to estate planning is best for your situation.

What Is a Trust?

These tools are sometimes called living trusts because they provide both before and after death asset management.

A living trust allows you to specify where your assets go and when your heirs can access them. You can also use a living trust to manage your property in the event you become injured or disabled and cannot do it yourself.

Living trusts are categorized as either revocable or irrevocable. A revocable trust means you can change the terms any time during the grantor’s life. Irrevocable trusts require you to permanently surrender any rights to revise the trust after it is established.

What Is a Will?

A will is a written legal document that specifies how you want your assets dispersed after you die. A will can be canceled as well as revised at any time during your lifetime. Wills identify a guardian for your kids in the event of your untimely death.

Will vs Living Trust; What’s the Difference?

Both wills and trust are similar in that they address your plans to distribute your property once you die. Before you choose one, study these following differences to find which works better for you:

Probate Court Proceedings

Wills are subject to probate court proceedings. Probate is a division within the judicial system that ensures that a deceased person’s property is allocated to the right beneficiaries. The court will also make sure that the deceased’s debts are all paid off.

Public Disclosure of Information

Certain cases filed with a court system can be viewed by the public. Probate cases are one of them. When a will is submitted to the court, anyone case request to see the filing at the court clerk’s office and view what’s included.

Information included in living trusts stays confidential. Only beneficiaries who have access to trust files can see this information.

Living Trust vs. Will: Which One is Best?

So which method is best for you? Here are some considerations that might influence your decision:

Marital/Family Status

If you are married, wills can transfer your assets to your spouse. If you have young children, a will can transfer their guardianship if both parents pass away.

Current Health/Age Status

Living trusts are not necessary for those who are healthy and at middle age. They set parameters to manage your care and property in case you are not able to.

Time Commitments

Managing a living trust can be a big time commitment. Living trusts can only disperse assets that you actively place into it. You must continually change legal ownership of all your assets like your cars, bank accounts or businesses to the name of the trust.

Types of Assets

If you own a business or other enterprises, you do not want to tie up operations while probate matters are finalized. Sometimes probate cases can take years to settle.

Next Steps

Are you planning your estate? If so, check out these helpful estate planning worksheets to help you through the process. If you are still unclear about a living trust vs. will, give us a call.

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Dying without a Will: What Happens to Your Family and Your Estate?

You might not want to think about your mortality, but getting your affairs in order may be more important than you think. 

No matter how big or small your assets, whether you’re single or married, or even whether or not you have children, it’s essential that you have a will that designates what happens to your money and property after death. 

If you end up dying without a will, you’ll leave it to the courts to decide who gets what. 

Don’t be one of the 46% of Americans without a will. Here are some of the things that might occur if you find yourself dead without a will.

Family Members Will Fight

A death in the family doesn’t bring out the best in people. Regardless of how much (or little) you have in terms of assets, it’s likely that your close family will dissolve into fights. 

Children might argue about who deserves the money more or come to blows over your favorite clock or nicknack… Relatives might say that you cared about them more and so they deserve part of your estate, and so on. But ultimately, this decision can be made by you today (and save everyone a lot of grievances! It might even save the family.

A will is an easy way to cut through the fight and make your desires clear. It is your money—and it is up to you where it goes.

Sentimental Items Will Get Complicated

Another issue that might arise is the issue of sentimentality vs. practicality. While the courts might be able to assign a monetary value to all of your assets, you cannot usually place value to sentimental objects.

For example, items like family heirlooms or engagement rings might be hard to pass down. Do you give it to one of your children, another family member, or sell it for money?

It can get even more complicated. If you give it to one of your children, is their share of the estate reduced by the value of the ring? Can you compare the value of cash to the value of a sentimental object?

By leaving instructions on the sale, preservation, and ownership of your valuable objects, you will make this whole situation a lot simpler.

Your Estate Will Be Hit with More Taxes

A will can even protect you and your estate from taxes.

The federal estate tax will not hit most Americans; approximately the first $5 million of an estate is tax exempt. The rest will be taxed around 40%.  But you cannot predict what future legislation will say in this regard.

Moreover, some states have their own regulations for estate taxes. And these state-level exemption levels can be a lot lower than the federal-level exemption.

If you do not have a will, you will lose tax benefits like marital deduction, which lets your surviving family members inherit your entire estate tax-free. Your estate may also be divided according to a state formula–which will subject parts of your assets to taxes.

