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

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Thursday, June 22, 2017

Estate Plan Reviews for Your Non-Probate Assets: Even More Benefits Than You Might Think

Summary: Estate plan reviews are important for many reasons. Changes in your life, or new changes in your state’s laws, may trigger a need for an amendment or replacement to a document like a will, trust or power of attorney. A review should also include checking non-probate assets to make certain that these assets’ beneficiary designation forms are up-to-date and still accurately constructed to achieve the goals of your plan.


A lot of times, estate planning “bad news” or “horror” stories involve some sort of dispute or disagreement between two opposing sides. For example, a few years ago, a case centering on the distribution of a life insurance policy went all the way to the U.S. Supreme Court. The account holder’s widow went to court to demand that she receive her husband’s $124,000 death benefit payout. The problem was, however, that she wasn’t the named beneficiary on the policy’s death beneficiary designation form; the man’s ex-wife was. (He had filled out the form many years earlier, while still married to the previous woman, and had never updated the beneficiary designation.) Ultimately, the courts ruled in favor of the ex-wife and the widow got nothing.

Sometimes, even when everyone is in agreement, an out-of-date plan can still cause problems. For example, assume that a woman with three children re-marries. She and her second husband have no kids together. Everyone agrees that the woman’s retirement account should be split equally (25% each) between the kids and the husband. When she dies, the widower asks the account holder to distribute funds equally between him and his stepchildren. The account holder refuses. Why? Because the husband’s name was the only one on the beneficiary form. As a result, the entire amount gets distributed to the husband. Wanting to honor his dead wife’s wishes, he withdraws 75% of the distribution he received and sends each of his three stepchildren an equal portion.

This latter case sounds like a “happy ending,” right? Yes and no. The wife’s wishes were honored but, because the husband had to complete a withdrawal of the money needed pay his stepchildren their shares, he incurred a much larger tax liability than he would have if he hadn’t been forced to use this multi-step system to get the money to his stepchildren.

In both cases, proper estate plan maintenance, including the maintenance of non-probate assets, could have avoided these pitfalls. In the first case, had the husband’s estate plan undergone a review, and the husband diligently pursued updating his beneficiary form, his life insurance could have gone his wife, and not to his ex. In the second case, the family could have avoided a needlessly large tax bill if, while the wife was still alive, she updated her retirement account beneficiary form to distribute the death benefit payout to her three children and her husband as equal co-beneficiaries.

This is why thorough estate plan reviews are so important. An estate plan, like a vehicle, can only function at peak performance if it is properly maintained. Estate planning documents like wills, trusts and powers of attorney should be reviewed periodically to make sure that any new events (such as life changes or changes in the law) don’t require an amendment or replacement. There’s more, though. There’s also reviewing your non-probate assets. Whether it is a life insurance policy, a retirement account or any other asset with a pay-on-death or transfer-on-death designation, these assets need periodic reviews as well, in order to make sure that the beneficiary designations attached to them still reflect your wishes. 


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, June 19, 2017

Life Estate Deeds | How They Can Be Helpful and How They Can Be Risky

Summary: Estate planning is a field where there often can be multiple different paths to achieve the same goal. There are many different ways to transfer real estate that avoids probate. Some of these methods may be more complicated and risky than others. Using a revocable living trust, transfer on death deed or enhanced life estate deed may allow you enjoy the advantages of simplicity and ease (and probate avoidance) while also escaping some of the complications and risks associated with other techniques such as ordinary life estate deeds.  

For a lot of people, one of the biggest (if not the single biggest) asset for which they seek to plan is their home. Estate planning when it comes to your home can be very important to you for multiple reasons. One very obvious reason is that, in many cases, the home is largest single asset in that’s person estate. In addition to the monetary consideration, there’s also the fact that, for many families, the home may represent the asset with the highest (or nearly the highest) emotional and sentimental value. There’s a often a desire, not only to craft a plan that is simple and cost-saving, but also one that hopefully ensures that the home will transfer to someone who will “care” for the home properly.

