Garland Law Offices, P.A.

Is Estate Planning Really Such a Big Deal?

“Your obligations to your family or loved ones do not stop, even if you have already passed on. If your family, especially your children, are still heavily dependent on you, you can still provide for them through proper estate planning, even if you are no longer present.”

Delaying your estate planning is never a good idea, says The South Florida Reporter, in the new article entitled “Why Estate Planning Is So Important.” That’s because life can be full of unexpected moments and before you know it, it’s too late. Estate planning is for everyone, regardless of financial status, and especially if they have a family that is very dependent on them.

Estate planning is designed to protect your family from complications concerning your assets when you die. Many people believe that they don’t require estate planning. However, that’s not true. Estate planning is a way of making sure that all your assets will be properly taken care of by your family, if you’re no longer able to make your decisions due to incapacity or death.

Without estate planning, a court will name a person—usually a stranger—to handle your assets and finances when you die. This makes the probate process lengthy and stressful. To protect your assets after you die, you need to have an estate plan in advance. You also need to address possible state and federal taxes. Your estate plan is a way to decrease your tax burdens.

With a proper estate plan, your final wishes for your assets will be set out in a legal document. With a will or trust, all of your assets will be distributed to your beneficiaries, according to your final wishes.

This will also save your family from having to deal with the distribution of your assets, which can become very complicated without a will. There can also be family fights from the process of distributing assets without a will.

 It is also important to remember that if you do create an estate plan, you’ll need to update it every once in a while—especially if there’s a significant event that happened in your life, like a birth, a death, or a move. Your estate plan should be ever-changing, since your assets and your life can also change.

It’s vital that you work with an experienced estate planning attorney, who can help you draft the legal documents that will make certain your family is taken care of after you pass away.

Reference: South Florida Reporter (June 12, 2019) “Why Estate Planning Is So Important”

When Am I Told If I’m a Beneficiary of a Will?

“Wills must go to probate court to prove their validity. Beneficiaries of a will must be notified no later than three months after the will is accepted for probate.”

When someone dies, the distribution of their assets is hopefully determined by a clear and legally binding will. If not, the assets come under control of the state, and a probate court will decide how best to distribute them.

An Investopedia article from last month asks, “When Are Beneficiaries of a Will Notified?” The article explains that in situations where the assets are structured to avoid probate (like setting up joint tenancy or making an assets payable upon death), there are no specific notification requirements.

Since probated wills are public record, when there are assets subject to probate and the will is filed with the probate court, anyone who thinks he or she may be a beneficiary is entitled to look at the will at the courthouse.

Probate is the legal process of proving that a will is valid and is administered by a probate judge. The court examines the will and directs the executor to gather the deceased’s assets and distribute them to the heirs, according to the instructions in the will.

Once the probate court says the will is valid, all beneficiaries are required to be notified within three months (in many states), but notification typically will happen a lot sooner.

Many county courthouses have a department called “Register of Wills,” where probated wills may be viewed.

It is important to understand that probate isn’t required in all circumstances. If the decedent has assets below a certain threshold (determined by the specific state), probate may not be necessary.

Reference: Investopedia (June 18, 2019) “When Are Beneficiaries of a Will Notified?”

What Are the Five “Must Have” Estate Planning Documents?

“It's important to have certain binding legal documents in place, if you become disabled due to an illness or accident. These aren't easy things to talk about, but attorneys say every adult needs them.”

WTHR 13’s recent article, “The 5 legal documents every adult should have” lists the five key documents involved in estate planning.

1. General Durable Power of Attorney. This document states who you want to make decisions, if you’re unable to do so for yourself. Without it, your family may have to petition the courts to become your legal guardian, which can be time consuming and expensive. A power of attorney allows the person whom you select, to pay your mortgage or rent and your bills.
2. Health Care Power of Attorney. This document plans for the situation, if you are unable to make your own health care decisions. You name someone you trust, like family members or friends, to do this on your behalf.
3. Will. This says that when you pass away, here's what I want to happen. A will states who will get your assets after your death. If you don’t have a valid will in place, the state laws of intestacy will govern what will happen to your estate—which may not be what you want.
4. Living Will. This is the document in which you state your instructions for end-of-life care, such as life support. This document is used to make certain that your family and physicians know what you want your end-of-life care to be. A living will is much different than a will.
5. Revocable Living Trust. This document can be important, if you're a parent with young children and would like your assets passed down properly to your children, if you die. Typically, if children are under 18 or 21, they're legally minors and can't receive assets. A trust can help coordinate their receiving your property.