The Risks of Dying Without a Will

Too many Americans find themselves unprepared for the event of a disaster or major death in the family. Dying without a will could leave your assets scattered and your family fighting for years after your death. 

Give yourself and your loved ones some peace of mind. Contact us today to take the first step towards planning your estate and getting your will set for the future.

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The Advice for Writing a Will That Everyone Should Follow

You do not know what is going to happen tomorrow.

Because of that, you should not put off writing your will until your “old age.” This advice is especially true if you have children. 

If you were to pass away unexpectedly, what would happen to your kids? If you have a Last Will and Testament, you can definitively answer that question. 

A will tells your loved ones what you want to be done with your assets. That is why it is so important to write a will as soon as you can.

The Parts of Your Will You Need to Think About

There are several different elements of a will you should be aware of. You will need to spend time thinking about these things and choosing some loved ones to include in the will. 

Your Assets to Be Identified in Your Will

These are your belongings. They are the things you are willing to other people. They can include personal items, property, bank accounts, investments, and additional money. 

The Beneficiaries to be Identified in Your Will   

Beneficiaries are the people who will receive your assets. These might be children, family members, close friends, and organizations or charities you want to support. 

The Guardians to be Identified in Your Will 

If you still have young children, you will need to choose a guardian who will take care of them if you pass away. It may be the surviving parent, but you will also want to pick a back up guardian in case something happens to both parents. 

The Executor to be Identified in Your Will 

This is the person who’ll make sure your assets are divided in the way you want them. Make sure this person is someone you trust. 

Advice for Writing a Will You Should Follow

The exact elements of a will can vary depending on what state you live in. However, there are some pieces of advice everyone should following when writing a will. 

Here are a few examples. 

Be Specific About assets, beneficiaries, guardianship and other wishes in Your Will

Try to be as specific as possible when writing your will. This can get tricky if you have a lot of children, have gotten remarried, or if you have step-children.

For example, let’s say you got remarried to a second spouse. You should not leave all your money to your second spouse and hope they leave it to your children when they pass away. Your second spouse might give the money to their own family instead. 

Write exactly what you want each person to get. 

Store Your Will Properly 

You cannot write a will then tuck it into your desk drawer. You have to make sure your will is somewhere people will find it when you pass away and somewhere it stays protected. 

It’s a good idea to keep your will (and other relevant documents) in a firebox. At Lilac City Law, we also help our clients maintain their wills digitally.

Update It Often

You cannot write a will once and be done with it. You should go back through your will at least every five years and make necessary changes. 

There are also other circumstances that mean its time to redo your will. 

If you do not update your will, your assets might not be divided in the way you intend. 

Don’t Do It by Yourself

You should never try to write a will by yourself. A professional estate lawyer understands the appropriate laws and can ensure you are not missing anything. They also know when the laws change and can let you know it is time to update your will. 

Although it might seem easy to write your own will, you may end up missing important elements. 

Advice for Writing a Will Everyone Should Follow

It is never too early to start writing a will. If you have a family and do not have a will yet, writing one should be your next priority. 

Do you need some help getting started?

Make sure you take a look at our family estate planning services and do not hesitate to contact us for more information. 

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It’s Not a Male Thing: Why Married and Single Women Need a Will

As you  become an adult, one question you may have is “who needs a will?”. 

The answer is everyone!

Everybody dies and almost no-one knows when.

It is a common misconception that only certain people need wills.  Every woman (and every man) should have their end of life documents ready and handy, regardless of their age. 

Women & Men both need a will.  Here are some examples of why.

You Need a Will if You Have Children

Who needs a will? Anybody with children, especially if those children are still minors. Often, the only place custody is discussed in regards to end-of-life planning is in a parent’s will 

If you do not have a will or your will does not designate the guardianship actions to be taken with your children, a court will end up deciding on your behalf.  

The courts do have a protocol for these situations, but it all depends on circumstance, and it is not a guarantee that your family or relatives (even the other parent) will take over custody.   

If you die and the other biological parent is still alive, capable and willing, the children will likely go to them.  However, if, for any reason, the other parent is not capable of caring for the children, the court will try to find the closest capable and willing relative to become the guardian of the children.  If there are no capable or willing relatives, your children will end up in foster care.

You Need a Will to Avoid Family Infighting

If you have any kind of estate (any property or assets), there is a risk that your family will argue over it. Stories abound of families tearing themselves apart of potential inheritance, and some never recover. 