One method some people rely on to accomplish this planning goal is the life estate deed. Life estates do have certain advantages. They are simple to set up and they are simply to deal with after the owner dies. At the death of the owner (technically known as the life tenant), the beneficiary (technically known as the remainder owner) simply provides a copy of the deed and proof of death.) They also have the advantage of avoiding probate (as long as they’re set up properly and the beneficiary doesn’t die before the owner does.)

However, they have shortcomings, too. Let’s say you set up a life estate deed on your home so that it transfers to your daughter when you and your spouse die. Now let’s say you and your wife decide you want to sell, whether it is to downsize, to relocate somewhere warmer and sunnier or whatever reason. You don’t get to make that decision alone anymore. The legal paperwork to complete the sale must be signed, not only by you and your spouse, but by your daughter, too. The same thing is true if you decide, for example, to take out a second mortgage on your home. Just like with a sale, your daughter has to sign off on it. Something similar is true if you want to change or undo the life estate you’ve set up. It is technically possible to do, but it has to be approved not only by you by also by the person you named as the remainder owner in your life estate deed. Even if everybody agrees, this can have negative tax or Medicaid planning consequences.

Fortunately, there are options that are often better ways to deal with your home as part of your estate planning. Some states have what they call a “transfer on death” deed. Others have what’s called an “enhanced life estate” deed. These deeds will avoid probate and are relatively simple to set up and deal with after your death. Unlike regular life estate deeds, however, they are very easy to change or undo and, if you decide you want to sell or mortgage your home, you are free to do without obtaining permission, or even notifying, the person you’ve named as the beneficiary under the deed.

Even if your state has neither transfer on death deeds or enhanced life estate deeds, all states recognize revocable living trusts. Living trusts can also be a relatively simple way to plan for your home and avoid probate. Depending on your circumstances, it is possible that there may be other aspects of your planning needs and goals that may make a living trust a better choice for you even if your state has transfer on death deeds or enhanced life estate deeds. Your estate planning attorney can help you sort out what’s best for 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, June 15, 2017

The Importance of Dotting All Your I’s and Crossing All Your T’s When Your Legacy Includes a Beneficiary With Special Needs

Summary: When you have a loved one with special needs whom you desire to include in your estate plan, you have many essential steps you should take in creating and maintaining your plan. Establishing and funding a “Special Needs Trusts” or “Supplemental Needs Trusts” may be an important part of achieving this element of your legacy. But protecting your loved one with special needs goes beyond that. Proper planning also means looking at, and periodically reviewing, your entire estate, including non-probate assets, in order to ensure that there are no components in your estate (and estate plan) that could cause problems for your loved one and frustrate the goals you were trying to accomplish.   

One of the groups of people who have one of greatest needs for engaging in careful and comprehensive estate planning is people who have one or more beneficiaries who have special needs. For these people, proper planning is vital because, in many cases, the beneficiaries with special needs whom they desire to include in their legacy receive essential services through governmental programs that have needs-based eligibility requirements. One wrong step could mean an event that triggers your loved one’s disqualification and a loss of those services. Even if it is only temporary, such a loss could be very harmful.

If you have a loved one with special needs whom you desire to include in your estate plan, you may already have heard about “Special Needs Trusts” or “Supplemental Needs Trusts” (SNTs.) This variety of trust planning can be very helpful because it allows you to provide a distribution for the benefit of your loved one with special needs without doing it in a way that potentially jeopardizes their continued eligibility for their government program-based benefits and services. This type of trust planning allows you to take the money to you would have left to this beneficiary and place in it an irrevocable trust for the benefit of that person. A person (not the beneficiary) whom you name then serves as the trustee of the trust, manages all of its funds and makes all decisions.

Most people’s estates go beyond just what is subject to their probate estate or living trust, however. This is why proper planning for your special needs family goes beyond just establishing a special needs trust. For example, what about your life insurance, annuities, IRAs, other investment products…. or, for that matter, any account that has a pay-on-death or transfer-on-death designation attached to it?

