Every year on the Fourth of July, Americans across the country celebrate our nation’s declaration of independence from Great Britain. Yet only about one-third of Americans have an estate plan—meaning that most Americans have given up their independence when it comes to deciding what will happen to them should they become incapacitated and what will happen to their property when they die. The fact is that, if you do not create your own estate plan, your state will create one for you through its state intestacy laws. This year, declare your own independence from your state’s intestacy laws. State Laws for Money and Property If you have not created a plan for what will happen to your money and property upon your death, your state has created one for you. If you have created an estate plan, the state will also intervene if your plan does not properly account for all of your money and property or does not provide for backup beneficiaries if your chosen beneficiaries pass away before you. While each state’s laws may differ slightly regarding how your money and property are distributed at your death, in general, if you are married, most, if not all, of your money and property will go to your surviving spouse. However, if you have children who are not also your surviving spouse’s children, usually some portion will go to your surviving spouse and the remainder will go to your surviving children. If you are not married or your spouse has died before you, your money and property will go to your children. If you are not married and have no children, generally your parents will receive your money and property. If you are not married, have no children, and your parents are both deceased, it is likely that your siblings will inherit your money and property. The state also has laws that cover what happens if you have no living relatives. However, most people know how they want their money and property to be divided after their death and whom they want it to go to. And for many, the people and relationships they want to include in their estate plan go beyond what the state’s plan anticipates. Example: George and Martha Washington have been married for forty years but have no children together. Martha was previously married and inherited a substantial fortune from her deceased husband. She also has two children from her previous marriage. George has nine siblings and is very close to his nieces and nephews, treating them as if they were his own children. However, George has been so busy fighting wars and running the country that he has neglected to create an estate plan. Upon his death, all his money and property, including Mount Vernon, goes to his wife, Martha. Upon her death, she leaves all her money and property (which now includes George’s money and property) to her two children. George’s nieces and nephews, who were like George’s own children, receive nothing. This is not what George would have wanted. State Laws for Financial Decisions if You Become Incapacitated If you have not appointed someone to make financial decisions for you if you become incapacitated and cannot make those decisions yourself (by creating a financial power of attorney) or your chosen person is either deceased or unable to act, the state’s plan commonly requires that a court appoint someone to make those decisions for you. Whom the court appoints is normally based on who has priority under the state’s rules. Usually, the spouse has priority, followed by an adult child and then a parent. However, the person with priority may not always be the person you would have chosen. Example: Thomas Jefferson’s pride and joy is Monticello, the hilltop home and gardens he designed. Thomas is unmarried because his wife of ten years died in childbirth many years ago, and he never remarried. The couple had six children, but only two daughters survived. After completing two terms as president of the United States, Thomas retires to Monticello where he suffers a stroke, leaving him incapacitated. Unfortunately, amid all his accomplishments, he did not accomplish creating a financial power of attorney. His daughter Mary is appointed to manage his financial affairs. Mary is quite inexperienced in financial dealings, and Thomas would have actually chosen his good friend James Madison to be his agent under a financial power of attorney. Because of the pressures of significant debt, Mary sells much of Thomas’s property, including Monticello, for less than market-value prices. This outcome may have been much different if Thomas had appointed James Madison by executing a financial power of attorney. State Laws for Medical Decisions if You Become Incapacitated If you have not appointed someone to make medical decisions for you if you become incapacitated and cannot make such decisions yourself (through a medical power of attorney, advance health care directive, or similar document) or your chosen person is either