Monday, March 20, 2017

Creating An Estate Plan | Don't Procrastinate Getting an Estate Plan, But if You Have, Don't Give Up!

Summary: When it comes to estate planning, the best time to act is right away. Acting promptly protects you from the many unexpected things that can crop up in life, whether they involve a loss of mental capacity or even sudden death. However, even if you've waited and your mental abilities are not what they used to be, do not simply assume that you are no longer allowed to create or update an estate plan. It is always best to consult experienced professionals who can explain exactly what the rules and what you are (or are not) allowed to do. You may have more options than you would have thought.

Helen Weste was a divorced woman living in New Jersey. When she reached her mid 60s, she executed a will. That will split Weste's assets between her sister, eight nieces and nephews and two charities. By 2001, Helen's health and mental sharpness started to decline. By April 2002, doctors diagnosed Weste with severe dementia. The family decided to move Weste into an assisted living facility. Earlier that year, Weste, who was 74 by this point, visited an attorney about her estate plan. She signed the new document in March 2002. That will left a small portion of her estate to one of the charities and two of the nieces, but gave her home and 90% of her remaining estate to John Brek, a neighbor who had befriended Weste and performed odd jobs around her house. The new will also named Brek as executor.

After Weste died in March 2010, the family admitted the 1994 will to probate. In 2011, Brek sought to probate the 2002 will. One of the nieces, Joanne Halkovich, challenged Brek's request to probate the newer will. She argued that her aunt lacked the mental capacity required to execute a will when she signed the newer will. Both sides had competing expert opinions regarding Weste's mental functioning. The niece had an expert who testified that Weste did not understand either who the recipients of her new will were or the volume of her assets. She also presented records from her aunt's treatment in April 2002, just a month after she signed the newer will. Those doctors rated Weste on a numerical functioning scale where 21-30 was considered "severe problems," and they gave Weste a score of 20. 

On the other hand, Brek also had an expert, and this psychologist testified that Weste had testamentary capacity. Weste's attorney also testified, stating that he'd been practicing law for more than three decades and had no doubt that Weste had the required mental capacity. The New Jersey courts ultimately sided with Brek. The requirement for testamentary capacity is a low bar. The trial judge pointed out that Weste was still living alone when she made the newer will, and if she had the functioning ability to live alone and care for herself, she had the capacity to make a will. The appeals court upheld that conclusion

Obviously, the best time to create or update your estate is.... NOW! Chances are very low that your clarity of mind will be higher in the future than it is today, but there is a very real chance that your mental functioning could decline in the future. Furthermore, none of us are promised tomorrow, meaning that you should get your current estate planning goals placed into valid written legal documents right away, so that you are prepared for whatever the future might bring.

However, if you've procrastinated, don't turn that error into a double mistake by thinking that the degree to which you've declined during that time of procrastination means that the door has been totally shut on your creating or updating your plan. Perhaps the biggest lesson to be taken from the case of Weste's will is that, in general, most states have a very low bar on what level of mental functioning you have to have in order to create or alter an estate plan document. Don't assume. Go out and seek definitive answers from experienced estate planning professionals. You'll be glad for the information and you may find out the answers are more favorable than you would have thought.    

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)
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Thursday, March 16, 2017

Powers of Attorney | Debunking 3 Common Myths


Summary: Like almost any legal document, there is confusion and misunderstanding that sometimes surrounds the legal document known as a power of attorney. By educating yourself about what these documents can (and cannot) do, you can develop a greater knowledge about how they function as an integral part of a complete estate plan, and have the peace of mind that goes with understanding which claims about these documents are actually just myths.

