Estate planning attorney of Legacy Assurance Plan of America for Wills,Trust & Avoid Probate

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Monday, September 18, 2017

Estate Planning With a Living Trust and Life Insurance

Summary: Many people have a variety of assets in their estates and, for a lot of those folks, life insurance is among them. Your goals for your life insurance likely involve making life easier for one or more of your loved ones. What you likely don’t want to do is have your life insurance payout trigger then need for a probate administration or go directly and in full to a beneficiary who cannot, or isn’t ready, handle it. Your living trust can be an integral part in avoiding these problems, either by using it as a primary, or an alternate, beneficiary of your life insurance. Your estate planning attorney can help you explore how these techniques can work for you.  

Once you have decided to be pro-active and create your estate plan, and once you’ve decided that your estate plan should include a revocable living trust, you’re still not “finished” even after you signed your documents. You, of course, have to complete the process of funding your living trust. In many situations, funding an asset means transferring ownership of it from you, as an individual, to your trust.

For some assets, though, you may not want to transfer its ownership. Life insurance policies already avoid probate even without being funded into a living trust. The death beneficiary designation on the policy itself accomplishes this. However, what if you find yourself in a circumstance where the person you want to name as the beneficiary on your life insurance is also someone who cannot (or you believe should not) get that whole insurance payout all at once?

For example, what if you want to name your under-18 child or grandchild as your life insurance beneficiary? This person, as a minor, cannot, by law, get these benefits directly. Alternately, what if that child or grandchild whom you want to receive your life insurance payout after you die has just turned 18 and is very inexperienced in handling, and dealing with, large sums of money? Or, what if they are an adult but have a history of making bad investments, spending lavishly or being too trusting of other when it comes to money?

In these situations, having a trust in your estate plan can be a big help! If you have a trust set up, then you can, instead of individually naming the person whom you ultimately want to receive your life insurance proceeds, name your trust as the beneficiary of your policy. Then, when you die, your proceeds will go into your trust and the successor trustee whom you personally selected when you created your trust can manage those funds for the benefit of that person.

This situation isn’t the only one where your trust can help you when it comes to life insurance. If you have a living trust, chances are that one of your planning goals is avoiding probate. Well, if you have an insurance policy and, when you die, there are no available beneficiaries to take the payout, then that money goes into… your probate estate and has to go through probate administration before it can distributed!

How can this happen? It can happen if a policy has too few beneficiaries (such as listing only one beneficiary) and that beneficiary dies before you do. Sometimes, though, a policy may have numerous beneficiaries but, through tragedy or the randomness of life and death, all of the beneficiaries may have died first. Other times, a beneficiary may have chosen to forfeit his/her rights to receive policy proceeds. Regardless of the reasons, there is a way to make sure your insurance proceeds don’t eventually require probate. You can install this protection by naming your living trust as the beneficiary of your policy. You may choose to name your trust as the policy’s primary beneficiary and then put your instructions on distributing these policy proceeds in your living trust, or you can simply name your trust as an alternate beneficiary, after all of your preferred individual beneficiaries, as a “failsafe” against having your policy proceeds go into your probate estate.   


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, September 14, 2017

Death Beneficiary Designations | Ways They Can Go Wrong

Summary: Placing death beneficiary designations on assets where the law allows you to do so can be an easy and inexpensive way to engage in estate planning and avoid probate on those assets. It can also create substantial problems for you and your loved ones if not carried out properly and not maintained properly. That’s because there are many different ways that beneficiary designations can go wrong and thwart your true estate planning intentions, resulting in your leaving behind a legacy that is far different than what you intended.

If you have engaged in estate planning or considered it, then you may already be familiar generally with beneficiary designations. Whether it’s your life insurance policy or a pay-on-death designation on a bank account or a transfer-on-death deed on a piece of real property, today there are lots of varieties of assets with beneficiary designations (or the potential to add beneficiary designations to them.)

