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Friday, January 19, 2018

Insurance, for Your Estate Plan? Take Steps Now To Make Sure Your Legacy is Protected

Summary: Experts agree that most everyone needs an estate plan. Just getting an estate plan isn’t enough; it is important to get a complete and thorough estate plan. By taking the time to ensure that your plan is complete alternate, or backup, beneficiaries and fiduciaries, you can give your plan some “insurance” in the form of protection against something happening to the people you have named in your plan as primary beneficiaries and fiduciaries. This insurance can help you ensure that an unexpected event won’t get in the way of accomplishing your goals and objectives.   

If you look at Google’s dictionary, under the word “insurance,” you’ll find two definitions. The first is the one that probably that probably sprung immediately to your mind, which is a contractual agreement between an insurer and an insured in which the insurer promises to indemnify (which means to compensate for a loss or harm) the insured if any of certain set of covered events takes place.  

The second definition is more general. It says “a thing providing protection against a possible eventuality.” This is the sort of thing that you might think of as “insurance” in the metaphorical sense. When a character in your favorite TV action-intrigue drama talks about an “insurance policy,” chances are he or she is talking about this second definition – something that, if an unfortunate or dangerous event occurs, will provide the bearer with a degree of protection against some type of risk of harm.

It is in this latter sense that your estate plan can benefit from some “insurance.” Everyone who makes an estate plan probably goes over the basics. Who do I want to be my beneficiaries? Who do I want to be the successor trustee of my living trust… or the executor of my will… or the attorneys-in-fact under my powers of attorney? These are all important and essential pieces of the estate planning puzzle and vital decisions you need to make.

However, if you stop there, your plan is still exposed to risk. If you name only one person as your attorney-in-fact under your power of attorney and that person is dead or incapacitated by the time you need an attorney-in-fact to act on your behalf, then that means that you have no one available and authorized to speak for you. This could potentially lead to expensive, time-consuming and stressful court proceedings to get a guardian or conservator appointed for you. Similarly, if you name only one person to be the executor of your estate and that person is unavailable (due to death, incapacity, unwillingness or some other reason,) then your estate could be thrown into extra court hearings where a judge will decide who should oversee the distribution of your wealth. All of these sound like distinct risks of harm, don’t they?

This is where careful and detailed planning comes in. If you have completed a detailed estate plan, then that plan will name, not only your beneficiaries, your executor, your attorney(s)-in-fact and your living trust’s successor trustee, but also alternates to serve as back-ups in each of those categories. These back-ups are the “insurance” for your plan that protects your legacy and your planning goals. Perhaps you want your daughter to serve as your financial attorney-in-fact. However, if she was not available for any reason, you would also be satisfied with your son-in-law serving in that role. By going the extra mile and naming your daughter as your attorney-in-fact and your son-in-law as the alternate attorney-in-fact, then you’ve given yourself protection in the event that your primary designee is dead, incapacitated or unavailable. This “insurance” safeguards your goals and objectives from being thrown into a mess, into the courts or both, just due to something happening to the first person you named.     

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


https://www.youtube.com/channel/UCx9HBYFIYdohfnrfW_XRkIQ      

Tuesday, January 16, 2018

What Happens When You and Your Sole Beneficiary Die on the Same Day?

Summary: In estate planning, going the extra mile often has its advantages. You may not always be able to plan around a beneficiary’s death, even if you engage in regular plan updates, if your beneficiary dies around the same time that you do. You can still protect yourself by going that extra mile and making sure that, in addition to including clear instructions for the distribution of your wealth to your beneficiaries, that your plan also names alternate beneficiaries as well. This way, your goals will not be impaired by an unexpected and untimely death.   

One real-life example of how proper, and properly detailed, estate planning can help was the estate of a 56-year-old Ohio woman named Crystal. Crystal lived with her 85-year-old mother, Willie Mae, in a home in northeast Ohio. One day in late October 2014, Crystal died while at home. Willie Mae found her daughter’s body and the horrifying discovery caused her to suffer a “stress-induced” medical event. Within hours, Willie Mae was dead, too.    

The peculiar nature of the facts surrounding these women’s deaths would eventually lead to estate litigation. Willie Mae didn’t have any type of estate plan, but Crystal did. Crystal had a will that named her mother as the sole primary beneficiary and then named several others as alternate beneficiaries if her mother did not survive her.

As is fairly clear from these facts, Crystal seems to have had a basic but relatively well-thought-out plan. She wanted, as her primary goal, her wealth to go to her mother, for her mother to use and enjoy for the remainder of her life. If that goal could not be realized because the mother died before she did, then she had other people whom she wanted to receive her assets.

