I Did My Own Taxes, Can I Do My Own Estate Plan?

You conquered your own tax return this year, and if you are lucky, you are anxiously awaiting your refund. Much like online tax preparation services, there are numerous DIY services available to those interested in tackling their own estate plan. If you are mulling over your estate plan, you may be wondering if those DIY websites are worth a shot.

While online estate planning services can sometimes save time and money, the quality, personalization, and clarity of the end product some of these services offer may not always be sufficient to protect your loved ones from headaches after you pass away. The decision to establish an estate plan through an attorney or through an online legal service depends on numerous factors including the type and size of assets you own, familial complexities, and budget. An article recently published in Forbes provides some points of consideration if you are weighing the pros and cons of DIY estate planning.

While there is not necessarily a right or wrong answer as to how you should go about establishing your estate plan, making sure you get an estate plan in place sooner rather than later is always a good idea.

Roses Are Red, Violets Are Blue, Getting Married? Here's What To Do...

If you are newly engaged or married, updating your estate plan is an important part of establishing your new life together with your spouse. Below are a few estate planning considerations for newlyweds:

  1. Beneficiaries: After getting married, you may wish to update your beneficiary designations on retirement accounts, brokerage accounts, and life insurance polices to include your new spouse.

  2. Property Titles: If you own real property or a vehicle prior to your marriage, you may choose to update your title to add your spouse as a joint titleholder.

  3. Wills: You will likely wish to account for your new spouse as a beneficiary in your will. Additionally, if you plan to have children, you can utilize your will to choose a guardian and make a plan for passing assets to your children.

  4. Powers of Attorney: Spouses typically designate each other as primary agents for purposes of making financial and medical decisions in the event of incapacitation.

Show your new spouse some love by planning for the future.

New Year Estate Tax Exemption

For 2019, the IRS has announced that the lifetime estate and gift tax exemption amount has increased to $11.4 per person, or $22.8 million for a married couple. This means that an individual may pass $11.4 million in assets without facing federal estate taxes. Married couples may still pass assets to each other upon the death of one spouse free of federal estate taxes. The surviving spouse may then elect to utilize the deceased spouse’s exemption amount (called “portability”) which would allow the surviving spouse to pass up to $22.8 million in assets free of federal estate taxes.

The annual gift exclusion amount remains at $15,000 for 2019. This means that each individual can gift up to $15,000 to an unlimited number of individual recipients without cutting into their $11.4 million individual lifetime estate and gift tax exemption allowance .

Check out this 2019 estate tax update from Forbes for more information on 2019 estate taxes.

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.