If avoiding probate is one of your central estate planning goals, then obviously one of the clearest ways that an asset with a beneficiary designation can go awry and fail to meet your objectives is if there is not valid beneficiary available to receive the proceeds of the account when you die. One way this can happen is if your beneficiary dies before you do. If your beneficiary predeceases you and you didn’t list an alternate beneficiary, then the proceeds of that asset will go into your probate estate and have to go through probate administration to be distributed.

You may have already considered this possibility and planned to avoid it through the inclusion of alternate beneficiaries. But death is only one of many ways that a beneficiary designation can go off course. Another life event that can create havoc is divorce and/or remarriage. With some assets, if you list your spouse as your beneficiary, then later divorce him/her and remarry someone else, the proceeds of that asset still go to your ex if you fail to update your beneficiary designation paperwork properly.

In some states, though, divorce automatically invalidates all beneficiary designations made to your now former spouse. For some folks, that could be a hindrance, not a help. Let’s say that you’ve decided that, even though you’ve divorced, you still want your former spouse to be the beneficiary on one (or more) of your accounts. If you made those designations while you two were married, those designations may be invalid now and you may need to go back and complete new beneficiary designation paperwork to establish that your former spouse is to be the beneficiary. 

Many people may recognize a beneficiary’s death as a call to update their beneficiary paperwork. What may not occur to you, though, is the need to act if your beneficiary becomes disabled. If your beneficiary is now getting SSI or other need-based benefits, you’ll need to re-work your beneficiary designation. If you don’t, your death could trigger an outright distribution of the proceeds of that account to your disabled beneficiary, which would, in turn, potentially cause your beneficiary to become disqualified for SSI (or other benefits.) To keep this asset flowing to the same beneficiary without possibly risking your beneficiary’s eligibility for benefits, a special needs trust will need to be created on his/her behalf, and the trust would then be named as the new beneficiary. Alternately, you could replace this person with someone else as the beneficiary. Either way, you’ll need to update your paperwork.

The world of business is always moving and changing, and these changes can affect your beneficiary designation. For example, if you’ve changed jobs and you’ve rolled over your retirement from your old employer’s plan to your new employer’s plan (or into an IRA,) then that wipes out your old beneficiary designations. You’ll need to create new ones for the new account.

On the other hand, maybe you’re not the one who has experienced a change, but your financial institution has. If the institution with which you had a pay-on-death or transfer-on-death asset (or assets) gets sold or merges with another entity, you may want to check on your accounts and your beneficiary designations to make sure that your designations remain in effect with the new institution.

This is just a short list of some ways that an asset with a beneficiary designation can go off-course and fail to accomplish what you intended. There are multiple ways to avoid this scenario, though. For some of your assets, you may want to consider structuring them differently. Perhaps, instead of using death beneficiary designations, you may decide that funding those assets into a revocable living trust may be preferable. Regardless of whether you restructure this wealth into other estate planning tools or not, the key to the health of any estate plan is routine plan reviews. A detailed, periodic review can help you identify any and all changes that have taken place and allow you to take the action you need to ensure the well-being of your plan and the integrity of your goals. This is especially true if you plan has multiple assets with beneficiary designations.   


 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, September 11, 2017

Good Communication | An Essential Ingredient of Successful Estate Planning

Summary: Experts broadly agree that almost everyone needs an estate plan. In addition to all of the legal documents and other paperwork needed to give life to the plan you’ve decided upon, there are other things that can help ensure that your planning is successful. By communicating clearly and definitively with your loved ones, you can potentially help to minimize the possibility of confusion, frustration, hurt feelings and discord, which can often play a role in fueling estate litigation that, in turn, may cost your family time and money and may also thwart the goals of your plan.      

