June 22, 2017

Retiring in Your Home

Most people would prefer to stay where they currently live when they retire. That means that they need to do some planning.

Generally speaking, the longer elderly people can remain in their homes, the better off they will be. It is good for the elderly to stay where they are comfortable and where they have built up support networks of friends and family.

It is certainly what most people would prefer to a nursing home. It is also normally better than moving to a new home that a person is not used to. Nevertheless, if aging in place is what you would prefer when you retire, then it is important that you take stock of your home to see if that will be possible.

The New York Times reported on this in "Planning to Age in Place? Find a Contractor Now."

Most homes are not designed and built with the elderly in mind. If nothing else, most homes have far too many stairs that are frequently difficult for elderly people to navigate.

Older homes can be even worse.

For example, many older homes have smaller doorways. Consequently, someone in a wheelchair cannot comfortably get through such doorways, if they can at all.

There are all sorts of things you might not even think about, that can make a home a bad place for an elderly person to live.

Therefore, if you would like to stay in your home in your later years, you need to plan for that now.

Your home most likely needs to be remodeled in some ways to make it safer and more livable. That should be done before the changes are absolutely necessary.

Reference: New York Times (May 19, 2017) "Planning to Age in Place? Find a Contractor Now."

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June 21, 2017

Your Debt and Your Demise

Most Americans pass away owing debt. What happens to that debt after they pass away?

It is not a secret that most Americans owe money to someone. The people of the U.S. are used to buying things on credit and, as a consequence, they have debts.

Most people would like to be rid of all that debt by the time they pass away. Unfortunately, the reality is that most of them will not.

Approximately 73% of people in the U.S. pass away while still in debt. The average amount of debt is $61,554, but that average goes down to $12,875, if mortgage debt is not included.

Market Watch discussed this in "What happens to your debt when you die?"

Because you are likely to pass away while still in debt, it is important to understand what will happen to that debt, to make sure it is not a burden on your family.

If it is debt that you alone are responsible for, then your estate will pay the debt out of any available funds before any assets are distributed to your heirs. If you estate does not have enough assets to cover your entire debt, then most types of debt die with you.

However, there are exceptions.

For example, any family member who still lives in a house with a mortgage would be responsible for the mortgage payments, if he or she wishes to stay in the home.

What this means is this: you should not worry about most debt being a burden to your family. However, if you wish to ensure that your debt does not eat up the inheritances of your heirs, then you should do some estate planning to avoid that.

Reference: Market Watch (May 29, 2017) "What happens to your debt when you die?"

June 16, 2017

Leaving A Large Inheritance? Pros & Cons

Many wealthy people are torn between wanting to leave a large inheritance for their children and fears that their children will not be able to handle the wealth.

Wealthy parents whose children do not get independently wealthy on their own, often fear that leaving those children a large inheritance would be a mistake. The children might not be able to handle the money and it might cause them to give up their own careers.

In some cases, the children might also waste all of the money and leave nothing for their own children. Despite this common fear, the wealthy parents do want to leave their children large inheritances.

This tension creates problems for many people as they plan their estates, as the Wills, Trusts & Estates Prof Blog points out in "New Focus for Estate Planning."

The key to resolving this tension is to understand that estate planning can be about more than just transferring a lot of assets to heirs. With a traditional Will, heirs get all of the assets at once, which leaves open the possibility that assets will be misused.

There are many kinds of available estate planning tools that can be used to make sure that heirs do not waste everything.

Many types of trusts will help preserve the assets.

Of course, this can only be done, if an estate planning attorney knows that the client fears his children will waste an inheritance. The attorney needs the client to express these fears, so the attorney can devise the best plans.

Reference: Wills, Trusts & Estates Prof Blog (May 17, 2017) "New Focus for Estate Planning."

May 29, 2017

Treating Your Children Fairly

One of the biggest problems in estate planning is figuring out how to treat children fairly in circumstances when fairly does not necessarily mean equally.

The default estate planning option for people with more than one child is to divide their estates equally between their children. That is the most common thing that is now done in estate planning.

It is easy and simple.