Have you made sure that all of these accounts’ death beneficiary designations are constructed properly? For example, let’s say you have two children: a son with special needs and a daughter who doesn’t have special needs. You have a SNT for your son. You may have set it up and funded it properly, but if your IRA’s death beneficiary designation says, “To Son and Daughter equally as co-beneficiaries,” your son could still have an eligibility requirement when you die. This is another excellent reason why estate plan reviews -- reviews that are genuinely comprehensive and look at all of your estate -- can potentially do so much good. Maybe you’ve set up a new financial account, or maybe you just moved from one account provider to another. Are you certain that all of your death beneficiary designations are constructed properly? A thorough review is as vital a part of planning for your special needs family as is creating a SNT.       

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, June 12, 2017

Making Your Estate Plan As Bulletproof as Possible

Summary: Your estate plan is designed to accomplish many things. One of these things is to give you and your loved ones peace of mind from knowing that you are truly prepared for whatever comes next. With a comprehensive estate plan, you can be confident that, come what may, your plan will be ready. 

There is common saying among people in the various planning fields. This saying encourages people to “expect the best but plan for the worst.” Planning for the worst is a wise and cautious way to make sure that, whatever comes your (or your family’s) way, you are ready. Your estate plan can benefit from this type of thinking as well.

There are several things you can do in order to make sure that, even if the nearly unthinkable happens, your plan can handle it. One example of this type of circumstance is having the deaths of you and your spouse take place in close succession. Depending on just how close your deaths might be, this situation could cause problems for your family.

Some people sometimes say that they hope they pass away at the exact same time as their spouse. Of course, if that happens in real life, it has the potential to cause complications if your and your spouse’s estate plans, like a lot of people’s plans, leave everything (or a sizable distribution) to the surviving spouse. If you die together, did your spouse survive you or not?

There is a statutory system for dealing with these types of circumstances. It’s called the Uniform Simultaneous Death Act. Like intestacy laws, it is a one-size-fits-all system set up by the state legislature. How close together do your deaths have to be to be count as “simultaneous”? It varies from state to state, ranging from 120 hours to 120 days.

If you don’t want to leave your plan’s distributions up to your state’s laws, there is a way to take control. You can simply insert a simultaneous death clause into your estate plan. In this clause, you can state that, if you and your spouse die together (or die in a manner that makes it impossible to tell who died first,) then your assets shall be distributed as if you died first. (You can also make the clause say that, in cases of simultaneous death, your spouse died first. The order is up to you.)

Of course, simultaneous deaths may not be your only concern. For example, what about having your deaths fall close together but just outside the definition of “simultaneous deaths”? If your plan centers around Last Wills and Testaments, this may force your family into having to go through probate administration twice within a very short period time. Obviously, one way around that is to plan to avoid probate and include one or more living trusts in your plan.

Another way around this problem is to include another clause in your plan that says a beneficiary must outlive you by a set period of time in order to receive his/her distribution. Whichever method you choose, the scenario of simultaneous deaths is just one of many that demonstrate the many various things that can happen to your family and complicate estate planning matters. The best way to protect yourself is with a truly comprehensive plan that ensures that your plan has planned for all reasonably possible possibilities.


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, June 8, 2017

Don’t Rely on Other Mechanisms | Get an Estate Plan to Express Your Wishes

Summary: An estate plan is an important piece of planning that almost everyone needs. Your legacy is too important to leave open to uncertainty and allowing uncertainty to enter the picture when it comes to your estate can lead to stress, expense and perhaps the need for courtroom litigation. By getting a comprehensive plan, you can to do everything possible to minimize these risks and uncertainties.  

If you’ve read much about estate planning, you know that just about everyone needs a plan. You may also know that certain groups of people have things in their lives that make planning especially important for them. A couple of these groups can include people with blended families and people with non-traditional relationships. Procrastination can often lead to problems, especially as you get older. A court case decided last year offers a clear illustration of these things and what can go wrong when you don’t plan properly.