1) Signing a Power of Attorney (POA) document means surrendering control of your right to make your own decisions. This is a common misconception about POAs. This one is not true on a number of levels. First, in some states, you can execute what's called a "springing" POA. That means that the POA does not become effective, and the agent you name in the document does not possess any authority, until you have been properly declared to be mentally incompetent and unable to make your own decisions. Once you're declared legally incompetent, you've lost your ability to make your own decisions, anyway. All this type of POA does is put into writing the person you want to make your decisions once you cannot make them for yourself. In doing so, this may possibly reduce the need to go to court to have a judge appoint a conservator or guardian over you. Even if your POA is immediate, and not springing, you still have nothing to fear. Your POA simply adds another person (whom you've named) who can make these decisions. If, for example, you create an immediate POA for certain financial decisions that names your son as your agent, all that means is that, as long as you're alive and competent, either your son OR YOU may make those financial decisions on your behalf.        

2) You can only name a licensed attorney to act on your behalf under a POA. This is also not true and a misunderstanding of the terminology involved. A person who has passed the bar exam and been sworn in by their state's Supreme Court is an "attorney at law." Yes, it is true that another name for an agent named under a POA is an "attorney in fact," but there is no requirement that your attorney-in-fact have any sort of legal education, training or experience in order to be your attorney-in-fact. Your state may have certain requirements on who may serve as an attorney-in-fact, but none of those requirements have anything to with whether or not your proposed agent is, or is not, a licensed attorney-at-law. 

3) POAs are only for seniors. This isn't true and it can be a dangerous mistake for younger people to make. You are never too young to have a complete estate plan, including POAs, in place. One does not have to be older to suffer a sudden traumatic illness, be seriously injured at work or in a car, or suffer some other sort of major calamity that causes a loss of mental capacity or even premature death. If you care about what happens to your wealth, your minor children or yourself (or both,) then you need a complete estate plan in place. Having POAs in place will not involve giving up any control while you are alive and have mental capacity and, if something should happen that triggers a loss of capacity, then your POAs may be exactly the sort of planning needed to prevent your family from having to go through potentially expensive and stressful court proceedings to get a conservator or guardian named to make decisions on your behalf.  

They say that knowledge is power. This is definitely true when it comes to estate planning. By learning what information regarding estate planning is accurate and what are just myths, you can get a better handle on what your estate plan can do for you, and be better equipped to take an active role in creating or updating your plan to achieve the goals 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
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844.306.5272 (Phone)
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Monday, March 13, 2017

Leaving A Legacy | The Importance of Getting an Estate Plan to Secure the Legacy You Want

Summary: Court cases can teach a lot of useful lessons about planning our estates. A recent Georgia case about a will executed by a man with schizophrenia reminds all of us that, if you have non-traditional planning goals (like excluding family members from your plan while including non-relatives,) you need to make sure you have a plan executed. It also reminds us that, even if you have serious physical and mental problems, you may still be able to create an estate plan and establish the legacy you desire to leave behind. 


Joseph Schmidt battled many medical maladies during his life. In 1973, doctors diagnosed him with schizophrenia. Three years later, Dale Groenenboom was named as Schmidt's conservator and guardian. Two decades after that, Schmidt moved into the Savannah Square Personal Care Home outside Augusta, Georgia. The home's owners were Charles and Jerry Reeves. In 2010, Schmidt decided to create an estate plan. He executed a will that split all of his wealth between Groenenboom and the Reeveses. Schmidt had one sister, Judith Webb, to whom he left nothing.

When Reeves died in the fall of 2013, Groenenboom went to court, seeking to admit the will to probate. Schmidt's sister objected to probating the will. Her brother, she argued to the court, lacked the degree of mental capacity required by the law to execute a will. This lack of mental capacity made her brother's will invalid. A victory for the sister would mean that Schmidt had no estate plan and his assets would have been distributed under Georgia's intestacy laws. That would have meant that the sister would have been the sole heir of her brother's entire estate.

