Estate planning really should become a priority as soon as you acquire your first asset, have a child, or step into adulthood in any other truly meaningful way. And yet many of us put it off for far too long, leaving ourselves and our families at risk of getting stuck in the court system in the event of an unexpected accident, illness, or injury.

I get it, planning for your incapacity and death can be scary. But it’s even more frightening to think of the potential tragedies that can arise if you and your family don’t have the right planning in place.

At the senior stage of life, effective estate planning is urgent, both for you and the people you love. And if you aren’t a senior yet yourself but have senior parents, getting your own planning handled can serve as a model to help get your parents moving on their plan.

Here are a few of the most common errors seniors make when it comes to estate planning and how to fix them:

Relying on a will as your plan
Many people, particularly older folks, believe that a will is the only estate planning tool they need. While wills are one key aspect of estate planning, they come with serious limitations:

• Wills require your family to go through probate, which is time consuming, open to the public, and expensive.
• Wills don’t offer any protection if you become incapacitated and unable to make your own legal, health, and financial decisions.
• Wills don’t shield assets from your creditors or those of your heirs.
• Wills don’t provide protections or guidance for when and how your heirs take control of their inheritance.

If you’re relying solely on a will for estate planning, you’re missing out on many valuable safeguards for your assets, and you’re guaranteeing your family will have to go to court when you die.

Not funding your plan properly
When it comes to a trust, it’s not enough to simply list the assets you want it to cover. You must transfer the legal title of certain assets—real estate, bank accounts, securities, brokerage accounts—to the trust (known as “funding” the trust) to avoid probate.

While most lawyers will create a trust for you, few will ensure your assets are properly funded. But we’ve got processes in place to keep track of our clients’ assets throughout life, making sure none are lost to the state’s Department of Unclaimed Property, and ensuring their families aren’t inadvertently forced into court at the most inopportune time.

Not keeping your plan current
Far too often people prepare a will or trust, put it into a drawer, and forget about it. But your estate plan will likely be worthless if you don’t regularly update it when your assets, family situation, and/or the laws change.

We recommend you review your plan at least every three years to make sure it’s up to date and immediately amend it following important life events like divorce, deaths, births, and inheritances.

If you aren’t sure what you need, begin by coming in for a Family Estate Planning Session. It will be custom-designed to your assets, your family, your wishes, and to educate you on the best ways to reach your objectives.

We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. Call us today if you’d like more information (and mention this article to get a complimentary consultation).

Dedicated to empowering your family, building your wealth and defining your legacy,

Approximately half of America’s population over the age of 16 is unmarried. While much of the discussion involving estate planning focuses on married couples, this topic is just as important for a single person. In fact, many times it is even more important that a single person have a well-coordinated estate plan. This is because the default laws governing estates often work poorly for people without a spouse and may not adequately provide for a significant other or unmarried partner. Having a cohesive and well-drafted estate plan will ensure that you protect and provide for those you truly care about upon your death.

Evolving Estate Planning

It is important to understand that your estate plan can change over time. You may eventually experience life changes like getting married, having children, or buying your first home that will necessitate changes to your estate plan. Although life is constantly changing, it is best to get in the driver’s seat early when it comes to estate planning.

If you die without a will — referred to as intestate — all of your possessions will be distributed according to the default laws of your state. While most state laws have a married person’s assets go to their surviving spouse and children, the same is not true for unmarried individuals. Generally, state law provides that a single person’s assets are passed on to their next of kin. This includes children, parents, and siblings. Noticeably absent for many unmarried people are provisions providing for a long-term boyfriend or girlfriend. And, if there are no surviving close relatives, the assets will likely go to the state. To avoid the state dictating what happens to your assets, it is vital that you have a properly drafted estate plan put together.

As an Unmarried Person, How You Own Things Is Very Important

There is an increasing number of couples that are not getting married, and other individuals who are deciding to remain single. For this group, estate planning is important because taxes and other financial benefits tend to favor those who have tied the knot. It also brings up the need to be very careful about how assets are titled.

How your assets are titled and how the beneficiary designations are prepared will impact how your assets will be distributed upon your passing. The most common ways to hold title to property is tenants in common (TIC) and joint tenants with rights of survivorship (JTWROS). Property that is held as TIC means that each owner owns an interest in the property.  At the death of one owner, that interest is transferred according to his or her estate plan, or intestate succession if there is no estate planning. This is not an ideal way for unmarried couples to own property because at the death of one of them, the other person will end up as joint owner with the deceased’s next of kin.  JTWROS is one option for unmarried couples because when one owner dies, the property automatically transfers to the surviving owner. There are several other planning strategies that can be beneficial for unmarried individuals — involving tax benefits, retirement plans, wills and trusts, and healthcare powers of attorney — if the right estate plan is carefully crafted.

Speak to an Estate Planning Attorney

If you do not have an estate plan yet, you should contact a knowledgeable estate planning attorney today. Whether you are married, single, or cohabiting with a partner, the right professional can help you craft a comprehensive estate plan that is tailored to your personal situation and assists you in protecting those you care for the most. Give us a call today if you have any questions.

