Make A Quick List, Check It Twice

Wondering where to start as you consider creating an estate plan? Thinking through this short and sweet checklist will give you a solid foundation for your estate plan:

  • Beneficiaries: Who will get your assets when you pass away? Friends, family, charities?

  • Specific Gifts: Do you have any special items such as family heirlooms or jewelry that you would like certain individuals to receive after you pass away?

  • Trustee: Who will manage assets on behalf of your children if you pass away while they are young?

  • Executor: Who do you trust to distribute your assets as you have spelled out in your will?

  • Financial Representative (POA): Who should make decisions regarding your finances and other personal business if you become incapacitated?

  • Health Care Representative (POA): Who should make medical decisions on your behalf if you become incapacitated?

  • Living Will: If you are in a terminal state as determined by a physician and unable to make decisions on your own, would you like to receive life-prolonging care, or would you prefer to receive comfort care only?

Best wishes for a safe and happy holiday season to you and your family!

Holiday Conversation Starters

Looking for some reading material to pass the time as you travel this holiday season? Kiplinger’s comprehensive guide to estate planning provides a solid base of information for those thinking about creating or updating an estate plan. Consider discussing some key topics from Kiplinger’s guide with family and friends over the coming months:

  • Does your existing estate plan still makes sense given your present situation in life and the current climate of estate tax law?

  • Should you utilize a trust to handle asset distribution, protect your privacy, or avoid the probate process?

  • What type of information could you share with your family members regarding your estate plan to ease tension and establish expectations?

  • How should your assets be divided (equally or unequally) among your loved ones and when should those distributions be made?

  • Should you make lifetime gifts to decrease the amount of assets you hold at the time of your death and to take advantage of the annual gift tax exemption?

Safe travels, and happy planning!

Celebrating 5 Years In Business!

Five years have flown by! As always, thank you to my family, friends, and clients for your continued support in building this business. Over the past five years, I have had the opportunity to assist over 350 individuals with their estate planning needs. Meeting so many wonderful people and working together to develop custom, affordable estate plans has been an incredibly fulfilling and rewarding experience.

Even more importantly, our family has been blessed with three beautiful children over the last five years. Many of you know that the past year has been incredibly difficult for our family after the birth of our third child, our second with special needs. I will be forever grateful to my clients for your kind words, prayers, and flexibility this year as we have managed our child’s medical needs. Your compassion during this time is appreciated beyond measure. To those closest to us who stand behind us daily, your unwavering support is everything - thank you.

I Have A Will...Now What?

If you have created your will, congratulations - you are more prepared than over half of America! While a will is an essential piece of any estate plan, Kiplinger’s recently highlighted some important matters to consider after your will is in place:

  1. Review beneficiary designations on life insurance policies and financial accounts.

  2. Plan and even pay for your funeral ahead of time.

  3. Account for “digital assets.”

  4. Make sure no accounts are forgotten.

While getting your affairs in order may seem overwhelming now, addressing these items will save headaches for your loved ones in the future. A trusted financial advisor can be a valuable asset in making sure you have tied up all loose ends when it comes to your estate plan.

R-E-S-P-E-C-T, No Will Breeds Hostility

Soon after Aretha Franklin's death this August, news broke that the celebrity, worth an estimated $80 million, failed to create an estate plan prior to her death.  Franklin's attorney asserts that although the singer understood the need to create an estate plan, like many Americans, she just...never got around to it.

Under the laws of the State of Michigan, Franklin's assets would be divided equally between her four sons.  Because of Franklin's celebrity status, no estate plan means that there is a strong possibility that extended family members, friends, or other individuals will try to claim a stake in Franklin's estate.  Such contests could tie up Franklin's assets in the court system for many years to come.

So, how could Franklin and her family have benefited from an estate plan?

1. A will or trust would have eliminated questions regarding how Franklin's assets should be divided.  In addition to fending off potential claims from opportunists, by planning ahead, Franklin could have provided a clear plan for passing her wealth to her four sons, in particular her eldest son who has special needs and is represented by a legal guardian.

2. Franklin could have utilized a trust to keep her assets out of the probate court.  By eliminating probate court involvement, Franklin would have effectuated huge time and money savings for her family.

3. While a will would have provided a road map for dividing Franklin's assets, wills become public documents once they are filed with the probate court.  Trust documents, on the other hand, are not made public and would have allowed Franklin to manage her affairs privately.  Unfortunately for Franklin's family, the administration of her estate will be a very public ordeal.

Although decisions regarding what will happen to our assets after we pass away can seem daunting, planning ahead provides peace of mind for both the testator and the testator's family.  With a little planning, questions and controversy can be easily avoided.

3 Tips For Drama-Free Estate Planning

Estate planners agree that family fighting is the main threat to estate planning.  Why?  While existing family conflict, a lack of communication, and unrealistic expectations are typical causes of inheritance-related drama, an increase in the number of blended families that include children from prior relationships and sometimes younger spouses may be to blame as well.

So, what can you do now to prevent family tension in the future?  Check out these three tips from the writers at CNBC:

1. Address family conflict directly with your estate plan.  Failing to create an estate plan will only add to existing family drama.  By creating a clear estate plan, you reduce the potential for disagreement among family members regarding your wishes after you pass away.

2. Inform your family ahead of time.  Make sure you thoroughly explain your estate plan to your family members to help them understand not only what to expect, but why certain decisions were made.

3. Update your estate plan over time.  A change in your family situation should trigger a review and potential update of your estate plan.  It may also be beneficial to review and update your estate plan in response to new tax laws as well.

A little planning today can protect your family from conflict down the road.

Estate Planning After Divorce

If you have gone through or are currently going through a divorce, your to-do list may seem overwhelming.  However, it is important to make sure you consider updating your existing estate plan as you work through this process.  There are a few quick changes that can be made during the divorce process, while other changes may need to wait until your divorce is finalized.

1. Revoke your existing financial and health care powers of attorney and renew with updated designations.  You likely do not want your former spouse managing medical and financial decisions on your behalf.  These changes can be made even before your divorce has been finalized.

2. Update beneficiaries on retirement accounts and life insurance policies.  Many times, these designations cannot be altered during the course of the divorce process, but it is a good idea to check to make sure.  Once your divorce has been finalized, you should be able to move forward with changes as you wish.

3.  Update your existing will or trust to appoint a new executor or trustee, beneficiaries, and a backup guardian if you have minor children.  If you have an existing will or trust, you likely appointed your spouse to the role of executor or trustee.  Now that you have decided to divorce, you may wish to select a different individual to manage your assets upon your death.  You will also likely leave your assets to your children or other family and friends once your divorce is finalized.

For more tips on managing your estate plan during and after divorce, a recent article in Forbes provides a helpful checklist.

 

Check Your Assets

A will is an essential element of any estate plan.  The will takes care of transferring only probate assets.  This means that the will directs how assets that do not transfer automatically upon the owner's death should pass.  Non-probate assets, however, transfer according to how they are titled.  For instance, your life insurance policies and retirement accounts pass automatically to the beneficiaries you have designated upon your death.  Additionally, if you hold assets jointly with your spouse or child, those assets pass automatically to the surviving joint owner upon your death.  Some accounts and real estate can also be designated to automatically "transfer on death" to a beneficiary.  Generally speaking, your will then catches and distributes all other assets through the probate process.

For more information on how titling your assets can impact your estate plan, check out this article in Daily Local News.