Tuesday, August 30, 2016

Digital Estate Planning and Estate Plan Reviews


Summary: Sometimes, we overlook how much little personal items will mean to our loved ones after we're gone. Your old photos and letters might seem trivial, but to a loved one, it might be an invaluable way to stay close after you're gone. In this age of email, Facebook and Instagram, accessing those memories may mean going online. To help keep your memory alive for your loved ones, your estate plan should include appropriate instructions for accessing your digital assets. Additionally, you should review your plan routinely to make sure that all parts of your estate plan, including your digital estate plan, is current and up-to-date. 

These days, more and more people of all ages are living more and more of their lives online. As that percentage continues to increase, estate planners continue to "bang the drum" of including your online and digital assets when you formulate your estate plan. Having a plan that allows your loved ones, after you're gone, not only to have the benefit of your tangible assets, but also your electronic things, is essential. What's also vital is making sure that you keep your digital estate plan in mind when it comes time for an estate plan review.  

When one crafts an estate plan, the things one leaves behind usually have either financial value or sentimental value. Digital assets are no different. Many people may think to include their access codes for their online banking or stock accounts, but may not be as diligent when it comes to, say, social media. All of these are important, though. Just as that old shoebox full of photographs and old letters probably has great value to someone in your family, so do your images saved in your smartphone or on your Instagram, Pinterest or Facebook accounts, or personal messages in your email.

Without a digital estate plan, gaining access to your electronic assets can be difficult or sometimes next-to-impossible. The internet is filled with stories of loved ones faced enormous challenges from Yahoo! or Apple or other electronic service providers when it comes to gaining access to an account of a deceased loved one. These battles often come at a price of great stress and considerable time for the loved one. If a court and/or lawyers must become involved, then it becomes stressful, time-consuming AND expensive!

Just like estate planning for tangible assets, estate planning for digital assets is an ongoing process, not a one-time deal. An estate plan review is great time to make sure that everything in your plan is up-to-date. Not only should ask yourself if you've undergone any life events that might affect your plan, you should also inquire about your digital assets. Just like you might need to contemplate how a new grandchild might impact your plan, you should also make sure that changes in your online accounts are reflected. If you opened a new account, whether it's a new online banking account or a new email account, make sure that your digital plan includes the necessary username and password information for accessing that account. If you've changed any of your passwords, you should make sure that your list of existing usernames and passwords is still 100% accurate. If you have relocated your list of usernames and passwords to a new location, make certain that your instructions to your loved ones regarding how to access this list once you're gone are current.

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
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Friday, August 26, 2016

Protecting Your Loved Ones Through Estate Planning


Summary: Adding extra trust provision to your estate plan can, in some cases, offer a needed level of added protection to your loved ones to whom you desire to leave your wealth. Whether your loved one has addiction issues, is going through divorce, or is merely young and/or naïve, adding spendthrift provisions to your plan can help ensure that your plan works as you want by ensuring that your wealth ends up with your loved ones, not your loved ones’ creditors.    

When you set out to make an estate plan and to leave your wealth to your loved ones, you’ll probably spend a great deal mulling over the distribution of your wealth, as it is an important part of your legacy. However, while you may wish to leave a significant sum to a loved one (or group of loved ones,) the prospect of doing so may make you uneasy if you fear that your loved one is ill-equipped to handle a significant influx of wealth. Fear not, though, as there is a wide array of estate planning options for every set of goals, and proper planning can help you protect your loved ones from the possible pitfalls that might otherwise occur with the receipt of a lump sum of wealth.   

One estate planning tool is the “spendthrift trust.” A spendthrift trust put limits on the extent to which the beneficiary (or beneficiaries) can access and control the wealth contained in the trust. While the Merriam-Webster defines the word “spendthrift” as a person “who spends money in a careless or wasteful way,” spendthrift trusts can be useful in more situations than just those that involve a potential beneficiary who is notoriously irresponsible with wealth.

To be sure, this tool can help if you have a loved one who is bad at handling wealth, whether that’s due to personal problems like addictions or because he/she easily duped or defrauded. In the case of a spendthrift beneficiary, the trustee you name can continue to protect your goals after you’re gone, making sure that your loved one will only have the benefit of your wealth to benefit him/her in the ways you’d want.

However, a spendthrift trust can also help in other circumstances. Perhaps your loved ones are not irresponsible with money necessarily, but are merely young. While a 19 or 20-year-old is a legal adult, you may feel that your loved one in their late teens or twenties is too young to handle receiving a single, large lump-sum of money. Your estate plan can help protect that loved one by delaying the distribution of wealth to them. It can make payments over time, like every year for a pre-set period of years, at certain major birthdays, like 21, 25 or 30, or other life-event milestones, like college graduation or getting married.