Richard’s family situation, in some ways, was not unlike many others. As a young man, he had gone overseas and served in war. He came home, went to college and got married. He and his wife had two children, a son and a daughter. Eventually, he and his wife divorced. Sometime later, he married again and had three more children. He and his second wife also divorced.

In other ways, though, Richard’s situation was not typical. Richard and his second wife eventually reconciled and resumed living together in the summer of 2012. They even discussed remarriage with the reverend of the church where they attended together, but they just never got around to setting a date

In addition to legally remarrying his wife, another thing that Richard didn’t get around to doing was creating an estate plan. By the fall of 2013, Richard became ill and was hospitalized. By mid-December, Richard was seriously ill. At that time, he and his wife had a wedding in the hospital. While the couple’s reverend provided the couple with the sacrament of marriage, there was no marriage license. The reverend had gone ahead with the ceremony to give Richard some “closure” regarding something Richard regretted procrastinating and not completing while he was still healthy.

Less than a week after the ceremony, Richard died. When he died, Richard had no estate plan. Richard’s daughter by his first marriage opened a probate case file. She listed four heirs at law: herself, her brother and her two surviving half-siblings. The wife filed a motion in the case, asking the court to declare her to be Richard’s surviving spouse and, as such, an heir.

The dispute went before an Assistant Clerk of Court, who ruled that, because the marriage wasn’t legal, the wife wasn’t an heir. The wife appealed to Superior Court, but lost again, as that court also ruled that she was merely an ex-spouse.

She took her case all the way to the Court of Appeals, where she finally won. While, under the laws of their state, the reverend committed a misdemeanor by performing the ceremony without the license, that didn’t change the fact that the ceremony complied with all of the requirements of state law. The lack of the license didn’t invalidate their marriage and the wife was legally na heir to her late husband’s estate.

They key to take away from this is: an estate plan could have saved this family all of this time, stress and expense. With an estate plan, Richard could have clearly expressed his intentions for his legacy by stating exactly how much he wanted to leave for his wife, for his children and for everyone in his life. With a will or a living trust, you can leave your wealth to anyone you want… even an ex-spouse. If Richard had a valid estate plan, their marital status might not have been such an important legal issue, because the wife would have been entitled to receive her distribution under Richard’s plan regardless of whether they were legally married or legally divorced. 


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, June 5, 2017

New State Laws Serve as Reminders of the Benefit of Estate Plan Reviews

Summary: Whether it is a court ruling or a newly enacted statute, changes in the law are one of many good reasons why you should get an estate plan review periodically. These new laws could mean making changes to comply with new demands, or they could mean making changes to take advantage of new benefits and rights created by the new laws. With a comprehensive review, you can make sure that you’ve taken the time to go over the changes that have happened in your life, as well as the changes that have happened in the law, to make sure that your estate planning has everything in it that it needs to do as much for you as it possibly can, and that it does so in the most optimized and efficient manner available.

One example of a state where the government has made recent changes to the laws that impact estate planning is Michigan. In 2016, that state made several alterations to its statutes.

One major new law was the creation of Michigan’s new “Fiduciary Access to Digital Assets Act”. This law that changes the rules regarding one of the more cutting-edge issues in estate planning, which is access to a deceased person’s digital assets.

Once upon a time, photos were glossy prints stored in an album or scrapbook, videos were recorded on 8mm film or VHS tapes and letters were paper documents stored in a shoebox. Today we have Instagram, Facebook, Pinterest, Youtube, Dropbox, Twitter and email. Instead of paper bank and financial statements, we have online banking. The key to opening up all of these possessions of a deceased loved one, as opposed to a metal key to lockbox, is a username and a password. In the past, many service providers steadfastly have refused to grant access to anyone, even a duly authorized executor, attorney-in-fact or successor trustee, unless they had the user’s ID and password. 

The new act specifically spells out four categories of people who are legally entitled to request access to your digital assets. These include your agent under your financial power of attorney, the personal representative of your probate estate, the successor trustee of your trust or your court-appointed conservator. If, however, you’ve named someone specifically to handle a particular account after your death (such as your Facebook “legacy contact,”) then that designation takes priority.