deceased or unable to act, the state has laws about who has priority to make those decisions for you. The order of priority usually includes someone who has been appointed by a court, a spouse, a child, a parent, a sibling, a grandchild, and so forth. Again, the person with priority may not always be the person you would have chosen. Example: Benjamin Franklin has three children and a common-law wife, Deborah Read. One of the children is Benjamin’s from a previous relationship; the other two are Benjamin’s and Deborah’s children. Benjamin also has eight grandchildren. When Benjamin falls into a coma after being struck by lightning, the family disagrees on whether his life should be sustained. Since the law does not recognize Deborah as Benjamin’s wife, she does not necessarily have priority to make healthcare decisions for him. This family drama could have been avoided had Benjamin created a document that named the person he wanted to make medical decisions for him during his incapacity. This year, choose to celebrate Independence Day by taking the steps to put in place or update an estate plan that will allow you to claim control of your and your loved ones’ futures. We want to help ensure that your family does not go through the same unfortunate events as in our fictitious examples above. Call us today so that we can help. 1 Lorie Konish, “67% of Americans have no estate plan, survey finds. Here’s how to get started on one,” CNBC, https://www.cnbc.com/2022/04/11/67percent-of-americans-have-no-estate-plan-heres-how-to-get-started-on-one.html
In an exciting development for the legal community of Coffee County, Governor Brian P. Kemp has appointed Jared L. Roberts as the new Solicitor-General. The recent swearing-in ceremony held on May 31, 2023, marked the official beginning of Roberts' tenure. As a prominent attorney and a dedicated public servant, Roberts brings a wealth of experience and an unwavering commitment to justice to his new role. Let's take a closer look at his remarkable journey and the impact he has made on the community thus far. A Journey of Success and Commitment to Justice: Jared L. Roberts, the founder and owner of Jared L. Roberts, Attorney at Law, LLC, has been entrusted with the crucial responsibility of serving as Solicitor-General of Coffee County. This momentous appointment is a testament to his outstanding legal acumen and his dedication to upholding the law. Throughout his career, Roberts has consistently demonstrated his passion for justice and his commitment to making a positive difference in the lives of those he serves. Roberts' Professional Background: Before assuming the role of Solicitor-General, Jared Roberts had already made significant contributions to the legal field. He served as a judge for the Broxton Municipal Court and worked as an attorney at Durham, Lewis, and Roberts. Additionally, Roberts gained valuable experience as an assistant public defender at the Waycross Judicial Circuit Defender's Office, where he tirelessly advocated for the rights of his clients. Roberts' Educational Background: Jared Roberts' impressive credentials reflect his dedication to excellence in the field of law. He holds both a Bachelor of Business Administration (B.B.A.) and a Juris Doctor (J.D.) degree from the prestigious University of Georgia. This educational foundation has undoubtedly equipped him with the knowledge and skills necessary to succeed in his legal endeavors. Commitment to the Community: Beyond his professional achievements, Jared Roberts actively engages with his community. As a member of Carver Baptist Church, he exemplifies his commitment to his faith and the values it espouses. Moreover, Roberts generously devotes his time and expertise as the head basketball coach for Citizens Christian Academy, positively impacting the lives of young athletes. Private Practice and Specializations: Even with his new role as Solicitor-General, Jared Roberts will continue his private practice as an attorney. Specializing in estate planning, business formations, and probate work, he aims to provide comprehensive legal services to individuals and businesses in need. This unique blend of public service and private practice allows Roberts to make a multifaceted impact on the community. The appointment of Jared L. Roberts as Solicitor-General of Coffee County marks a significant milestone in his remarkable career. His exemplary professional background, unwavering commitment to justice, and active engagement in the community make him the perfect candidate to uphold the law and serve the people of Coffee County. As we celebrate his achievement, let us recognize Jared Roberts' dedication to both his new role as Solicitor-General and his continued commitment to his private practice. Congratulations to Jared on this well-deserved appointment, and we look forward to witnessing the positive impact he will undoubtedly make in the years to come.
