May 17, 2017

Getting Upset Over Another’s Estate Plan

Sometimes when we hear about another person's estate plan, we may tend to get upset, if we think we are slighted in some way. It is a good idea to think about the plan from the other person's point of view.

There is a very human tendency to get upset whenever we initially feel slighted by someone else. A recent advice column in philly.com, "Wife upset by in-laws' plans for their estate," illustrates why it is sometimes better to hold off on the anger and look at things from other people's points of view.

A woman wrote in to say that her husband had a teenage son from a previous marriage. The woman was cleaning out papers from their office and discovered a printed out email from her father-in-law to his attorney. The father-in-law was asking how to set up his estate, so it would be certain to go to the teenage son, and not the woman, after her husband passed away.

This upset the woman, since she felt that she was being viewed as not being trustworthy enough to make sure the teenage son received an inheritance after her.

The problem here is that if the woman had seen this from the father-in-law's point of view, she might not have been so upset.

He wanted to make sure that his assets were kept in the family and that his grandchild would eventually receive them. The woman could have possibly gotten remarried or had a falling out with the son after her husband passed away.

From the father-in-law's perspective, he merely wanted to make sure his grandchild was taken care of, which was not necessarily making a judgment on the woman's character. "At our firm, we may hold two family meetings, to help a family understand and accept the plan," says Michelle Profit, an estate planning attorney.

Reference: philly.com (April 23, 2017) "Wife upset by in-laws' plans for their estate."

May 16, 2017

Do Not Put Your Will in the Bank

It is important to keep your will and other estate planning documents in a safe, secure location where they can be easily found, when needed. A safety deposit box in a bank is not one of those places.

A will is only effective if it can be used after you pass away to administer your estate. If no one knows where your will is or if it has been destroyed, then it cannot be used by the courts.

You could have the most detailed will that has ever been created, but it is worth nothing if it cannot be found.

For this reason, it is important to make sure your will can be found and accessed quickly by those who need it after you pass away. Many people believe that a good storage place is somewhere safe and secure.

That is true.

Many people also believe that the safe and secure place is at a bank in a safety deposit box.

That is not true, as Noozhawk recently explained in "12 Things to Keep in a Safe at a Home, Not at a Bank."

The biggest drawback to safety deposit boxes is that they are secure because access to them is extremely restricted. The bank is not going to let someone show up and access your box, even if that person has your key and your death certificate.

Access normally requires a court order, which can be time-consuming to get. Courts are often reluctant to give them to anyone other than the executor of the estate. However, without seeing the will, it would not be known who the executor of your estate is supposed to be.

The better option is to keep your original will home and put it in a secure place, such as a safe.

Reference: Noozhawk (April 23, 2017) "12 Things to Keep in a Safe at a Home, Not at a Bank."

May 15, 2017

The Danger of Wills

It is easier to get wills today than it ever has been, since forms can be downloaded and filled out on your own. However, that ease has led to many people not understanding the potential dangers of wills.

That everyone should have an estate plan is a principle which most people understand when the reasons are explained to them. Estate plans, even as simple as a will, at the very least can help prevent families from fighting over estates.

Since you do not know when you will pass away, you should go ahead and get an estate plan.

While most Americans still do not have a will, a greater percentage of Americans have them than ever before. It is easy and cheap to get wills today, since you can purchase downloadable forms from several different services.

However, there are some hidden dangers in doing that, as The New York Times explained in "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."

The biggest issue is that the probate process is different in every state.

Submitting a will to probate for administration, in some states, is very expensive and can take a long time. That suggests that probate avoidance strategies should be used, which could lead some people to utilize a trust instead of a will as their primary estate planning vehicle.

Trusts, however, are more expensive to get than wills and in some states probate is relatively quick and inexpensive. Consequently, trusts may only be needed for people with larger estates.

There are other probate avoidance strategies that can be used, but they also have their drawbacks. For example, retitling an asset as joint property with a child, which is a common tactic, can make the asset vulnerable to the child's creditors.

The best thing to do is to hire an experienced estate planning attorney in your state, so that attorney can help you with the best estate planning strategy for your state and your estate.

Reference: New York Times (April 21, 2017) "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."

May 5, 2017

The Beauty of Wills

Wills might seem like a bunch of dry legal words, but they can be quite beautiful, if done well.

The average layperson reading a legal document is unlikely to find it beautiful. No layperson has ever read, for example, a petition to the court in a personal injury case and been struck by the beauty of the document. Even plaintiff's attorneys are unlikely to find a lot of beauty in even the most well written petitions in personal injury cases.

The fact is that most legal documents are dry, technical and unlikely to ever appear in anyone's list of the most beautiful things they have ever read.

But, wills are different.

Wills can be beautiful, as Nasdaq points out in "A Will Can Be a Beautiful Thing."

The potential beauty of a will is not in the actual words themselves.

That much should be obvious, because most wills are, in fact, dry, technical and boring legal documents to read. They often contain formal required language that does not change very much from will to will.

The true beauty of a will is in what lies behind the words.

A will, at its best, tells how a person wants his or her loved ones to be taken care after the person passes away.

It is an expression of caring and love.

A will shows that we have carefully thought about what will happen to the people we love, after we pass away.

That can be a beautiful thing, even if the language itself is dry and boring.

Reference: Nasdaq (April 10, 2017) "A Will Can Be a Beautiful Thing."