The case of Schmidt's will went all the way to the Georgia Supreme Court, with the courts ultimately deciding that the will was valid and that Groenenboom and the Reeveses were entitled to split Schmidt's estate. The sister tried unsuccessfully to convince the courts that her brother was too incapacitated to make a will, as proven by the fact that he did not know how much wealth he possessed and that he had memory problems. These arguments did not persuade the courts, because the law doesn't require you to know exactly how much you are worth in order to create a will, and it does not require that you be completely free of memory problems or lucidity issues. In this case, the law required the person challenging the will (Webb) to prove that the person executing the will (Schmidt) lacked even a general understanding of what property would be passed under the terms of his will, or to prove that Schmidt was not lucid at the exact time that he executed the will. The sister didn't have this evidence, so she lost.

The case of Schmidt's estate plan can teach us some important lessons, though. First, if the estate planning goals you want to accomplish include disinheriting a close relative, or leaving a distribution to non-relatives --- and especially if your goals include both of these things --- it is imperative that you get an estate plan in place. Intestacy laws assume that people want to leave their wealth to their close family members, so if you have different objectives, you need valid, carefully written legal documents in place saying so. Second, do not assume that you are prohibited from creating an estate plan due to your health problems. Schmidt had schizophrenia, kidney cancer and memory problems, just to name a few, but he was still mentally competent under the laws of his state to execute a will. Because he took this important step, he was able to leave behind the legacy he wanted. 

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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Thursday, March 9, 2017

Revocable Living Trusts | How a Popular Radio Financial Advisor's Misconceptions Reveal Common Errors People Make

Summary: There are a lot of misconceptions people have regarding living trusts. Sometimes, even experienced (and well-known) financial planners can hold and speak some of these misconceptions. By looking closely at what the law allows you to do with a living trust (or any estate planning tool), you can get a better understanding of how these tools really can work for you and whether or not including them in your plan makes sense for you. Despite what some may say, a properly drafted living trust can allow you to maintain exactly as much control over your assets after you've funded them into your trust as you had before. 


Dave Ramsey is, according to Wikipedia, "an American businessman, author, radio host, television personality, and motivational speaker," and he is a highly successful one at that. His radio show is heard across 500 stations and his financial advice courses have been attended by countless people. His advice has helped many people overcome financial problems, especially when it comes to overcoming the potentially crushing burden of excessive debt.

Just like all of us, however, Ramsey is not infallible. When it comes to the issue of estate planning and the use of revocable living trusts, his statements reveal some misconceptions that are common among some professionals and lay people alike. By looking at some of his misconceptions, you can get a better picture of the estate planning options that exist and whether or not they could potentially benefit you.

In his book The Legacy Journey, Ramsey writes that "living trusts require you to move your assets from under your own control to a trust before your death. As a result, even basic financial decisions – like adjusting investments, managing bank accounts, giving to charities, and buying or selling real estate – have to go through a trustee because the trust legally owns everything." While Ramsey's statements are not outright falsehoods, they seem to demonstrate a fundamental misunderstanding of how living trusts can, and many do, work.

His description of how living trusts work is technically accurate in a certain sense, but it is also potentially very misleading. It is true that, if you create, execute and fund a living trust, you as an individual have relinquished control of those assets. That is exactly how trusts help you avoid probate... by moving those assets from legal ownership by you as an individual (which is how your assets are exposed to probate) to legal ownership by your trust (and avoid probate). But here's the thing: setting up such an arrangement does not mean that you have to give up actual control of your assets. 

The law allows you to customize your trust in a great many ways, with lots of options regarding when and to whom you distribute your wealth, as well as who is in charge of your trust. You can, and many people do, set up a living trust where you are the trustee from the time you set up the trust until the day you die or become mentally incapacitated. When Ramsey says that establishing and funding a living trust means moving control of your assets from you to a trustee, he's technically correct, but here's the thing: that trustee who takes over control of your assets --- it's you if you've named yourself as the trustee of your trust. In other words, all you do when set up a living trust like this is move the control of your assets from you as an individual to you as a trustee of your trust. You have no less control that you did before, and you can choose to maintain that level of control right until you die or become mentally incapacitated.
  
Ramsey also described living trusts in his book as "an up sell in the estate planning world" that is, in his words, "expensive" and "unnecessary." While he is correct that, in most cases, an estate plan with a living trusts costs more than one without a trust, a living trust is certainly not in the same class as, say, a fancy sunroof on your new car. 