About 40 to 50 percent of all marriages in the United States end in divorce. Regardless of how you feel about your child’s spouse, you must face the possibility that they could become your child’s ex-spouse. Should that day come, the money you leave to your child could be subject to a division of marital assets. But with careful estate planning, your child’s inheritance can be kept safely out of the hands of their spouse or former spouse. Separating Inheritance Money from Marital Money During marriage, the lines between what each partner owns can blur. Generally, whatever is acquired during the marriage by either partner becomes marital property that is subject to division in the event of a divorce, but there are exceptions. One exception is a bank account that is kept separate during the marriage. Inheritance money that you leave to your child or monetary gifts that you give to your child during your lifetime can theoretically go into a separate account. However, in practice, it can be difficult for spouses to avoid commingling bank accounts. Even something as simple as depositing marital money into the account or using it to pay bills during the marriage could make the account marital property. A better way to keep your child’s gift or inheritance separate from their spouse’s money is to hold it for them in a trust account. It is not just wealthy parents who leave money to their children in a trust. A trust is a flexible and powerful estate planning tool that allows parents of any means to exercise greater control over the money and property that they pass down. Trust Management and Third-Party Trustees Holding your child’s inheritance in trust involves doing the following: ● You place money and property in a trust ● You name a trust beneficiary (i.e., your child) ● You name a trustee (somebody to manage trust distributions) ● You leave written instructions that specify how the money and property are to be used (trust instrument) While it is possible to name your child as both the beneficiary and the trustee of the trust, absent additional restrictions, this structure negates the point of establishing a trust for the purpose of preventing spousal commingling. Similar to how commingling can occur with a separate bank account, if your child uses money in the trust for marital expenses and then gets divorced, the court could consider the trust funds to be marital property. To avoid commingling, you can name a third-party trustee to manage the money on behalf of your child. This takes control of the trust out of your child’s hands and places it in the hands of a third-party who can use their discretion in interpreting the trust’s instructions for how the trust funds are to be used. Instead of distributing money from the trust directly to the beneficiary (which raises the possibility of commingling and trust division in a divorce proceeding), the trustee can pay third parties on the beneficiary’s behalf. For example, if the beneficiary needs a new vehicle, the trustee can pay the car dealership directly. Or, for larger purchases such as a home, the trustee could loan the money to the beneficiary. The house would be used as collateral to secure the debt to the trust and protect it from asset division. Child and Trustee as Co-Trustees Giving a single third-party trustee sole discretion over trust fund distributions affords maximum protection against asset commingling, but it provides your child with limited flexibility over how they can spend their inheritance. If you prefer to give them more options but still protect the funds you leave to them in the event of a divorce, you can name a third party to serve as co-trustee with your child. However, other restrictions may be appropriate for creditor protection and tax purposes. When setting up a trust, there are several types of trustees that you can choose from, each with a different set of responsibilities and obligations. For example, you might name your child as an investment trustee, giving them the authority to invest money held in the trust. In this capacity, your child is acting on behalf of the trust (not in a personal capacity), so the trust money is not commingled with marital assets. At the same time, with good investments, they are effectively growing their own wealth. You can then have a co-trustee handle distributions for your child’s benefit. Naming co-trustees has other benefits as well. In the event of a divorce or creditor issues, the child can resign as trustee, leaving the other trustee with sole discretion. You can also set up the trust in such a way that an independent co-trustee can make distributions to your child for any purpose, but your child is limited to distributions for health, education, maintenance, or support (i.e., a HEMS provision or ascertainable standard that is a safe harbor under federal law). While this does not provide the maximum creditor protection (because any distributions made to the child could be susceptible to creditors), amounts remaining in the trust may still be protected. In addition, special consideration must be given to the beneficiary’s ability to remove and replace another co-trustee. Covering All Angles To create a bulletproof trust strategy to keep your child’s inheritance out of their spouse’s hands, you must take a wide view of everything that could happen. That includes a possibility that you would probably prefer not to think about: your child passing away. Should your child either predecease you or pass away before receiving the full benefit of the trust that you establish for them, the trust may, by default, be inherited by their spouse unless you have planned for this event. You can keep this from happening by naming a contingent (backup) beneficiary to your child. This could be your grandchildren, your child’s sibling, a charity, or any other party that you specify as next in line as the trust beneficiary. In addition, be careful when giving a testamentary power of appointment to your child. This power would allow your child to direct trust property (or their share of trust property) to another individual upon their death, and that person could be their spouse. As the creator of the trust, though, you can limit who the trust property can go to, such as your child’s children or other descendants only. Take Control of Your Legacy: Talk to a Trust and Estate Planning Attorney Part of being a parent is protecting your children from their own lack of foresight. If your child is newly married or in a marriage that is headed in the wrong direction, you can take steps to keep your hard-earned money from falling into their spouse’s hands, where it may not benefit your family, by creating a trust. Flexibility is one of the most powerful features of a trust. There are many types of trusts to choose from, and they can be customized with any number of provisions to ensure your final wishes are fulfilled. Remember that an estate plan can—and should—be revisited. You can include restrictions in the trust now and remove them later as circumstances change. You can also decide to do away with the trust altogether. Whatever plans you have for your money and property, make the most of them by getting help from our team. Contact us to set up an appointment.
