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.

Why? Why? Why? 3 Reasons To Plan

Do you really need an estate plan?  Is it really that important?  In a piece contributed to Forbes, Certified Financial Planner® Joel Johnson describes the three main reasons individuals create estate plans:

1. Minimizing probate fees and taxes after death.  There are many tools available to transfer assets outside of the probate process such as designating homes, cars, and bank accounts to transfer automatically upon one's death, setting up beneficiaries on retirement accounts and insurance policies, and transferring assets prior to death.  While Indiana and Ohio do not collect estate taxes, gifts during life and irrevocable trusts can be utilized to avoid federal estate taxes for large estates.

2. Protecting assets during life.  While Johnson's piece specifically refers to planning ahead for the cost of a nursing home (often referred to as "Medicaid planning"), this point can be expanded to include protection of one's interests during life through the use of financial and medical powers of attorney.  While Medicaid planning can be an important part of an estate plan, determining who will handle your financial affairs and medical decisions in the event that you are incapable of doing so is a crucial function of an estate plan as well.

3. Controlling assets.  Controlling how one's assets will be distributed after death is typically the main goal of an estate plan.  In order to have confidence that your assets will be distributed as you wish upon your death, it is imperative that you establish some sort of estate plan.  Without an estate plan, you relinquish control over your assets which often leads to court and familial battles that are less than ideal.

Family Feuds

Is the fear of upsetting family members holding you back from completing your estate plan?  You are not alone.  Many of us worry that relatives will disagree over bequests made by will.  On the other hand, some individuals incorrectly assume that no argument will occur.  The behavior of friends and family after a death occurs can never be predicted.  A recent article in the New York Times provides a few helpful tips to prevent fighting among family members after you pass away:

  1. Have difficult conversations ahead of time.
  2. Think through the trusteeship appointment and any possible conflicts that could arise.  Consider appointing a trustee outside of your circle of friends and family.
  3. Include trustee replacement provisions in your trust if you have one.
  4. Consider separate trusts for each beneficiary.
  5. Provide ethical guidance to beneficiaries in your will.

Where Is Your Will?

So, you have gone through the motions, you have made the decisions, you have finalized your will, living will, powers of attorney, and other estate planning documents.....but do you remember where you put them?  A lost estate plan is as effective as no estate plan at all.  Unfortunately, lost estate plans are all too common and can lead to big headaches for your loved ones down the road. 

A vital part of the estate planning process is storing your documents in a safe place and making sure your friends or loved ones know where to find them.  Where should you store your estate planning documents?  While any safe place will do, below are a few good options:


  • A fireproof safe in your home.  Make sure your family or executor know how to access the documents.
  • A safe deposit box.  Again, make sure family members or appointed agents have full access to the safe deposit box.
  • Your lawyer's office.  Some attorneys will store wills on behalf of their clients.  Make sure your loved ones know how to get in touch with your lawyer to access your documents.
  • Your local probate court.  By filing your will with your local probate court prior to your death, you can eliminate the risk of losing your will.
  • Your doctor's office.  By keeping copies of your health care power of attorney and living will on file with your doctor's office, you save your loved ones time and energy needed to search for these documents when they become necessary.

The most important part of storing your estate plan is letting your friends and loved ones know where these documents can be found for ease of access when the need arises.  It is also a good idea to store a list of your bank accounts, contact information for your financial planner and attorney, email and social media accounts, and all passwords in a safe place that can be accessed by your loved ones in the event of your incapacity or death.  As always, the best way to ensure proper execution of your estate plan is to plan ahead.


New Year, New Tax Law

You have surely heard about the new tax legislation signed into law by President Trump at the end of 2017, but what does it mean for your estate plan?  Below are a few key changes to the tax law that can impact estate planning:

  • The annual federal gift tax exemption increases to $15,000 this year, to be adjusted for inflation each year thereafter.  This means that each individual can give up to $15,000 in gifts to as many individuals as they would like in 2018 without touching their lifetime exclusion amount.
  • The lifetime gift and estate tax exclusion amount increases to $11,200,000 for each individual as of January 1, 2018, and will increase with inflation each year through 2025.  This means that each individual can pass assets worth up to $11,200,000 during life and/or at death without incurring federal gift or estate taxes.
  • The lifetime exclusion amount is still portable, meaning a deceased individual's unused portion can be utilized by a spouse.  As such, the exclusion amount for a married couple for 2018 is effectively $22,400,000.
  • On January 1, 2026, the lifetime exclusion amount will drop back to the 2017 level ($5,490,000 adjusted for inflation) per individual.
  • The federal estate tax rate remains 40% for those who exceed the lifetime exclusion amount.


Wishing you all the best for a happy and healthy 2018!

Celebrating 4 Years in Business!

This week marks my fourth year in business, and I could not be more grateful for my friends, family, and clients who have made this endeavor so fun and rewarding!  Over the past four years, I have had the opportunity to assist over 280 individuals with their estate planning needs.  Thank you to everyone for your support and referrals along the way.  I am looking forward to year five!