The problem arose because the distribution of Crystal’s assets could go two very different possible ways. If Willie Mae did not legally outlive Crystal, then all of Crystal’s assets would go to her named alternate beneficiaries. If Willie Mae did legally survive Crystal, then Crystal’s assets went to the mother and all of both women’s wealth would distribute under the rules of intestacy as part of the mother’s intestate estate. This led one of Crystal’s brothers, who was set to take from Willie Mae’s intestate estate, but was not a named beneficiary in Crystal’s will, to take the case to court, arguing that Crystal’s estate belonged to Willie Mae.

In Ohio, like most states, there’s a law to cover this circumstance. Like estate planning generally, the law of “simultaneous deaths” allows you to take control within your estate planning documents and state the exact length of time by which a beneficiary must outlive you in order to take from your estate. If you don’t name a timeframe in your estate, the state names one for you. In Ohio, the statutory time duration is 120 hours. Crystal’s will did not contain a simultaneous death clause, which meant that the statute’s time period was the one used. Willie Mae died less than 24 hours after Crystal did, which was far less than 120 hours.


That meant that, even though the mother technically outlived her daughter, as far as probate law was concerned, she had predeceased Crystal and Crystal’s wealth went to the people she had named in her will as alternate beneficiaries. Crystal, by taking the time to name those alternate beneficiaries, was able to continue to control her legacy even after her primary beneficiary (her mother) died.     

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Friday, January 12, 2018

Get an Estate Plan to Make Sure Your Planning Goals Will Be Achieved

Summary: Some people's estate planning needs can be met effectively through the rules of intestate succession. The problem is that the percentage of people for whom that is true is very, very small. That number is much smaller than the number of people who currently have no plan and who, if they died today, would have their estates go through intestacy. There are many reasons why you might need a plan. Maybe you have an ex-spouse who you want to have a role in your estate plan. Maybe you have a beneficiary whom you want to receive assets at a future (such as graduation, marriage, etc.) In these and many more scenarios, executing a detailed and well-crafted estate plan is the right way to take control of your legacy. 

Sometimes, a story may involve some very unique facts but still may provide some lessons that can apply to a wide audience. Take, for example, a recent court case from Illinois, which included some unusual facts, but nevertheless contains some estate planning reminders that many should heed.

The case involved a man named Finis, who was in his 60s and who had no estate plan. He did have some possessions that he owned, including a Jeep SUV. He also had some estate planning goals. As his health deteriorated and his time grew short, Finis stated that he wanted the Jeep to go to his young grandson, Rakayne, who was still in high school. Finis stated that he wanted his ex-wife (Rakayne's grandmother) to hold possession of the SUV until the grandson graduated high school, at which point the grandmother was to transfer the title on the Jeep to the grandson.

Despite these very clear and very specific estate planning objectives, Finis still did not get an estate plan. The fact that you are in poor health, or even on your death bed, does not prevent you from obtaining an estate plan. As long as you have your mental competency, you can create a plan. Finis, however, died without a plan in early May of 2014. Rakayne, who graduated high school in May 2015, received title to the Jeep in April 2015.

Along the way, though, there was a problem. Finis's son, Antwan, who was also Rakayne's father, had used the Jeep in a theft crime. This led to the State of Illinois invoking that state's forfeiture laws and taking the Jeep. The court case was full of peculiar facts. Antwan told authorities that Finis left the Jeep to him, which was impossible because Finis never executed an estate plan. Rakayne's grandmother claimed that she was entitled to transfer the Jeep to Rakayne because she received the Jeep through intestacy. That was also impossible because she was Finis's ex-wife and ex-spouses don't receive anything under the rules of intestacy (in Illinois or anywhere else.)

So, even if you never have a run-in with law enforcement, or have had to deal with your state's forfeiture laws in any way, there's still a lot to learn from this family's unfortunate situation. First, the rules of intestate succession are very much a "cookie-cutter" type of plan of distribution. If you have any unique circumstances in your life, such as an ex-spouse whom you want to receive or handle the distribution of certain assets, then that raises the very high probability that doing nothing (and relying on intestate succession) likely isn't the best way to go.