In fact, Forbes believes that about $1 trillion will be inherited every year on average until about thirty years from now. Whether this trend is continued beyond that is unclear.

What is clear is that with savings and assets to pass down, families often get to fighting and splitting up over objects and bank accounts.

You Need a Will to Name an Executor 

One specific issue that can be avoided by having a will is a struggle over an executor. An executor is a person chosen by you to distribute your estate.

An executor needs to be someone who not only understands money but who is unlikely to lie or cheat others out of what is rightfully theirs.

If you want to avoid any potential issues by having everyone paid equally, regardless of who the executor is, this needs to be specified in the will.

You Need a Will to Lay Out Specific Instructions

There may be some aspects of your estate that you have specific wishes for that go beyond who owns what. For instance, maybe there is a charity you support or a business owned by you or some other member of your family that you wish to contribute to.  You will need to lay this out in your will. 

Another example is if you own shares of stock, and you want a decision on the stocks (or vote on shareholders’ rights) decided a certain way. Your wish will also need to be stated in your will.

Who Needs a Will?

Who needs a will? Everyone.  Both Women and Men.

No matter how small you think your estate may be, you have something that can be passed on to your family or loved ones.

Remember, there are many purposes of a will, but above all else, a will is meant to care for family members. 

Establish Your Will Today

If you want to know more about getting your estate planning in order contact us today. 

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Aretha Franklin Did Not Leave a Will

Aretha Franklin Did Not Leave a Will

Many of us were saddened by the news that we lost a great singer, Aretha Franklin, on August 16, 2018. She was known as the “Queen of Soul” and her family saw her as the rock of their family.  Aretha Franklin died at the age of 76 after fighting advanced pancreatic cancer. 

What may be even more surprising than her death, is the fact that she did not leave a will. 

What does this mean for her estimated $80 million estate? Will it go to her sons or other family members? What about her lawyer, agent, and other people who help her career? Is there such a thing as too rich or too poor to have a will?

What a Will is and Why it is Important

A will is a legal document in which:

  • you name the beneficiaries of your estate
  • designate how your estate will be divided
  • name a guardian for your minor children

It is important to have a will whether you are a millionaire or if you are living from paycheck to paycheck.  It allows you to decide who will be included in the division of your estate.  If you do not have a will set up, then it will be up to a judge to determine how your estate is divided as well as who will take custody of your minor children.

In the case of Aretha Franklin, under Michigan law, if an unmarried person dies without leaving a will, then their assets will be divided equally between any surviving children.  Aretha Franklin has four adult sons, but that has not kept other family members from trying to get their cut of her wealth.  Her niece has also decided to file to be appointed to be the personal representative for her estate. When you do not leave a will, it opens it up for other family members to fight over what they believe is their share of your estate.

If you have a will, then the judge will go with what your wishes are, and it will reduce the fighting between your loved ones.

Why Not Everyone Has a Will

Many people know that having a will is important, but they put it off.  When you are younger, it is not something you want to think about.  Many think that making a will is not something you will need to do until you are older.

Even after getting older, many still do not create a will.  They either just do not get around to it, or they think that their family will not fight over their estate.  Others, are fine with the probate judge deciding.

Unfortunately, some circumstances cause us to die before we get around to writing our will.  It is important to have a will no matter what age you are.  You can always adjust it as you get older or as your circumstances change.

What Happens if You Do Not Have a Will

If you do not have a will when you die, then the state will determine how your estate is divided.  Each state has its own set of laws, so how it gets divided depends on what state you live in. Typically, legal spouses, children, grandchildren, parents, and siblings will be included in who gets a portion of your estate.  Most states do not recognize charities, friends, and unmarried partners. They will not receive anything unless you have a will.  If relatives cannot be found, then your assets may be retained by the state.

How Having a Will Helps

If you do not have a will, then your family will have to go to a probate court.  The probate court will appoint someone to oversee your estate and divide your assets.

Having a will is about protecting your family.  You will not be around to see it executed so think of them and what not having a will set up will put them through.  You do not want to leave them to sort your assets and pay court fees after having to deal with your loss.

In Aretha Franklin’s case, her sons are entitled to her estate, but there may be a long battle with other family members.

Get Help Setting Up Your Will Today!

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Is it True that Prince Didn’t Have a Will?

Celebrate Your Military Family, Improve Your Military Will

Celebrate Your Military Family By Improving Your Military Will

There’s an old military adage that says, “No good plan survives engagement.” 