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One would assume that celebrities with extreme wealth would take steps to protect their estates. But think again: some of the world’s richest and most famous people enter the pearly gates with no estate plan, while others have made estate planning mistakes that tied up their fortunes and heirs in court for years. Let us look at three high-profile celebrity probate disasters and discover what lessons we can learn from them. 1. Prince The court battle over musician Prince’s estate was a probate disaster. ● When the ‘80s pop icon died in early 2016, he left no estate plan (reportedly due to some previous legal battles that left him with a distrust of legal professionals). ● The probate court had the task of determining Prince’s heirs among all of the people who stepped forward claiming an interest in Prince’s money and property. In 2017, the court ruled that his five half-siblings and his sister were to inherit from Prince. ● The court battle among Prince’s potential heirs cost millions of dollars, and all matters involving Prince’s money and property took about six years to resolve. Lesson learned: Accurate legal documentation protects your legacy. Do not let a general distrust or a bad experience propagate through generations, leaving your loved ones to fight or lose their inheritance. 2. Whitney Houston Whitney Houston’s failure to update her estate plan ended up leaving her daughter with more than she probably intended. ● Whitney Houston executed a will in 1993 and died in 2015 without making any updates to the distribution instructions in her will. ● Her will left everything to her nineteen-year-old daughter, Bobbi Kristina Brown. ● According to the will, one-tenth was to be given to Bobbi at age twenty-one (about $2 million), another one-sixth at age twenty-five, and the remainder at age thirty. ● Unfortunately, Bobbi died in 2015 at the age of twenty-two, of drowning. ● Many people have speculated that Bobbi was not mature enough to have received $2 million when she turned twenty-one. Lesson learned: Naming your child in your estate plan is not enough. You must periodically review the documents and assess whether your original plan to leave your money and property is still in the best interest of your child. 3. Michael Crichton ● Michael Crichton, author of Jurassic Park, had a will prepared and died leaving behind a daughter from a previous marriage and his surviving wife. His surviving wife had signed a prenuptial agreement and was not considered an heir when he died. She was, however, pregnant with his son. ● He did not update his will to provide for his soon-to-be-born son. ● A court battle was fought between his daughter and his wife, on behalf of her son, to determine what share he was to receive. Was he to split the inheritance fifty-fifty with his half-sister, or a smaller amount as a pretermitted (omitted) heir? ● His son ultimately inherited from his father, but the cost of the litigation reduced the inheritance, the process took a considerable amount of time, and the conflict most likely damaged familial relationships. Lesson learned: There are four major events that should trigger a review of your estate plan: a birth, death, divorce, or move. These milestones could have a lasting impact on your estate plan. When they occur, review your plan and contact an experienced estate planning attorney to make the necessary changes. These celebrity probate disasters serve as stark reminders that no one’s wealth is exempt from the legal trouble that can occur without proper estate planning. As always, we are here to help you protect your loved ones and legacy. Give us a call today to discuss protecting your hard- earned money and property and your loved ones.