As most people familiar with estate planning know. your living trust can help you avoid probate. In some states, the simple fact that your estate avoids probate can, by itself, pay for the cost of your living trust many times over. As an example, consider California. Some California estate planning lawyers have estimated that the average probate administration process costs the heirs roughly 5% of the value of the gross estate. So, if you have a $500,000 gross estate, then probate could cost you around $25,000. (And that's just on average!)

Additionally, there are other collateral benefits of living trusts that Ramsey overlooks. One of these is privacy. Certainly, some people may not care about all of the details of their estate becoming public record as part of their probate court case file, but a lot of people might look upon avoiding this outcome as an important goal as it relates to protecting their privacy and the privacy of their loved ones. Living trusts can do that in most locations. In most states, a probate case file, which has to be opened to probate a will, is public record; on the other hand, no such court case file is required to be opened to settle your trust and distribute its assets.   

Furthermore, you can also potentially enjoy greater control over the distribution of your wealth by using a trust. With a will, the entirety of an heir's distribution is given to him or her as soon as the probate process is complete. If you'd like to give your loved ones their distributions in portions spread out over a longer period of time, a trust can help with that, while a plan that relies upon a will cannot.

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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Monday, March 6, 2017

Digital Estate Planning | Planning to Ensure the Proper Management of Your Digital Assets

Summary: Often times, society moves faster than the law. Legislatures are only now catching up to the fact that many people live much of their lives online and the individuals they name as their fiduciaries need to have a way to access that person's online accounts if the principal becomes incapacitated or dies. The enactment of these new laws creates a valuable new opportunity to modify one's will, trust and powers of attorney to ensure that the fiduciaries you designate have meaningful access. Even with these new laws and new opportunities to express your wishes in your estate planning documents, you may want to consider setting up a separate digital estate plan to ensure that you and your online assets are fully protected. 


The Uniform Law Commission is an unincorporated association of lawyers and legal scholars who work together to draft and publish "uniform acts," which are proposed laws intend to bring clarity to important areas of the law. The commission doesn't make laws; the uniform laws they put together may be thought of somewhat like templates, which state legislatures can, if they act on a uniform act at all, adopt entirely or adopt with their own changes.

One area the commission tackled recently was the thorny problem of access to digital assets. Estate planning professionals had, for years, sounded the alarm of this problem where a person died or became incapacitated and, even though that person had named a person (or people) to manage their affairs, that designated agent was unable to obtain access to electronic accounts ranging from online banking to email to social media. 

In 2015, the commission created the Revised Uniform Fiduciary Access to Digital Assets Act (Revised UFADAA). Since the commission set up the Revised UFADAA, several states have debated putting its provisions into their statutory codes. 20 have passed fiduciary access to digital asset laws, and a dozen more have introduced bills on this issue. For people residing within the states that have passed these laws, you may want to take this opportunity to consider updating your plan. Several different types of people can potentially qualify as a "fiduciary" under the Revised UFADAA. These people can include the trustee of your revocable living trust, your agent named in your power of attorney or the personal representative of your probate estate.

In order to ensure that the people you want to have access do have the access they need, you may possibly need to modify some of your estate planning documents. For example, without clear instruction in your estate planning documents, your trustee, personal representative or agent under a power of attorney, your designated fiduciary may have some access under the new law, but it may not be enough to be truly helpful. Take, as an example, North Carolina's version of the Revsied UFADAA. The law gives your fiduciary the authority to access your email but, if you've not expressed any powers explicitly in your estate planning documents, your fiduciary can only view the to/from and subject lines of the emails in your account. That's probably not very helpful, is it? However, with the proper express language in your power of attorney, trust agreement or will, your fiduciary can look at, not only the to/from and subject lines, but the entire content of your email account.

