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."

April 25, 2017

The Trumps and Trusts

Trusts might be more of a topic of political conversation today, thanks to the Trump family, than at any other time since President Theodore Roosevelt waged war against the trusts of the Gilded Age. That could be a good thing.

Trusts are not often a subject of much public discussion. They are important to estate planners, but as a matter of pressing national concern they rarely register.

The last time they were considered to be a matter of nightly discussion on the national news was during the first Roosevelt administration, when President Theodore Roosevelt resolved to bring the trusts to heel.

Today, trusts are back in the news because of the Trump administration and how members of President Trump's family are using trusts to hold their assets.

A lot of digital ink has been spilled over whether the President's family is using trusts in ethically appropriate ways.

One of the more recent examples of that comes from a New York Times article on Ivanka Trump's trust titled "Despite a Trust, Ivanka Trump Still Wields Power Over Her Brand."

While the press reporting has been mostly over the concerns about the ethical considerations of the Trump family trusts, there is another possible story.

What the Trumps are teaching us is that trusts can come in all sorts of shapes and sizes. They can be created for different purposes and give different people various levels of control over the assets in the trusts.

Whether or not you care about the ethical considerations of the Trump trusts, pay attention to the different things they do with their trusts. It might give you some ideas about what you can do with trusts that you can make part of your estate plan.

Reference: New York Times (March 20, 2017) "Despite a Trust, Ivanka Trump Still Wields Power Over Her Brand."

April 19, 2017February 23, 2022

Dying With Debt

Most Americans pass away still owing some debt. The debt does not merely die with them. It is more complicated than that.

There is a common belief that any debt a person has, dies with him or her. In a sense that is true, but it is also false depending on the type and the amount of debt.

It is important to understand the dynamics of debt and dying, because 73% percent of Americans pass away with debt. The average amount of debt at death is approximately $62,000 according to FOX Business in “Americans Are Dying with an Average of $62K of Debt.”

The only type of debt that completely disappears when the debtor passes away is federal student loans. However, even then the proper paperwork must be filed. The same situation is not necessarily true with other types of student loans.

Other types of debt must be paid by the estate, before any assets are distributed to heirs.

Thus, if a person passes away owing $100,000 and having assets of $150,000, then the estate must pay the debt and only the remaining $50,000 can be inherited by heirs.

If the estate does not have enough assets to cover the full amount of the debt, then heirs are not responsible to pay it. However, there are exceptions. For example, if the estate contains a home, then the value of that home might be used to pay the debt even if other people are living in it. As a result, the heirs might need to pay the debt to stay in the home.

The issue of debt and death can get very complex. If you have any questions, it is a good idea to talk to an estate planning attorney who can help you manage what will happen to any debt you have when you pass away.

Reference: FOX Business (March 21, 2017) “Americans Are Dying with an Average of $62K of Debt.”

November 9, 2016October 25, 2023

Putting Your Home in a Trust

If you have decided to get a trust it often makes sense to put your big assets, such as your home, in the trust.

People who get living trusts always have questions about what kind of assets they should put in their trusts, especially whether or not to put their home in it.

Recently, FOX News discussed this in “Why Should I Put My Home in a Living Trust?”

To understand the answer to the question, it is important to understand the main purpose of most living trusts.

Most people who get living trusts do so to avoid having their estate go through probate after they pass away, which is necessary if someone passes away with or without a will.

Probate can be costly and time-consuming, especially when there is a dearth of practical information left behind regarding where the legal documents and assets are.

With a living trust people can use their assets while they are alive and then after they pass away those assets can be distributed to the beneficiaries of the trust without going through probate.

The trustee, not a probate court, is responsible for making sure everything is handled appropriately. It can be faster and cheaper. The most valuable asset for many people is their home, so it only makes sense to include that in the trust rather than having it go through probate.

Of course there are many other reasons to get a trust, such as for estate tax purposes. There are also many different types of trusts that can be used for other purposes.

If you would like to know more about living trusts and what you can do with one, talk to an estate planning attorney.