Another situation where extra planning can help is if your loved one has elevated risk when it comes to creditors or potential creditors. Maybe your loved one owns a sole-proprietorship business. Perhaps your loved one is heading toward divorce. If your loved one has creditors or people who could become creditors, a spendthrift trust could provide a much-needed additional degree of protection because, if your beneficiary is not in control of the funds in the trust, those funds are not available to his/her creditors, either.    

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






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Tuesday, August 23, 2016

Legal Challenges to Your Estate Plan


Summary: Estate plans, like almost every other legal documents, are subject to challenge in court and potential invalidation. This process is hard to accomplish and relatively rarely successful. Courts consider the intent of the estate plan creator to be paramount, as long as the plan doesn’t violate certain statutory rules (like spousal shares.) Plans are generally only invalidated if the challenger shows that the plan creator was influenced to such an extent that the plan did not reflect the creator’s true intentions. The possibility of a challenge should not stand in the way of you and establishing your plan.   

One of the concerns that a lot of people have as they contemplate creating an estate plan is: “How can I know that my plan is safe from legal contests?” This concern can be especially strong for folks who have unusual or unique goals for their plan. Maybe they wish to leave a distribution to a non-relative. Maybe they have decided not to leave a distribution to a child or other close relative. Regardless of the reasons, fears related to court challenges should not discourage you from getting a plan and generally structuring it however you want. 

The fact is, most plans have a fairly high level of safety from challenges because the law usually makes it hard for challengers to prevail. That’s because the law generally considers “testamentary intent” (in other words, the goals and objectives the plan creator intended to accomplish) to be of the utmost importance.

A real-life example from Michigan, decided by that state’s Court of Appeals in July 2015, hammers home this point. A man named Robert Cederquist created an estate plan with a living trust. Cederquist named Bonnie Rowan and Randal Lewis, who were the ex-spouses of two of his children, as the trustees of his trust, and the beneficiary and alternate beneficiary of his trust and his retirement account. Cederquist’s four children received nothing from either the trust or the IRA.

After Cederquist died in 2011, the children sued, alleging that the man’s estate plan should be declared invalid because Rowan exerted undue influence over the man. The law in Michigan regarding estate contests in similar to that in many other states. In order to succeed in challenging a plan, the challengers must prove that the estate plan creator was influenced by threats, lies, fraud, or other physical or emotional manipulation so severe as to destroy his free will. In other words, the influence was so overpowering the contents of the plan he made did not reflect his true intentions.

In Cederquist’s case, the children had evidence that Rowan “schemed to turn” the man against his children, and that his relationship with them deteriorated the more time he spent with Rowan. Despite this proof, the children still lost. Having evidence that somebody “poisoned” the mind of the estate plan creator isn’t enough by itself. The law in Michigan required the children to give the court direct proof that the poisoning of Cederquist’s relationship with his children was the result of lies Rowan told him. In this case, all they had was evidence that raised speculation or the possibility that Rowan had influenced Cederquist through lies, but no direct proof. So they lost.

The laws in many states are similar. It typically takes a lot of proof, and a very specific type of proof to succeed. Getting a court to invalidate and estate plan is generally difficult and rare. Anyone considering an estate plan should not be scared off by the possibility that a court contest will unravel all the work you’ve set out to do.  

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






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Friday, August 19, 2016

Approaching Estate Planning When You Live in More than One State


Summary: Having a living situation where you have more than one place (and state) that you call "home" can create complexities and risks when it comes to distributing your assets, especially your real estate, when you die. Owning property in multiple states may mean multiple probates, and the risk of larger costs and longer delays. A revocable living trust can help avoid this risk. With a properly funded trust, you may be able to avoid probate in all of the states where you own property. 

Many people, regardless of how many residences they own, have one specific place they think of as "home." For some people, though, the answer to the question, "Where is home?" is a bit more complicated. Whether it is due to the nature of their work, or simply a preferred retirement lifestyle that embraces warm southern winters and cooler northern summers, some people have two places both of which they consider to be home. If you find yourself in that situation, getting a proper estate plan is very important in order to avoid some the pitfalls associated with probate law.    

Say, for example, you have two homes: one in Michigan and one on Gulf of Mexico in Texas. You spend a significant amount of time each year living in each of these places. In that situation, how should you approach estate planning? First off, you should pursue getting a plan without delay! Next, you may be wondering, "Do I need Texas documents or Michigan documents?" The answer to that question is, "It depends." For your will and living trust, your documents should be from the state where your legal residence is located. The law considers your legal residence to be the place where you spend a substantial amount of time and where you intend to have residency. You can show your intent by various actions, such as getting a driver's license, titling and registering your vehicle(s) or registering to vote.

