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Author: Profit Law Firm

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Estate Planning Is Ongoing Process

MP900439295[1]It is not enough to get an estate plan once and leave it alone for all time. It needs to be constantly reviewed and updated to take account of changing circumstances.

Some people can get away with getting an estate plan once and never looking at it again. If someone never gets divorced, remarried, has more children or increases assets, then the first estate plan they get might be good enough for the rest of their lives.

This is true, even if that estate plan was written 50 years before the person passes away.

However, most people's lives are not that constant.

In fact, most people have significant changes in their lives as they get older.

When things change, then estate plans normally need to be changed as well, as Forbes discusses in "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

The more wealth that you have, the more often you will probably need to change your estate plan.

This is because your assets will grow, how you hold those assets will change and tax laws will also change.

Nevertheless, it is not just the wealthy who need to constantly review and update their estate plans.

Everyone should do so, whenever there is a significant change in their lives that should be reflected in an estate plan.

Examples of these changes include divorce, remarriage, a new child, a new higher paying job, a new grandchild and much more.

If you have not changed your estate plan recently, then take a look at it.

Ask yourself whether it still does what you want it to do, given all the changes in your life.

If the answer is no or even maybe not, then talk to an estate planning attorney.

Reference: Forbes (Sep. 6, 2017) "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

 

 

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Estate Planning Is Ongoing Process

MP900439295[1]It is not enough to get an estate plan once and leave it alone for all time. It needs to be constantly reviewed and updated to take account of changing circumstances.

Some people can get away with getting an estate plan once and never looking at it again. If someone never gets divorced, remarried, has more children or increases assets, then the first estate plan they get might be good enough for the rest of their lives.

This is true, even if that estate plan was written 50 years before the person passes away.

However, most people's lives are not that constant.

In fact, most people have significant changes in their lives as they get older.

When things change, then estate plans normally need to be changed as well, as Forbes discusses in "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

The more wealth that you have, the more often you will probably need to change your estate plan.

This is because your assets will grow, how you hold those assets will change and tax laws will also change.

Nevertheless, it is not just the wealthy who need to constantly review and update their estate plans.

Everyone should do so, whenever there is a significant change in their lives that should be reflected in an estate plan.

Examples of these changes include divorce, remarriage, a new child, a new higher paying job, a new grandchild and much more.

If you have not changed your estate plan recently, then take a look at it.

Ask yourself whether it still does what you want it to do, given all the changes in your life.

If the answer is no or even maybe not, then talk to an estate planning attorney.

Reference: Forbes (Sep. 6, 2017) "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

 

 

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ImagesElectronic Wills are around the Corner

Almost all business can now be conducted electronically. Wills are one of the last holdouts, but that is starting to change.
Traditionally, for a will to be accepted as valid in probate court, it had to follow very strict forms and procedures. It needed to be signed and there needed to be witnesses present who could testify that the will was signed. Normally, two witnesses were needed.

Eventually, some states relaxed the strict formalities and allowed other wills to be probated, if it could be proven that the contents of the will were the intentions of the testator. However, some states kept the very strict rules.

That makes it difficult for wills to be made digitally, like most everything else can be today.
The law is now beginning to adapt in ways that will make them possible, as the New Jersey Law Journal discusses in "Electronic Wills: No Longer in A Galaxy Far, Far Away."

In 2013, an electronic will was accepted into probate in Ohio. In that case, the person had digitally signed the will using a stylus and witnesses were present to the signing.

While Florida recently rejected an electronic wills law, Nevada has passed a law that allows them.
In other states, courts are rewriting the rules to allow more non-conforming wills to be accepted, which will eventually pave the way for electronic wills in those states.

For now, you probably do still need to make sure that your will is written on paper and that all of the formal procedures are followed correctly.
That might not be true in a decade.

Reference: New Jersey Law Journal (Sep. 11, 2017) "Electronic Wills: No Longer in A Galaxy Far, Far Away."

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Trusts Are Cheaper Than Wills

If you are looking to save money on your estate plan, then you might think that you should get a will  since they are cheaper to get than a trust. However, trusts are actually cheaper overall. MP900403058[1]

Estate planning can be expensive for some people. Estate planning attorneys do not always come cheap and not everyone thinks they can afford to hire one.

In most cases, a will is less expensive to get than a trust.  This is because trusts normally require more of the attorney’s time to draft. This leads many people to get wills to save time and money.

