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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Maximizing Tax Umbrellas for Estates

You have made it your life’s work to leave your family with substantial assets to provide for them after you are gone. Legacy is extremely difficult to build, but the estate tax law in the United States does not seem to take this into consideration.

Estate tax can rip as much as 40% of your family’s assets from them, depending on the value of your estate and its location in the country.

Right now is the time to protect your estate from federal and state taxes. If you take the time to create a well thought out plan, you can protect a great deal of the wealth than you have earned for your family.

Here are some powerful tips that you need to know.

Knowing Whether Your Estate Will Be Taxed

Estate taxes are not the same everywhere. Depending on the state you reside in, you do not have to be ultra-wealthy in order to be harshly taxed. Federal estate taxes have a minimum threshold that is in the million-dollar estate valuation, but states like Washington or Idaho can very easily tax middle-class families. If you are leaving behind any sort of investments, bank accounts, businesses, property or life insurance packages, the estate tax applies to you regardless of the size of that asset.

Also note, valuation is often subjective, and it is a discussion you should have with your estate planning attorney.  When it comes to estate taxes, you do not know whether the state will try to value your real estate or businesses higher than other sorts of appraisals – you should not leave it up to them to determine a fair valuation.

Geography is also something to take into account – if you live in a premium real estate location, just a couple of properties can push your entire estate value through the roof.  Sometimes this comes as a big surprise to the family after the passing of a loved one.  For example, the children of farmers often find themselves stuck with huge tax bills upon the death of a matriarch or patriarch because of the hidden value of the land on which the farm sits.

Providing Gifts and Charity the Smart Way

If you reduce the value of your estate through gifts to your children and grandchildren, that value cannot be counted against you for estate tax purposes. Every year, individuals save on the estate tax bill by giving away tens of thousands of dollars to their loved ones.

Moreover, making donations to charitable organizations is another great way to reduce your estate tax bill. These donations may also have an additional tax deduction attached to them. Donating to charity is a great way to ensure that the money you earn is used in the way that you prefer after you are gone.

Consult with your lawyer to learn how to maximize this benefit for your present taxes, as well as the ones that will impact your family after your passing.

Knowing When to Use Your Estate Tax Exemption

Everyone has a large (multimillion-dollar) tax exemption for estate taxes that can be used at any time, not only at the time of death. Knowing how to use the exemption can be an essential tool for reducing a tax bill before passing an asset on to a child.

So, what exactly is the estate tax exemption? Let’s say that you have an asset or an account that you expect to grow exponentially in the coming years. Right now, the value of that business is less than the estate tax minimum. In the future, you expect it to grow beyond this exemption. (In most cases, this type of asset will be a business.) Because you can use the lifetime exemption at any time, if you give away the business to a child or grandchild before it passes above the estate tax minimum limit, there will be no estate tax on the asset when you pass on.

Using a Trust Structure for Your Most Important and Valuable Assets

Establishing a trust is one of the best ways to avoid big out of pocket estate tax payments. Many people may hesitate at the idea of handing over large chunks of assets to others inside of a trust. However, the rules say that the person managing a trust can be a trusted family member, or even yourself.

A trust is one of the most sophisticated tax umbrella structures available to individuals. As such, it requires careful planning and coordination of care to establish & employ correctly. The type of trust that you choose can also make a difference.

If you are serious about preserving your legacy, it is essential that you craft your trusts with the right legal help.  

Using Life Insurance to Protect Your Assets

First, this is not financial advice.  However, life insurance is a conversation we often have with clients and there are certainly a lot of tie-ins to your insurance policies and a healthy estate plan. 

Some of the best life insurance policies, for high net worth individuals (HNWIs) for example, may include provisions for paying off any estate taxes that are due at the time of death. To enable this kind of benefit, you might want to, again, set up a trust.  Regardless, these financial maneuvers and plans should be discussed with your estate planning attorney. 

In short, using life insurance smartly is a great move for HNWIs who would be concerned about the effects of estate taxes on their heirs inheritance(s).

Additional Items to Consider Regarding Your Estate Taxes

Now that we have gone over a few strategies that you can employ to shield your assets from estate taxes, let’s go over a few things that you need to know so that you can go to your attorney as informed as possible.

