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Friday, September 25, 2015

Legacy Assurance Plan Article: Making changes to Your Estate Plan... And Making Them the Right Way




Summary: The end of the calendar year can be a time of reflection, including reflecting on one's estate plan. Most estate planning documents can be changed either through an addendum document (such as a trust amendment or will codicil) or through replacement documents. It is very important that your change documents are drafted, signed, dated and witnessed properly, in order to ensure that they meet all the statutory requirements of your state. 

As 2014 progresses toward its conclusion, many people use the holiday season as an opportunity for reflection on the year that is nearly complete and looking forward to the new year ahead. As part of this, now is an excellent time to assess your estate plan and determine if you need to pursue. Have you experienced a life event that changes your family situation (such as a marriage, divorce, birth or death) that you would desire to reflect in your plan? Perhaps, as you review your plan, you simply have decided that you'd like to change some of the decisions you've made in plan. Regardless of the reason, if you want to change your plan, you generally can. It is very important, though, to make sure that you complete the changes in the right way, in order to avoid the legal complications that can arise from an improper change document.



Generally, a will is changed through a document called a "codicil." A codicil allows you to revoke certain parts of your will or add new elements to your existing will. The law is very demanding with regard to whether a codicil is valid or not. Codicils must be dated, signed and witnessed just like wills. In some cases, however, it may be easier and more effective simply to replace your old will with a new one. If you decide to create a new will, it is very important that you make sure you legally revoke your old will. This is generally done by inserting language into your new will that says that you revoke all the wills you previously signed.

You have similar options with your living trust. You may put your desired changes into effect through a trust amendment document. Your trust amendment should be signed, witnessed and/or notarized exactly as your trust agreement document was. If both you and your spouse signed the trust agreement, both of you should sign the amendment. If you and your spouse created your trust together but your spouse has since passed, there may be some types of changes that are not allowed.



In some cases, it may make more sense to revoke your trust and replace it with a new one to achieve the changes you want. Because this can be complicated and time-consuming, these situations are more rare.

For your powers of attorney, changes are generally achieved by replacing the existing documents with new powers. Much like a replacement will, your replacement power of attorney should revoke previous powers by including language spelling out that revocation. For any of these changes, your estate planning attorney can walk you through the process and make certain that the documents bringing your desired changes to life will meet all the requirements dictated by the law.

   

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

Friday, September 18, 2015

Legacy Assurance Plan Article: Ensuring the Safety and Security of Your Estate Plan


Summary: Estate planning involves, in large part, providing for those that matter most to you. To make sure your plan can accomplish this, you must plan to provide for the security of your estate planning documents. Having a plan that cannot be located can lead to many problematic consequences, such as added expense or the courts distributing your assets in a manner not consistent with your true wishes. To avoid this, make sure not only that you keep your documents in a safe place, but that you communicate the location of your plan, and how to access it, to the people who will need to know.

You've taken the steps you need to secure your family's future by putting an estate plan in place. You've signed all your documents. You've funded all the trusts that are part of your plan. But have you taken the necessary steps to protect your estate planning documents themselves? This step, while easily overlooked, is a very important element to ensuring that your plan is a success and carries out the wishes you've recorded in those documents.

If your original documents are lost or destroyed, the consequences can be incredibly harmful. In most all cases, the law requires your executor to produce the original copy of your will in order to start the probate process. If the original will cannot be found, the court will decide what happens to your assets. If the court receives enough evidence, it may, in some cases, order your estate probated in accordance with the missing will. In many situations, though, the court will view the inability to produce the original will as proof that you intentionally destroyed it, which means that you revoked it. Unless you also created another valid will previously, the court will distribute your assets in accordance with the intestacy laws of your state.

If your plan includes one or more trusts, note that they are not required to be submitted to the courts when you die. Nevertheless, you should make sure that these documents, along with your powers of attorney and living will, are kept someplace completely safe. Most people usually keep all their estate planning documents together in one place, such as a folder or a binder, which makes it easier on them and their estate planning professionals should they need to make changes. This will also be of great benefit to your loved ones and executors/successor trustees after you die.