Most of the time it is a fair way to divide a parent's estate and one that the children accept. That does not always work, however, because as every parent eventually learns, treating children fairly does not always mean treating them equally. That holds true in estate planning.

Adult children can wind up in very different life circumstances for a variety of reasons. For example, if one child became wealthy after receiving a large gift from his parents to start a business, it might not be fair to treat that child the same in an estate plan as another child who went into public interest work.

Figuring out how to divide an estate unequally but fairly between children can be difficult, as the Wills, Trusts & Estates Prof Blog discussed in "Dividing Your Wealth Among Your Children."

The biggest problem is figuring out how to make the unequal division without causing any of the children to dispute the estate. Trusts are extraordinarily helpful in these situations, since they are much more difficult to challenge.

Parents can create a trust with an independent trustee and give the trustee the power to make distributions to the children based on their circumstances and needs. It is also important that parents who are leaving unequal inheritances for their children talk to the children and let them know the reasons for doing so.

If you want to leave your children unequal inheritances, you need to seek the advice of an experienced estate planning attorney to make sure you do so in a way that your children will think is fair and not seek to challenge.

Reference: Wills, Trusts & Estates Prof Blog (May 5, 2017) "Dividing Your Wealth Among Your Children."

May 5, 2017June 14, 2025

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.”

April 17, 2017

An Estate Battle over Support for Donald Trump

In an extremely unusual case, the children of Phyllis Schlafly are involved in a bitter dispute over her estate that appears to have started, when Schlafly decided to support Donald Trump for President.

Throughout the late 20th century, Phyllis Schlafly was a well-known and powerful force in Republican politics. She is often credited with personally defeating the Equal Rights Amendment, when it appeared to be on the verge of passing.

Although she had faded away from the public eye in recent years, Schlafly remained an important figure in Republican circles until she passed away in 2016. When she endorsed Donald Trump for President during the 2016 primaries, it might not have mattered to the general public, but it did matter in the Republican operative world.

It also appears to have mattered to her children and her estate, as the Daily Mail reports in "Children of late conservative icon Phyllis Schlafly at war over their inheritance and have been fighting since she threw her support behind Donald Trump."

Schlafly's endorsement of Trump created a rift between her sons, who supported the decision, and her daughter, who opposed it. The daughter claims that the decision was influenced by Republican political operative Ed Martin.

Since Schlafly passed away, Martin has been creating political action committees in her name to support Trump and the daughter has attempted to stop him. She also claims that Martin and her brothers unduly influenced their mother to change her will in their favor and to make it more difficult for the daughter to challenge the will.

This is disputed by the sons.

Reference: Daily Mail (March 23, 2017) "Children of late conservative icon Phyllis Schlafly at war over their inheritance and have been fighting since she threw her support behind Donald Trump."

April 12, 2017October 25, 2023

The Core of Estate Planning

If you feel overwhelmed about planning your estate, it might be helpful to remember what is at the core of estate planning. It is a way to transfer assets.

Estate planning can be and do many different things. It can provide for the care of minor children. It can be a way to let people know that you love them. It can create a charitable legacy.

In fact, there are so many things estate planning can be and do that may people get overwhelmed thinking about all of them. As a result, they do not create estate plans.

At its core, however, estate planning is not that complicated. Estate planning can be as simple as transferring your assets after death.

As the Times Herald-Record explains in “Transferring assets upon death,” there are four main ways to do that, including:

Wills – In a will you state who should get your assets and appoint someone to be in charge of making sure that your wishes are carried out. Wills have to be approved by a probate court.
Joint Ownership – If you have assets in joint ownership with another person, then by law when you pass away the joint owner becomes the sole owner of the asset.
Beneficiary Designations – For life insurance policies, retirement accounts and savings accounts, you name a specific beneficiary to receive the assets after you pass away. A court does not need to approve the designation.
Trusts – With a trust, you state how your assets should be handled, appoint someone to handle them and name the people for whose benefit the assets will be handled.

How do you know which approach or approaches are best for your circumstances? Contact an experienced estate planning attorney.

Reference: Times Herald-Record (March 15, 2017) “Transferring assets upon death.”

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Category: Wills