An experienced estate planning attorney can help you with the creation of these documents, while creating an overall plan so that your wishes are followed, your legacy is protected and your family is secure.

Reference: WTHR 13 (April 17, 2019) “The 5 legal documents every adult should have”

Did Rapper Nipsey Hussle Have an Estate Plan?

“Rapper Nipsey Hussle was gunned down outside his L.A. store on Sunday, March 31. He is survived by his two minor children and longtime girlfriend Lauren London. Assuming that Hussle died without an estate plan, all his assets would pass to his children in equal shares, since he was not married at the time of his death.”

This raises significant issues, because minors can’t own more than a certain amount of assets, explains Rolling Out in the recent article, “RIP Nipsey Hussle: 5 reasons you need an estate plan.”

This means that a guardian or trustee must be appointed to manage the funds for them, until they reach the age of majority. If the deceased doesn’t have a will that instructs who that guardian shall be, they will be chosen by the court. In this case, Nipsey’s longtime girlfriend Lauren London would get nothing from Hussle’s estate (even though that may not have been his intention), because it looks like she wasn’t his spouse or an heir. Consider these important reasons for an estate plan:

Property transfer wishes. This is the primary objective of estate planning. Your estate consists of all your property (real, personal, and intellectual) minus your debts. Your estate plan will determine who gets what and when. Create clear goals, as to who should inherit your property and alternative beneficiaries, in case someone predeceases you.

Transfer costs and taxes. Another goal of estate planning is maximizing any available tax benefits. You can limit estate taxes by creating trusts, making charitable donations and by establishing a family limited partnership for a business.

More net assets to heirs. An estate plan will help avoid the expense and delays of probate.

Liquidity at death. Funds need to be available to satisfy the immediate needs of the family. This can be accomplished with life insurance policies, IRAs, stocks and bonds. If all of your property is being transferred by will or intestate succession, no one gets anything, until the estate is probated.

Personal wishes surrounding death. Write down all of your preferences concerning burial, cremation, and organ donation to help your family.

Hopefully Hussle created an estate plan, so his family doesn’t have to grieve his death, while figuring out his personal, business and family matters.

Reference: Rolling Out (April 1, 2019) “RIP Nipsey Hussle: 5 reasons you need an estate plan”

Should I Try Using a DIY Will Online?

“For some people with complicated personal and financial lives, today’s complexities may not be fully addressed with a do-it-yourself service for wills and trusts.”

Although using a DIY site to draft a will can save money and time, sometimes doing it this way could lead to expensive and unpleasant estate planning mistakes.

Next Avenue’s article, “The Problems With Do-It-Yourself Online Wills” reported that one DIY estate planning service had typos on its site, and its estate-planning “packages” had the same document labeled with three different names. Even worse, some of these packages were missing a key estate planning document about which very few users would know to ask.

Many DIY estate planning sites have attorneys on staff, but access to specific help for your personal documents is rarely available. If personal advice is offered, it may cost much more to get it.

It is true that many of us would prefer to fill in the blanks in silence, then have to talk to anyone about our doubts or concerns. However, sometimes it helps—a great deal—to get professional advice.

If you prepare your taxes yourself and they end up incorrect, you and the IRS may end up working things out. However, if you decide to do your estate planning by yourself, you will never know the results of your DIY handiwork. Your loved ones will. And it may not be pleasant.