Even with advances such as the passage of fiduciary access to digital asset laws, you may still want to consider creating your own separate digital estate plan. For example, even with the new laws, Yahoo! will not give your fiduciaries access to your Yahoo! mail. If your fiduciary notifies Yahoo! that you've died, Yahoo! will simply close your email account and permanently delete everything in it. To protect yourself and your digital assets, you can create your own plan where you record all your digital accounts, from online brokerage and/or banking to email to social media. You can also record your user names and passwords. Obviously, in this age of identity theft, this is a very powerful document and should be carefully encrypted (if it is a digital file) or closely safeguarded (if it is a hardcopy document). You should take care to ensure that only the person (or people) you want to access your accounts in the event of your death or incapacity have the ability to access this information.    

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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Thursday, March 2, 2017

Estate Planning | The National Elections and Their Impact on Your Estate Plan

Summary: There are many things that can influence your estate plan and indicate a need for a change to your plan. That's why estate plan "checkups" are so important; they give you an opportunity to take a closer look at these events and how they impact the plans you've made. Sometimes the influential event is a change in your life; sometimes it's a change in the law. Whenever the country elects a new president, that election's result could impact the laws related to estate planning. That is especially true in 2016, as the outcome of this election could greatly impact the estate tax laws and, for some people, necessitate a significant re-analysis of the plans they've made.  


The two major party candidates appear to have significantly different visions of what the federal estate tax should look like under their leadership. Democrat nominee Hillary Clinton has proposed an increase in the estate tax rate. Under the Clinton plan, an estate that owed estate taxes would pay between 45 and 65 percent, depending on the size of that estate. Additionally, Clinton's plan would make a broader range of estates obligated to pay the tax. Currently, the estate tax exemption is $5.45 million for an individual, or $10.9 million for a couple. Clinton's plan would drop that exemption to $3.5 million for individuals, the lowest the exemption amount has been since 2009.

Republican nominee Donald Trump's plan calls for a complete elimination of the estate tax, but would impose a different tax at death in certain cases. Under Trump's plan, the federal government would impose a capital gains tax at death on assets in an estate that had appreciated in value over time. This would mean that anything from collectible fine art to investment holdings could be taxed at a rate just below 20%. The Trump plan would, however, carve out a $10 million exemption for small businesses and family farms.    

The leading candidate outside the two major party nominees is Gary Johnson of the Libertarian Party. Johnson's tax plan calls for a complete elimination of the estate tax, along with all income and payroll taxes. Under Johnson's plan, they would be replaced with a national consumption tax commonly known as the "Fair Tax." 

Each of these candidate's plan would obviously have a dramatically different impact on the planning of one's estate. Were Johnson to become president and enact his plan, there would be no need for any sort of estate planning to eliminate or minimize estate tax obligations, as no potential tax obligation would exist. Were Trump to become president and enact his plan, there might be a substantial need for some people to significantly alter their estate plans. If, for example, the Trump plan only imposed its capital gains tax on assets located inside a deceased person's probate estate, then the establishment of this plan might, for a substantial range of people, greatly expand the benefits of utilizing trusts as part of their estate plans. The Trump plan might also create other new techniques for minimizing or eliminating the death-triggered capital gains tax proposed under his plan.

If, as many pollsters forecast, Clinton becomes president, then many people may want to re-visit their estate plans. Currently, a married couple can potentially pass $10.9 million ($5.45 million each) of wealth at death without paying federal estate tax. Clinton's plan would lower the exemption to $3.5 million, or $7 million for a couple. This means that substantial number of estates that would owe nothing under the current system would be facing an estate tax obligation of between 45 and 65%. This could have dramatic impact on the considerable number of people with estates between $7 and $10.9 million, including small business owners and farmers. For these people, it would become essential to explore avenues for reducing the size of their taxable estates. These techniques can include trust planning options like Irrevocable Life Insurance Trusts, Qualified Personal Residence Trusts, Charitable Trusts and Grantor Retained Trusts. It may also involve establishing limited liability companies (LLCs) and/or Family Limited Partnerships (FLPs). 