As a single individual, you may feel overwhelmed when you think about who will step in and make decisions for you if you cannot make decisions for yourself and who will receive your money and property when you die. You may consider your parents or siblings, but depending on whether they are living and the nature of your relationship, they may not be an option. Having an estate plan is important to ensure that your wishes are carried out during your life and after your death. If such worries are preventing you from completing your estate plan, we are here to help you. Choosing the Right Decision Makers A time may come when you will need someone to handle financial transactions or make or communicate medical decisions on your behalf. If you have not already chosen someone in a properly executed document, the court will step in and, using state law, choose the person who will make the important decisions for you. Below are a couple of the important roles that, to properly protect yourself, you should name someone to fill. Agent under a Financial Power of Attorney The agent in a financial power of attorney is the individual who carries out financial transactions (such as signing checks or opening a bank account) on your behalf. The duration and scope of the agent’s authority are spelled out in the financial power of attorney. No matter whom you choose, it is important that your agent be responsible, keep detailed records regarding the financial transactions they undertake on your behalf, and have the time to dedicate to the role. If you have no family member or friend whom you trust to manage your financial transactions, you can hire professionals to assist you. Agent under a Healthcare Directive If you cannot communicate or make medical decisions, someone else will have to do it for you. By properly naming this person in a medical power of attorney, you retain control over who will make medical decisions on your behalf instead of allowing a judge to select someone to make such decisions. When choosing this person, you must make sure that they will follow your wishes regarding your medical decisions and are available to make or communicate them. If you have no trusted family member to be your medical agent, consider a close friend or a trusted professional. However, state law may prevent certain professionals, such as doctors, from acting as an agent, unless an exception exists. Choosing the Right Recipients If you do not have an estate plan prepared, your state’s intestacy statute will determine who receives your money and property (owned solely by you and not controlled by a beneficiary designation) and the amount each legal heir will receive. Intestacy laws vary by state, but generally speaking, money and property go first to a surviving spouse, then to descendants (children or grandchildren), parents, siblings, and siblings’ children, in that order, depending on who survives you. If you have a life insurance policy and fail to designate a beneficiary, the proceeds from the policy may be paid to your estate, necessitating the costly and time-consuming probate process, or may go to individuals according to the order outlined in the policy agreement. Similarly, if your retirement account does not have a named beneficiary, that account may also end up going through probate, which may cause unintended income tax consequences or distributed according to the default rules of the account agreement. Proper Tax Planning The federal tax system gives preferential treatment to married people. Married couples can take advantage of the estate tax marital deduction and transfer an unlimited amount of money and property, tax free, to the surviving spouse when one spouse dies. In addition, married individuals are allowed to add any remaining part of their deceased spouse’s exemption amount to their own exemption amount. As a single person, you have only your lifetime exemption ($11,700,000 in 2021). Because you can use only your lifetime exclusion amount and the annual exclusion amount, if you are very wealthy, you may need to engage in tax planning earlier and it may be more complex. We Are Here to Help You Completing your estate plan allows you to take control by providing instructions about what is to happen during your life and at your death. Estate plans can be drafted in a number of different ways to ensure that your unique wishes are carried out. Call us today to learn more about how we can help ensure that your legacy is protected and that the people and causes you care about are provided for.
Do you have a foundational estate plan? Has it been reviewed? An estate plan is a set of instructions memorialized in legal documents that explains to your trusted decision makers and loved ones your wishes about your care, the care of any dependents, and how your money and property should be handled. Last will and testament Depending on your unique situation and needs, you may have a last will and testament (also known as a will) as the foundation of your estate plan. This document allows you to name someone to wind up your affairs (i.e., gather your belongings for safekeeping, create a list of everything you own, pay your outstanding bills and taxes, and give the remainder to the individuals and charities you have chosen). You can also name a guardian for your minor children if you have any. Because a will takes effect only at your death, using a will to outline your wishes will likely still require your loved ones to go through the probate process (a court process that can be expensive, time-consuming, and public) to carry them out. Revocable living trust On the other hand, you might have a revocable living trust as the basis of your estate plan. A revocable living trust is an entity that owns your accounts and property. In order for your trust to own your accounts and property, they will either be retitled in the name of your trust (instead of in your sole name) or the trust will be named as the beneficiary that will receive money and property at your death. Your trust instrument provides your chosen decision maker (trustee) with instructions for how to operate the trust. In the beginning, you can serve as the trustee of your own trust, which means that you are still able to control what happens to the accounts and property owned by the trust. Additionally, you can continue to benefit from the accounts and property because you are also a trust beneficiary. In the event you are unable to manage the trust (i.e., are incapacitated) or you die, someone you have chosen ahead of time can step in as trustee and continue managing the trust for your benefit (if you are still living) or for your chosen beneficiaries (at your