Showing posts with label Estate Planning. Show all posts

Tuesday, July 16, 2019

Avoid mistakes leading to estate planning failures

by Tom Alberts Jan 29, 2019

Summary: Estate planning failures are mostly preventable. If you have a plan, you’ve avoided one big problem, but other pitfalls lurk. Problems often arise when people fail to update their plans and inadequately address issues involving incapacity, minor and special-needs children, beneficiary designations, end-of-life care and other matters.

There are many reasons why estate plans fail, but they tend to have one factor in common – the failures are avoidable.

When creating a comprehensive estate plan, you’ll find there’s a lot to learn about how various legal documents operate separately and work together – wills, trusts, powers of attorney, advance health care directives and so on.

If you’re like most Americans, you’ve wisely relied on your attorney or consultant to explain in detail how the sea of paperwork protects your interests and provides for your beneficiaries. But in too many cases, those planning documents gather dust on a shelf or hide in a drawer. In the meantime, those documents – if they exist to begin with – can become outdated, ineffective and lead to outcomes you no longer intend or never intended.

Planning mistakes lead to unpleasant surprises in the future – disinherited loved ones, rewarded ex-spouses, disqualification for entitlements or lawsuits among warring family members – and they don’t have to happen. Your estate plan, like most things in life, requires some adjusting, maintenance and even professional help from time to time to remain viable and succeed.

Here’s a look at seven preventable failures that can make your life, and death, more difficult and give your loved ones more grief than necessary:

How do estate plans fail?

Failure to create an estate plan
There perhaps is no planning blunder greater than having no plan at all. The estates of those who lack at least a valid will are subject to the delays, expense and lack of privacy of probate and state laws of intestacy that have rigid rules on how assets are distributed. Family members may find themselves fighting among each other – and in court – over your assets. Without a will, parents can’t name a guardian to care for their minor children. If you ever become incapacitated and lack powers of attorney for health care and finances, an advance health care directive or a revocable living trust with explicit instructions, you could force your family to petition a court to appoint a guardian to make decisions for you. You may relinquish control over health care and financial decisions to a total stranger. A judge, unaware of your preferences, could appoint an ill-motivated professional guardian. Without a plan, you also lose control of the distribution of your assets when you pass away. Without a comprehensive plan, you’ll burden loved ones with the hassles of probate, be vulnerable to an unwanted guardianship and squander the ability to control your financial legacy.

Failure to plan for incapacity
Your planning documents need to address more than how your property is distributed when you die. One recent study found that those who reach the age of 65 have a 50 percent chance of becoming incapacitated in their lifetime. But incapacity can happen to anyone, young or old, at any time due to an accident, disease or disability, so there’s no excuse to delay being prepared. With powers of attorney for health care and finances, you can be proactive and create a plan that names trusted people of your choosing to act on your behalf. Otherwise, your loved ones may be subject to costly court proceedings to be allowed to care for you or challenge an unwanted guardianship. Another way to plan for incapacity is to create a revocable living trust in your lifetime that can enable your successor trustee to protect and manage your assets, on your terms, upon your incapacity. Remember, a will only takes effect upon your death, and the personal representative you name in your will cannot manage your affairs while you are alive.

Failure to review your plan
Peace of mind is a good thing. Out of sight and out of mind isn’t. A failure to update your plan is an oversight that can lead to its downfall in many ways. As time passes and family dynamics change, your plan must be amended to include or exclude people and provisions depending on life events and your current priorities. If you get married, divorced, remarried, have children or suffer a death in the family, it’s time to review and amend existing documents. Otherwise, you risk passing assets to an ex-spouse or leaving behind a new family member. Beneficiary designations (and alternate designations when allowed) for annuities, insurance policies, retirement accounts and bank and brokerage accounts must be up-to-date. They must be coordinated with the beneficiaries named in your will and trust for your plan to succeed. When the “wrong” beneficiaries receive assets, lawsuits from disgruntled family members challenging the estate are to be expected. Beneficiary designations supersede the provisions of a will or trust, and conflicting documents can lead to legal challenges. Regular reviews (after major life events or every few years) are required.

