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More Money, More Problems

Of all people, it would seem that celebrities and the ultra-wealthy would have access to every resource they might need to establish an elaborate and air-tight estate plan.  Unfortunately, that is not always the case.

Most recently, Alan Thicke of "Growing Pains" fame passed away with a seemingly solid plan to split his assets between his children and his third wife, Tanya Callau Thicke.  However, an ugly battle has erupted between the parties stemming from disagreements related to Thicke's prenuptial agreement with Callau and the trust Thicke had established during his lifetime.  For more on this story, check out this piece from CNN.com.

6 Easy Tips For Writing A Will

The process of creating a will can be intimidating, but it doesn't have to be.  Kiplinger's Personal Finance has provided a simple six-step approach to creating a good will:

1) Sort out all of your assets including real estate, financial assets, personal items, and other possessions such as automobiles to help you get started.

2) If you have minor children, then select a guardian who will take care of your children if you pass away.

3) Designate beneficiaries who will receive your assets once you pass away.  This could include family members, friends, or charities.

4) Select an executor who will be in charge of distributing your assets according to your wishes.

5) Meet with an estate planning attorney to make sure your wishes are properly reflected in your documents.

6) Update your will from time to time as you go through life changes.

While thinking about death is probably not at the top of your to-do list, breaking down the pieces of a will into these six simple steps can make the process of creating a will much less daunting.

 

Do You Have An Estate?

Thinking about creating an estate plan?  The Vanguard Group, Inc., recently released a helpful piece listing five facts that everyone should know about estate planning:

1. If you own anything, you have an estate.

2. Your estate plan comes into play if you are incapacitated or if you pass away.

3. If you fail to plan, your state's laws will make decisions for you.

4. Update your estate plan regularly, as your plan is not final until you become incapacitated or pass away.

5. Although DIY estate planning can save money now, generic forms may be inappropriate for your situation, costing your loved ones in the long run.

 

4 New Year's Resolutions For Married Couples

Whether you are planning a wedding this year, or you have been married for 50 years, this helpful article from A Practical Wedding outlines four major planning discussions you should have with your spouse.  Writing your wills, purchasing life insurance, preparing living wills, and documenting various aspects of life can go a long way toward making an unexpected situation much simpler for your spouse or other loved ones to manage.

Thank you for a wonderful 2016, and best wishes for a safe and happy 2017!

How Will Donald Trump's Election Impact Estate Taxes?

After this month's election of Donald Trump as the next President of the United States, many Americans anticipate changes to the tax code.  On the campaign trail, President-elect Donald Trump vowed to eliminate the estate or "death" tax.  So, what does this mean for you?

For 2016, the unified credit (sometimes referred to as the estate and gift tax exemption) is $5.45 million per person, or $10.9 million for a married couple (this will increase to $5.49 million per person, or $10.98 million for a married couple in 2017).  This means that only assets held at the time of death above this threshold are subject to estate taxes as the law currently stands.

If enacted by Congress, Donald Trump's proposal would eliminate the current estate tax, but would impose a capital gains tax on assets valued at over $10 million at the time of death.  A recent article in Forbes provides a synopsis of Donald Trump's proposal.  What will actually happen remains to be seen, as an overhaul to the entire tax code requiring compromises will likely be necessary before any changes will be made by Congress.

 

Celebrating 3 Years in Business!

A HUGE thank you to all of my family, friends, and clients as I celebrate three years in business this week!  I feel very lucky to have the opportunity to do what I love, and I am truly grateful for all of the support, advice, and referrals you have provided over the past three years.  During these three years, I have had the pleasure of helping nearly 200 individuals with their estate planning needs!  I look forward to meeting and working with many more wonderful people in the years to come.  THANK YOU!

Time To Do Your Homework!

Summer is winding down, kids are heading back to school, and sports, clubs, and other activities are starting up again.  As the new school year begins, now is the perfect time to think about your estate plan.  Respected personal finance publication Kiplinger recently shared five important reasons to establish an estate plan:

1. Maintain control over what happens to your assets after you pass away.

2. Minimize the negative impact your death could have on a business you own.

3. Prevent information about your assets from becoming public after you die.

4. Prepare in advance for an unforeseen disability.

5. Take inventory of your finances to plan for the future both during your lifetime and after your death.

Click here to read further.

 

Add Your Estate Plan to Your Summer Vacation Checklist!