If you’ve done much research into estate planning, you probably know some of the components of a successful estate plan. Your plan will include a last will and testament and powers of attorney for finances and healthcare. Some states allow you to put your end-of-life planning preferences into your healthcare power of attorney while, in other states, your plan will include a separate living will/advance directive. Many plans also include one or more revocable trusts, which can help you realize the goal of avoiding probate.

These documents help you announce your planning objectives in a written form that is recognized by the law. Having a plan that it is enforceable by the power of law is only one side of the equation, though, when it comes to putting together a fully successful plan. Take, for example, the recent case of the estate of a suburban Detroit father. Alex and his wife, Dolores, had opened two banking accounts – one with a large bank and one with a local credit union. According to their son, Greg, the couple gave Greg an ATM card attached to the credit union account, and also gave him permission to deposit funds and withdraw money, both for the parents’ use and for Greg’s own use.

After Dolores died in late 1999, Alex added Greg as a joint account holder on the credit union account. According to Greg, Alex did this because one of his planning goals was for Greg to get all of the money that remained in the credit union account when Alex died. Specifically, Greg claimed that this was all part of Alex’s larger plan: upon Alex’s death, Greg would get the credit union funds, and his two brothers would split Alex’s home. This type of estate planning – adding a loved one as a co-owner of a financial account – is not uncommon. 

After Alex died, Greg’s brother, Mike, who was the personal representative for the father’s estate, sued Greg. According to Mike, Greg was only given access to the credit union account as a convenience to assist his ailing mother and his father, who was mostly blind following a war injury in Vietnam. Mike accused Greg of fraud and embezzlement, among a series of other transgressions. Ultimately, the courts sided with Greg, ruling that Mike did not have enough evidence to prove that Greg defrauded, unduly influenced or coerced his father into adding him as a co-owner of the credit union account. Absent proof of fraud, coercion or undue influence, Greg was a valid co-owner and free to do with those credit union funds as he wished.

What this case reflects is the value that you can derive from engaging in open and detailed communication with your loved ones about your plans. At the trial, Mike testified that his father told him that “the money gets split up evenly three ways” and that all three sons would “be well taken care of.” While this father’s statement gave his son some insight into his goals (like leaving a sizable distribution to each child,) a more detailed communication might have been more helpful. Perhaps the father meant that he planned to provide for his sons by splitting up all of his wealth (as opposed to splitting up “the money”) among his children. Alternately, if the father did desire that all of his banking and credit union funds get split 1/3 each to the three sons, then clear communication might have helped remove uncertainty and helped everyone work toward making that happen.

In the end, many familial estate planning disputes arise after a parent gives one child one set of instructions while leaving one or more others in the dark. By engaging in clear and open communications with your children and other loved ones, you can potentially reduce this type of discord and possibly unnecessary (and costly) estate litigation.         


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, September 7, 2017

A Legacy of Values | How Your Estate Plan Can Reflect Your Faith

Summary: For people who practice a religious faith, the teachings of their religion may have a substantial impact upon the way they approach estate planning. Whether one is Catholic, Protestant, Jewish, Muslim or a follower of another faith, the deeply ingrained teachings and values of religion may inspire followers to give a portion of their estates to religious causes. In order to ensure that these and other religiously inspired estate planning goals are met, you need to put into place a detailed and carefully crafted estate plan, which will allow you to take control and ensure that your personal preferences and religious obligations are all satisfied. 

One example where religious rules closely impact estate planning is the Islam faith or, more specifically, the observance of Islamic Sharia law. These rules are derived from to several sources. These sources, which include both holy scripture and certain additional rules, contain specific teaching on how one plans one’s estate. For example, Sharia inheritance rules dictate what fraction of the estate a surviving spouse should get, as well as the portions that should go to surviving sons and surviving daughters.