Failure to plan for children as beneficiaries
Part your plan is to make sure the kids have a financial safety net. But naming a minor as a direct beneficiary can backfire. When beneficiaries automatically receive an inheritance at a young age, long-term financial planning usually falls by the wayside. One nightmare is not being around for your children. Another is imagining them squandering their inheritance in short order. A better option is to ensure your will or trust specifies that minor children receive their inheritance once they reach a certain age, and that your representative or trustee will be responsible for managing their assets and providing support. If the child – not your trust – is the beneficiary of your life insurance policy, the child stands to receive a lump sum at age 18 or 21. Proper trust planning is required if you intend assets to be paid out over time or when a child reaches certain milestones. Another potential mistake is adding adult children to the deed on your home as co-owners with rights of survivorship. With this arrangement, they could expose the value of the home to their liabilities (divorce settlements and debt claims come to mind) and possibly create a tax burden by receiving the home as a gift.

Failure to plan for special-needs beneficiaries
Leaving assets directly to a beneficiary who has special needs and receives government assistance can be disastrous. In many cases, those with special needs rely on Social Security and Medicaid benefits to provide support over a lifetime. A windfall of income, however, could disqualify a special-needs individual from receiving government entitlements. Most of the inheritance would have to be spent down to enable the individual to once again qualify for assistance – a contradiction of your objectives. A better solution is to create a special-needs trust within your will or living trust that can be rigorously controlled by a qualified third-party successor trustee and maintain eligibility for assistance. But even a professionally designed special-needs trust is fraught with challenges because of strict rules in the administration of trust assets. Its trustee faces complex duties that require a high degree of formality, and it’s not a job easily assumed by a family member. In many cases, a professional trustee is necessary to prevent administrative failure.

Failure to plan if you outlive a beneficiary
Beneficiary designations are praised for their ability to distribute assets quickly to your loved ones after your passing. They help achieve the important goal of bypassing probate. Unfortunately, our presumptions about the order of death of our beneficiaries are sometimes wrong. You need to update your beneficiary designations as circumstances in life change, otherwise assets can wind up in your probate estate or in the hands of an unintended recipient. If a beneficiary dies before you do, your plan can fail, and most banks don’t allow alternate beneficiaries for payment-on-death accounts. Proceeds from life insurance policies, retirement funds and other assets also are at stake, and alternate beneficiaries should be named, whether you’re leaving behind a checking account or a Chevrolet. Meanwhile, other problems arise when former spouses or departed family members were named as beneficiaries long ago when accounts were initially created. Your paperwork is only as good as the last time it was updated.

Failure to plan for end-of-life issues
Many people avoid planning for the possibility of a terminal illness or a tragic accident. After all, it’s an unsavory subject. But if misfortune strikes, there’s no good reason to lack control of your fate or force your family or loved ones to make difficult treatment decisions on your behalf. Many people fear being placed on artificial life support or having to endure a long, slow death. A living will, also known as an advance health care directive, enables you to express your end-of-life treatment preferences. It’s important, while you can still communicate, to decide the extent of life-sustaining treatment you want – or don’t want. Otherwise, you leave treatment decisions at the sole discretion of medical professionals, who may not share your preferences or those of your family.

How can I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life’s contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

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:
Legacy Assurance Plan
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
info@legacyassuranceplan.com (email)
#legacyassuranceplan
@assuranceplan

Avoiding Court Appointed Guardianship | Legacy Assurance Plan

Avoinding Court Appointed Guardianship | Legacy Assurance Plan

Estate Planning with Legacy Assurance Plan allows you to plan for your future decisions, avoid court appointed guardianship and protect certain assets from the probate process. Sometimes, the hardest part of the process is just knowing where to start. At Legacy Assurance Plan, we make getting started easy. Nowhere, will you f‌ind a simpler, easier or more cost-effective way to create and maintain a comprehensive estate plan, designed specifically for you and your family. We guarantee it! Learn more about what a comprehensive estate plan can do for you on our Website https://LegacyAssurancePlan.com

This article is re-published by 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 or medical 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 legacyassuranceplan.com.