death), without court involvement. Because the trust will be the owner or beneficiary of almost everything, for probate purposes, you will die owning nothing. If you own nothing in your sole name, there is nothing that has to be transferred through the probate process. A trust becomes effective as soon as you sign the trust agreement. Review your documents Because life circumstances often change, it is important that you periodically review your existing estate planning documents. Do they still reflect your wishes? Have there been any major changes in your life that might necessitate another look at your documents? Also, if you have a revocable living trust as part of your estate plan, it is crucial that any accounts or property that are supposed to be owned by the trust have been properly retitled and, if there are any accounts or property that should name the trust as a beneficiary, the appropriate paperwork has been completed. Can someone manage your financial affairs when you cannot? If you are out of the country, it will likely be more difficult to handle your personal financial matters (e.g., writing a check for rent, following up on an insurance claim, etc.). However, just because you are unable to do these things does not mean that no one else can do them for you. A durable financial power of attorney enables you to name a trusted decision maker to handle your financial matters. When crafting a financial power of attorney, your estate planning attorney will discuss when you want the document to be effective. In some states, you can choose to give your trusted decision maker the authority to act on your behalf immediately or only upon the occurrence of an event (which is usually a determination that you are no longer able to manage your own affairs). In the case of international travel, you may want to consider giving the power immediately so that your chosen decision maker can respond as soon as there is an issue, regardless of whether you are capable of making a decision for yourself. In addition, you can tailor how much authority you give your chosen decision maker in the financial power of attorney. You may want to limit the person’s authority to actions related to a specific transaction, such as a real estate closing, or you may want to allow that person to carry out almost anything you could do for yourself. This is a personal decision based on your unique circumstances. How will you manage your health while you are away? Even the healthiest person can develop a health issue while traveling. This is why it is important for you to choose a trusted decision maker to make medical decisions for you. A standard estate plan typically includes a medical power of attorney that appoints a person to make medical decisions, a living will or advance directive document that gives instructions for your end-of-life wishes, and a HIPAA authorization form that grants named individuals the right to obtain your private healthcare information. These forms can be state-specific and may not be accepted in another country, so if you are traveling internationally and will be staying in a particular country for a long period of time, it may be beneficial to look into how to name a medical decision maker under your vacationing country’s laws. Another thing to consider is whether your health insurance will be accepted overseas. In some cases, your health insurance may be valid only in the United States. It is important that you research this and, if necessary, look for a short-term policy that will cover you while traveling. Speaking of insurance, do you have adequate insurance? In addition to health insurance, there are two other types of insurance that may be important for protecting yourself while you are traveling. First is travel insurance. International travel can be more complicated than domestic travel, and having additional insurance can help you navigate the curve balls life can sometimes throw at you. Depending on the cost of your trip and the items you are taking, getting travel insurance may save you money in an emergency. Life insurance is also important to have and review. It is essential to fill out your beneficiary designations correctly so your loved ones will receive what you want in the way you want. It is also important to review the policy terms to see whether any of the activities you want to engage in while on vacation will void your coverage. Sometimes insurance companies will not pay out if the insured has engaged in extreme activities like bungee jumping, skydiving, and scuba diving. This means that if you are in an unfortunate accident while engaged in one of these activities, your loved ones may receive nothing. What arrangements have you made for your minor children? If you have minor children, taking care of them does not stop when you go on vacation. If your minor children will be traveling with you, they will likely require a passport. It is important to remember that a passport for a child needs to be renewed more frequently than a passport for an adult. Also, some countries may require proof that you are the children’s parent or legal guardian. With the threat of international kidnappings and human trafficking, customs officers want to ensure that children remain safe when traveling internationally. If your minor children will be staying with someone while you are traveling, it is important that you have the proper documentation in place so the chosen adult can fully care for your children. Many states have a document that will allow you to designate someone to make medical and other decisions on your minor children’s behalf on a temporary basis. The document’s name and effective duration can vary by state, but having this document can ensure that whomever you leave your child with will be able to fully care for your children in your absence. Additionally, whether you are traveling or not, it is important that you have a last will and testament that designates someone to care for your minor children in the event you and their other legal parent die or are unable to care for them. Some states allow you to name someone to care for your minor children in the event you die or are otherwise unable to care for them in a document other than a last will and testament, such as a durable power of attorney or nomination of guardian. Although these documents will not avoid court involvement, they will help ensure that your wishes are honored. We know that preparing for travel has a lot of moving parts. We want to offer our assistance to ensure that you are properly protecting yourself and those you love during your amazing journey. Give us a call to schedule an appointment before you go.
