Showing posts with label inheritance. Show all posts

Saturday, July 21, 2018

Some new faces in the family? Time to rethink your estate plan

Some new faces in the family?
Time to rethink your estate plan

by Tom Alberts July 21, 2018

Summary: Adoptions create special considerations for families when it comes to estate planning. Intestate succession laws require that the adoption process be finalized before children can establish inheritance rights with their non-biological families. Other situations, such as same-sex marriage and advances in reproductive technology, require modern-day families to make sure their children are considered rightful heirs.

Sometimes, families expand in nontraditional ways through adoption or when stepchildren become part of a blended household.

While the addition of an adopted child or the welcoming of a stepchild into a newly formed family can be a reason to celebrate, those events also require re-evaluating your estate plan.

Intestate succession laws in the United States determine who inherits property when someone dies without a last will and testament. Those laws, many of which were initially written a century ago, take a traditional approach to defining the family unit.

Traditional legal definitions for words like “child,”“issue” and “heir” don’t always fit in a society that has made unimagined advances in reproductive technology and whose relationships have diversified widely from the nuclear families familiar to our top-hat wearing forefathers. But many estate plans continue to use those terms to determine inheritance.

As a result, it’s important that wills and trusts are created with modern families in mind. It’s also critical that those legal documents employ the proper terminology to protect your legacy and your heirs – whether they are children adopted by same-sex couples or offspring conceived in test tubes or by a surrogate mother.

State laws of descent and distribution generally refer to “child” as first generation only. “Issues” are defined as lineal descendants of the same bloodline. An “heir” is someone who either was conceived by or birthed by the individual who has died or is the child of such an heir.

In the law books, a relationship by “blood” is the common thread that ties together the rights of inheritance, but there are important exceptions. Modern families, however, are very often not limited to such “blood” relationships.

Intestate succession laws generally treat adopted and biological children equally as long as the adoption process – which can take months to years to complete – is finalized. A child with an adoption that is still in progress has not secured inheritance rights and must be named in a will or trust of an adoptive parent or parents to be protected as a beneficiary.

Also keep in mind that stepchildren don’t have rights of inheritance under a new stepparent unless the new stepparent legally adopts them.

Adoption by a new stepparent, however, can impact the child’s ability to inherit from their biological parents and biological relatives. Basically, it’s one or the other – the child is either the rightful heir of the biological parent or the adoptive parent. The children’s inheritance rights are linked to the adoptive parents and severed from the birth parents once an adoption is official.

ARE YOU IN A ‘MODERN FAMILY?’

A different scenario arises in second-parent or co-parent adoptions, which often take place when an unmarried person adopts a partner’s children without termination of the other partner’s parental rights. In some states, according to the National Center for Lesbian Rights, the second-parent adoption procedure can be utilized by same-sex parents. Other states limit or prohibit adoption by unmarried LGBT individuals and couples.

Married same-sex couples, however, have the same adoption rights as traditional couples, the organization says, but caution is urged.

“It is legally advisable for non-biological parents to get an adoption or parentage judgment to ensure that their parental rights are fully protected no matter where they move or travel to, even if they are married, in a civil union, or a registered domestic partnership,” the NCLR advises.

Advances in reproductive technology and the legal acceptance of same-sex marriage have made second-parent adoptions an important part of estate planning.

Consider the situation involving Lyndsey D’Arcangelo of New York, who wrote a commentary for NBC News about her experience with second-parent adoption as a same-sex parent. In D’Arcangelo’s case, her wife gave birth to a child via artificial insemination.

Despite their legal same-sex marriage, D’Arcangelo was left off the birth certificate as the baby’s legal parent.

“In same-sex couples, where only one member of the couple can donate biological material at a time by default, the legal status of the non-biological parent is in question,” D’Arcangelo writes. “In New York State, the non-biological parent in every same-sex couple that conceives via in vitro must go through a second-parent adoption if both parents want legal rights to that child.”

In other cases, second-parent adoptions can enable a child to be adopted by a stepparent or another adult while preserving ties to existing birth parents. Often, the intention is to create a new parental relationship while preserving ones that previously existed. Such an adoption would require consent of the birth parents.

Estate planning also is critical for unmarried couples who want the nonparent to have custody should the parent die or become incapacitated or if nonparents want children to inherit from them. A parent in an unmarried relationship can grant power-of-attorney authority in a will that allows the nonparent to act in the child’s behalf if the parent is incapacitated.