Dedicated to empowering your family, building your wealth and defining your legacy,

Most parents want to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles, and good friends sometimes want to leave gifts to beloved young children, too. Unfortunately, good intentions and poor planning often have unintended results. Don’t make these common, expensive mistakes. Instead, here’s how to both protect and provide for the children you love.

Common Mistake: Don’t Use a Simple Will to Leave Assets to Minor Children

Many parents think if they name a guardian for their minor children in their wills and something happens to them, the named person will automatically be able to use the inheritance to take care of the children. But that’s not what happens:

• When the will is probated, the court will appoint a guardian to raise the child; usually this is the person named by the parents in their wills.

• But the court, not the guardian, will control the inheritance until the child reaches legal age (18 or 21).

• At that time, the child will receive the entire inheritance in one lump sum.

Most parents would prefer that their children inherit at a later age, but with a simple will, you have no choice; once the child reaches the age of majority, the court must distribute the entire inheritance at once.

Common Mistake: Avoid Court Guardianship

A court guardianship for a minor child is very similar to one for an incompetent adult.

• Things move slowly and can become very expensive.

• Every expenditure must be documented, audited, and approved by the court, and an attorney will need to represent the child.

All of these expenses are paid from the inheritance, and because the court must do its best to treat everyone equally under the law, it is difficult to make exceptions for each child’s unique situation and needs.

Correct Action: To Protect the Child and the Assets, Use a Trust

Instead of using a simple will, a better option is to set up a children’s trust in a will:

• This would let you name someone to manage the inheritance instead of the court.

• You can also decide when the children will inherit.

• But the trust cannot be funded until the will has been probated, and that can take precious time and could reduce the assets.

• If you become incapacitated, this trust does not go into effect…because your will cannot be adjudicated until after you die.

• And, anything that goes through probate, as these assets would, is visible the public which means predators, unscrupulous family members and nosey neighbors, know what your child inherited.

The best option is a revocable living trust, the preferred option for many parents and grandparents:

• The person(s) you select, not the court, will be able to manage the inheritance for your minor children or grandchildren until they reach the age(s) you want them to inherit–even if you become incapacitated.

• Each child’s needs and circumstances – even special needs – can be accommodated, just as you would do yourself.

• And assets that remain in the trust are protected from the courts, irresponsible spending, and creditors (even future divorce proceedings).

For many folks, the absolute best solution is to keep the assets in trust for their lifetime or until assets get spent down. Assets that are protected in this manner are there for your children but can’t be taken from them.

Dedicated to empowering your family, building your wealth and defining your legacy,

A dream without a plan is simply a wish. Estate planning is not just about death and taxes — it puts you in the driver’s seat of your financial life, allowing you to set achievable goals. But it’s also a great opportunity to focus on the legacy you want to leave behind for loved ones, help you avoid the expense and delay of probate, as well as help you save on taxes.

Putting Your Dreams on Paper

When putting together your estate plan, think about what legacy you want to leave behind. The best way to do so is to write down your wishes. Consider the values you want to promote. Think about important family traditions you want to encourage or memories you want to preserve. Rather than a just dry discussion of what happens to your assets, including these wishes in your documents makes your plan relatable and more meaningful for your family.  Because you’ve passed along values and wisdom along with your financial wealth, you will have solidified and furthered your dreams, hopes, and aspirations you have for your family, even though you are no longer with them.

For your estate plan to effectively pass along your values and wisdom, it should:

(1) clearly state who you are leaving your assets to;

(2) give an explanation as to why an individual is receiving a particular asset;

(3) provide guidance about how you want a beneficiary to benefit from your assets (e.g. what “education” you intend to help with, whether or how you want to instill a work ethic, what you mean by “support,” etc.);

(4) make sure that those assets are received by your beneficiaries at the right time to maximize their benefit, and

(5) protect your legacy from being taken by estate taxes, creditors, predatory lawsuits, government claims or divorce.

You even have the opportunity to protect your legacy beyond your beneficiaries’ lifetimes into future generations if you want to do so.

Estate Planning Basics & Benefits

There are several benefits of developing an estate plan with your legacy in mind. You can help the next generation become empowered to achieve competence, character, and confidence. You can also preserve and reinforce your family’s core values and traditions.

In addition to preserving your legacy after you die, a comprehensive estate plan can provide guidance for managing your affairs if you become incapacitated and unable make decisions for yourself. Some basic documents that should be included in your estate plan are:

• A will: A written document that states who you want to inherit your property and names a guardian to care for your minor children or disabled family members.  The use of a will as your primary estate planning strategy does require the court process known as probate.
• A trust: A legal structure which holds property for your benefit during your life and for the benefit of your beneficiaries after your death. The use of a “fully funded” trust allows your beneficiaries to avoid the costly and time-consuming process of probate.
• A healthcare directive: A written document that spells out your wishes for healthcare and end-of-life choices when you are unable to make these decisions for yourself.
• A financial power of attorney: A written document giving a trusted person authority to handle your finances and property on your behalf.

Guidance From Estate Planning Attorneys

A skilled estate planning attorney can help you make your dreams a reality by communicating  them through a well thought-out estate plan. Contact us today to learn about your options.

Dedicated to empowering your family, building your wealth and defining your legacy,