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Monday, November 20, 2017

Second Marriages and Your Estate Plan


Summary:  There are many things in life that can highlight the need for a well though out estate plan that states your goals and desires with clarity. One such event is your decision to marry again. If you’ve decided to re-marry, you need a detailed plan to ensure that your objectives are 

Many people find love later in life. Whether their previous marriages ended as a result of death or divorce, they’ve moved on and have now found a new partner to share their lives with. For a lot of those people, they decide to take the plunge… again… and marry. If you are someone who has, or is considering, getting married for a second (or subsequent) time, there are some things regarding your estate plan that you should keep in mind.

The main and overarching thing you should keep in mind is the importance of details and clarity in your planning. Whether your plan is providing instructions regarding your new spouse, your ex-spouse, your children or your step-children, it is important to be clear, specific and detailed. In fact, that is one of the wonderful benefits of putting an estate plan in place. Without a plan of your own creation, you are stuck with the one-size-fits-most plan of intestacy created by your state’s laws. With a plan of your own creation, you have extensive latitude in how you distribute your assets.

Generally speaking, the law says that you are not allowed to disinherit a spouse, so you’ll want to keep that in mind as you enter your new marriage. There is a narrow exception here because, if you and your spouse have pre-nuptial or post-nuptial agreements that say that you are waiving your respective rights to claim a spousal share of the other’s estate, then you are allowed to disinherit your spouse. If that’s the case, though you should be very certain that your estate plan makes mention of the pre-nuptial/post-nuptial agreement clearly and specifically. For those without these types of agreements, your spouse may either accept what you’ve provided in your plan, or “elect” to receive the spousal share dictated by your state’s statutes.

For many people marrying later in life, there are children (often adult children) of previous marriages/relationships involved. This is yet another area where detailed and careful planning is so important, especially if there are complexities or challenges in your extended family. Some people may be worried that, if they die first, then their children may get stuck receiving nothing while their step-children end up getting everything. For those with such concerns, planning with a trust or trusts may be helpful in their estate plans. Inclusion of a trust or trusts can give you the ability to ensure that your side of the blended family continues to have a voice, even after you die (should you die first.) You could choose, for example, to create a living trust that names you and your new spouse as the initial trustees but that directs, upon your death, that the trusteeship be held by your spouse and one of your children.

In other cases, though, the complexity doesn’t arise from concerns about your step-children, but perhaps your own children. Sometimes, bonds of affinity don’t always track along the same lines as blood kinship. You may find yourself estranged from your own children while loving your new spouse’s kids as if they were your own. Again, this is a time for careful and detailed planning. The law says that you cannot disinherit a surviving spouse, but that is the only person you can’t disinherit. There’s no law that says you cannot leave a child nothing. The law gives you the freedom to customize your plan as you desire as long as you are accounting for your spouse. If you want to leave distributions to your new spouse’s children and leave you own biological children nothing or very little, you can do so. These situations can be tricky, though, as they often create an increased risk of estate plan contests in court, so it is important to work with an experienced estate planning attorney to get the strongest possible plan.     


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



          



Thursday, November 16, 2017

4 Estate Planning Mistakes made by People seeking to avoid probate. And How to Avoid Them!

Summary: Many people seek to avoid probate, and with good reason. Depending on where you live, probate can be expensive, time-consuming and stressful. However, as with the pursuit of almost any goal, it is important, not just to plan to achieve the goal, but to go about it the right way. There are many risks that exist for unwary people who go about avoiding probate the wrong way. By engaging in proper planning, you can achieve your goals and avoid these harmful potential traps.  

In the pursuit of any goal, there are risks. Engaging in estate planning to avoid probate is no different. The fact that potential harms exist doesn’t mean that you shouldn’t plan to avoid probate; it just means that you should make absolutely certain you are planning properly to avoid harmful mistakes. Here’s is a list of four such mistakes: 