Regardless of what state your documents come from, you'll want to give serious consideration to creating a living trust. If you do not, your estate may have to go through multiple probates. Continuing with the previous Michigan-and-Texas example, let's say that your state of legal residence is Texas. That means that you would need a Texas will. But Texas law does not permit a Texas estate executor to deal with real estate in anyplace except Texas. As a result, your will would need to go through what's called "ancillary probate" in Michigan. Even with newer probate laws that streamline the process in many states, the costs and delays associated with going through multiple probate administrations have the potential to really mount up.    

Creating and funding a living trust can avoid such pitfalls. You can establish a trust and fund both of your residences into it, and neither would need to go through probate when you die. If all the assets you own in one state are funded into your trust (or structured in other non-probate ownership vehicles,) then your estate would not have to go through probate at all in that state. If this is true in both states, then you'd successfully avoid probate entirely in both places.      

Other estate planning documents, such as powers of attorney, are a little different. The law allows you to have multiple powers of attorney in effect at the same time -- your documents simply must state that neither one revokes the other and that the pair work in tandem with each other. You should ask your attorney about the possible benefits of having both Michigan powers of attorney and Texas powers in order to make certain that the wishes you've established in your plan will be carried out without complication. 

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






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Tuesday, August 16, 2016

Moving to a New State? Consider Getting an Estate Plan Review


Summary: Today, people move from one state to another with some frequency. Moving to a new state does not mean that the will and living trust you created in your old home state are now invalid and useless. Your move does mean that an estate plan review is potentially beneficial to you, as the differences in the laws of each state may lead you to desire a change to your plan, and it likely will mean that you'll want to replace some of your documents, such as advance directives or healthcare powers of attorney.    

In today's modern, mobile society, moving from one state to another is an increasingly common thing. Whether it's a job, family or a retirement destination, people move across the country for many reasons. This may seem like a problem in terms of your estate plan. If you're like many people, you've invested a lot in getting your plan in place. Moving to a new state does NOT, however, mean that all your documents immediately become invalid. It does, though, mean that getting an estate plan review is a good idea. 

Generally speaking, your will remains valid even if you move from one state to a new state. Many states have laws that explicitly state that out-of-state wills are recognized and enforceable in their states. Even though the document is still valid, an estate plan review can help you. Depending on where you moved from, and moved to, you may want to make changes to your plan. 

Perhaps you live in Ohio but decide to retire to a new home in Arizona. That means that you are moving from a state that does not follow community property rules to one that does. ("Community property" means that most things you acquire during your marriage are owned jointly by the two of you as a married couple; as opposed to non-community property where each spouse typically individually owns whatever is acquired in his/her own name.) This move from a non-community property state to a community property state may cause you to re-think some of the provisions in your will and perhaps alter your will's terms.

Another thing to keep in mind is your personal representative. Some states allow non-residents to serve as personal representatives, others allow it but only subject to certain conditions or restrictions and some states forbid it completely. Florida law, as an example, requires that your personal representative must be related to you by blood or marriage, or else must be a resident of Florida. A move to Florida may mean that you'll need to modify your will to name a new personal representative.

Your living trust is generally not affected by the sort of statutory rules that impact your will, so moving from one state to another is less likely to trigger a need for a change to your trust. A review is still a good idea, though, as it can help you make sure everything is up-to-date and that your trust is optimized to serve you in your new state.

Your advance directives and your healthcare power of attorney are different. Each state has its own rules and its own format for how these documents should be worded. Even though some states have laws that expressly allow for the enforcement of out-of-state documents, the best way minimize potential objections from healthcare providers is to create a new document in your state.

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






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Friday, August 12, 2016

Making Sure That Your Powers of Attorney Are Sufficiently Specific


Summary: Powers of attorney, like many estate planning documents, can be extremely broad or specific. The key to obtaining a power of attorney that will achieve the objectives you want from your estate plan is making sure that your document is sufficiently specific to cover the powers that must be named explicitly, while also remaining adequately broad to address all the issues that might arise in the future. 

A recent ruling from Kentucky's highest court offers some good "food for thought" whether or not you live in that state. The ruling determined that a general power of attorney was insufficient to allow an attorney-in-fact to make decisions that involved the waiver of certain fundamental rights. This decision shines a spotlight on the idea that, if you're considering an estate plan, or a plan update, you should make sure that your power of attorney (POA) documents are adequately specific to accomplish the goals you want to achieve.  

The September 2015 case involved three Kentucky resident each of whom created a power of attorney. In each circumstance, the POA named a close relative as the attorney-in-fact. (Two of them named a child, the third named a spouse.) Each of the three powers were general POA documents, meaning that they granted to the attorneys-in-fact general authority to make decisions on behalf of the people who executed the powers. 

Sometime after executing the POA documents, each of three people who had executed them entered nursing homes. The nursing homes required that their new patients complete application forms, which included an optional form requiring all disputes between the patient and the nursing home be arbitrated instead of being brought directly to court. In each situation, the attorney-in-fact completed the admission paperwork for the patient and, in each situation, the attorney-in-fact signed the arbitration agreement. 

Unfortunately for all three of the patients, each of them also died shortly after their admission to the nursing homes. Each family sued their respective nursing homes for wrongful death. The trial courts in Kentucky issued a mixed bag of rulings, with some ruling for the families and some favoring the nursing homes and their arguments that the arbitration agreements must be enforced. 

Ultimately, the Kentucky Supreme Court resolved all three cases in favor of the families and their right to sue. The arbitration agreements were not enforceable because the attorneys-in-fact signed them and they did not have the legal authority to make those decisions. Agreeing to arbitrate instead of suing involves the waiver of a fundamental right and, according to the court's ruling, an attorney-in-fact can waive a fundamental right only if the POA under which she is acting expressly authorizes her to make such decisions. In these three instances, the POA documents only conferred general authority to the respective attorneys-in-fact, so the POAs were insufficient to allow the attorneys-in-fact to enter into arbitration agreements on behalf of the patient.

As you contemplate creating a new estate plan, or updating your existing plan, you may want to consider the possibilities regarding your future need for nursing home care. Depending on the law in your states, if you want your attorney-in-fact to have the power to make decisions like signing arbitration agreements within nursing home application packets, you should be sure that your POA explicitly gives your attorney-in-fact to power to do so. These cases also highlight how, in some states, it is imperative that your POA include certain explicit grants of authority to your attorney-in-fact in order to function the way you want.

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






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Tuesday, August 9, 2016

The Advantages and Disadvantages of Life Estates Versus Living Trusts in Estate Planning


Summary: For many people considering estate planning, their family home is their most valuable and most treasured asset. Multiple different options exist for transferring that home to your loved ones after you die. Some options, like life estates, come with benefits, but may also leave your home exposed to your beneficiaries' creditors or ex-spouses if they're sued. Other options may provide similar or equal benefits without as much risk.    

If you're like a lot of families, your most important possession, and likely one of your most monetarily valuable possessions, is your family home. When it comes time to tackle estate planning, you may already have a beneficiary (or beneficiaries) in mind for your home. But there are lots of different ways to accomplish transferring that home to your intended recipients. Each one comes with its own unique set of positives and negatives.

Life estates are legal arrangements where an owner (or owners) reserve the right to possess a property for the remainder of their lives and, after they die, then the property goes over to the recipients named in the life estate deed. For example, a married couple creates a life estate deed that transfers their home to their two children, but reserves a life estate for them. In that scenario, the home remains in the possession of the parents for as long as either is alive. When they both have died, then the home goes to the children. 

This technique involves several benefits. It allows the parents to stay in their home until they die. It transfers the home to the children without requiring probate. It also may allow the family to maintain certain capital gains exclusions that provide tax benefits if or when the family decides to sell the home.

However, it also has certain distinct drawbacks. Unlike living trusts or transfer-on-death deeds, life estates are not very flexible. Once you've named a beneficiary to receive the property after your life ends, it is very difficult to alter that beneficiary should you change your mind later. Additionally, using a life estate creates certain legal exposure should one of the people you've named as beneficiaries be sued, get divorced or declare bankruptcy. If that happens, that ex-spouse or creditor may be able to stake a legal claim to your home.

With a living trust, you may be to avoid some or all of these pitfalls. Just like the life estate, using a living trust means that the property will transfer without requiring probate. Also, the Internal Revenue Service's regulations make it clear that, even if you've titled your home in a living trust, the full capital gains exclusion applies when the property is sold. So, the living trust offers the same upsides in these areas as a life estate. However, with a living trust, you have much greater flexibility if you decide you want to change your beneficiaries. Also, using a living trust protects the property in the event your beneficiary is sued, gets divorced or goes bankrupt.

Finally, in some situations, you may need to maintain a life estate in order to be eligible for certain property tax benefits, like a disabled veteran's homestead exemption. Be aware that, if you're in such a circumstance, you still have the option of using a life estate in tandem with a living trust. Your estate planning attorney can explain all of the avenues that are available to you and which makes the most sense 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






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