This article is re-published by:
Legacy Assurance Plan
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
info@legacyassuranceplan.com (email)
#legacyassuranceplan
@assuranceplan

Thursday, November 22, 2018

For Thanksgiving, serve up some talk about life and estate planning

by Tom Alberts Nov 22, 2018

Summary: When the family gets together for Thanksgiving, it’s an ideal time to catch up on the past year and look forward to the future. Some topics of conversation are more palatable than others, but when families discuss issues related to life and estate planning, they can make significant progress toward protecting their interests and the legacies they leave behind.

Every year on the fourth Thursday in November, far-flung relatives trek home for an annual feast and a long weekend with family.

Americans look forward to celebrating Thanksgiving with overloaded plates, a full day of football and a good long nap. They travel far and wide to endure countless hours surrounded by chatty and opinionated family members, which is why politics and religion are wisely kept off the discussion menu.

Topics like favorite movies and Black Friday sales are safer territory and can prevent food fights. But another way to maintain family harmony in the present and for gatherings and generations to come is by engaging in meaningful conversations about life and estate planning.

Some candid conversations among family members can help keep future misunderstandings and surprises to a minimum and reduce the potential for friction among heirs. Even though discussions about serious matters involving life and death are delicate and can be met with resistance, talking in advance about family values, shared goals and planning objectives is easier than during a period of stress and sadness.

Thanksgiving is a holiday about family, tradition and reflection. A big part of Thanksgiving is simply catching up on what has happened over the past year and sharing our appreciation for the good things in life. Family gatherings are a unique opportunity to assess priorities and make or update plans that protect the interests and legacies of you and your loved ones. If it’s possible to broach the big topics – like planning for incapacity, guardianship, long-term care, burial wishes, avoiding probate and other matters – you’ll be a step closer to being prepared for some of life’s most challenging issues. They are serious and sometimes contentious matters, but at some point, they will need to be addressed. Thanksgiving provides a unique opportunity to have those conversations.

Your family is likely to resist having these discussions, since, for many of us, talking about debilitating diseases, nursing homes and what happens if we become incapacitated or when we pass away is awkward, but those dreaded discussions don’t get any easier when it’s too late to deal with life events after they’ve happened. Remember, a family’s time together should be a positive experience, and useful discourse doesn’t need to devolve into inquisitions about who gets granny’s grandfather clock or Aunt Edna’s antique armoire. Legal documents can come later, but simple communication is needed to start the process and can include discussing the family’s shared interests and values.

If there were any changes in the family tree over the past year, that’s a good place to begin. It’s never too early, for example, to envision a bright future for a baby making a Thanksgiving debut. Have the parents created or updated their wills and nominated a guardian for their minor children should the unthinkable happen? If there is a child with special needs, is there a plan in place to deal with long-term obligations? Does the grandparents' planning include the recent addition?

Besides the addition of bundles of joy, there are a multitude of other life-altering events that may have taken place over the past year. Marriages, divorces, separations, deaths and other circumstances mean that existing planning documents require review and possible modification, and life’s changes can create unanswered questions. Should an alternative guardian be nominated for a new child? Should a new in-law be added as a beneficiary? Do planning documents like wills and trusts need to be changed because of a divorce, separation, death in the family or other circumstances?

Legacies fail when plans are not made, when plans are made but remain secret and when outdated plans are not reviewed and update. Most of all, plans fail when those we leave behind don’t understand them. For the more senior members of the family, Thanksgiving also provides a unique opportunity to talk about what decisions they have made, their goals and their values. If you have a plan, discussing it, and the choices you made, while the family is together may avoid future hard feelings and arguments. You are the best person to explain your plan so that your family understands and accepts your choices.