(1)  Not engaging in proper plan updating. When it comes to estate planning, and to planning to avoid probate, getting a great plan put into place isn’t enough. You can have a plan that is comprehensive, well-thought out and exquisitely tailored to meet all your goals.. However, if it just sits for decades without ever receiving a “check-up,” it still may fail to do what it was intended to do. In the years since you began your planning, many things could have changed, and these changes could negatively impact your plan’s ability to achieve your probate-avoidance goals. For example, if you’ve failed to review your plans, you may miss the fact that all of the named beneficiaries on your life insurance have predeceased you. When that happens, do you know what happens to the death benefit on that policy? It gets paid to your estate. That means that, in order to be distributed to a person or entity that you want, it has to go through probate administration. This can be avoided through proper plan reviews and updates, like executing a new death beneficiary form.
(2)  Using the wrong methods to accomplish their probate-avoidance goals. There are actually a lot of different ways to avoid probate. These different methods are not all created equally, however. For example, creating a joint ownership arrangement with an asset (or assets) can potentially meet the goal of avoiding probate. But is also comes with many serious risks. If the person you name as your co-owner becomes involved in a bankruptcy or a civil litigation case (meaning anything from a business dispute to a divorce to an auto accident,) that legal action could result in you losing that asset completely. Other avenues for avoiding probate, such as living trusts or transfer-on-death/pay-on-death designations, can give you the advantages of avoiding probate without these risks.
(3)  Mishandling your transfer-on-death/pay-on-death assets. Transfer-on-death and pay-on-death designations can be a useful part of some estate plans designed to avoid probate. They can also, however, be extremely problematic if not used properly. If you make the mistake of not naming contingent (a/k/a alternate) beneficiaries, or not naming enough of them, then you could have a problem. If your beneficiary (or beneficiaries) all die before you do, then the asset with that transfer-on-death or pay-on-death designation will go, upon your death, to your probate estate, which will likely mean going through probate before that asset can be distributed to your loved ones.    
(4)  Misusing gifting as a means of avoiding probate. Some people decide that they will attempt to avoid probate simply by giving their assets to their loved ones before they die. This strategy is filled with a variety of serious potential risks. Two of the biggest potential risks are: taxes and impoverishment. As far as taxes are concerned, any gift above a certain dollar amount is considered to be a “taxable event” by the government’s taxation authorities. That means that it may have to be reported on tax return forms and, depending on your circumstances, it may trigger tax problems for your beneficiaries. Depending on what type of asset it is, gifting it to your intended beneficiary could create negative capital gains tax consequences for your beneficiary should he/she decide to sell that asset later. As far as impoverishment, life is full of unanticipated twists and turns. You may think that you have enough wealth to give away certain assets (and live the rest of your years on what’s left,) but unexpected changes (such as unforeseen medical problems) could mean that you find yourself without enough left to meet all of your own needs.  



The key to almost any type of planning is ensuring that you’re engaging in proper planning. With an estate planning team that includes an experienced attorney supporting you, you can make certain that you can avoid probate and also avoid the pitfalls that are out there.

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, November 13, 2017

How a "No Contest Clause" May Be Able to Protect Your Estate Plan

Summary: There are many ways that you, as someone creating an estate plan, can try to discourage your beneficiaries from challenging your plan in court. In some cases, one option may be a "no contest clause." These clauses may be useful in some places and some circumstances, depending on state laws and the specific distributions contained in the plan. An experienced estate planning lawyer can help decide if a no contest clause is valid in your state and, if it is, whether it can help you.

Many people, as they contemplate planning their estates, struggle with the idea that their plans might lead to disappointment, disagreements and disputes that could spill over into the court system. They desire a plan that will prevent, or at least reduce the likelihood of, such occurrences.

Ideally, the best way to eliminate or reduce the possibility of such outcomes is to communicate with your loved ones in a clear and in-depth manner. An explanation of your plans that comes directly from you may go a long way toward encouraging all your beneficiaries to accept your desires and refrain from challenging your plan.

If, however, you still have concerns, you may have other options. One such option is something called a "no contest clause" (also known by the Latin phrase "in terrorem" clause.) These provisions allow you, as the creator of an estate plan, to dictate that, if any of your beneficiaries challenges your plan, they forfeit their distribution and get nothing.

It is important to understand that these clauses do come with certain limitations. For one thing, a "no contest clause" probably won't stop or discourage a beneficiary to whom you've left very little. The provision's motivational approach will only work if your beneficiary sees the distribution as valuable enough to make him think that losing it would be a significant punishment. If, for example, you leave your one estranged son $50 in your estate plan, he probably won't believe that he has much to lose by launching a plan contest, even if your plan does have a no contest clause.

Another thing to keep in mind is that not all states' laws recognize no contest clauses as valid. The law in some states says that these clauses cannot be enforced there so, even if you have a beneficiary who contests your plan, he/she will still get his originally intended distribution, regardless of the outcome of the contest case. If you have a no contest clause in your plan and your state declares these provisions invalid, that doesn't by itself, however, bar the rest of your plan from being carried out. Generally, an invalid provision such as an unenforceable no contest clause is viewed by the courts as if it was not even included in the document.

A no contest clause is but one of many potential tools that may be available to you as you plan your estate and seek to ensure that the goals you've formulated are carried out. An experienced estate planning attorney can help you determine if a no contest clause is enforceable in your state and, if so, if it may be able to benefit you.

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


 



Thursday, November 9, 2017

3 Reasons Why Estate Planning Is Very Important for Young People


Summary: There are many reasons why people of any age should get an estate plan. Even young people have certain unique needs that mean they can benefit from having their plans in order. Whether you have minor children, have non-traditional relationships in your life, a desire to leave money to charity or any of a variety of other reasons, chances are you have one or more reasons why you, as a young person, have an immediate need for a plan.  