  • A relatively new tax law (The Tax Cuts and Jobs Act) allows you to give away slightly over $11 million over your lifetime in gifts that will not be taxed subsequently on your estate. This law will only last until the end of 2025. After that, it will fall back to $5 million, meaning that anything more that you give away may get taxed by the IRS starting in 2026.
  • If you are able to get your gifts to your loved ones before 2025, the United States Treasury and the IRS are likely to allow those transfers to stay as tax-favored gifts.
  • However, depending on your situation, using the “step-up” basis may actually save your family more money. The step-up basis allows an asset to be valued at its cost basis at the time of passage rather than at the time of acquisition. Stepping up the cost basis wipes out any paper profit the asset may have generated in the past, reducing the basis for the estate tax.

What Is the Answer? Get the Help That You Need Right Now.

We are here to help you with properly managing and maximizing the tax umbrellas available to you for your estate.

Protecting your estate is an ongoing responsibility – one that will require experienced legal assistance for the entire process of establishing your estate plan and modifying it over the coming years and decades, as necessary.

If you are ready to protect your hard-earned lifetime work, contact us today!

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It has Been Awhile: The Top Signs It Is Time to Update Your Estate Plan

Are you thinking about updating your will? Have you had some big lifestyle changes that may affect your future finances? Have you always had a will but not kept up on updating it as your life has changed?

If you have answered yes to one or all of these, it may be time to change or update your estate plan

Keep reading for some more detailed reasons why your will might need to be changed. 

Your Relationship Status has Changed

In this day and age, a person’s relationship can change a lot about their lifestyle. 

One of the biggest reasons to update your will is if you have had a drastic change in a relationship. This could range from getting married, getting a divorce, to losing a spouse.

Marriage

Making sure your will and estate plan reflect the relationship(s) you are in is very important. If you have recently gotten married, keep in mind that a new spouse does not necessarily have to inherit everything should you pass, but it may be important to you to make sure they are reflected in your new will.

Divorce

On the same hand, getting a divorce makes updating a will essential. Make sure you speak with your estate planner after a split and discuss all options for removing an ex from your estate documents. 

Widowhood

Losing a spouse is hard. If you become widowed, you may inherit from them. This means that inheritance must be reflected within your new will or trust. 

You Have Had a Child

Growing your family will reflect on your estate as well. If you are thinking about having children make sure you speak with an estate planner about how this will change your will.

Once you have had a child, making sure they are added to your will is important. Updating it each time you add a new member to your family will also guarantee should the worst happen that they are well cared for in the future. 

You Have Changed Jobs

Sometimes a job change will affect your estate. A significant pay increase or a job loss should be reflected in any will you have drawn up. Make sure you speak with your estate lawyer any time a job change occurs. This will keep your finances safe in the future. 

It is also important to keep in mind that estate laws are not universally recognized throughout the country. An estate law in California will not be the same as in Washington state.

If you have moved to another country you may have to change your will accordingly. Contact an estate planner immediately once you have settled in a new home.

You Now Own Property

Nothing changes your life more than suddenly becoming a homeowner. This is a significant financial change that will need to be taken into consideration when you are redrafting your will. 

You will need to figure out how to pay it off should you pass. It will also need to have a set inheritor that you must document carefully. 

Update Your Estate Plan Today 

If you are thinking about big lifestyle changes, it may be time to create a detailed estate plan.

Having a will or plan will ensure your finances are well taken care of after you die. Making sure you work with a professional estate planner will further guarantee your affairs are set in order. 

From marriage to children to owning a home, your life can change at any moment. Having a will that is up-to-date on those changes will give you the peace of mind you need. 

Visit our blog if you’d like to learn more about how estate planning can affect your daily life. 

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Planning Pitfalls: The Most Common Estate Planning Mistakes

The Most Common Estate Planning Mistakes to Watch Out For

Most people do not like to think about their eventual demise, and they certainly don’t like asking uneasy questions about estate planning.

In fact, 6 in 10 adults in the United States do not have a will or living trust.

And that is a problem, considering how many people want their assets to pass on to their loved ones after their death.

Here are some of the most common estate planning mistakes to avoid, and how an estate planning attorney can help you figure out the details. 