It’s a far-fetched goal to expect everyone in the dining room to experience an estate and life planning epiphany. But if your goal is to get the rest of your family talking and thinking about the subject, you’ve already made significant progress – and perhaps preserved family harmony for many Thanksgiving dinners to come.

Do you have a plan?

Wednesday, September 26, 2018

When tragedy strikes, what happens to the kids?

When tragedy strikes, what happens to the kids?

by Tom Alberts Sep 26, 2018

Summary: Estate planning helps parents ensure their minor children will be taken care of if the unthinkable happens. Typically, parents execute a last will and testament that nominates a guardian who would be responsible for the care and well-being of their children upon their death. During the lifetime of the parents, plans also should be made for circumstances when they are absent from their children for an extended period – whether intentional or accidental. Parents can plan for what happens and who takes care of the kids until they return or recover and until a guardian is officially appointed and can take over parental responsibilities.

Talk to most parents, and you’ll quickly find that the care and welfare of their children – morning, noon and night – is at the top of their list of priorities.

Moms and dads stay busy with the endless issues that involve their kids every day – health and nutrition, schooling, clothing, finances and friendships among them. So, when parents of young children get around to creating an estate plan, they typically do so with an eye on the distant future. Young couples starting families may assume that an estate plan, if they even have one, won’t be put into action for many decades to come. They may assume all that’s needed is a last will and testament that would appoint a permanent guardian if that ever became necessary.

Even though traditional estate planning tends to focus on the long term, parents of minor children should consider situations in life when they are absent from them or involved in an unexpected tragedy in which one or both parents become incapacitated or die.

As part of a comprehensive estate plan, a person’s last will and testament can nominate a guardian for minor children should misfortune strike. But there are situations that may require a caregiver to be available immediately to take same-day action and make decisions on behalf of the children. Parents want peace of mind knowing ahead of time that there is someone – another family member or a trusted friend – who could serve as an interim caretaker until a permanent guardian is officially appointed by a court.

The bottom-line question to answer: Who can immediately take care of your minor children if you are away from home for an extended period, if you are involved in an accident or other crisis, or, worse yet, die suddenly? Imagine if parents are in an accident and police officers arrive at the home to check on the youngsters. It’s unlikely they’d leave the kids with the baby sitter, and child welfare authorities could get involved. Parents have planning tools available to deal with such contingencies. Given the unpredictability of what may lie ahead, planning for life events can be just as important as making plans for the end of life.

Three important documents can help provide answers and solutions to all sorts of life’s dilemmas and mitigate some of the horrors in the event of your worst nightmare. They are a power of attorney for child care; a signed document with emergency instructions; and your last will and testament.

A power of attorney for child care

There are many situations in which parents may be absent from their minor children for more than a day or two. Business trips, military service and vacations are among common reasons for short-term separations from the kids.

With a power of attorney for child care, parents can plan for many contingencies and legally authorize other family members or friends to make decisions about the child’s health care, schooling and general well-being in the short term. A power of attorney for child care is an alternative to formal, long-term guardianship. The document, usually drawn up with the help of a lawyer, can ensure that the caretaker – known as the attorney-in-fact or temporary guardian – has the ability to deal with medical and other issues that may arise during the parents’ absence. The power-of-attorney document can be worded to specify its effective dates and can define what types of decisions can be made. In most states, the power-of-attorney document will need to be signed by the parent or parents and the agent and witnessed by either a notary public or two unrelated witnesses.

The appointment of a parental surrogate with power of attorney is limited to no more than a year in some states. For longer time periods, a hearing for full guardianship of minor children may be required. Also, power-of-attorney authorities do not survive the death of the person who granted them. So, their utility is confined to parental absences in the short term. Permanent guardians are nominated in a person’s last will and testament, and a guardian’s official appointment must be made by a probate court judge.

A signed document with emergency instructions

It’s doubtful the teenage baby sitter is among those with power-of-attorney authority over your minor children. A loved one or a trusted family friend is probably better suited to be a short-term or temporary guardian and surrogate decision-maker for absent parents – especially if a parental absence is more than an evening or a day or two.