Some people may choose to maintain a safe deposit box at a bank for their estate planning documents. Others might choose someplace closer to home. If you keep your documents at home, it is important to ensure that they are kept not only protected from theft but also disasters such as fire or flood. Regardless of the location you select, it is important that you communicate this information to the correct people. Whether it is an estate planning attorney who will be handling the probate of your will, or a loved one who will be serving as the successor trustee of your living trust, they will need to be able to find and access your documents promptly. If your documents are secured in a locked location, you might consider providing your successor or estate planning professional with a copy of that key. If you are using a safe deposit box, you may want to complete the necessary forms with your bank to give that person the right to open the box. By taking these pre-planning steps, you can help ensure that you will save your loved ones time, stress and possibly money.
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

Friday, September 11, 2015

Legacy Assurance Plan Article: Funding Your Revocable Living Trust: Knowing What NOT to Put into Your Trust

Summary: Proper funding of revocable living trusts is essential to the success of estate plans that include trusts. It is vital to know which assets should, and which should not, be funded into a living trust. With certain assets, transferring them into a living trust can have very damaging tax consequences. With other assets, transferring them into a trust may not be necessary to gain the advantages of probate avoidance, but depending on your circumstances, you might have other goals that dictate funding that asset into the trust anyway.

You've taken most of the steps to completing the process of getting an estate plan in place. You decided to get started. You reached out to an attorney. You decided on your executors, trustees, power of attorney agents, as well as who will receive your wealth. You've signed the documents to put that plan in place. If your plan includes a revocable living trust, though, you have one more essential step: funding your trust.

One of the keys to the success of your estate plan is knowing what assets should go into your trust, and which ones you should leave in your own name. Its important to know what to transfer and what to avoid transferring, because in some cases, the results can be very harmful, such as triggering negative tax consequences or exposure to creditors.

Legacy Assurance Plan and  Revocable Living Trust

Generally speaking, your assets that have a pay-on-death or transfer-on-death beneficiary designation on them are assets you need not fund into your trust. Those death beneficiary designations mean that those assets already avoid probate, so they already avoid the probate administration process.

For some assets, transferring them into a trust can be quite damaging to your wealth. For example, if you transfer ownership of your life insurance from your name to the name of the trustee of your living trust, that may increase the exposure to creditors that policy will have. Qualified retirement accounts (like 401(k)s, IRAs or qualified annuities) and health savings accounts definitely should not be transferred into your living trust. Health savings accounts cannot be funded into a trust, and transferring a qualified retirement account to a trust counts as a total withdrawal of the account funds, which carries with it potentially very harmful tax consequences.

 Legacy Assurance Plan for Estate Planning to Keep Your Money in the Family


Depending on what state you live in, there may be other assets that do not require probate to pass to your loved ones when you die. For example, in some states, the transfer of your car, truck or boat upon your death does not require probate. If you live in one of these states, you would not need to fund your vehicle into your trust in order for it to avoid probate.

In each of the above discussions, the focus is on whether or not you need to fund an asset in order to gain the benefit of probate avoidance. However, you might potentially choose to transfer an asset into trust anyway, based on your circumstances. Trusts offer their creators many benefits other than just probate avoidance, and for some people, placing assets into a trust may satisfy another goal they're seeking to accomplish. Your estate planning attorney can help you differentiate between assets that can be funded into a trust and those that should not be funded.


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.

Wednesday, September 9, 2015

Legacy Assurance Plan Article: Estate Planning Tips for Childless Married Couples

Summary: Estate planning is very important for childless couples, because the risks involved in doing nothing are great. A childless couple who create no plan may risk disinheriting one spouse's family as a result of intestacy laws. Failing to plan thoroughly may also create a situation where, if you need another person to make medical or financial decisions for you, a very costly probate court proceeding may be required.  

Much of estate planning, in many cases, involves leaving a legacy for one's immediate descendants: children, grandchildren, great-grandchildren and so forth. But today, as people live longer lives and also have smaller families, the scenario of a married couple with no children occurs increasingly frequently. Maybe your children predeceased you with no children of their own, or maybe you and your spouse have no children. In either event, couples in this situation still have very important planning needs that require a carefully thought out plan.