Not Understanding How Your Assets Will Pass

One of the most common mistakes that people make is not properly understanding how their assets will pass after their death. 

Many people believe that all of their assets can be passed through a last will and testament. But that is not true.

Certain assets cannot pass through your will at all, such as non-probate assets. These include:

  • Jointly-owned assets with rights of survivorship
  • Life insurance policies with a named beneficiary
  • Annuity contracts with a named beneficiary
  • Bank accounts with a payable-on-death beneficiary named
  • IRAs and other investment accounts for retirement
  • Accounts or property titled in the name of a trust

If an asset cannot pass through your will and there is no alternate plan in place, then it will have to go through probate court after your death–and in many cases, the cost of negotiating through probate court is higher than the value of the asset itself.

Blunders with Your Beneficiaries

The next most common mistake in estate planning is errors associated with beneficiaries. 

We could write a whole article about beneficiaries, but we have narrowed it down to two main problem areas: disabled loved ones and the so-called “problem child”.

The Disabled Loved One

If you have a disabled beneficiary, it is generally wise to work directly with an estate planning attorney to make plans for them.

Your goal here is twofold: you want to leave them an inheritance to protect them, but you also want to ensure that they still qualify for public assistance. 

To be clear: if you leave them an inheritance outright, they may be disqualified from receiving public assistance until they spend the inheritance down to the statutory limit. 

The Problem Child

The other side of the equation is the problem child. 

Ask yourself: realistically, how will your beneficiaries manage your assets after your death? Are they smart with money? Or do they waste it foolishly? 

If your beneficiaries tend to burn through money, that will help give you a sense of how the inheritance will be spent after you are gone, and whether there will be anything left to send your grandchildren to college.

Do not cross your fingers and hope for the best. If you want to leave assets to a beneficiary you know has problems, work with an attorney to develop a plan that can protect those assets from bad spending habits, creditors, or even divorcing spouses.

Having No Plan At All

But the biggest mistake of all? Having no estate plan whatsoever. 

You might think that your life and finances are relatively straightforward. And if your assets are minimal and straightforward, then it is fine for you not to have an estate plan.

Unfortunately, “simple and minimal” is not a phrase that applies to most people’s assets and finances.

If you have any kind of outstanding debt, any property, and more than one person left behind when you die, then the fact is that you need an estate plan. 

We get it. You do not like the prospect of dealing with end-of-life issues. But your family will be worse off if you die without any plan in place.

Avoid These Estate Planning Errors

There are a lot of common misconceptions about planning for the future. But you do not need to let them hold you back.

The key is having a plan. That is where we come in–we are experienced family estate planning attorneys that know how to help parents protect their most precious assets.

If you need help developing a plan, do not hesitate to get in touch today. 

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Five Signs it is Time to Update Your Estate Plan

It is estimated that 58 percent of the baby boomer generation (those between the ages of 53 and 71) have an estate plan in place.

However, once created, many people do not realize that updates may be needed from time to time.

As a person ages and their situation changes, it may also be necessary to update their estate plan.

Do you know when it is time to make these changes?

If not, do not worry. You are not alone. You can learn when it is time to update these estate plans here.

Some Type of Major Life Event Occurs

Has some type of major life event occurred? Do you even know what this is? All of the following would be a major life event:

  • Someone gets married
  • Someone gets divorced
  • Someone is born
  • Someone dies

While the total list is much more extensive, this gives you a general idea of when you may need to update your estate plan. If you are not sure if what you have experienced is a major life event, then it may be a good idea to ask your attorney.

Your Financial Situation Has Changed

Regardless of if you have received some sort of windfall, received an increase in your pay, or have even lost your job, it is important to consider if the change is going to impact your estate plan.

Any significant financial gain or loss will likely require you to update your estate plan to reflect this change.

You Have Experienced a Significant Asset Change

If you move to another state, then it may be necessary to update the documents for your estate plan so you comply with the laws in that new state. It may also need to be changed so you can take advantage of any differences in the law.

If you own a business, a change in control or sale may affect your estate plan. If you currently sell real estate and move the proceeds into an investment account, then beneficiary designations may wind up impacting what passes through your estate.

While this is a short list, it gives you an idea of what to watch for. If you sell or purchase something of significant value, change the nature or status of an investment, updating your estate plan is a good idea.