A baby sitter may be given a phone number to call if “something happens” or the parents don’t arrive home at a certain time or can’t be reached. Beyond that, there may be no other guidance for the sitter to follow. But when an emergency occurs, there’s often little time to spare. The temporary guardian you have in mind – the one who has signed the notarized power-of-attorney document you took the time to create – may be unavailable on a moment’s notice or may need time to travel. Meanwhile, quick decisions about the kids need to be made when, for example, that police officer comes to the door with bad news.

If mom and dad aren’t coming home, an instructional bridge between the baby sitter and the temporary guardian is needed. That’s where a signed document with emergency instructions – something more than a simple note to the baby sitter of who to call – is useful. The emergency instructions should be specific to the day or evening of a parental absence. Instructions that are specific to that day or evening can ensure a responsible person is available and on standby at a moment’s notice. Otherwise, the police officer may be forced to place children in the immediate custody of child welfare officials until the temporary guardian with power of attorney can take over.

Although not necessarily a formal legal document, a written and signed statement by parents with emergency instructions can give authorities immediate guidance in the interim. Emergency instructions help ensure that every moment of time kids spend without their parents is covered.

A last will and testament

Because wills are only effective upon death and must be proven as valid in probate court, the official appointment of a permanent guardian can take days or weeks.

In the meantime, minor children can be left in limbo – or in the custody of authorities – until their guardianship situation is resolved in the probate process.

Most married couples leave their estates to each other so that when one spouse dies, the survivor will inherit the estate and take care of the children. As part of comprehensive estate planning, parents also must consider who would take over parental obligations if they were to die at the same time. That’s why a vital component of a parent’s last will and testament is the nomination of a guardian and successor guardians for their minor children. A lawyer can provide proper advice for parents and the many options they have in providing for child rearing, management of the children’s finances, the distribution of assets and other considerations.

Conclusion

Elements of a comprehensive estate plan typically include wills, trusts, powers of attorney for health and finances and living wills. Yet many of those tools sometimes aren’t adequate to deal with the immediate needs that unexpected events in life present, especially when young children are involved.

In the meantime, prudent parents should utilize strategies that deal with immediate and short-term care of their children – like powers of attorney and emergency instructions – until a long-term plan for guardianship can be put into effect.

Thursday, August 9, 2018

Separation anxiety: Two celebrity deaths reveal issues to consider in estate planning

anxiety of a man shown by a photo that displays hisself dissipating

Separation anxiety: Two celebrity deaths reveal issues to consider in estate planning

by Tom Alberts Aug 9, 2018

Summary: The recent deaths of celebrity chef Anthony Bourdain and fashion mogul Kate Spade, who were both parents and separated from their spouses, reveal estate planning issues couples face when marital relationships change and an unexpected death occurs.

Celebrity chef Anthony Bourdain and fashion mogul Kate Spade had a terrible burden in common – depression – when they committed suicide within days of each other in June 2018.

Their deaths left their large, loyal followings saddened and dismayed. But Bourdain, 61, and Spade, 55, did share a blessing in common. Both were parents of daughters (ages 11 and 13, respectively). Bourdain, like Spade, was married but separated.

From an estate planning perspective, their mutual marital status serves as a reminder that difficulties may loom for separated couples who are not legally divorced when an unexpected death occurs. Intentions about one’s legacy and priorities change with life’s situations, which is why estate planning documents need to keep pace with a family’s ever-changing framework.

In these modern times, it’s not unusual for spouses to decide to remain married, but separated, to preserve the family unit in the best interest of their minor children. Estranged spouses may reason that staying married provides a sense of stability for a child whose parents are in a shaky relationship. This appears to be the case for Bourdain and his estranged wife, a former celebrity MMA athlete. They reportedly had an amicable relationship and remained “together,” despite their separation, for their young daughter. Their careers and frequent travel led the couple to splinter yet remain united in terms of caring for their child.