School is out and summer is finally here!  For many, that means it's time for a long-awaited vacation away from home.  Whether you are heading to Disney World, taking a cruise, or relaxing at a nearby lake this summer, make time to review your estate plan before you take off.  Below is a quick and easy checklist to make sure your plan is ready to go:

1. Review Beneficiary Designations - If you have a will, you have probably designated beneficiaries to receive your probate assets (meaning assets that will pass through the probate process instead of automatically) if you pass away.  Keep in mind that non-probate assets such as retirement accounts, life insurance policies, and other financial assets may include beneficiary designations as well.  Transfers to these beneficiaries will occur almost automatically and outside of the probate process upon your death.  Take a quick look at your probate and non-probate beneficiary designations to make sure your assets will transfer according to your current wishes if something happens to you.

2. Update Powers of Attorney - It is important to make sure you have powers of attorney established in the event that you are in an accident and need someone to make medical or financial decisions on your behalf.  If you have not established powers of attorney and something happens to you, a court will intervene to appoint someone to handle these decisions on your behalf.  This process can be expensive and time consuming for your loved ones.  Planning ahead will save time, money, and headaches for everyone involved.

3. Designate a Guardian - If you have young children, you will want to make sure you have made a guardianship appointment in your will.  If you do not select an individual to take over guardianship of your children in the event of your death, a court will make a selection instead.  Additionally, you will want to select a trustee to manage any assets you plan to pass to young children should something happen to you.  This includes assets passed by will, or through life insurance polices, retirement accounts, and other non-probate assets.

4. Make Documents Accessible - Before you leave for vacation, store your estate planning documents in a safe place, and let your loved ones know where they can be found and how they can be accessed if necessary.  A lost or hidden estate plan will be of no use to anyone.

5. Don't Wait! - You have spent months or even years planning and saving for your vacation, so why put off updating your estate plan until minutes before you leave?  Updating your estate plan doesn't have to be arduous - get started today!

Have a safe and happy 4th of July weekend!

How Failure to Plan Could Impact Prince's Legacy

After the shocking news of Prince's death and subsequent reports that he appears to have died without a will or other estate plan in place, you might be wondering what this all means.  Reuters recently published a comprehensive piece on the impact Prince's inaction could have not only on the distribution of his assets, but on his legacy for years to come. 

Avoiding Probate: Utilizing a TOD Deed to Transfer Property

For many Americans, the largest asset possessed at time of death is real estate.  When it comes to your estate plan, one way to transfer real estate, whether land, a house, or both, is through a bequest by will.  Real estate can also be transferred through use of a trust.  Indiana and Ohio offer an alternative option for those who wish to gift their real estate to specific individuals at the time of their death.  This alternative option utilizes a Transfer on Death Deed and allows owners of real estate to transfer their property outside of the probate process.

The real estate transfer on death option works much like the transfer on death or payable on death designations that banks and financial institutions utilize for the transfer of financial assets after death.  By executing and recording a Transfer on Death Deed, the owner of real estate, called the "grantor," can seamlessly transfer his or her real estate to a named beneficiary or multiple beneficiaries at the time of the grantor's death.  During his or her lifetime, the grantor retains ownership of the real estate.  Upon the death of the grantor, ownership of the property can be transferred quickly by simply recording an Affidavit of Death with the recorder of the county in which the real estate is located. 

Designating a transfer on death beneficiary may seem a bit confusing.  Here are a few helpful facts about the transfer on death option for real estate transfers:

1. After executing and recording a Transfer on Death Deed, the grantor retains full ownership of the property.  This means that the grantor is not subject to eviction by the beneficiary, and the grantor maintains his or her homestead exemption during the life of the grantor.

2. The grantor can still mortgage or sell the real estate during his or her lifetime even after making the transfer on death designation.  The sale of real estate cancels a transfer on death designation, but the grantor can certainly make the designation on any new real estate purchased.

3. The transfer on death designation can be changed or removed from the grantor's real estate at any time.

4. Real estate that transfers on death is transferred outside of the probate process upon the death of the grantor, which can save time and money.

If you are looking for ways to avoid the probate process, a Transfer on Death Deed may be an option to consider.

What's New For 2016?

Welcome to 2016!  If getting your estate plan in order is one of your resolutions for the new year, take a look at this quick list of changes to 2016 estate planning law compiled by financial services company The Motley Fool.  Even if you already have an estate plan in place, it is helpful to understand how these changes could impact your estate plan. 

  1. The lifetime exclusion amount, or the amount of assets an individual may pass free of tax during life or after death, increases to $5.45 million in 2016.
     
  2. Individuals may give gifts of up to $14,000 to any number of individuals this year before the lifetime exclusion amount even comes into play.
     
  3. The federal tax rate for taxable estate assets is 40% this year.
     
  4. The lifetime exclusion amount is still portable, meaning spouses can utilize any unused portion of a deceased spouse's lifetime exclusion amount if the proper election is made.  As such, married couples can take advantage of a $10.9 million lifetime exclusion amount this year.
     