In those situations, experts suggest both partners should change their wills. The parent’s will would name the partner as guardian; the nonparent’s will would list property to be left to the child as a beneficiary. It’s also recommended that you name a guardian familiar with your family’s needs and circumstances and clearly state your intentions in your will and in a living trust. Also, the creation of a trust may be a good option to protect an adopted child’s interests and ensure assets benefit the child, experts say.

Adopted children also present other considerations for parents. For example, parents may want to include special provisions in wills and trusts when a foreign-born child is adopted. Parents can provide for an adopted child to visit his or her native country and be exposed to native culture.

WHO WILL TAKE CARE OF YOUR CHILD?

Keep in mind that adopted children are no different from biological children when it comes to considering a supplemental-needs trust for youngsters with disabilities. Parents also should ponder the multitude of life’s scenarios that can arise. For example: What if both parents die at the same time in a car accident?

The nomination of a guardian in one’s will can deal with such a tragedy and other unforeseen situations.

“It’s better to nominate an individual as a personal guardian; if you name a couple and they split up, what happens to the child? Be sure to consult with the person you name to be sure he or she wants the job, and name an alternative guardian in case your first choice should have a change of heart or die before the child is grown,” according to the American Bar Association.

A property guardian is another appointment to consider making in a will, the ABA says. Generally, the property guardian is the same person as the personal guardian.

“You can appoint two different people to manage the child’s money and personal affairs, but be aware that conflicts can arise if you split authority this way,” the ABA advises. One exception may be if the property guardian lacks financial expertise, a separate guardian for personal and financial affairs could be considered.

There are several other factors and real-life situations to consider concerning adoptions and estate planning. Fortunately, membership in Legacy Assurance Plan, which educates its members on a variety of estate planning options and provides access to numerous resources to achieve planning objectives, can assist families in making important decisions that improve lives for the next generation and beyond.

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

Monday, July 2, 2018

Intestacy is not an ailment, but it can be painful to loved ones

by Tom Alberts July 2, 2018

Summary: When someone dies without a valid last will and testament, a probate judge will follow state intestacy laws to determine how their estate is distributed. The laws don’t take into consideration the specific wishes of the deceased.

Intestacy is not a disease, but it should give you heartburn thinking about it. It’s described as the condition of an estate of a person who dies without having executed a valid last will and testament. In other words, if you don’t have a valid will when you die, you’ll lose direct control of your financial legacy.

Intestacy laws, which vary from state to state, determine who is entitled to inherit property when no guidance from a will is given and no estate plan is in place.

One’s heartburn should begin with the realization that once you’re gone, a probate judge, unaware and legally blind of your true intentions, will decide the fate of your estate and divvy up your assets.

Imagine someone pondering a will that proclaims: “I hereby leave to the state and a probate judge all the necessary authority to decide in a public forum who receives my property and how much they shall receive, regardless of my actual wishes. If necessary, the court can appoint anybody it sees fit, without my input, to serve as guardian of my minor children. In addition, please charge my estate 3 to 8 percent of its value for the services of the probate process.”

It’s hard to fathom someone of sound mind contemplating such a declaration. But that’s essentially what happens when an estate lacks a properly executed will.

In intestacy, there’s no effort to investigate what the dearly departed’s wishes truly were. An inquiry into proper and well-thought intentions? No way. Judicial interrogations to determine the undisputed and desired outcome? That’s not likely, either.

Generally, intestacy statutes distribute estates to the surviving spouse and children and their descendants and climb up and down branches of the family tree as necessary to determine other beneficiaries. State laws on the method of property distribution vary but generally provide that recipients are the closest surviving relatives.

The order of inheritance in most states is the surviving spouse, children, parents, siblings, nieces and nephews and next of kin. If you lack survivors, the state treasury will gladly consume the fruits of your life’s labor – not your favorite charity, beloved friend or treasured pet.

When a person dies without a will, he is described to have died "intestate."

There are a plenty of examples to illustrate the ills of intestacy, but consider just one mess caused in Texas when a woman’s husband died without a will.

The husband was survived by two children from prior relationships. The woman had lived with her husband in a home he bought before they were married.

The lack of a will suddenly put the home in play. Would the children seek the sale of the home in order to collect their share of dad’s assets? That’s because, in Texas, the surviving spouse is entitled to half of the couple’s community property but only one-third of the deceased spouse’s personal property and the children would get dad’s two-thirds in equal shares. Since dad owned the house before marrying his surviving spouse, she’s only entitled to one-third of the dwelling’s value.