“As a family, I think we’ve done a really good job and we’re doing a really good job and would like to keep it that way,” Bourdain told People magazine after their split in 2016. “As a marriage, clearly it’s not ideal, but there’s no injured party here, nobody’s angry, nobody feels like the injured party, nobody feels like a victim. So, we’ll proceed like that.”

Similarly, in the case of Spade and her spouse, the estranged couple was motivated by the interests of their daughter. Spade and her business-partner husband, although living apart from one another, remained close, according to media reports. Spade’s husband, Andy, released a statement to The New York Times, saying their daughter “was our priority” and they were “co-parenting” her. Mr. Spade said they were not legally separated and had not discussed divorce.

Details about Spade’s estate have not been reported, but provisions in Bourdain’s will have raised some eyebrows. Bourdain’s probate estate is valued at about $1.2 million, and he’s leaving most of those assets to his daughter. The host of CNN’s “Parts Unknown” named his estranged wife as executor of his estate, and he left his wife his personal and household effects – and his frequent-flyer miles. Bourdain also did not name a guardian to oversee his daughter’s inheritance; it’s a role his estranged wife likely will assume.

When Bourdain named his spouse as executor of his estate, it meant his estranged wife was responsible for handling funeral arrangements and other sensitive details surrounding Bourdain’s legacy as part of her duties administering his estate. Fortunately for Bourdain, their relationship was considered to be amicable.

WHAT TO DO WHEN A MARRIAGE IS A MESS?

About 45 percent of married couples in the United States divorce, according to the American Psychological Association. Before taking the ultimate step, couples in many cases decide to separate but remain married for a variety of reasons. Spade and Bourdain, for example, stayed married in the best interests of their daughters but lived apart from their spouses.

When marriages are in meltdown mode, one option for couples without a prenuptial agreement is a postnuptial agreement. A postnuptial agreement can define ahead of time how property would be distributed in the event of a divorce and keep the matter out of often messy dissolution proceedings.

Being separated or simply living apart, however, does not terminate spousal rights. Legal separations are like divorces in that a court approves the division of finances and marital assets and makes decisions on child custody and support. The key difference is that legal separations, like informal separations, don’t impact spousal inheritance rights; only divorce and a dissolution decree signed by a judge will end those obligations. Also, separations can be reversed, but divorces cannot.

For Bourdain and Spade, they remained unhappily married, and their estranged spouses retained their rights to their shares of the estates. In many states, the surviving spouse is entitled to half or more of the assets and cannot be disinherited.

Proper estate planning, however, can give estranged couples some immediate independence in certain areas before a divorce is finalized. Having a will is a key first step; otherwise, intestacy laws automatically will require that at least half your estate goes to your spouse. Because divorces can take years to resolve, it’s suggested you revise your estate planning documents in case you die before the divorce is finalized. Trusts also may require revision, especially if members of an estranged spouse’s family are designated as successor trustees.

If a vengeful spouse is something to fear – like one who has the power to “pull the plug” – there are other estate planning factors to consider. An advance health care directive can designate who has authority to make decisions about your medical care and in the event of your incapacity as well as funeral arrangements (or lack thereof) at your death. A power of attorney for financial matters also can be appointed, and that person does not have to be a spouse. Also, an individual’s living will can control who would serve as one’s guardian if incapacity is declared. Those estate planning documents can limit the control of a warring spouse.

Divorcesource.com considers durable powers of attorney to be potential “loaded guns” in the context of spousal discord, and there are numerous instances where estranged spouses have used the authority “to transfer their spouse’s assets to them, take out loans in the name of their spouse, etc. If you have given your spouse a durable power of attorney, you should consider revoking it immediately so that it cannot be used in an unintended fashion.”

Another consideration is beneficiary designations. Spouses typically designate their other half to receive proceeds from life insurance and retirement plans. Federal law requires that spouses are sole beneficiaries of company pension and 401(k) plans unless a written waiver has been signed by the survivor. Laws vary, but all states grant spouses a share of the estate, regardless of what the other spouse’s will dictates. Prenuptial and postnuptial agreements, of course, can alter those inheritance rights.