A resume is a snapshot of your experience, skill set, and education that provides prospective employers insight into who you are and how you will perform. Imagine not updating your resume for five, ten, or even fifteen years. Would it accurately reflect your professional abilities? Would it do what you want it to do? Probably not. Estate plans are similar in that they need to be regularly updated to reflect changes in your life and the law so they can do what you want them to do. Outdated estate plans, like outdated resumes, simply do not work. Take a Moment to Reflect Think for a moment about all of the changes in your life so far. What has changed since you signed your will, trust agreement, and other estate planning documents? If something has changed that affects you, your trusted helpers, or your beneficiaries, your estate plan probably needs to reflect that change. Below are examples of changes that are significant enough to warrant an estate plan review and likely updates: ● A new family member that you want to provide for in your estate plan (child, grandchild, etc.) was born. ● A new family member that you want to provide for was adopted. ● You, a trusted decision maker, or a beneficiary got married. ● You or a beneficiary got divorced or separated from a spouse. ● A loved one passed away. ● A loved one is now battling an addiction. ● One of your trusted decision makers is now incapacitated. ● A loved one is now disabled. ● You or a loved one is now suffering some health challenges. ● Your financial status or a beneficiary’s has changed, either for better or worse. ● Laws pertaining to tax, retirement accounts or benefits, property, or other relevant topics have changed. ● You, a trusted decision maker, or a beneficiary moved to a new state. ● Your family circumstances have changed. ● Your business circumstances have changed. Procrastination Estate planning is usually at the bottom of a person’s to-do list. After it has been completed, most people do not think about it again. Do not be like most people. Estate planning is an ongoing project that requires review and attention. There is no time like the present to review your estate plan. Call our office now to get your estate planning review scheduled. As with most people, if it is on the calendar, you will make it happen. Just as you update your resume and meet with your doctor, dentist, CPA, or financial advisor regularly, you should meet with us regularly as well. We will ensure that your estate plan reflects your current needs and the needs of the people you love. Updating is the best way to ensure that your estate plan will do exactly what you want it to do.
In estate planning circles, the word “probate” often carries a negative connotation. Indeed, for many people—especially those with valuable accounts and property—financial planners recommend trying to keep accounts and property out of probate whenever possible. That being said, the probate system was ultimately established to protect the deceased’s accounts and property as well as their family, and in some cases, it may even work to an advantage. Let us look briefly at the pros and cons of going through probate. The Pros For some situations, especially those in which the deceased person left no will, the system works to make sure all accounts and property are distributed according to state law. Here are some potential advantages of having the probate court involved in wrapping up a deceased person’s affairs: ● It provides a trustworthy procedure for redistributing the deceased person’s property if the deceased person did not have a will. ● It validates and enforces the intentions of the deceased person if a will exists. ● It ensures that taxes and valid debts are paid so there is finality to the deceased person’s affairs rather than an uncertain, lingering feeling for the beneficiaries. ● If the deceased person had debt or outstanding bills, probate provides a method for limiting the time in which creditors may file claims, which may result in discharge, reduction, or other beneficial settlement of debts. ● Probate can be advantageous for distributing smaller estates in which estate planning was unaffordable. ● It allows for third-party oversight by a respected authority figure (judge or clerk), potentially limiting conflicts among loved ones and helping to ensure that everyone is on their best behavior. The Cons While probate is intended to work fairly to facilitate the transfer of accounts and property after someone dies, consider bypassing the process for these reasons: ● Probate is generally a matter of public record, which means that some documents, including personal family and financial information, become public knowledge. ● There may be considerable costs, including court fees, attorney’s fees, and executor fees, all of which get deducted from the value of what you were intending to leave behind to your loved ones. ● Probate can be time-consuming, holding up distribution of your beneficiaries’ inheritance for months and sometimes years. ● Probate can be complicated and stressful for your executor and your beneficiaries. Bottom line: While probate is a default mechanism that ultimately works to enforce fair distribution of even small amounts of money and property, it can create undue cost and delays. For that reason, many people prefer to use strategies to keep their property out of probate when they die. An experienced estate planning attorney can develop a strategy to help you avoid probate and make life easier for the next generation. For more information about your options, contact us today to schedule a consultation.