Michigan also passed a “Funeral Representative Act.” Similar what its neighbor, Indiana, did last decade, Michigan now has a law on the books that gives you the option, as part of your estate planning, to execute a document that names a specific person who will have the legal authority to make decisions about “the handling, disposition, or disinterment of my body, including decisions about cremation.” If the person you prefer make your final arrangement decisions is someone other than your next of kin, this new law (and the new estate planning document it created,) can be extremely helpful to you in making or updating your plan.

The state also now gives residents the option to name an official designated caregiver. Once you’ve designated a caregiver, the law requires your hospital to work with that person on things like your discharge from the hospital and your after-care needs.

The recent round of statutory changes also allows Michiganders to set up a specific type of irrevocable trust that offers enhanced protection from creditors (assuming your trust and your situation meet all the legal requirements.) Michigan became the 17th state to recognize these trusts. If you are a farmer or other small business owner, it may be helpful to learn more about them.

To be sure, Michigan was only one of many states to enact statutory changes that had an impact on estate planning recently. Sometimes, these changes are created by the legislature and sometimes they’re caused by court decisions (such as 2015’s same-sex marriage ruling by the U.S. Supreme Court.) Even if you don’t live in Michigan, your state government may have made changes that could have potential impacts on your plan. With a detailed estate plan review, you can make changes to comply with new laws’ demands. Alternately, when a new law gives you a new opportunity to assert even more control over your legacy and further customize your plan, a review can help you make that happen.

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, June 1, 2017

The Many Ways That Your Estate Plan Can Achieve ‘Extra’ Planning Goals

Summary: An estate plan can accomplish many major, common goals like avoiding probate, saving on some taxes and providing for a surviving spouse. But, if your objectives go beyond that, chances are your plan can help meet those preferences, too. With a carefully crafted plan, you can not only provide for your loved ones’ needs, you can incentivize them to make positive choices, too. 

Pay attention to discussions surrounding estate planning long enough and you’ll hear certain reasons for planning come up again and again… avoiding probate, potentially saving on certain taxes, directing family business succession or providing for your surviving spouse and children. These are all very important and very valid reasons to go out and get an estate plan (or update the one you have) and to do so without delay. However, these are not the only objectives you might want your plan to accomplish, and these are certainly not the only objectives your plan can achieve.

One thing that many people want to include as part of their legacy is helping to encourage their loved ones to make positive choices. What that means may vary depending on you and your family. Maybe you want your daughter to go to college and obtain a degree. Or perhaps you want to encourage your son to settle down, get married and live a more stable lifestyle.

There are ways of using your estate plan to accomplish these ends. One or more trusts may potentially serve as very useful vehicles in meeting this goal. Your trust(s) can dictate that certain events in a beneficiary’s life will trigger certain distributions to them from the trust’s assets. Those events could include things like graduating from college or getting married. By inserting these types of provisions, you are reaping multiple benefits. You are reinforcing your values (such as the importance of education and/or family,) you are helping incentivize your loved one to make wise decisions and, by delaying some of your loved one’s receipt of money, you are protecting him or her from the problems that can arise from receiving too much wealth at too young an age in a single lump-sum.

Speaking of protection, your trust can also help shield your loved ones, too. If you have a loved one with addiction issues, you can keep his or her money in trust, which offers the added protection of your trustee handling this beneficiary’s wealth instead of the addicted beneficiary him/herself. These same types of protections can be used for other beneficiaries, too, like a loved one who is in a bad marriage or is being sued. Certain trust types, such as ones often called “spendthrift trusts” can help you meet these goals.

Finally, it is often useful to make sure that your incentive provisions in your plan are what some observers call “more carrot and less stick.” By offering positive incentives, you will encourage your loved ones to follow the wise path you’d like them to follow. Negative incentives, such as provisions that call for your loved one to lose some or all of his distribution may not only create ill feelings, they may also invite legal contests to your plan, 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