It Has Been Over Five Years

Time can slip by pretty quickly. You may not even realize how much time has passed since you initially created your estate plan.

It is a good idea to review your plan regularly to ensure no changes need to be done.

Is it Time to Update Your Estate Plan?

If you are not sure whether or not it is time to update your estate plan, then it is a good idea to talk to an attorney. Keep this updated will help ensure that your wishes are adhered to after you pass away.

More information about creating and updated an estate plan can be found by contacting us at Lilac City Law. We are here to help with all of your end of life planning needs.

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Three Reasons Why Millennials Need an Estate Plan

If you are younger than 45 or 50, you may not think you need to worry about estate planning. That is something you do when you start thinking about retirement, right?

Those of us who are young and healthy have our whole lives ahead of us and plenty of time to worry about things like that later.

But the unfortunate truth is no one knows when something might happen to change their plans. Cars crash, people get sick, and sometimes young people die long before their time.

If you are on the fence about starting your estate plan, read on to discover three reasons why you should not put it off any longer.

To Protect Your Children

As millennials start heading into our thirties, many of us have children or have babies on the way. It may seem crazy to start thinking about your own death as soon as your child is born, but it becomes a much more pressing issue at that point. If something were to happen to you, who will take care of your child?

Setting up a will can help make sure your kids are taken care of if you or your partner pass away. Without one, they may go into the foster care system or wind up bouncing from relative to relative as a court sees fit. Some places offer family-friendly estate planning events, so there is no reason not to set up a plan to protect your kids.

To Control Your Health Care

One of the biggest advantages of having an estate plan in place is it allows you more control over your health care. Under normal circumstances, of course, you have a say in what medical treatments you do or do not get. But if you are in a coma or otherwise unresponsive or incoherent, that control will go away.

Having a plan in place can make sure your wishes are respected when it comes to your health care. For example, maybe you hold the view that you would rather die peacefully than stay on long-term life support or live with a debilitating brain injury. Having those wishes down in writing ahead of time can save your family (and yourself) a lot of heartaches and legal battles.

To Give Your Partner Rights

By this point, you may be saying, “Well if any of these things happen, I trust my partner to make the right decisions for me.” And while that is a wonderful thing, what happens if your partner does not have legal rights to make those decisions. Believe it or not, sometimes a person’s partner is not assigned as their power of attorney, especially if you are not married.

If you want your partner to be the person making the decisions if something happens to you, you need to have that down in writing. You can give them the authority to do everything from managing your health care choices to taking care of your children. Giving your partner authority will save a lot of legal battles and the risk that your wishes are not respected if you are not there.

Get Started on Your Estate Plan

Estate planning can be a somewhat morbid business; after all, no one likes to think about their own death. But it is the best way to ensure that if something does happen, your wishes and your loved ones are protected.

If you are not sure where to start the estate planning process, visit the rest of our site at Lilac City Law or contact us using the form below. We provide family estate planning to help you get your affairs in order so you can enjoy your life worry-free. Contact us today to get started on your estate plan.

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How Planning for Being Incapacitated Will Strengthen Your Whole Family & Estate Plan

When you think about it, planning your estate is not about dying. It’s about managing and protecting your assets, and who gets to control them, while you are living.

If you become incapacitated, having an incapacity plan in with your overall estate plan ensures that your best interests are clear. It also ensures your family is taken care of.

Why An Incapacity Plan?

If you become seriously ill or develop conditions affecting your memory, you may not be able to handle your finances without assistance. If you do not have a power of attorney, there could be a delay in handling essential matters such as paying a mortgage or filing taxes. Eventually, someone else will be appointed to manage your affairs, hopefully before you have done permanent damage to your estate.

To get ahead of these potentially catastrophic situations you can designate someone today to manage your affairs, care for you, seek treatment on your behalf, and generally make sure everything is handled how you would (or would have) handle them.

Build Your Plan

When you begin your estate planning, remember the following are essential documents that build your incapacity plan into your overall estate plan.

Living Trust

A revocable living trust is good to have for many reasons, including as security in the event you are ever incapacitated. All strong estate plans include a living trust.

In this trust document, you place assets such as your home, investments, and bank accounts. They move from your name to the trust’s name. You become both trustee and beneficiary.