  5. Both Indiana and Ohio have done away with estate taxes, so state level estate taxes are not a concern for Indiana and Ohio residents this year.

Here's to a safe and happy 2016!

A Solid Estate Plan is the Gift that Keeps on Giving

Looking for a last minute gift idea for your family and loved ones this holiday season?  How about putting together an effective estate plan to protect them in the future?  The gift of a solid estate plan can save your family and loved ones time, money, and headaches down the road.  It is important to put in the time now to make sure your affairs are in order as mistakes in your estate plan can have devastating consequences after your death.  A piece on the website Financial Planning highlights ten major celebrity estate planning mistakes to avoid:

  • Appointing an untrustworthy trustee or executor
  • Failing to clarify intent
  • Putting off estate planning until it is too late
  • Making verbal promises outside of the plan
  • Failing to fund a trust
  • Failing to make documents accessible to loved ones
  • Creating unenforceable documents
  • Failing to update estate planning documents after major life events
  • Creating "do it yourself" estate planning documents
  • Failure to establish an estate plan at all

Wishing you a happy and safe holiday season and all the best in the new year!

Celebrating Two Years in Business!

This week marks two years in business!  Thanks to the support and referrals of many friends and family members, year 2 was a great success.  Over the past two years, I have had the opportunity to assist over 120 individuals with their estate planning needs.  Thank you to all of my clients - it has been a pleasure working with you!  I look forward to what lies ahead in year 3 and beyond! 

Make sure to follow me on Facebook and Twitter for estate planning updates.

4 Tips for Creating a Stress-Free Estate Plan

If you or someone you know have lost a loved one, you have probably heard or even experienced the horror stories of feuding families and missing estate plans.  Minimizing stress and maximizing clarity should be of the highest priority when you are creating your estate plan.  Brian Vnak of MartketWatch recently put together four tips to reduce stress for your surviving loved ones and for those who will handle your estate after you pass away.

1. Consider what your beneficiaries want when dividing up your assets.

2. Explain your intentions to your family now to avoid fighting and hurt feelings after you pass away.

3. Gift assets during your lifetime to decrease the size of your estate and to "test" beneficiaries' capacity to handle assets.

4. Consider your beneficiaries' tax brackets when deciding how to distribute your assets.

By putting these four simple tools to use as you create your estate plan, you can assure peace of mind for you and your family.

Estate Plans: Not Just For Parents

Do you think wills, life insurance, and all that boring stuff are just for moms and dads to plan for their children’s futures?  Think again!  If you are a newlywed, it is time to start thinking about how your estate plan will impact your spouse’s future. 

Are your parents currently listed as the beneficiaries on your 401(k) or life insurance policy?  Do you own your own home?  Who will make financial and health care decisions for you if you are in a car accident?  If you have been recently married, now is good time to think about the possibility of changing the answers to these questions

A recent post from Financial Planning provides an excellent planning checklist for newlywed couples:

  1. Update life insurance and retirement account beneficiaries.
  2. Consider purchasing additional life insurance while rates are low.
  3. Designate beneficiaries of your estate by executing a will, even if you signed a prenup.
  4. Establish powers of attorney for finances and health care and a living will.
  5. Discuss home ownership options.

Planning for your future and the future of your spouse can be stressful, but it is a vital part of the transition to marriage.  Consider planning just another expression of your love for your new spouse.

Estate Planning Doesn't Have To Be Taxing!

Who will make medical and financial decisions on my behalf when I am incapable of doing so? 

Who will receive my personal items when I pass away?  My car?  My house?

More importantly, who will get my money? 

Who will take care of my children? 

Who will manage the assets I leave behind for my children if they are young when I pass away? 

Will my loved ones be faced with a massive estate tax bill? 

These are all important questions to consider when you are thinking about your estate plan.  Often times, individuals are very concerned about the impact that estate or inheritance taxes will have on the assets they leave behind.  Luckily, for those of us in Indiana and Ohio, both states have done away with estate and inheritance taxes.  However, it is still important to understand the federal estate tax and how it could impact your estate. 

At this time, the federal estate tax exemption is quite high.  For the year 2015, every taxpayer has a lifetime exemption of $5,430,000, while married couples have a $10,860,000 lifetime exemption (amounts are adjusted each year for inflation).  This means that, by and large, the federal estate tax will impact only those individuals who die leaving behind large estates.  Here is an interesting summary of the recent history of U.S. federal estate tax exemptions and rates.