While this quote’s timelessness must lend credit to its applicability in battle, it transcends its martial roots and applies equally as well to law.  Especially Estate Law. 

Take for instance the idea of a Last Will and Testament.  A Will is probably the most well known and well-understood items in an estate plan.  The purpose of the Will is to make sure your assets go where you want them to go after you pass away.  It need not be too complicated, and in many cases, Wills have been as simple as notes scratched on a piece of paper from the deathbed of the person writing the Will.  <- We do not advise this, but if it is a bad idea and it works, is it indeed a bad idea?  

Today, and this month, we are celebrating the Month of the Military Kid.  As a law firm, this got us thinking, what can we do to celebrate?

 Share updates and resources, check.  Spread the good word, check.  Educate…  we can do that!  That is what this blog is all about.  Getting good information, usable information, from our brains and into a forum (this forum!) where readers can make informed decisions.  In that spirit, the purpose of this article is to answer for Veterans and those still serving, why their Military Will is not enough protection for their family, and show them how to fix this.  

Your Military Will Just Is Not Enough

It’s not your fault, and it is not a bad start.  But the hard fact is, your military Will is not enough protection for your family.  Here’s why.

As we mentioned above, a Will of any type is designed to designate who will get your assets when you pass.  The process begins with your death and then must go through a legal action known as probate.  Probate is the bane of estate planners for several reasons.  The top of these reasons being time, cost, messiness.

Probate is an Unnecessary Pain

Death is a hurry up and wait process when probate is factored in.  You are scrambling around trying to figure out last arrangements (if you haven’t set up an estate plan ahead of time), trying to figure out the finances of paying for burial or cremation, ceremonies, and getting family and friends together.  Then, you have all the assets of the deceased to figure out what to do with.

Houses, cars – are they owned?  Who has the right to sell them? Trinkets, storage items, family heirlooms, tv’s, jewelry, books, intellectual property, investments…the list is endless.  And it is going to take 6-9 months to figure out who has the right to even make decisions on these assets.  That is 6-9 months to work through probate, assuming the issue of ownership is uncontested!

Let’s set aside the time suck that is probate on Willed assets and work our way through costs.  Get ready to pay up to 10% of the assets of the estate just to transfer them to where they are supposed to go!

If you are keeping track that’s thousands of dollars and 6-9 months so far.  Again, IF the declarations in the Will are uncontestable.  Do you have an ex-wife that owns half your house but your adult kids and your current fiance’ are the ones named to inherit your assets in your military Will?  How’s that going to be settled?  Who is going to help you (or really them) to figure it out?  And how much is it going to cost?

Wills In the Military

Being honest, we are pointing out the drawbacks of Wills because there is another way for young families to prepare for the future. An approach that can release them & you from the turmoil of probate, the financial burden of an unnecessary legal process, and avoid the messiness of contested assets altogether.   So why does the military get service members set up with Wills in the first place?

For one, Wills are relatively straightforward and easy to set up en masse.  Did your command order you and 100 other people to set up your military Will through JAG?  Was it a pre-deployment Will or something set up for family day?  If so, it may be very limited in scope and entirely out of date if any one of a hundred or more things have happened since it was penned.

New kids, new property, new assets, new marriage situations, and more are all reasons to update a Will.  And in reality, updating a Will is not as simple as crossing off an outdated item and adding a new issue.  You are likely going to have to re-write the whole thing.

So, while military Wills get the job done, temporarily.  They do not grow with you and your needs, and if it has been a year or more since you established yours, you need another option.

Another Option – Let’s Talk Total Estate Planning

Wills are a means to an end and can be effective if you use them in the right way.  However they do come with drawbacks, and for a young military family, there are strong reasons to consider other paths for estate planning.  Especially, trusts, powers of attorney, and other options.

Recall from this discussion some of the drawbacks of Wills, and particularly military Wills.  

  • To transfer assets upon death requires probate, which can take 6-9 months;
  • Probate can cost up to 10% of the assets of the deceased;
  • Disputes over the Will can lead to painful situations which are only solved in probate court; and,
  • Wills only cover items and beneficiaries specifically.  Any change to your situation and family might change the whole dynamic of the military Will.  