Regardless of which candidate becomes president, the election reminds us that laws, including the laws impacting estate planning, can change, sometimes dramatically. Getting a periodic estate plan "checkup" can help you secure the peace of mind that comes from knowing that your plan is best equipped to deal with whatever the changed legal landscape looks like.

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)
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Monday, February 27, 2017

Esate Planning Laws | Enactment of New Laws Reminds Us of the Importance of Estate Plan Reviews


Summary: Estate planning-related court cases can teach a lot about what are good ideas, and bad ideas, in planning one's estate. They can remind us, as one recent case did, of the substantial and often needless risks involved in adding co-owners to your assets for the purpose of convenience or probate avoidance, as well as educating us that, if your estate planning goals change, it is vital to get your plan updated to reflect those new objectives.

Real-life estate planning scenarios spelled out in the pages of court decisions can provide valuable insight into planning techniques, including what worked... and what didn't. Take for example, a case from Michigan from late summer. A father, who had four children (three sons and a daughter) executed an estate plan in 2002. His will stated that his assets should be distributed evenly between his four children.

The father's assets including several bank accounts, including one with Bank of America with a substantial balance, as it contained the proceeds of the 2006 sale of the father's house. The bank account listed the father as a co-owner of the account. The other co-owner was his son, Mel. Mel considered his status on the account to be one of mere convenience for his father. Mel only used his status to manage the account, and never utilized any of the money in the account for his own benefit. Sometime later, though, Mel's sister, Mary, was added as another co-owner. Mary did use the money for her own needs, taking it for both herself and her daughter. According to the daughter, her father had given her oral approval to use the money for her own benefit, once telling her that she did not need to ask permission, but simply to take the money, as he planned on disinheriting his sons upon his death, anyway. 

After the father died, Mel, as his father's executor, sued Mary on behalf of the father's estate. Mary was accused of improperly taking funds that belonged to the father and using them for her own gain. Mary asked the trial court to throw out the lawsuit, arguing that, because she was listed as a co-owner of the account, there was a legal presumption that she was allowed to use the money on herself and the estate had not submitted enough evidence to the court to prove that she acted wrongfully. The trial court ruled in her favor. The estate took the case to the court of appeals, and that court reversed the lower court's ruling. That court ruled that there was no legal presumption in favor of the daughter and that the estate had presented enough evidence to the trial court to raise the possibility that the father never meant for the bank account funds to be used for the benefit of anyone other than himself during his lifetime.

Regardless of whether the daughter acted legally or not, the father's plan offers a clear example of a plan gone awry. This was, in no small part, the result of multiple mistakes. If the father wanted the bank account money used only for his benefit during his lifetime, but wanted some of his children to have certain abilities regarding the account, there were better tools available to him. For one, he could have created a financial power of attorney and included the management of the bank account in the powers assigned to his agent. Alternately, he could have funded the bank account into a trust, and given one or more children authority as trustees to manage the trust. In either situation, the father would have had the protection that comes with the fact that both an agent under a power of attorney and a trustee of a trust has what's called a "fiduciary duty" to handle the assets they manage in a proper way. 

Simply naming another person as a co-owner of a bank account, much like simply "adding" someone to the deed of your home in order to avoid probate, creates some significant and arguably needless risk. A co-owner of an asset often has wide freedom in making decisions regarding that asset. Furthermore, this plan potentially exposes this asset to claims made by creditors of the person you've added to the account.

Additionally, the father's estate plan may have been out-of-date and needed an update. If the father sincerely had a goal to distribute all (or even a larger-than-one-quarter portion) of his wealth to his daughter, then his 2002 will would not have accomplished this objective. A new or amended will would have allowed him to change the distribution pattern of his estate, updated to reflect his current wishes regarding the amount that each child should get.       

Regardless of what your goals are, potential pitfalls exist when you try to use the wrong the wrong technique to achieve an objective. By working with experienced estate planning professionals, you can protect yourself from falling victim to choosing the wrong tool for the job at hand.

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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