May 4, 2017February 23, 2022

Avoiding Probate

One of the most common questions that people have about estate planning, is how to avoid probate. You probably cannot do so entirely, but you can make it quick and painless.

For most people, the word “probate” conjures up nightmare scenarios of protracted estate battles that cost lots of money and tear families apart. It is an ugly word for most people.

As a result, most people generally want to avoid having their estates go through probate.

In fact, one of the most frequently asked questions of estate planning attorneys is how to avoid probate, as Forbes points out in “Probate, Wills, Executors: Your Estate Planning Questions Answered.”

It is important to understand that probate is merely the type of court that a will or an estate without a will has to go through.

Most of the time, it is a relatively simple process, especially with the assistance of an estate attorney. However, there are times when it can be long and expensive, so the desire to want to avoid it are not unjustified.

The key is to have an estate plan that utilizes instruments that do not have to go through probate. The most typical of these are trusts, but there are other more complex legal instruments that can also be used. Find out more about the basics of trust and wills, click here.

However, even the most airtight probate avoidance estate plan might have to go through the probate process briefly.

All estate plans should have at least a simple pour-over will that directs any unaccounted for assets into a previously created trust.

If there are enough unaccounted for assets, they will need to go through probate. However, the process should be quick and easy.

Reference: Forbes (April 7, 2017) “Probate, Wills, Executors: Your Estate Planning Questions Answered.”

May 3, 2017

Wills Can Be Changed

Spouses will often agree to get wills. They or their heirs believe that a contract has been entered into that prevents those wills from being changed. It is not true.

It is fairly common in estate planning attorneys' offices, for a husband and wife to come in and declare that they both want similar wills drawn up. These wills are often referred to as "mirror image wills."

The most common form they take, is that each spouse gets a will leaving everything he or she owns to the surviving spouse. The second to pass away spouse, then gives everything to the children or other agreed upon heirs.

Despite their seeming simplicity, these wills are an unusually common source of litigation, as the National Law Review discusses in "Contracts to Make Wills or Trusts."

The problem starts when the surviving spouse has a change of plans and changes his or her will to divide things differently or to give the estate to different heirs.

The heirs of the original mirror image wills routinely argue in court, that the spouses entered into a contract to make the original wills. Unfortunately, that is simply not the case in almost all circumstances.

To be valid, a contract requires that a person receive some sort of compensation, called consideration, for whatever promise it is that they are contracted to perform.

In the case of mirror image wills, spouses rarely receive any form of consideration for promising not to change the will later.

It is important to understand this point, because the issue frequently comes up in estate litigation. It costs estates a lot of money, when the issue is raised.

Reference: National Law Review (April 10, 2017) "Contracts to Make Wills or Trusts."

May 2, 2017February 23, 2022

Estate Planning Prevents Family Fights

There are many reasons to plan for your estate. The most important is probably that with proper estate planning, you can help to prevent your family from fighting over your estate.

Only the most sadistic people among us, would really want their families to fight over their estates. The goal for almost everyone is for our families to get along with each other, even after we are no longer around.

However, families do often fight over estates.

Some of those fights are unavoidable, since they stem from longstanding family dynamics and family members who do not trust each other or get along with each at all.

Many of those fights are avoidable, as Wealth Management discusses in “How to Prevent Feuds Among Heirs.”

The single most important thing that needs to be done to prevent family fights over an estate, is to get an estate plan. Review the basics of getting an estate plan click here.

Sound estate plans can often cut off any reason for families to fight. Proper planning can ensure that everyone gets their fair share of the estate. The estate plan can set forth reasonable means for resolving any disputes that do come up.

However, just getting an estate plan is not enough.

The next thing that needs to be done, is to communicate with your family about what is in the estate plan. An estate planning lawyer can help you start the process of developing a plan and letting family know about it.

People who know what they are going to get and why that was the choice of the departed, are much less likely to be upset and start fights with other family members over the estate.

If you do not already have an estate plan, get one.

If you do already have one, then make sure that you review and update it regularly to ensure that it will be effective in preventing your family from fighting.

Reference: Wealth Management (April 10, 2017) “How to Prevent Feuds Among Heirs.”

May 1, 2017July 26, 2024

Family Wealth Does Not Always Last

Even great amounts of family wealth, can easily be lost by future generations who do not preserve and add to it as the original wealth generator did.

James Jewett Stillman’s greatest lasting achievement was running the bank that eventually grew into Citigroup. However, he had another legacy.

Stillman also had a large and valuable collection of art and an estate he wanted to be preserved for use by the public. If everything had gone according to plan, the art and the estate would have been preserved for generations.

However, everything did not go according to plan.

His heirs are now trying to auction off the art, because they need the money to save the estate, as Bloomberg reports in “New York Banking Royalty’s Heirs Are Unloading Art to Save the Family Estate.”

The source of the problem, in this case, appears to be that trustees who were charged with running the estate have squandered millions of dollars over the years. The estate’s funds have run so low, that the heirs have no choice but to sell something. Therefore, they have chosen to sell the art.

The immediate lesson to be learned? It is very important to choose trustees carefully and to make sure that trust documents are carefully crafted to make squandering money difficult.

However, there is also a more important lesson that wealth does not last forever, unless it is properly maintained. Had it not been the trustees who squandered the wealth in this case, it might have been the future heirs.

Reference: Bloomberg (April 4, 2017) “New York Banking Royalty’s Heirs Are Unloading Art to Save the Family Estate.”

Building Legacies that Last Estate Planning and Elder Law

Month: May 2017