November 22, 2016February 23, 2022

Do You Want a Will or a Trust?

One of the first things that people have to decide when they start thinking about estate plans is whether they want to use a will or a trust. Both have their advantages.

If you start asking your friends and family or look on the Internet for estate planning advice, then you are likely to receive a lot of conflicting advice. Should you get a will or a trust? Nearly everyone seems to have an opinion one way or another. You can find out more about the basics of estate planning on our website.

Normally, the opinion of non-attorneys is rooted in which of the two options was best for the person giving the advice. It may or may not be the best advice for you.

To help decide the better option to use as the primary legal instrument in your estate plan it is helpful to know the basic differences between the two.

This was the subject of a Motley Fool article titled “Wills vs. Trusts: Which Are Better?” We also

A will determines who gets your possessions after you pass away. It has no legal effect until then. It is a roadmap for what you want to happen later. The rules for wills vary from state to state, but they need to go through probate court and the details are made public. For people with small estates they can be cost-effective.

Trusts, on the other hand, have legal effect as soon as they are executed. Property is placed in the trust while you are still alive. While trusts can be more costly to obtain and maintain, they do not ordinarily have to go through probate after you pass away and the details are not made available to the public. Trusts are normally preferred to wills for larger estates.

If you are uncertain whether a will or trust is a better option for you, that is okay. You probably should not decide between the two before talking to an estate planning attorney who can help you make the decision. Schedule a consultation if you would like to learn more.

Reference: Motley Fool (Nov. 8, 2016) “Wills vs. Trusts: Which Are Better?”

November 4, 2016

Adopting an Heir

To make sure that someone they love receives a portion of their estate some people decide to adopt the loved one. That is unnecessary and can create other complications.

When it comes to the law, having limited information can be dangerous.

For example, what if you know there is a default rule that says your children will inherit your estate if you do not have a living spouse. So what if you reared someone as if he or she was your own child and you would like to make sure they receive an equal share of your estate? Does that mean you should adopt that person?

That is what one person recently wrote and asked My San Antonio, as reported in "Should adoption be used to ensure an inheritance?"

In that situation adopting the person would work. However, there is a far simpler way to make sure someone receives an inheritance.

If you create an estate plan, then you can give an inheritance to anyone you want. The only restriction is that you cannot cut out your spouse or minor children completely.

On the other hand, adoption can create complications, since it severs the legal relationship between the adopted person and his or her biological family. It could potentially create other legal obligations for you and the other person.

Before adopting someone for inheritance purposes, visit an estate planning attorney.

In the end, getting a proper estate plan created may be an easier method of leaving your assets for another person than adopting them.

Reference: My San Antonio (Oct. 13, 2016) "Should adoption be used to ensure an inheritance?"

November 1, 2016

Is an Inheritance the Same Thing as Love?

Parents who are considering leaving their children unequal inheritances often struggle with the notion that those children will believe they are not loved equally as a result.

Parents have many good reasons for wanting to leave one child a larger inheritance than another child. The most common reasons are that one child needs the money more or that one child has been given more financial support than the other previously.

Recently, Washington Post columnist Michelle Singletary discussed these reasons and others in an article. She receive some pushback from readers, which she discusses in another column reprinted in the Ventura County Star as "Michelle Singletary: Will does not equal parental love."

Singletary's readers pointed out that children who receive a lesser inheritance than others often come to believe that means their parents loved them less or that they have done something wrong.

Sometimes the unequal inheritances even lead to bitter family disputes.

Singletary responds with a plea to those who inherit less. She encourages them not to assume they were loved less by their parents, but to consider the valid reasons for inequality.

While that debate is interesting, there is another thing that needs to be pointed out. A lot of the problems unequal inheritances cause can be avoided. Parents can discuss their estate plans with their children before they pass away and let the children know why there is a disparity.

Consult a qualified estate planning attorney to help you through this delicate process.

Reference: Ventura County Star (Oct. 12, 2016) "Michelle Singletary: Will does not equal parental love."