While the thought of tax planning can be scary, it is helpful to note that under current law, most individuals will not leave behind a hefty estate tax burden.  Don't let concerns and confusion about how estate taxes will apply to you deter you from moving forward with your estate plan!

Life After Death On Facebook

What will happen to your digital assets when you pass away?  Who will take over your email, Facebook, or Twitter accounts?  Although it may seem silly to think about now, planning for how your electronic accounts will be handled after you die is an important part of the estate planning process.

While it is a good idea to include directions for handling your digital assets in your will, some service providers have simplified this process by allowing users to make an election in their account settings.  Facebook users can now appoint a "legacy contact"to manage their Facebook accounts after they pass away.  Before the legacy contact option became available, Facebook profiles were either deleted or frozen upon notification that a user had passed away.  With legacy contacts, Facebook profiles can now live on and be continually updated long after their original owners pass away.  Google offers a similar planning tool called the "Inactive Account Manager."  This feature allows users to control how their Google accounts should be handled after a designated period of inactivity.

Although Facebook and Google may be ahead of the game, it is likely that many online service providers will be offering similar planning options in the future.

 

5 Tips For Retirement Planning

Are you one of the 76 billion Baby Boomers in the United States who are headed toward retirement?  If so, Sharon Bandys, of The Mather Group, LLC, has created a helpful checklist of five financial planning tips as you look toward the future:

  1. Make sure your spouse has an understanding of your financial assets.
  2. Plan your funeral ahead of time.
  3. Create an updated will.
  4. Understand both spouses' Social Security benefits.
  5. Maintain a cash reserve for potential expenses that may pop up.

Sharon's full article can be found here.

Are You In The 50%?

Are you one of the more than 50% of Americans who does not have an estate plan?  That’s right, more than half of all Americans have left no direction as to where they would like their assets to go after they pass away. 

Estate planning IS for everyone.  While thinking about death and what will happen to our things once we are gone is not something we love to do, science has proven that 100% of us will die at some point.  If you leave no plan for your family, you won’t be harmed, but your loved ones will be left with the burden of figuring out your affairs while trudging through a costly and hectic probate process.

Without an estate plan, you give a court permission to decide who gets your assets and who will raise your children.  If a court decided to divide your assets amongst your family members, would you trust all of your family members to handle your assets responsibly?  A trust can help in this situation, as a trust allows you to dictate how assets can be used to make sure untrustworthy or incapable loved ones cannot handle their newly-acquired assets inappropriately.  Do your loved ones know where they can find your assets?  It is important to make sure this information is available to prevent a wild goose chase after you pass away.

What about real estate – do you own valuable real estate that you hope to pass down through your family?  Or let’s say you own valuable or cherished personal property such as antique furniture or family heirlooms.  Family turmoil often results from a failure to designate specific beneficiaries for meaningful personal property.

Further, who are the beneficiaries on your retirement and other financial accounts?  Are they up to date?  If you have gone through a divorce, have you removed your former spouse as a beneficiary?  If not, your former spouse will still receive those assets even if  he or she has no other rights to your other assets by virtue of the divorce.

In addition to distributing your assets, your estate plan will nominate individuals to make medical and financial decisions on your behalf if you become incapable of doing so.  This process can become very tricky and stressful for your loved ones if you fail to appoint an individual to act on your behalf.

Establishing a basic estate plan is one simple gift that everyone can give to their loved ones.

Passing Your Bucks: Who Will Get Your Financial Assets?

If you have checking, savings, retirement, or investment accounts, do you know where the funds in your accounts will go upon your death?  While you can distribute assets to beneficiaries through your will, any designation you have made on your accounts will be honored first. Below are a few ways to avoid the probate process by passing financial assets outside of your will.

Beneficiary Designation: If you designate a beneficiary, and sometimes an alternate beneficiary, on a retirement or other type of account, the funds from the account will transfer to the beneficiary you have designated with your financial organization upon your death.  These funds will transfer directly without reference to your will, thus keeping these assets out of the probate process.

Payable on Death or Transfer on Death Designation: Some banks will allow you to make a "transfer on death" or "payable on death" designation.  This just means that upon your death, the funds from a savings account for instance will transfer to the POD or TOD designee you have selected.  Additionally, vehicles in Indiana and Ohio can be registered to transfer on death.  The POD/TOD designation is another simple way to transfer assets seamlessly outside of the probate process.

Joint Account Holders: Another way to transfer financial assets outside of a will is to add one or more account holders to your bank account so that the account is held jointly with survivorship rights.  Upon your death, the joint account holder with survivorship rights would assume ownership over the account.

The small steps you take today to arrange your affairs can be very helpful to your family and friends down the road.