Second, if you have specific goals you want to accomplish in terms of estate planning, don't leave things open to uncertainty. Take control of your legacy and create a plan. That way, you are the one dictating what will happen to your assets. At the very least, get a plan with a last will and testament, in which you can enshrine you preferences and objectives in a valid and enforceable written document. In Finis's case, he might have benefited from even more extensive planning than just a plan with a will. He had some specific goals he wanted to accomplish in terms of leaving a distribution to his underage grandson. If he wanted someone else, like the boy’s grandmother, to hold possession and title of the vehicle until a future date, like the boy's graduation, a plan with a trust might have been helpful. With trust planning, you can dictate, not only who gets each asset, but also when they get them, and who should oversee and manage your assets until those future dates occur.




This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan





Monday, January 8, 2018

Transfer on Death Deeds Can Be Helpful Parts of an Estate Plan, But Sometimes They Can Backfire

Summary: There are many different types of techniques and tools you can utilize when you create your estate plan. Each comes with its own set of positives and negatives. Transfer on death deeds can be helpful devices but, in some situations, they can have severe drawbacks, as well. For some people looking to create an estate plan, there may be better ways to accomplishing their desired goals while minimizing or avoiding the risks that can be involved with transfer on death deeds.  

State statutes authorizing the recognition of transfer on death (TOD) deeds are becoming increasingly common in recent years. Missouri was the first pass such a law in 1989 and, even just a decade ago, the number of states with TOD deed statutes was a small minority. Today, more than half of all states have TOD deed statutes, with California having enacted one in 2016.

Some people might see a TOD deed as a “magic” solution for avoiding probate when it comes to one’s real estate which, for many folks, can be the bulk of their over wealth. TOD deeds generally are short, simple and easy to execute. Properly created, executed and maintained, they will succeed in avoiding probate.

What’s not to love, right?

Well, like with almost any estate planning option (or legal option in general,) there are plusses and minuses. In addition to the positives mentioned above, there are negatives that can sneak up on the unwary user. For example, there are ways that your TOD deed can fail to accomplish what you want. For example, if you outlive the beneficiary (or beneficiaries) you name on your TOD deed the, when you die, that property goes into your personal estate and must be distributed by means of probate administration. If one of your goals for your TOD deed was to avoid probate then, in that scenario, your objectives would not have been realized.

In addition to probate, there are other circumstances where the courts might have to become involved, even if that was not your desire. If you name as a beneficiary someone who’s still under the age of 18 when you die, then a court proceeding to appoint a guardian and/or conservator for that child is likely going to be necessary.

Finally, what happens if you become mentally incapacitated? It is possible that, in this situation, the ability to makes changes to the deed may be lost because you lack the capacity to do so yourself and no one else has the legal authority because you are still alive.

One method that may avoid these potential pitfalls while still giving you the ability to avoid probate is a revocable living trust. While, technically, a trust can fail to avoid probate if the grantor outlives all of the beneficiaries, this is much less common than in a deed scenario, as most people approach living trusts and wills differently from death beneficiary designations (like TOD deeds) and create a much larger group of beneficiaries and alternate beneficiaries. If you have a beneficiary who is underage, your trust can simply instruct your trustee to continue managing that child’s assets until such time as you want that wealth distributed to that beneficiary. Finally, if you become mentally incapacitated, your trust will continue to function just as fully and vibrantly as it did before. The management of your trust simply transitions from being handled by you to being handled the successor trustee you personally named when you set up your estate plan.          

For some people, TOD deeds can be useful parts of an estate plan. For others, then may offer more risk than benefit, as they are not without their potential pitfalls. An experienced estate planning attorney can help you determine what components should be used to comprise your optimal estate plan that will best achieve your goals.



This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan






Friday, January 5, 2018

Using Multiple Different Tools Working Together to Achieve Your Overall Estate Planning Goals

Summary: When most people think about estate planning and the legal documents that will dictate the terms of the distribution of their wealth after their deaths, they often focus their attention on the last will and testament or perhaps a revocable living trust. It’s true that these documents are essential pieces of many estate plans, but they may not be the only ones. An example of how this can work is the estate plan of Hugh Hefner. Based upon news reports, this celebrity estate plan appears to have been an example of how a wide variety of tools, including planning with wills, trusts and even prenuptial agreements, can come together successfully and synchronize to achieve one’s overall estate planning objectives.  

Like a lot of people, Playboy magazine creator Hugh Hefner had some elements of his set of estate planning goals that presented some unique issues. Whether one approves or disapproves of the method by which Hefner made his millions, one can still learn a lot from the way his overall plan appears (based upon reports) to have achieved his goals through the techniques used within his plan. 

In Hefner’s case, one unique goal was his desire to ensure that his much younger wife would be “taken care of” financially. While most people probably aren’t facing a situation where they must plan for a spouse who is 60 years younger (as was the age gap between Hefner and his third wife, Crystal,) many people may find themselves in a position where a substantial age gap exists and that gap presents its own set of issues. Planning to provide for a spouse 2 or 3 years your junior is much different than planning to provide for a spouse who is 25 or 30 years your junior.