Important Milestones You Can Incorporate in Your Estate Plan Life is full of contingencies. While some outcomes are relatively certain, other events are more difficult to predict. This uncertainty can create estate planning challenges. Because life changes quickly and sometimes unexpectedly, your estate plan needs to be flexible. You can make changes to your estate plan when you are still alive, but when you pass away, your plan is effectively—but not entirely—set in stone. Incorporating milestones into your estate plan is one way to hedge against the unpredictable future. By creating incentives for particular events, you can continue to exercise your values and provide for your loved ones beyond your lifetime. Clarifying Your Wishes with If-Then Statements If-then statements allow outcomes to be determined with conditions. They are found in deductive logic, computer programming, and legal documents, including estate planning documents. The premise of an if-then statement is simple: if a given criteria is met, then a certain action follows. For example, you might write in your will that, “If my spouse predeceases me, then I leave my house to my oldest son,” or, “If both my spouse and I pass away, then [Person X] will be nominated as guardian of our children.” Such clauses can help you retain some power over outcomes that would otherwise be out of your control. They can also help you to plan for future contingencies in a way that is not possible with simple declarative statements (e.g., “I leave my house to my spouse.”). If-then clauses can be combined to account for numerous future possibilities. So, in addition to “If my spouse predeceases me, then I leave my house to my oldest son,” you could specify that “If my son is not employed, then I put my home in a trust to be managed by [Trustee Y].” Common Beneficiary Milestones Used in Estate Plans Conditional provisions that offer enhanced flexibility to your estate plan can take many forms. These provisions do not always have to be if-then statements. They can also include gifts or distributions that are triggered at specific times or milestones. The following are some events that you might consider incorporating into your estate plan: ● A child turning eighteen or twenty-one . A child celebrating a milestone birthday could trigger an action in your estate plan, such as the child receiving distributions from a trust to which they are a beneficiary. ● Completing a degree or certificate. A gift in your will might be conditioned upon the beneficiary graduating from college or earning a professional certificate. ● Purchasing a first home. You could give some or all of a bequest to a beneficiary when they purchase their first home. ● Financing a first wedding. Parents typically pay for most wedding expenses. [1] A clause in an estate plan can direct wedding money to a child the first time they tie the knot. ● Employment. You might hesitate to leave money to a beneficiary who is bad with money or has a poor employment record. As a compromise, you can base their inheritance on being fully employed for at least a year. ● Sobriety. Like an employment clause in your estate plan, there can be a clause that releases an inheritance only if the beneficiary has stayed sober for a certain length of time such as a year or has successfully completed a rehab program. ● Having children. Having a child is expensive. To help with the expenses of childbirth and childrearing, include an estate planning provision that kicks in extra money to a family member when they give birth, adopt, or require assistance with reproductive technology, such as in vitro fertilization. ● Retiring. Approximately two-thirds of Americans are not financially prepared for retirement. [2] If you want to ensure that a beneficiary continues to work but can retire comfortably at an appropriate age, reward them with a lump sum inheritance to be used once they reach retirement age. Keep in mind that these estate planning milestones can be combined and modified as you wish. For example, you might give wedding money to a child, but keep the rest of their inheritance in a trust so that if your child gets divorced, the money and property you pass on will not end up in the hands of their ex-spouse. Another option is to set up your estate plan to direct more money to someone if the value of a certain account or property rises. Or, if the account overperforms, the increase in value could be donated to a charity of your choice. You could also use an if-then statement to provide that a beneficiary receives an extra gift only if they meet a certain milestone. The options are nearly endless. Now Is the Time to Plan for the Future Populating your estate documents with numerous if-then clauses and milestones can make things more complicated. But it might give you greater peace of mind knowing that numerous potentialities have been anticipated. It is crucial to make sure that everything is in writing. Your estate planning attorney can create a diagram or flowchart that helps you keep track of all the moving pieces. Having a chart—rather than a jargon-filled legal document—can make it easier to review and update your estate plan if there is a major life event, such as a death, birth, marriage, or illness). Whatever you decide to do, do not put it off. Act now to create a plan that provides for your loved ones while honoring your wishes. Schedule an appointment with our estate planning attorneys to get started. [1] Kim Forrest, Who Pays for the Wedding? Here ’s the Official Answer , WeddingWire (May 21, 2021), https://www.weddingwire.com/wedding-ideas/who-pays-for-what-in-a-wedding . [2] Sean Dennison, 64% of Americans Aren ’t Prepared for Retirement—and 48% Don’t Care , Yahoo (Sept. 23, 2019), https://www.yahoo.com/now/survey-finds-42-americans-retire-100701878.html .