If his dying wish was to risk leaving his wife without a home and cause a major rift among his survivors, intestacy laws are able to help make that happen. Intestate also means a lengthy wait – usually several months and sometimes years – for the potentially costly legal process of probate to conclude.

Being intestate has unintended consequences, which is why proper estate planning is always a smart move.

Avoiding probate and ensuring that your wishes are followed begins with a properly executed last will and testament. In the estate planning process, there are other options to consider, such as a creating a living will and establishing trusts. That way, the distribution of your estate is determined by you, not a judge, and uncertainty, stress and the possibility of a legal challenge is minimized.

One option to consider is membership in Legacy Assurance Plan, which educates its members on a variety of estate planning options and provides access to numerous resources to achieve planning objectives.

Legacy Assurance Plan is an estate planning services company. Its goal is to educate people on a variety of estate planning issues. It also provides access to a variety of resources to help its members achieve their estate planning objectives. Whether your goal is as simple as protecting your family and loved ones from the costs, delays, and hassles of probate or as complex as providing for a disabled child when you no longer can, Legacy Assurance Plan can help you find the information and resources you need to privatize your 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 was 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

Sunday, January 28, 2018

Can the Government Get 100% of Your Assets When You Die?

Summary: We all probably have slightly different ideas about what we want to happen to our wealth when we die. Chances are fairly high, though, that few if any of us have, as out preferred plan, leaving everything to the government. However, that can and does happen. It happens when people who have no immediately known living relatives fail to create an estate plan. Having all of your assets revert to the government is just one of many unfavorable outcomes that can occur as a result of failing to plan. You can avoid these and take control of your legacy by taking the pro-active step of getting a complete estate plan without delay.

Chances are, most everyone knows the word “cheat” and what it means. On the other hand, chances are that most everyone is not familiar with the word ”escheat.” Escheat, as it turns out, has nothing to do with cheat. The concept goes all the way back to the system of feudalism that existed in Medieval times. It meant that, in certain situations, a property might, upon the death of the owner, go to a lord or perhaps to the King.

Today, the word still exists in law, and refers to a circumstance where property reverts back to the treasury of the state in which it is located. How can the government end up getting your property when you die? The first thing that has to happen is that you have to have created no estate plan. If you have executed a valid will or living trust, then your assets will be distributed according to the instructions you put into your estate planning document(s). So, if you have a valid plan in place, there is virtually no way that your assets can escheat to the government. If you have no plan in place, though, that’s where things can get tricky. In that scenario, the law says that your assets are to be distributed according to the rules of intestate succession.

What is “intestate succession”? Intestate succession means the system for distributing estates when there were no estate planning documents. The rules of intestate succession were created under the theory that assets should transfer upon death to a deceased person’s closest living relatives.

For most people, they die leaving behind a spouse, children or both. Several others may also be survived by grandchildren, siblings, parents, aunts/uncles, nieces/nephews, cousins and so on. The intestate succession system starts with the closest relatives (spouse/children) and works outward from there in search of a relative to whom the assets can be distributed. Sometimes, it is exceedingly difficult to find these heirs. One of the jobs that a professional genealogist might do is finding these long-lost relatives in complicated cases.

Remember the old screwball comedy movies from the 1980s and beyond where the film’s main character gets a letter from out of the blue stating that he/she has inherited a large sum of wealth from some distant relative he/she barely remembers or didn’t know at all? That can actually happen. Take the case of a central Florida genealogist named Jerry, as reported by a news channel from Orlando. According to Jerry, an inability to find heirs to instate estates (and the assets in those estates reverting back to the government) “happens more often than people realize.”

Back in January, Jerry was working on the estate of Lydia, a Puerto Rican woman who, at the time of her death in 2012, was a legal resident of New York. When Lydia died, she had no surviving spouse or children. Jerry had identified her parents and a brother who served in the Korean War. At the time that Jerry discussed the case with news agencies, though, no living relatives had been found. If the search fails, then Lydia’s entire ONE MILLION DOLLARS will go to the State of New York.

Reference:

Bechara, Stephanie. (2018-01-24). Kissimmee genealogist searches for heir to Puerto Rican fortune. Retrieved from: http://www.mynews13.com/content/news/cfnews13/news/article.html/content/news/articles/cfn/2018/1/24/kissimmee_genealogis.html