You manage and use your assets as you always have. A living trust is revocable, which means you can change it later if you wish.

Your trust will list a successor trustee to step in if you die or become incapacitated. Your successor trustee is bound by the instructions you included in the trust.

He or she must manage your assets as you intended. When asked how to create an estate plan, attorneys often recommend living trusts because they provide peace of mind as well as financial protection.

Financial Power of Attorney

As mentioned earlier, the financial Power of Attorney (POA) appoints someone as your agent to pay bills and manage other financial matters. Even if you have a living trust, the POA provides extra securities.

Your POA can be durable, which means it can’t be revoked should you become incapacitated. It can also be springing, which means it doesn’t take effect unless you become incapacitated.

Estate planners understand and can explain the additional advantages of each type of POA.

Medical Power of Attorney

In some states, the medical POA is called a health care proxy or Designation of Patient Advocate (DPA). If you become incapacitated, it gives your chosen agent the authority to make medical decisions for you.

HIPAA Authorization

Federal laws known as th Health Insurance Portability and Accountability Act (HIPPA) are in place to protect your privacy and other patient rights. Medical providers often cannot share your medical information.

If you sign a HIPAA authorization, your medical team can communicate needed information to your family and medical POA.

Living Will

living will is not the same thing as a medical POA. A living will states your wishes when it comes to end-of-life care.

A living will is not enforceable in all states, but it allows you to convey critical information about your wishes should you become incapacitated and unable to express those wishes when it is time.

Contact Your Estate Planning Attorney

If your estate plan does not have all five of these documents, or if you do not already have an estate plan set up, it is time to talk to an estate planning attorney.

Contact Us today to get your estate plan and incapacity plan setup.

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What Guardianship Forms Do I Need To Protect My Children?

What Guardianship Forms Do I Need To Protect My Children?

Anyone with a child should have an estate plan.

 A fundamental part of your estate planning is setting up the appropriate guardianship forms should something happen to you.

Unfortunately, many people do not have an estate plan or guardianship plans because they either have not thought about it or they are unsure how to start.

In this article, we will discuss how to make sure your kids are protected, and the forms you’ll need to think about to establish this plan.

A Will

A last will and testament can be the most important form you can have in your estate plan.

Your will is not only the place for you to outline what happens to your property after you die, it is also where you might name a guardian for your children (or pets), identify someone to handle your property after death on behalf of your children, and identify an executor to manage your property from the time you die until your estate is settled.

A will falls under the umbrella of guardianship forms because whoever you name in your will, will become your children’s permanent guardian after you die.

If you do not name someone, then either a judge (who likely does not know you or your family) will choose who they think will be best, or someone will have to petition the family court to become your children’s guardian.

If you want a specific person to raise your children after you die, then you need to have a will.

To find out how to choose the best guardian for your children, click here.

Temporary Guardianship

Naming a temporary guardian for your children is not something most people think about.  This is especially true if they have already named a permanent guardian.  But there is a good reason to get a temporary guardianship setup.  For instance,  if there is an emergency and your permanent guardian cannot get to your children right away, then your children will go into the state’s care until your permanent guardian can get to them.  This is just adding trauma to trauma – in an already uncomfortable situation for them!

Having a temporary guardian set up will help reduce the stress and anxiety the children may already be going through.  They will be more comfortable with someone they know and trust.  And they can start working towards their new sense of normalcy.

Setting up a temporary guardian is also important if you are going out of town or the country.  Setting up a temporary guardianship will allow your children’s caretaker to make school decisions and medical decisions if needed.

To read more about temporary guardianship, click here.

Letter of Instruction

One more guardianship form that gets overlooked is a letter of instruction.

This is the place where you explain your hopes and expectations for how your children are raised.  These include decisions about your children’s education, activities, and religion.  Be sure to update this letter as your children grow and their interests and needs change.  Also, make sure you share and discuss this letter with your chosen guardian(s) so there are no surprises.

These are the three most important guardianship forms to have for your estate plan to protect your children.  You can read our article What Legal Documents Do I Need for my Estate Plan? to learn more about what other documents you need to have in your estate plan to protect your children and family.

I Need Help Setting Up Guardianship Documents For My Family
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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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