A trust on the other hand

  • Can transfer assets almost immediately upon death, or even before passing if it is set up to do so. 
  • Will not require anyone to pay lawyers or a probate court.  Once the trust is set up the only cost is modifying it, if necessary.
  • Trustees (recipients of the trust) are decided between you and your estate lawyer when drafting and updating the trust.  It is very clear who your trustee(s) will be and under what conditions they assume control of the trust that your assets have been placed in. 
  • You can set up your trust to be disbursed to certain people in certain circumstances.  If you want your brother to receive part of your assets upon passing but not his spouse, you can make that a condition at any point.  
  • Lastly, a trust is private.  The process of going through probate opens up the details of your assets to the public eye.  Your beneficiaries could have unscrupulous suitors showing up at their door if you have a sizable estate to pass on.  A trust being disbursed to the trustee(s) in the manner you wanted is not handled in the public eye.  

Should You Scrap Your Military Will? 

You already know there are no absolutes in life.  And as we have discussed in this article, this sentiment is true in death too!

Should you scrap your military Will wholesale?  Maybe not.

At the very least, it is a fantastic jumping off point to discuss what else you should be considering or should have already considered.

The good news is that while you are still alive, it is not too late!

We Help Military Families Get Their Estate Plans In Order

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Estate Planning: A Key Baby Boomer Family Value!

Estate Planning: A Key Baby Boomer Family Value!

If you were born between 1946 and 1955, you are considered to be a “Baby Boomer.”

If you are a Baby Boomer do not already have an estate plan established, you need one for your own sake and for your family’s.

So, what is an estate plan and why is it important?

In this article, we are going to discuss the basic components of a good estate plan, and why it is important for you and your family to have one.

Estate Plan Fundamentals

Estate planning is the process (and paperwork) of preparing your estate (no matter how big or small) for when you die or otherwise become incapacitated.  There are several different aspects of comprehensive estate planning and what you put in yours will be dependent on your needs, assets, and vision.

The ultimate goal of estate planning is to keep courts out of your assets and personal planning and to ensure that your family knows your wishes in any eventuality. If you do not set up an estate plan, it is very likely that a court will be the one who chooses how your assets are divided and who will take care of your health and financial decisions should you become incapacitated.

Let’s look at each part of a comprehensive estate plan more closely.

Last Will & Testament

A will is a legal document that says how your property will be distributed at the time of your death.  It is revocable and can be amended at any point while you are still alive.  If you have minor children, you will name their guardian in your will.  Here is more information on the components of a last will and testament. 

Trust

A trust is used for both while you are alive (if you become incapacitated) and/or after death.  The effect of a trust is keeping a court out of intervening to manage or distribute your estate.  There are also significant tax planning purposes for establishing a trust for your assets.  If you become incapacitated, whomever you name in your living trust will become your trustee and manage your estate.  The only parts of your estate covered in your living trust are the ones you put into the living trust. To learn more about a trust, you can see our article “6 Reasons to Establish a Trust as Part of Your Estate”.

Health Care Directives

Health care directives will typically include a health care declaration (living will) and a power of attorney for health care (POA).  These documents allow you to choose someone to make your health care decisions for you if you are unable to.  You can state when you want them to start and end and the conditions that should be met before granting someone else authority to make decisions on your behalf.  

Financial Power of Attorney

A financial power of attorney is similar to the health care power of attorney.  You can choose someone to make your financial decisions, instead of or in addition to healthcare decisions, on your behalf if you are unable to.  You may also choose the same or an altogether different person than you did for your health care power of attorney to act on your behalf.   

Beneficiaries for Your Bank and Other Accounts

Naming beneficiaries for bank accounts and retirement plans ensure your account are automatically “payable on death” to your beneficiary and allows the funds to skip the probate process. Likewise, in almost all states, you can register your stocks, bonds, or brokerage accounts to transfer to your beneficiary upon your death.

Plan for End of Life and End of Life Events (Funeral)

Make sure your family and loved ones know what your end of life wishes are regarding organ and body donation.  Also, make it clear whether you would like to be buried or cremated.

Instead of doing a funeral prepayment plan, consider setting up a payable on death account at your bank and deposit funds into it.  The account will pay for your funeral and any other related costs.

Why Estate Planning is Important

An estate plan is important for anyone at any stage of their life.  Estate planning will help your family members and loved ones before and after you pass.  If set up well, your estate plan will also ensure more of your wealth gets to people that you love, and less is taken away in probate, and other needlessly expensive and challenging court/tax processes.

Remember, even if you are not a Baby Boomer, it is important to think about estate planning too!

Begin Your Estate Plan Today

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