The problem with is that a will is more expensive overall than a trust, as the Times Herald-Record explained in “Trusts will cost you less at settlement time.”

When someone passes away, someone must then administer either the will or the trust to make sure that property is distributed as the deceased directed.

Using a will requires going to probate court and having an executor, who can charge for the service, go through the process of administering the estate.

On the other hand, using a trust means that a trustee, who can also charge for the service, is required to distribute everything.

The trustee normally does not have to go to court, which makes it a much faster process. The speed means that the trustee may charge much less overall.

In the end, the trustee may be a lot cheaper than any money that might have been saved by getting a will instead of a trust.

When getting an estate plan created, it is important to use the instruments that work best for your situation. Do not be afraid to get a trust because of the initial expense.

It just may be cheaper in the long run.

Reference: Times Herald-Record (August 2, 2017) “Trusts will cost you less at settlement time.”

 

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Estate Planning Is Important

Bigstock-Family-Portrait-At-Christmas-4881212[1]You cannot merely tell your family what should be done with your assets after you pass away. You need to go through the process of getting a formal estate plan drawn up.

Many people are under the impression they do not need to get a formal estate plan, because they can rely on their family to divide up their assets after they pass away without any problems. They think if they just give family members some directions about who should get what, then the family will reliably carry out those wishes.

While we all would hope that we can rely on our families in this way, there are legal and practical reasons why it is unwise to do so and why people need to get a proper estate plan.  This was discussed in a recent Fontana Herald News article titled "Having estate planning documents is very important."

The biggest issue faced by your family if you do not make an estate plan, is that your family will not decide who gets your property. Instead, the courts get to make that decision and they do so by following statutes that determine who gets everything.

The person who the courts decide gets everything, might not choose to follow any directions you have given to distribute that property to other people. In some cases, it might be impossible for them to follow your wishes, even if they wanted to, since they could face negative tax consequences.

If you can take the time to tell your family how you want your property divided up, then you can take the time to get a formal estate plan that will actually carry out your wishes.

Reference: Fontana Herald News (August 7, 2017) "Having estate planning documents is very important."

 

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What Is Fair in Blended Families?

Bigstock-Large-Mixed-Race-Family-2589417_(2)[1]How to fairly divide an estate between multiple children, can be a difficult question to answer. It can get even more difficult, when the family is not a traditional one.

When people get remarried and they have children from a previous relationship, then their estate planning can get pretty complicated.

Consider for example, a man who has two homes and two daughters from a previous relationship getting remarried. This man decides to create a trust that leaves one of his homes to his two daughters, since that is the house in which they grew up in. The other home will go to his new wife.

That seems like an equitable solution.

However, the man and his new wife, then had a son and they also purchased a third home.

Now, the question becomes how do they make sure that all of the man's children are treated equally?

If any inheritance the new wife receives will eventually go to her son and he also receives a portion of his father's estate, then he will receive a larger inheritance than his step-sisters.

How to resolve this situation was the subject of a recent letter to Market Watch as reported in "How do I split my estate between my two stepdaughters and biological son?"

There is no single perfect solution to this situation that will work in all cases.

 It depends on how much the woman brought into the marriage and how old her step-daughters were at the time.

What will work for one family, will not work for another.

If the women brought few assets into the marriage, then the fair thing to do might be to give her a life estate in the property, but then divide that property up equally between all three children when she passes away.

If you have a blended family, then visit an estate planning attorney to learn about the options to deal with this type of situation for your family.

Reference: Market Watch (August 8, 2017) "How do I split my estate between my two stepdaughters and biological son?"

 

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Update Your Estate Plan

man and women shake hands over a laptopIf you do not continuously update your estate plan, then it will not be as effective as you want it to be.

After people get an estate plan, the last thing many of them want to do again, is to go back to the estate planning attorney and make changes.

It can be expensive to do so and it takes time away from other things. It also forces people to think again about their own deaths.

This leads people to think that if they have already gotten an estate plan, then at least they have something. They believe that they do not need to make regular changes,  since they will always have time when they are older to change their plans to account for everything that has changed since they first got estate plans.

However, that is a bad idea as Market Watch reports in “There’s no time like the present to update your estate plan.”