It is once again summertime, which means a time of transition for many young people. Some may have just graduated high school and be headed to college. Others, who have just graduated high school or college, are transitioning into the world of work. Still others may be newlyweds, having followed the old tradition and tied the knot in June.

Whatever new doors are opening, it is important for you as a young person (or as the parent of a young person,) to step back and realize that these changes represent a great time to get an estate plan in order. Some statistical surveys show that more than three-quarters of people under age 36 have no plan. Even though you undoubtedly feel like you have a million things more important than estate planning, that thinking is mistaken. Here is a list of a few of the main reasons why getting a plan now is so important:

·         (1) Dealing with incapacitation: Unfortunately, serious medical traumas can hit anyone of any age. If one should strike you, you'll need to be prepared. The way to do that is with what's called "powers of attorney." These two documents (your power of attorney for financial matters and your power of attorney for healthcare decisions) allow you to designate the person that you want to make decisions about your money or, especially, your health and personal matters when you cannot speak for yourself. With no powers of attorney, your family may have to go through a potentially difficult, time-consuming and expensive court procedure known as guardianship.

These documents can be especially important if there are complications between you and your parents, who are often first in line to receive decision-making authority under a guardianship. In one famous 2007 case, an incapacitated man's parents obtained a guardianship over their son (who had suffered a ruptured aneurysm) and denied the incapacitated man's long-term partner visitation because they opposed the couple's same-sex relationship. The partner had to take his case all the way to the state Court of Appeals just to get to see his partner in the hospital. Whether you are in a similar situation to this incapacitated man (such as an LGBT issue or an estrangement from your parents) or have some other element making your personal/family relationships "non-traditional," estate planning is extremely important for you so that you can be in control and have the people you want making your decisions.

·         (2) Avoiding intestacy: No young person likes to think about dying, but tragically, some people do die very prematurely. Regardless of your age, if you die with no estate plan in place, whatever assets you own will go through the legal process known as intestacy. Intestacy means that your assets are distributed according to a pre-set plan devised by your state's laws. For an unmarried young person with no children, that often means than 100% of your assets going to your parents. For some young people, this might be an acceptable outcome. For many others, though, their goals might be different. Maybe you have a committed relationship partner to whom you're not married. Maybe you wish to leave part of your estate to a charity. (In either of these circumstances, intestacy would leave them nothing.) Or maybe you have an estranged relationship with your parents. For any of these circumstances (among numerous others) that make your goals something different than "100% of my assets to my parents," then you have a particularly high need for a plan.

·         (3) Protecting your children: Unlike many seniors, who often are focused on estate planning, many young have one aspect of their lives that makes them especially in need of planning: their children. If you have minor children, especially if you are a single parent, you need a plan. With an estate plan, you can designate the person you want to care for your child(ren) if you die or become incapacitated. Without this planning (which is contained in your last will and testament,) a judge will have to make this decision with no input from you.

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, November 6, 2017

5 Questions to Ask Yourself as You Prepare to Choose Your Power of Attorney Agents

Summary: When you decide to take the step of getting your estate planning affairs in order, there are many decisions you’ll have to make. In a truly comprehensive estate plan, there’s more to your plan that just your will or living trust, which means there are more decisions to be made beyond just the division of your assets. When selecting the people who will act as the agents acting under your powers of attorney, it is important to consider many things, including your closeness to that person as well as whether or not you are both “on the same page” about your preferences and desires.

One set of decisions that is extremely important in any estate plan relates to who will speak for you when you cannot. As you prepare to create powers of attorney and name the agents who will act under the terms of those documents, here are five important questions that you may not have considered but are useful to contemplate as you make these decisions:

  1. Do you get along well together? Your brother may have an M.B.A. from Harvard and may be a highly sophisticated financial whiz, but if you two don’t work well together, he may not be the best choice as the agent under your financial power of attorney. Bear in mind that, whomever you pick, you should pick someone with whom you’re extremely comfortable sharing the most intimate details of your financial life.

  1. Does this person have financial sophistication? While, as noted above, the most financially sophisticated person whom you dislike may make poor candidate, something with whom you are very close but who has little to no financial skills or savvy might also be a flawed selection. The more complex your estate is, the more difficult it will probably be for someone without financial knowledge or skill to do the job of financial attorney-in-fact effectively on your behalf.

  1. Does this person live nearby? This is a valid consideration with either POA. Close geographic proximity may make it easier on your agent, and easier to meet your needs, when your agent is called upon to make decisions and interact with outside professionals like your doctors or your business associates. If you are in situation where you need the aid of your attorneys-in-fact, chances are that there will be many things that must be dealt with. Choosing someone who lives 2,000 miles away will make it hard on them, and hard for them to represent you effectively.      