For a person in the United States who is faithfully observant of Sharia law, then, it is important to have an estate plan, because Sharia’s rules are distinctly different from the intestacy laws in this country. For example, Sharia law gives a surviving spouse one-eighth of her dead husband’s estate and says that each surviving son should receive a portion equal to double the portion taken by each surviving daughter. No state’s intestacy laws match this distribution scheme so, by failing to create an estate plan, one’s estate would be doomed to be distributed in a way that is non-compliant with these religious rules.

Other religions with larger numbers of American adherents – like Christianity – generally do not have such specific inheritance rules. Nevertheless, these faiths (and the rules they establish for their followers) may still have a strong impact on their followers’ estate planning goals and objectives. Some Christian denominations teach the importance of tithing. Some teach that tithing is the giving of one-tenth of one’s paycheck to the church. Others believe that the practice of tithing extends to all of one’s wealth, including one’s estate. Whether you want to give a portion of your estate as a tithe or you desire to include your church or other religious ministries in your estate out of a more general spiritual calling to give, if you want to make a religious donation in your estate, it takes an estate plan to make this happen. The intestacy laws of any state will look to find your closest living relative, and distribute all of your assets to this person/people. Your carefully constructed will or revocable living trust can allow you to make certain that your religious giving goals are met in the way you want them to be.             

Another place where you can ensure that your estate planning mirrors your values is through your end-of-life planning. Many religions’ teachings in relation to the sanctity of human life impact the way their followers approach end-of-life planning. A faithful adherent may desire to have an end-of-life in plan that makes it clear when (if ever) life-extending care may be withdrawn or declined. This type of planning, which is usually spelled out in a living will/advance directive or a healthcare power of attorney, can give the creator of that estate plan the peace of mind of knowing that, not only will their objectives be honored and followed, their religious faith’s requirements will be, too.  

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, September 4, 2017

Keeping Track of Your Documents | Another Ingredient to Successful Planning


Summary: There are several steps that go into truly complete estate planning. Once you’ve decided upon your plan goals, retained counsel and executed the necessary legal documents, you’re still not finished. In order to save your loved ones (or the other people who might need access to your documents) time, money and stress, you need to ensure that you have a plan for your plan; in other words, you need to make sure that your documents are stored in a safe place that can be reached by those whom you need to have access, and that they have the tools and information they need to get the documents when the time comes.
  
You have done everything you need to do to in order to “check off” the item of estate planning from your “to do” list. You’ve retained knowledgeable counsel, and you’ve executed a clear and well-thought out set of planning documents to achieve your goals. You’ve undertaken the steps needed to fund your revocable living trust. You’ve communicated with your loved ones about your plans. Except for calendaring a periodic plan review to make sure your plan stays fully up-to-date, you’re all set, right?

Not necessarily. Do you have a plan in place to ensure that, after you’re dead, your loved ones (or other people who need access to your planning documents) can find them? This step is easy to overlook, but failing to accomplish can have dire consequences.

An example of this took place recently in Kansas. In the fall of 2014, Ray died at a hospital in Topeka. He was 93. By that time, he was a widower, survived by three children: a stepdaughter who lived nearby, a son in Texas and a daughter in Kansas City. Before Ray died, he told his stepdaughter that he had made an estate plan. He told her that the will was either in a safe deposit box at the bank or else it was at the local courthouse.

After Ray died, the stepdaughter, the daughter and the daughter’s two children searched for the will. They went to Ray’s safe deposit box, but they found only an unsigned will codicil. Next, they went to the courthouse. Despite speaking to multiple people, at both the clerk’s office and the recorder of deeds’ office, they left with no will. They checked Ray’s home and they checked with Ray’s attorney. None of these efforts yielded the will.

Sometime later, the stepdaughter hired a new attorney who found the will. 11 months had passed. Once they found it, the stepdaughter submitted it to be probated. In Kansas, you generally only have six months to submit a will to probate. Ultimately, this case went to the Court of Appeals, which concluded that the will could not be probated and the estate had to proceed as an intestate one. The only scenario, under Kansas law, for extending the deadline required that someone knowingly hid the will. In this case, there was no one who had engaged in knowingly concealing the will, so the deadline could not be extended and the will could not be probated.