The biggest issue is that you might not have as much time to update your estate plan as you think. Even the most cautious person with the healthiest habits in the world, can never know what might happen to him.

You do not have time to wait to update your estate plan to take changing circumstances into account. It is important to make changes to your estate plan, when those changes first become necessary.

If you do not continuously update your estate plan, then you risk leaving your family in a bad position when you pass away. They are the ones who will have to deal with anything that might have made sense once, but that no longer does.

Reference: Market Watch (August 7, 2017) “There’s no time like the present to update your estate plan.”

 

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The Wrong Ashes

MP900382652[1]A pet cemetery and crematory in Illinois is accused of giving pet owners the ashes of animals that are not their own.

While a local animal rescue volunteer was searching for a missing dog at an Illinois pet cemetery and crematorium that also had an attached animal shelter, he noticed a smell coming from a refrigerator on the property. The closer the volunteer got to the refrigerator, the more overpowering that the smell became.

Upon opening the door, the volunteer discovered the bodies of three dead animals.

One of the animals was a cat that had been implanted with a microchip.

The data on the microchip was read by local authorities and it was discovered that the cat belonged to a family, whose pet had died three years previously.

That family had been given the ashes of a different animal already, according to the Daily Mail in "Pet cemetery is accused of giving the ashes of random animals to grieving owners after dozens of decomposing carcasses were found in a freezer."

It is not clear why the family was given the incorrect ashes or why the cat was never cremated at all.

Unfortunately, the owner of the cemetery committed suicide shortly after the police started their investigation.  Therefore, the answers as to why may never be known.

If the owner thought he could avoid any problems by taking his own life, then he was wrong.

It is still possible that his estate could be sued and his family will have to be the ones to face legal consequences, instead of him.

Reference: Daily Mail (July 30, 2017) "Pet cemetery is accused of giving the ashes of random animals to grieving owners after dozens of decomposing carcasses were found in a freezer."

 

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Online Wills Are Dangerous

MP900411753[2]You can create a will by purchasing a form online and filing it out.  However, it makes no sense to do so.

One of the biggest questions people have about estate planning today, is whether they should use one of the several online legal document services.

These services allow people to purchase forms they can download and fill out for themselves that purport to be legal documents. Many people have made their own wills this way.

The problem is that there is no actual advantage to creating a will this way, as MoneySense pointed out in "Danger of DIY Wills."

The one advantage people think these online wills have is that they are cheaper than going to an estate planning attorney. However, that is not really the case.

 It is true that you might be able to save a few hundred dollars now by doing things yourself. If there are any problems with the documents you purchased after you pass away, then your estate is going to pay thousands of dollars, a lot more money, to attorneys to sort out the problems.  This will dwarf any "savings" you might have had from drafting the document yourself.  

There are almost always problems with form wills.

The source of the problems is always the same.

You are not an expert.

You might think you know what the best legal options are for your estate, but you are almost certainly wrong.

Do not be offended by that.

Unless you happen to be a surgeon, you do not know how to take out your own appendix either. Estate planning requires expertise every bit as much as surgery.

Reference: MoneySense (July 14, 2017) "Danger of DIY Wills."

 

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Estate Planning and Retirement Planning

Estate planning and retirement planning are not separate things. If they are done properly, you will do both at the same time.

People often think of retirement planning as saving for their own financial needs, when they are no longer working. They also think of estate planning as something different, simply planning to distribute whatever is left over when they die.

While things can be done that way, it is better to think of the two things at once, so your plans complement each other.

If your estate planning attorney and financial advisor work together, then both your retirement and estate plans will work better for you.

You will have a comprehensive plan, as TD Ameritrade discusses in “Estate Planning: Build Up, Draw Down, Distribute Balance.”

A comprehensive plan helps determine how you are going to build up your account balances to have more than enough money for your retirement. It also makes sure your assets are held in the best possible way for your future estate.

The plan takes into consideration how you will draw your assets down during retirement to make sure you leave something for your heirs, if that is your decision.

Finally, the plan determines the best way for you to pass the remainder on to your heirs.

If you do things properly, then you will have enough for your needs and your heirs will have plenty after you pass away.

If you would like to get a comprehensive estate plan, then talk to an estate planning attorney about how to make sure your retirement plans complement your estate plan.

Reference: TD Ameritrade (July 19, 2017) “Estate Planning: Build Up, Draw Down, Distribute Balance.”