  1. Is this person assertive? This is something to consider when choosing either a financial or healthcare attorney-in-fact, but it is especially important with an agent under a healthcare power of attorney. If your preferences include very minimal (or no) life-extending medical intervention, your agent may have to fight hard for the enforcement of your wishes against a medical establishment “hardwired” to want to provide treatment in all situations. The more assertive your agent, the more confident you can be that your wishes will be honored and carried out.

  1. Does this person share your values? This is an especially important concept to contemplate as you select your agent for your health power of attorney. Having an agent who is “on the same page” as you will serve two goals, both enhancing the likelihood that your preferences will be carried out, and that those goals will be fulfilled with a minimum of heartache for your loved ones. For example, if your preferences include receiving little or no life-extending medical care when you are in an end-of-life situation, it might be less than ideal to select as your agent a loved one who, whether for religious or other reasons, is steadfastly morally opposed to withholding life-extending medical care in any circumstance. Both your wishes and your loved one’s emotions might suffer in that type of situation.

This is, of course, not a complete list. There are many questions, in addition to these, you should ask yourself before making the very important selections of your power of attorney agents. This list, however, provides some food for thought and a starting point for making these choices. 

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, November 3, 2017

You Don’t Want to Die Without an Estate Plan, But You Don’t Want to Die With an Incomplete Plan, Either



Summary: There are many goals that almost everyone needs to accomplish when it comes to estate planning. Having no plan leaves your loved ones to deal with your assets being distributed according to state law rather than your wishes. Having an incomplete plan is also problematic, though, as it may leave your loved ones with uncertainty about your wishes relative to critical issues. Working with experienced counsel can help you get a plan that will protect you and give you control even if intervening life events, like the death of a close loved one, should occur.  

If you read much about estate planning, you’ll read about the importance of avoiding intestacy. There are many benefits to avoiding intestacy. By avoiding intestacy, you can be sure you have control over your legacy and that you can remember people outside your immediate family, such as non-relative loved ones and beloved charitable organizations.

Just avoiding intestacy isn’t enough. Most any estate plan can avoid intestacy but, if it isn’t a complete plan, it still may not be enough to avoid problems after you die. A court case from Mississippi from late last year showed how this can happen. The case involved the estate of Dorothy, who died in February 2014, two months shy of her 101st birthday. Some time before she died, Dorothy created what’s called a “holographic” will, meaning that the will was completely handwritten. Some states do not allow handwritten wills, but Mississippi law says that they can be valid.

Handwritten wills are not necessarily problematic just because they are handwritten; they can be problematic because the people who make them often do so with little or no input or assistance from knowledgeable professionals who could help them avoid estate planning pitfalls. Dorothy’s estate was one of those situations.

The will made distributions to each of Dorothy’s daughters, Ann and Mary, each of her two sons, John and Jim, and one of her grandsons, Jamie. In this case, the problems related not to what Dorothy put in her will, but what she didn’t. The will named the two sons as the co-executors of the will. It didn’t say what should happen if one or both of them were unavailable to serve as executors. Additionally, Ann, Mary, John and Jim weren’t Dorothy’s only kids. Another daughter, Frances, died in 2004, leaving two surviving daughters of her own. The will didn’t indicate that those granddaughters were to receive anything.

There were questions and concerns surrounding the will, specifically related to where Dorothy signed, the way the will’s pages were numbered, the way certain words were scratched out or added and the fact that the will left nothing to Frances’s family. These issues led to a will contest litigation by the daughters. In that case, the trial court ruled against the daughters. The daughters took their case to the Mississippi Court of Appeals, who ruled that the will contest must undergo a new trial. The problem with the first judgment was a procedural flaw that made the judgment void.

So, Dorothy’s estate was going to undergo at least two will contest trials and at least one appeal at the Court of Appeals. All of this might have been avoided with a more complete estate plan. Part of a complete plan’s value is in the protections it provides. Whether your plan has a will or a living trust as its focal point for asset distribution, a complete plan accounts for many of life’s contingencies. In Dorothy’s case, she lived for almost another decade after she signed her will. Many things could have changed. What if one of her four kids died before her during that period? What if one of those to predecease her was someone she’d named to serve as an executor? A more complete will would have carefully spelled out what Dorothy in the event that any of those events occurred.

With a complete plan, you can have confidence that you will still be in control, and your loved ones will still be clear about your goals desires even if an intervening event takes place, like the death of a child. This can be accomplished by including paragraphs that contain contingent instructions that take effect if a beneficiary pre-deceases you, or if an executor pre-deceases you.

A complete plan, established with the help of experienced counsel, will also account for events that have already occurred. In Dorothy’s case, there was uncertainty about the status of the two daughters of Dorothy’s daughter who died before Dorothy. A complete plan could include instructions that make clear what distribution relatives like that should get, or make clear that they get nothing at all.

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