Legacy Assurance Plan For Elder


Couples in this situation should be keenly aware of the risk posed by doing nothing. The rules of inheritance enshrined in state law, known as the "intestacy laws," will govern what happens to your assets if you do nothing. In many states, this could mean that the surviving spouse inherits everything owned by the spouse who dies first, and then all of both spouses' assets are distributed, upon the death of the second spouse, to the relatives of that second-to-die spouse, leaving the family of the first-to-die spouse receiving nothing. One possible method for avoiding this situation is creating a joint living trust. With a properly funded living trust, the wealth of both spouses is held in trust for the couple, managed by the couple and then, after the death of both spouses, distributed to those loved ones chosen by both spouses.


Legacy Assurance Plan Of America For Family

Additionally, if you as a couple have relatives but do not wish to leave your assets to them, but rather to distribute your wealth to friends or charities, a plan is extremely important in this circumstance, too. If, for example, you've both agreed that you will leave all your collective wealth to the ASPCA when you die, each of your can create matching wills that establish that distribution. You can also use a living trust to accomplish this objective.
Another element of your plan that childless couples must consider is their powers of attorney and living wills. For many people, deciding who will be their surrogate decision-makers can be fairly straight-forward. They may name their spouse as the primary agent, with one or more children as alternate agents. For a married person with no children, he/she may name his/her spouse as the primary agent, but thorough planning also typically includes naming one or more secondary agents in the event your spouse is deceased, incapacitated or otherwise not able to do this task. It is often helpful if the individuals serving as secondary agents are younger than you. If you become ill or incapacitated and need someone else to make financial or healthcare decisions for you, and all of your agents named in your plan are deceased or incapacitated, a probate court proceeding may be necessary, which can cost thousands of dollars.

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

Tuesday, September 1, 2015

Legacy Assurance Plan Article: 'Get it in Writing' is Good Advice in Many Areas, Including Estate Planning



Summary: A Michigan man's estate plan became entangled in litigation because two of his beneficiaries claimed they had an oral agreement with the man regarding the distrubution of his assets. The case serves as a lesson to anyone making an estate plan to ensure that your plan documents are updated and correct, in order to reflect all of your goals and objectives.

Making sure that the estate plan that gets carried out distributing your assets to your loved ones matches your actual objectives is probably among the biggest goals of anyone creating an estate plan. To make sure that happens, you should put all of your intentions in writing, in order to minimize the risk of confusion and discord, as a recent case from Michigan illustrates.

The case pertained to the estate plan of William Weigle. Weigle's neighbors, Stephen Demyanovich and Timothy and Linda McConnell, all provided care for the widower, whose wife and only child had predeceased him. Weigle wisely executed an estate plan years earlier, in 1994. Weigle's trust dealt with his two biggest assets: his house and a Comerica account worth roughly $2 million. 






Weigle amended his plan three times to distribute portions of his wealth to his caretaker neighbors. When he amended his documents in 2007, he left roughly 70% of the financial account and half his house to the McConnells. Four years later, he changed his plan and left the entire house to the couple but gave them nothing from his financial account.

After Weigle passed away in 2012, the McConnells sued Demyanovich (all three of whom were co-trustees of Weigle's living trust.) One of the things they claimed in their lawsuit was that they had an oral agreement with the elderly man. The deal stated that, in exchange for their providing personal care services, the couple was supposed to receive a part of the financial account.

The McConnells lost their lawsuit. Whether Weigle ever promised the couple what they claimed he did will forever remain unknown, as the only "proof" of the oral contract was the couple's statements that it existed. Perhaps Weigle actually meant for each of his neighbors to get what they got under the terms of his plan as amended in 2011. If that is the case, then his plan worked exactly as it was supposed to, and the lawsuit between his neighbors and co-trustees is an unfortunate reminder that sometimes estate contests are difficult to avoid.




If, however, Weigle did make the oral promise to the McConnells, and intended to honor that agreement, then the plan may not have player out the way he truly wanted. If this was the case, then Weigle's plan serves as a reminder that, when you are making an estate plan, always put your objectives and goals in writing in your plan documents. An oral promise can be extremely difficult to prove and enforce, especially if written documents exist that say something different.  

This article is published by the Legacy AssurancePlan 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 legacy Assurance plan