You need to have customized estate planning documents to avoid court involvement, to decrease administrative issues and to know that the job is done. The four basic estate planning documents are a will, a trust, power of attorney for financial matters and an advance health care directive. If you use any of these on a DIY site, you’ll be offered a fill-in-the-blank approach. However, each state has its own probate code, and the software package you use may have different names for these documents.

Some DIY websites have all of these documents for you, but only if you purchase their higher-end packages. Some offer limited attorney consultation, but it can be just a set of drop-down of questions with pre-written responses, rather than an actual conversation with an attorney.

The benefit of using a DIY service is that you’ll have a plan, quickly and cheaply as possible—which may be better than having no plan at all. Many programs presume that you already know what you want. The reality is that many people have no clue what they want or need. When you get into the complexities of family dynamics, with legal terms specific to your state and situation, DIY estate planning can cause more challenges than working with a qualified estate planning attorney.

Reference: Next Avenue (March 29, 2019) “The Problems With Do-It-Yourself Online Wills”

If You’re Single with No Kids and Approaching Retirement, You Still Need an Estate Plan

“Are you single with no kids and approaching retirement? If so, you probably have not given much thought to estate planning.”

You may have been busy building your career, socking away money and enjoying your time off with weekends away and exotic vacations.

Forbes’ recent article, “5 Estate Planning Strategies For Singles,” says that, as you move closer to retirement, you should seriously think about your estate plan. Here are some important components:

Power of attorney and a health care proxy. These are used while you’re still alive. They let you choose who will make important financial and medical decisions for you, if you can’t make them for yourself. A single person must be sure that she’s named someone she trusts to make these decisions. When you die, the power of attorney and health care proxy are no longer valid, so you also need to create a will and trust.

Will. You need to designate an executor of your estate. This individual will take care of your affairs after you die, probate your will if necessary and pay any income and estate taxes. The beneficiary of your will can also be a revocable trust that you create during your lifetime.

Revocable trust. While you are alive, you should be named the primary beneficiary. You may also want to provide benefits for your significant other, especially if you live together and you’re the primary breadwinner. Name the beneficiaries who’ll receive the assets at your death. You also need to name a successor trustee to manage the trust assets, in the event you are unable to manage them yourself. The successor trustee will play an important role, if you’re incapacitated. As a single person, naming someone to manage the assets for you is an important part of your planning. If you fund the trust during your lifetime and are later incapacitated, the successor trustee can use the funds for your care.

Estate taxes. Many singles don’t mind if their beneficiaries receive less, and the government receives more. However, if you do care, there are many planning options to consider, such as charitable giving as a way to reduce taxes and give back to those charitable institutions that have played an important role in your life. You can also make lifetime gifts to family and friends.

If you’re that single person without an estate plan, don’t wait until the last minute. Otherwise, it will be too late.

Reference: Forbes (March 15, 2019) “5 Estate Planning Strategies For Singles”

As a New Parent, Have You Updated (or Created) Your Estate Plan?

“For new parents, the need for legacy planning is especially obvious.”

You just had a baby. Now you’re sleep-deprived, overwhelmed, and frazzled. Having a child dramatically changes one’s legacy plan and makes having a plan all the more necessary, says ThinkAdvisor’s recent article, “5 Legacy Planning Basics for New Parents.”

Take time to talk through two high-priority items. Create a staggered checklist—starting with today—and set attainable dates to complete the rest of the tasks. Here are five things to put on that list:

1. This gives the probate court your instructions on who will care for your children, if something happens to both you and your spouse. A will also should name a guardian to be responsible for the children. Parents also should think about how they want to share their personal belongings and financial assets. Without a will, the state decides what goes to whom. Lastly, a will must name an executor.
2. Review your beneficiary designations when you create your will, because you don’t want your will and designations (on life insurance policies and investments) telling two different stories. If there’s an issue, the beneficiary designation overrides the will. All accounts with a beneficiary listed automatically avoid probate court.
3. Created by an experienced estate planning attorney, a trust has some excellent benefits, particularly if you have young children. Everything in a trust is shielded from probate court, including property. This avoids court fees and hassle. A trust also provides some flexibility and customization to your plan. You can instruct that your children get a sum of money at 18, 25 or 30, and you can say that the money is for school, among other conditions. The trustee will distribute funds, according to your instructions.
4. Power of Attorney and Health Care Proxy. These are two separate documents, but they’re both used in the event of incapacitation. Their power of attorney and health care proxy designees can make important financial and medical decisions, when you’re incapable of doing so.
5. Life Insurance. Most people don’t think about purchasing life insurance, until they have children. Therefore, if you haven’t thought about it, you’re not alone. If you are among the few who bought a policy pre-child, consider increasing the amount so your child is covered, if something should happen.