What this unfortunate outcome meant was that, instead Ray’s estate plan going forward in the manner that he had dictated in his will, his estate would be distributed according to the intestacy laws created by the Kansas Legislature. The control over his legacy that Ray tried to assert by creating a will got thwarted because no one found the will in time. This is an important lesson for anyone who has engaged in estate planning. Part of complete planning is making sure that you leave clear instructions so that the people who need to access your documents after you die or become incapacitated can do so, and do so in an easy and efficient manner. Even if your plan isn’t thwarted by statutory deadlines for submission to probate, you still probably don’t want your loved ones (or attorneys) to spend hours, days, weeks or even months trying to discover where your planning documents were kept. With a proper plan for your plan, you can save your loved ones, time, money and a lot of stress.

 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, August 31, 2017

Estate Planning With a Living Trust and Life Insurance

Summary: Many people have a variety of assets in their estates and, for a lot of those folks, life insurance is among them. Your goals for your life insurance likely involve making life easier for one or more of your loved ones. What you likely don’t want to do is have your life insurance payout trigger then need for a probate administration or go directly and in full to a beneficiary who cannot, or isn’t ready, handle it. Your living trust can be an integral part in avoiding these problems, either by using it as a primary, or an alternate, beneficiary of your life insurance. Your estate planning attorney can help you explore how these techniques can work for you.  

Once you have decided to be pro-active and create your estate plan, and once you’ve decided that your estate plan should include a revocable living trust, you’re still not “finished” even after you signed your documents. You, of course, have to complete the process of funding your living trust. In many situations, funding an asset means transferring ownership of it from you, as an individual, to your trust.

For some assets, though, you may not want to transfer its ownership. Life insurance policies already avoid probate even without being funded into a living trust. The death beneficiary designation on the policy itself accomplishes this. However, what if you find yourself in a circumstance where the person you want to name as the beneficiary on your life insurance is also someone who cannot (or you believe should not) get that whole insurance payout all at once?

For example, what if you want to name your under-18 child or grandchild as your life insurance beneficiary? This person, as a minor, cannot, by law, get these benefits directly. Alternately, what if that child or grandchild whom you want to receive your life insurance payout after you die has just turned 18 and is very inexperienced in handling, and dealing with, large sums of money? Or, what if they are an adult but have a history of making bad investments, spending lavishly or being too trusting of other when it comes to money?

In these situations, having a trust in your estate plan can be a big help! If you have a trust set up, then you can, instead of individually naming the person whom you ultimately want to receive your life insurance proceeds, name your trust as the beneficiary of your policy. Then, when you die, your proceeds will go into your trust and the successor trustee whom you personally selected when you created your trust can manage those funds for the benefit of that person.

This situation isn’t the only one where your trust can help you when it comes to life insurance. If you have a living trust, chances are that one of your planning goals is avoiding probate. Well, if you have an insurance policy and, when you die, there are no available beneficiaries to take the payout, then that money goes into… your probate estate and has to go through probate administration before it can distributed!

How can this happen? It can happen if a policy has too few beneficiaries (such as listing only one beneficiary) and that beneficiary dies before you do. Sometimes, though, a policy may have numerous beneficiaries but, through tragedy or the randomness of life and death, all of the beneficiaries may have died first. Other times, a beneficiary may have chosen to forfeit his/her rights to receive policy proceeds. Regardless of the reasons, there is a way to make sure your insurance proceeds don’t eventually require probate. You can install this protection by naming your living trust as the beneficiary of your policy. You may choose to name your trust as the policy’s primary beneficiary and then put your instructions on distributing these policy proceeds in your living trust, or you can simply name your trust as an alternate beneficiary, after all of your preferred individual beneficiaries, as a “failsafe” against having your policy proceeds go into your probate estate.   


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