October 26, 2016

After Divorce and Remarriage

If you have been divorced and remarried, do not consider yourself done with all of the legalities when your divorce is finalized and your marriage license filed. You still need to do some estate planning.

For most people, getting divorced is a legal headache. There is all sorts of legal and financial paperwork that must be gathered, filled out and filed with the court. You might have to go through multiple meetings with attorneys, formal mediation and several court hearings before the process is over. It can take months and in some cases years.

If you go to get remarried, then you have even more legal and financial paperwork that needs to be filled out and filed. While you might want that to be the end of all the legal things you have to do, it is not.

As Splitopia points out in "Protect Those You Love in Divorce, and Remarriage," there are other details you need to mind or avoid them to your peril.

These other things you still need to do include:

· Change Your Estate Plan – Your estate plan likely had your former spouse receiving much of your property. It should be changed immediately after your divorce is final. It should be changed again to include your new spouse when you get remarried.

· Update Beneficiaries – If you have any life insurance policies, retirement accounts or transfer on death bank accounts, then you need to make sure those are changed as well to make sure your former spouse is a beneficiary on them and to include your new spouse if you want to.

After getting divorced and remarried you probably do not want to deal with attorneys for a while. However, estate planning attorneys are only there to assist you and you need their help at that time. Visit with one.

Reference: Splitopia (Oct. 5, 2016) "Protect Those You Love in Divorce, and Remarriage."

October 25, 2016May 1, 2023

Family Business Succession Planning

If you have a family business that you want to leave behind for your children or grandchildren, it is important that you not only plan ahead, but that you also start easing the way for the transition.

Any estate plan is going to be more effective the more you plan ahead for what might happen and the more you prepare your heirs for what property and responsibility they will receive. However, for most estate plans that is not absolutely necessary.

Most estate plans will still work out fine if you wait to make plans and do not tell your family what will happen. But, estate plans that include a family business are different. They will not work out so fine.

It is vital that you plan ahead for them as the Wills, Trusts & Estates Prof Blog writes in “Preparing the Family Business for Succession.”

For the family business to thrive after the current owner passes away, careful plans must be made for who will be in charge next. Everyone needs to know who will be in charge on day one and, to make that go as smoothly as possible, it is important that the next leader knows what he or she is supposed to do.

Ideally, the next leader should be groomed for the role by taking part in the business on a day-to-day basis and making decisions about it sooner rather than later. Even if all that is done, it is important to plan for any contingencies that might occur. A secondary plan for succession should also be in place.

If you have a family business, do not delay. Talk to an estate planning attorney about how you can make sure it succeeds when you are no longer running it.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 6, 2016) “Preparing the Family Business for Succession.”

October 24, 2016

Step-Family Estate Planning

One of the most difficult things to navigate with estate planning is dealing with blended families. If not done well, then the people you want to inherit your estate could be left out.

Americans are continuing to get divorced and remarried at a high rate. This has led to an increasing number of blended families where the spouses have children from previous marriages.

Despite this new reality the default estate laws have not kept up. They still reflect the general idea that people will get married only once in their lives. That means if you pass away without an estate plan, the laws of intestate succession will presume your spouse is also the parent of all your children.

In most states, the spouse will get everything, but the spouse will be under no legal obligation to pass anything on to his or her step-children.

The Wills, Trusts & Estates Prof Blog recently wrote about this issue in "Estate Planning for your Step-Family."

When attempting to deal with step-families, it is vital that you have some sort of formal estate plan. At a minimum you need a will. Even better would be a more elaborate estate plan that specifically includes the names of everyone you consider to be in your family and precisely what you want them to inherit.

It should also include those people you do not consider a member of your family, such as former step-children.

If you have a blended family, you should see an estate planning attorney without delay to make sure the people you want to inherit your property are those who actually do.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 7, 2016) "Estate Planning for your Step-Family."

Suggested Key Words: Estate Plan, Blended Family

October 19, 2016October 25, 2023

Post Death Termination Fees

Families and estate executors have enough to worry about after someone passes away. Should they also have to worry about termination fees for canceling a contract with a utility? One state says no.

If you have ever wanted to move to a different cell phone provider, you are likely to have come across a problem. As long as you signed a contract with your current provider, you either have to continue to pay the contract or pay a termination fee.

Depending on where you live, you might have come across other termination fees for things such as cable, electricity and garbage service. These fees are normally seen as reasonable as long as the person who signed the contract is alive. However, some people have discovered that some companies refuse to waive the fees even if the person who signed the contract has passed away.

These post-death termination fees can put a real strain on many small estates. If the deceased had few assets, even a fee of a couple of hundred dollars can be difficult for the estate to pay.

The state of New York has decided to address this problem and recently passed a law that prohibits utility companies from charging termination fees after the contract holder has passed away.

Fox 5 reported on this new law in “NY: Utilities can’t charge termination fees after death.”

This small law could provide big relief to families who are going through the difficult process of grieving for a deceased loved one. In turn, the new law should not create an undue burden on the companies. It remains to be seen if other states will follow suit.

Reference: Fox 5 (Sept. 28, 2016) “NY: Utilities can’t charge termination fees after death.”

October 3, 2016

Alleviating End-of-Life Regrets

Everyone regrets something at the end of a long life, even if it is just not telling friends and family how much they meant to them. A letter-writing project seeks to help people alleviate some of those regrets.

Doctors and other professionals who care for the elderly who are approaching the end of their lives often report that their patients are full of regrets. They regret everything from not mending a broken relationship to not saying thank you to those who helped them and not telling people how much they love them.

This should not be surprising as there are many things people wish they had done differently during their lives. One of the tragic things for those near the end of life, however, is that they often do not have the time or ability to tell loved ones what they regret not saying sooner.

The New York Times reports on a new project designed to help with that problem in "Writing a 'Last Letter' When You're Healthy."

The Stanford Friends and Family Letter Project is a relatively simple idea.

It offers a free letter template with seven questions for people to answer. The questions include "Who do you wish to thank?" and "What do you wish to thank them for?"

This simple idea provides an easier way for people to order their thoughts and let people know how they feel.

One thing this project does not address is estate planning.

Having a properly planned estate is one way to lessen end-of-life regrets as it gives comfort in knowing that family members left behind will be taken care of. If you do not have an estate plan, then contact an estate planning attorney about how to get one.

Reference: New York Times (Sept. 7, 2016) "Writing a 'Last Letter' When You're Healthy."

September 14, 2016

Estate Plans That Work

Estate plans that are perfect on paper can later become completely unworkable. To avoid that and have a good estate plan, you need to take a few simple steps after you get an estate plan.

When you walk out of an estate planning attorney’s office with a newly executed estate plan in your hands, do not make the mistake of thinking that your estate planning is complete. You have taken an important step toward having an estate plan your family can use after you pass away.

After you have created your estate plan, there is more that still needs to be done as the Reading Eagle recently explained in “Office Space: 4 steps to a perfect estate plan.”

To make sure that your estate plan will work you still need to:

Make sure the people who have important roles in your estate plan are aware of those roles. For example, if you have a general durable power of attorney, then you need to let the designated person know about it so he or she understands what to do should anything happen to you.
Let your family in on your plans so they know what is going on and who needs to do what. You do not necessarily need to tell them everything, but they should at least know where to look when the appropriate time comes.
Do not keep old financial documents you no longer need for any reason. You do not want your family to waste time trying to track down old accounts that no longer exist after you pass away.
Make sure to periodically review your estate plan and keep it up to date with any changes in your circumstances or the circumstances of your heirs and beneficiaries.

Reference: Reading Eagle (Aug. 30, 3016) “Office Space: 4 steps to a perfect estate plan”

Building Legacies that Last Estate Planning and Elder Law

Category: Estate Plans