When couples split and divorce proceedings are underway, experts suggest drafting a formal separation agreement regarding property, debts, child custody and support and other issues that include estate planning. One part of the agreement may include a provision to waive rights to a share of the other’s estate if one spouse dies before the divorce is finalized. Spouses who stand to inherit from their parents or other family members also may want to take action. If a parent or relative leaves an inheritance to an heir whose divorce isn’t finalized, the estranged spouse still would be entitled to a share of the proceeds. The parent or relative may choose to utilize a trust to distribute assets directly to the recipient’s intended beneficiaries, such as children or new paramour, and bypass the estranged spouse in the event the recipient dies before a divorce is final.

When a divorce is finalized, entire estate plans should be reviewed and updated to reflect new priorities for your legacy. Items that may require revisions are numerous and include: wills; revocable trusts; power-of-attorney designations; advance directives for health care; real estate deeds; titles for vehicles and other assets; beneficiary declarations for life insurance policies, retirement accounts, annuities, payable-on-death accounts and transfer-on-death deeds; and online account information including usernames, passwords and social media access.

Friday, March 16, 2018

Estate Planning for the Continued Success of Your Farm

Summary Whether you own a small retail or service business, or you are a family farmer, your business is an important part of your life and wealth. Chances are, you have taken steps during your lifetime to protect your business and ensure its longevity. You have probably also taken steps to protect your family during your lifetime. A proper estate plan can include provisions that will ensure that your business or farm’s continuity will be appropriately provided for, and that your loved ones will receive what you intend in accordance with your wishes.

A court case from “across the pond” serves as an example and a useful reminder of just how important proper and complete planning is, especially when you own a business or a farm. In the case from England, the husband was part of a family farming operation. The family had created a business entity (in this case, a partnership) for the business. The farmer’s wife believed that the partnership owned the farming business but that the farmland itself was owned by the husband individually.

The husband died in 2005. He had created a will before he died. His will said that the farmland was to be distributed into a trust that was to benefit the wife. Eventually, though, the wife discovered sometime after her husband’s death that the farmland was 100% owned by the partnership. This meant that the husband individually owned none of the farmland, which meant that his provision in the will funding his farmland into the trust was meaningless and the trust received nothing in terms of land.

The case even ended up in the British courts. While the law of the United Kingdom has its differences from the laws of the U.S. states, the facts that led to this unfortunate farmer’s wife’s problems and subsequent trip to the courthouse could just as easily have been something that happened here in the States.

Business entities can be very useful tools within an overall business plan for your family farm. Establishing a partnership, corporation, LLC or other entity can offer substantial advantages to you and your family (and your farming business) when it comes tax planning, asset protection and reduction of liability exposure, or other objectives.

When you decide to create such legal structures, though, it is important to make sure that they are properly incorporated into your estate plan. If you own your interest in your farm as a member of an LLC, for example, it is essential to make sure that your estate plan includes instructions for distributing your ownership stake in the LLC to whomever you want to receive your interest in the farm. It is also important to make sure that you understand clearly “who owns what,” so that you can make certain that your estate plan functions properly. An estate plan that distributes land will not work if it turns out that your LLC, and not you, own that farmland.

If your estate planning goals have led to establishing a living trust, it is important to make sure that your trust is properly funded. This could include funding your ownership interest in your farm’s business entity into your trust. In other words, for example, you may need to create documentation that transfers legal ownership of your stake of your farming LLC from you as an individual to you as the trustee of your living trust.

While this may all sound very technical, what you should take away is just how important it is, when you plan your estate, to make sure that everything is coordinated to work together. It is just as important to make sure that you review and update your plan – your whole plan – to make sure that it is still constructed to give you and your family the maximum benefit and the maximum realization of your goals. Your experienced estate planning attorney can help you with making the best choices for you and your family.

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:

Legacy Assurance Plan

8039 Cooper Creek Blvd

University Park, Florida 34201

844.306.5272 (Phone)

info@legacyassuranceplan.com (email)

@assuranceplan

#legacyassuranceplan