Reference: FOX News (October 5, 2016) “Why Should I Put My Home in a Living Trust?“

September 30, 2016

What Happens When a Will is Lost In Maryland?

Some states require that an original will be submitted to probate or restrict the circumstances when a copy can be produced instead. What happens when the original will has been lost? Maryland and the District of Columbia require originals.

It is always a good idea to keep the original copy of your will safe and secure. In some states the original has to be produced for the will to be used in probate. In other states the original might not always be necessary, but the circumstances when a copy of the will can be used are restricted.

For this reason, many people choose to have their lawyers keep the original copy of the will. When they pass away, the attorneys can then produce the original will.

In a recent Napa Valley Register column entitled "Is lost will still valid?," a couple wrote in to ask what would happen to their will. They left it with the attorney who drafted it for them. The attorney, however, had retired and the couple had no idea what happened to their will or how to find the attorney to ask.

While the advice given was specific to California, it is generally good advice anywhere in the U.S. in this type of situation.

Attorneys are required to keep their files even after they retire. The normal practice is to have another attorney take care of the client files and to inform the state bar association of the arrangement.

Therefore, this couple should call the bar association and make inquiries. If that does not produce the whereabouts of the will, the couple can always get a new will.

Reference: Napa Valley Register (Sept. 8, 2016) "Is lost will still valid?".

August 12, 2016October 25, 2023

You Have an Estate

Even though you might not realize it, you do have an estate. You should plan for what will happen to it.

The word “estate” conjures up certain ideas in the popular imagination. The term has connotations of mansions with well-manicured lawns. Estates are where the very rich live secluded from the day-to-day world of ordinary people.

The Rockefellers and Carnegies of the world had estates. People of more ordinary means do not think that the term applies to them.

However, as Detroit Lakes Online points out in “Help your loved ones: Get ahead on estate planning,” almost everyone alive has an estate.

Estates are not just something the very wealthy have. The term refers to the totality of everything you own when you pass away. Even if you live alone in a small apartment, you have some possessions. Homeless people often own something, even if it is nothing more than the clothes they wear. In fact, very few people can claim not to own anything at all.

The fact that you have an estate, no matter how large or small, means estate planning is appropriate for you. Estate planning lets you determine who gets all of the possessions that make up your estate. It also lets you plan for who will handle things for you should you be unable to handle everything for yourself.

Even if you do not care who gets your possessions or who handles your affairs, you probably have people in your life who will care. If you do not make those plans, then they will have to clean up a potential mess and have a much more difficult time doing so.

Unfortunately, that mess likely will be cleaned up in court—unless you take steps now to plan around it.

Reference: Detroit Lakes Online (July 5, 2016) “Help your loved ones: Get ahead on estate planning”

August 9, 2016

What Time of Year Is Best for Estate Planning?

Some people wonder what time of year is the best time for them to get estate plans. There are several possible answers.

At first glance it might seem like an odd question, but it is one that gets asked with some frequency: What is the best time of year to plan for my estate?

The simplest and probably best answer to that question is that the best time to plan for your estate is whenever estate planning is on your mind. If you are thinking about getting an estate plan, then you should do so no matter what time of year it is.

As the Lowell Sun points out in “Summertime is right time for estate planning,” other answers are also possible.

The article suggests that getting an estate plan in the summer is good because many estate planning attorneys also handle real estate transactions. The summer is generally a slow period for real estate, so attorneys might have more time to focus on your estate plan.

That is all true, but many attorneys only do estate planning and elder law so the advice might not be applicable for the attorney you want to use.

Getting an estate plan when you do your taxes is also considered to be a good time of year since you will already have many of your financial documents easily accessible.

The best answer, however, is still the first.

If you are thinking about getting an estate plan, do not worry about what time of year is best to get one.

Get an estate plan as soon as you think about getting one.

Reference: Lowell Sun (July 17, 2016) “Summertime is right time for estate planning”

Building Legacies that Last Estate Planning and Elder Law

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