Early reports about Hefner’s estate plan trumpeted the fact that Hefner’s widow was set to get nothing from the publisher’s probate estate due to the terms of his will and what reporters described as an “ironclad” prenuptial agreement. Most people don’t think about prenuptial agreements and estate planning, but the two can go together. A “prenup” can be a helpful estate planning tool for someone who has children from a previous marriage or has certain cherished assets that they want to ensure go to children or other blood relatives and not to the new spouse. If you decide to execute a prenuptial agreement and intend to use it to foster some of your estate planning goals, it is important to have a clear and careful conversation with your attorney to make certain that your prenuptial agreement and your other estate planning documents are written in such a way that they will work seamlessly together and not cause any legal conflicts that could lead to courtroom litigation.

In the case of Hefner’s estate, it was true that he and Crystal had a prenuptial agreement and that his will left her nothing from his probate estate. These facts, however, do not tell what the late radio commentator Paul Harvey might have called “the rest of the story.” There are many reasons why a person might choose to disinherit someone close and leave them nothing in their will. One of those reasons is if that person’s overall estate plan included accomplishing the goal of providing for that beneficiary through other means outside the probate estate. In this case, Crystal Hefner received $5 million in cash. Additionally, Hugh Hefner, in 2013, bought a 5,900-square-foot California home (complete with 4 bedrooms, 5 bathrooms and an “infinity” pool) in the Hollywood Hills. He placed that home in a trust. Upon his death, that home went to Crystal. Hugh Hefner had an estate plan objective for his wife… it just wasn’t contained within his will.




This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan





Monday, January 1, 2018

Adding Someone to an Asset to Avoid Probate Can Do More Harm than Good

Summary: Avoiding probate can offer the person who plans many possible rewards. They can include savings of time and money and stress. There are, as with many things in estate planning, multiple ways to achieve a particular objective. Some ways of avoiding probate may accomplish the goal, but may do so by creating potential pitfalls in terms of negative tax implications or exposure from civil lawsuits. By planning properly and carefully, you can effectively avoid probate and do so with opening yourself up to unnecessary risks.

At its most fundamental level, avoiding probate involves making sure that you do not have assets in your probate estate when you die or, if you do, they are small enough to be distributed using one of your state’s highly simplistic and abbreviated procedures for very small estates. One of the many relatively simple ways to make sure an asset isn’t in your probate estate is to make sure that you aren’t the last living co-owner left. If your asset is co-owned and one or more co-owners (often called “joint tenants” in technical legal verbiage) survive you, then the asset goes to that person or people without requiring probate administration.

To achieve that end, some people take the step of “adding” someone to an asset (or assets) to create this sort of joint tenancy and method for avoiding probate. While this technique may well avoid probate, it carries with it a series of potential problems that can befall you or your loved ones. For one thing, “adding” someone as a co-owner (joint tenant) of an asset that you currently own by yourself is that, in the eyes of the IRS, you have made a gift unless your new co-owner paid you. By just “adding” someone with no money changing hands, the tax authorities consider what you did as giving 50% of that asset to that other person. This could potentially create gift tax issues for you and income tax issues for the other person (among other things.)

Another potential issue is that the person you’re adding as a co-owner immediately takes full rights to one-half of the property. That means that, after you add him/her, he/she has all the same power and authority over the asset that you do. Want to sell the asset? He/she has to approve it. Want to refinance that asset? He/she has to sign off.

An additional thing to keep in mind is that adding someone means additional exposure from potential legal judgments. Perhaps you trust your daughter implicitly and think that she is a safe person to add to the title on your home. But even the most upright and trustworthy of people can find themselves facing civil lawsuits related to their business ventures, a divorce or an auto accident. If your child is a defendant in any such case and the court enters a judgment against her, that asset that you and she now co-own could potentially be used to satisfy that legal obligation of hers.  

Other methods of avoiding probate may be much safer. For example, avoiding probate with a revocable living trust allows you to reap all the same benefits of probate avoidance as adding someone to your asset(s), but will allow you (if you choose) to maintain sole and complete control over that asset(s) during your lifetime, and will not subject your wealth to civil lawsuit exposure the same way that adding someone to a deed/title would. To be sure, avoiding probate with a living trust is not as simple as avoiding probate by adding a co-owner to your assets, but it is safer. And anything worth doing is worth doing well.  


This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com


This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan