Thursday, September 28, 2017

In a Committed Long-Term but Non-Marital Relationship? There’s an Estate Plan for That


Summary: Sometimes, people make the mistake of thinking that estate planning isn’t for everyone. The truth is that most everyone needs a plan. If you are someone who is in a long-term committed relationship that exists outside of marriage, your circumstance may indicate a very powerful need to engage in detailed planning. Even if you plan on distributing all of your assets to your children or other blood relatives, your non-marital partner may still be an integral part of your planning needs and preferences. With a proper plan, you can make sure that you’ve done everything necessary to protect yourself, your partner and your relatives.         

The diversity of types of couples relationships in this country is greater than ever. As part of that trend, there are more couples who are long-term committed pairs who, despite their status, are choosing not to marry. Some may do so for philosophical reasons. Others, including some seniors, have financial bases for doing so, as the legal consequences of marrying one’s new partner may include very dire negative financial consequences.

Regardless of your reasons for not marrying, it is important not to fall into the trap of thinking that, just because you and your partner have not married, you don’t need an estate plan (or plan update.) To the contrary, your status is one that strongly calls out for careful estate planning.

Part of the mistaken thinking that sometimes causes people to overlook their high need for estate planning is that they think estate planning deals with nothing more than the distribution of assets after death. This is an incorrect way to see estate planning.

Based upon this wrongfully narrow view of estate planning, you may say, “My partner and I aren’t married. We are not planning to marry, and we each plan to leave our respective pools of wealth to our respective children (from previous marriages.) We couldn’t possibly need estate planning.” That’s a mistake because there’s much more to estate planning than just post-death distribution of your wealth.

In addition to asset distribution, a careful and comprehensive estate plan also covers planning for events that may happen during your lifetime. A complete plan includes a durable power of attorney (POA) for financial decisions and a durable power of attorney for healthcare. These documents protect you in the event that you become mentally incapacitated (either temporarily or indefinitely) and cannot make decisions for yourself. Your financial POA allows the person you’ve designated in advance to step in and make decisions for you with regard to the management of your wealth. Your financial POA agent can carry on managing your assets and paying your bills while you are incapacitated. A healthcare POA operates similarly, allowing the person you’ve named in advance to make your medical and personal decisions when you cannot make them yourself. This may include decisions regarding what medical treatment you’ll receive and whether or not you’ll go into a nursing home.

This is an area where many unmarried people may desire to include their partners in their planning. Even if their goals are to leave all of their wealth to their children or other blood relatives, they may still prefer that their partner make financial and healthcare decisions on their behalf for any period of time during which they are incapacitated. Whether that’s your objective due to your closeness to your partner or the fact that your relatives all live very far away, it is important to get that goal put down on paper in proper legal documents like powers of attorney. Without properly executed power of attorneys in place, your partner will very likely have no ability to make any decisions on your behalf if you’re incapacitated.
   

Powers of attorney are but one of many potential areas where your status as a member of a commitment but non-marital relationship could impact your estate plan. An experienced estate planning attorney can help you identify all of your planning objectives and the best ways to accomplish all of your needs and preferences.


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 25, 2017

Get the Right Kind of Estate Plan to Avoid Problems Down the Road

Summary: Every estate plan is unique, just as everyone’s life circumstances are unique. Sometimes, though, there are certain life events that may point toward a particular type of estate plan. For some people in certain situations, an estate plan with a revocable living trust may offer an especially high degree of benefit. Making the decision to go out and get a plan is essential, but it is also vital to make sure you obtain the right kind of plan.   

For an example of how the right kind of estate planning can make a big difference, look at a court case of a man named Michael from South Florida. Michael’s life story involved elements that are probably like many others. He grew up in Pennsylvania and, as a young man in his 20s, married his wife Kelly. As a young father in 1991, he went out and obtained an estate plan with a will. That will left his entire estate to his two children.

As is true for many people, though, life is full of unexpected twists and turns. Kelly developed cancer and, in 2010, she died at the young age of 48. Michael left Pennsylvania and moved to South Florida. There, he befriended a woman named Karen. Eventually, Karen and Michael moved in together and in the fall of 2014, Michael created a new will. This will left everything to Karen. The following March, Michael died.

What ensured was the all-too-common occurrence of strife and estate litigation. Michael’s daughter took the older will and began probating it. Karen went to court three weeks later, seeking to probate the second will. What ensued was a protracted litigation battling over whether Karen had followed all of the required legal rules and whether or not she had legal standing to contest the daughter’s probating the first will. As of August 2017, all that had been resolved, though the course of a trial court and an appeal was that Karen did, in fact, have the legal right to go forward with her court challenge of the 1991 will.     

Perhaps Karen will win or perhaps the daughter will ultimately succeed in court. Regardless, it seems highly unlikely that Michael actually intended for his estate to end as the subject of protracted litigation dispute among his loved ones.

Is there a better way? In many cases, there may be. Using the scenario of this man’s estate, a different approach to planning may have provided significant benefits. Once he decided that his estate planning goals had changed, he could have created a new plan with a revocable living trust. That trust could have named Karen as it sole beneficiary and also could have named her as the successor trustee. (In general, beneficiaries – even sole beneficiaries – can be successor trustees of living trusts.)

A plan like might have offered greater clarity and simplicity for Karen. In the court case, had the judges ruled against her, Karen would have lost her right to pursue the benefit promised to her in the 2014 will, all due to the technical rules involved with probate. Trust administration and distribution generally involves many fewer technical rules and time-based restrictions as compared to probate.

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 21, 2017

When it Comes to Estate Planning There are Many Perils to ‘Do It Yourself"

Summary: Sometimes, people don’t always grasp the deep significance of certain decisions. Engaging in do-it-yourself estate planning can be one of those things. You may not necessarily realize it but, by creating an estate plan on your own, you are essentially doing for yourself what an attorney would otherwise do for you. And, as Abraham Lincoln once famously said, “He who represents himself has a fool for a client.” We don’t know what we don’t know. The best way to be sure that your plan is comprehensive, reliable and optimally designed to meet your unique needs is to avoid DIY estate planning and work with an experienced estate planning attorney. 

The Wall Street Journal recently published an article entitled “DIY Estate Planning Has Its Risks.” The article correctly points out that there are many ways that do-it-yourself estate planning can fall short of meeting your needs. Sometimes, those shortcomings can be problematic. Other times, though, they can be downright disastrous. In a lot of cases, the flaws in an improperly created estate plan are not even discovered until after the plan’s creator(s) have passed away, leaving their loved one stuck with stress, uncertainty and, all too often, big expenses that go with fixing the problems created by the poorly constructed plan.

As the Journal points out, if a person’s assets are not very complex and their planning goals are uncomplicated, then it is possible for DIY estate planning to meet their needs adequately. But that just leads to another question: how do you know that your estate is sufficiently simple and your planning objectives sufficiently straightforward to allow you to skip the step of hiring of an experienced attorney? Your estate and your goals might seem simple and non-complex to you, but there could be complications or complexities lurking within your circumstances that a knowledgeable estate planning professional might be able to spot, whereas they were hidden to you.

Another type of “hidden trap” that can ensnare the DIY estate planner is, as the Journal noted, the risk of missing something. Perhaps you think you have done everything you need to do in order to complete the creation of your estate plan while, in reality, you’ve done almost everything. Maybe you overlooked the naming of a contingent fiduciary. Maybe you made a math error and your plan distributions distribute 110% of your wealth. Perhaps the form you used doesn’t address some new change to your state’s estate planning laws. As a financial adviser correctly summed it up to the Journal, “We don’t know what we don’t know.”

Additionally, while no one likes to think about a court challenge to their plan, plan contests do happen, and they are one more area where having used an attorney in the creation of your plan can help. Your estate planning attorney can help explain to a judge why you made the decisions you did and help explain, not only your estate planning objectives, but also your state of mind and mental clarity when you did them. The internet and modern technology tools can be wonderful things for many types of research and learning, but Siri can neither testify in court about the personal reasons motivating you to leave 80% of your assets to your daughter and 20% to your son, nor your mental capacity when you made an estate plan doing exactly that.            

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 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