Reference: ThinkAdvisor (March 7, 2019) “5 Legacy Planning Basics for New Parents”

Have You Accomplished This Critical Task?

“There's one critical move that a large number of older Americans have yet to make: creating a will.”

Motley Fool’s article, “Nearly Half of Americans 55 and Over Are Making This Huge Financial Planning Mistake,” notes that almost 50% of Americans 55 and older don't have a will. If you're missing a will, it's critical to make the time to get this important document written, before something tragic happens and heirs are left in the lurch.

While creating a will might be uncomfortable, delaying won't keep you from having to contemplate your own mortality. Not creating a will places your family in a tough spot, if something happens and there’s no will.

Another reason that people put off writing their wills, is that they don't want to make their children uncomfortable by getting them involved in the process. Adult children are also frequently hesitant to start a dialog about parents’ estate planning. Nonetheless, those discussions are important to have.

Wills, trusts and estate plans are not just for wealthy people. If you own anything, including a home, a car and any bank accounts, you need an estate plan and that includes a will.

If you don't have a will, you won't have the opportunity to direct the way in which your property is distributed. Instead, the laws of probate will instruct how your investments and belongings are disbursed after your death.

Once you have that will created, keep it in a safe place—no, not in a shoebox under your bed. Instead, buy a fireproof safe and store it there. In addition, give your children or loved ones access, so they're able to locate your will in the event that it’s required.

It’s common to get advice that you should store your will in a safe deposit box at your bank. That works if your children or other trusted people in your life are permitted access to it. However, if you're the only account holder on that safe deposit box, your family may need to go through some legal machinations to get into it. When you enlist the help of an estate planning attorney to create your estate planning documents, she should also retain a copy of it on record. That's another great benefit to having an attorney create your will, rather than going it alone.

Creating a will can be unpleasant business, but it’s not something you should put off. Having that document in place will give you peace of mind—you’ll know that your wishes will be executed as you desire. That's reason enough to stop delaying and get going.

Reference: Motley Fool (February 16, 2019) “Nearly Half of Americans 55 and Over Are Making This Huge Financial Planning Mistake”

What Can You Do If Your Dad Leaves Your Out of His Will?

“There are limited actions you can take, if you're disinherited.”

If your father divorces your mother to marry a younger woman, it’s not unlikely that your step-mother will make your dad change his will. The step-mother may then stand to inherit everything. Is there anything the disinherited child can do?

Unless there were some specific circumstances concerning the dad, there's probably nothing the child can do, says nj.com in the recent article “My step-mother changed my dad's will. I got nothing. What can I do?”

In the U.S., for the most part, a person has the right to leave his or her property and assets to whomever he or she chooses. It’s called "freedom of disposition." However, even in the United States, some classes of beneficiaries have the right to take 'against' the will." For instance, a surviving spouse can claim an elective share of an estate if he or she is disinherited. The rules for granting an elective share are complicated. However, the thought behind the law is that a spouse has the obligation to provide for the support of his or her spouse and by disinheriting the spouse, they’re violating this duty.

In the U.S., adult children typically don’t have any right to inherit from a parent.

To overcome this, a child would need to prove that his father didn’t act of his own free will. The child would need to show that his stepmother “unduly influenced” his father to change his prior will and leave everything to her. If successful, the father’s property would be distributed according to his last valid will, or if there is no will, according to the intestacy statute.

Proving undue influence can be quite difficult to do. The child would have to show that the step-mother was in what is known as a "confidential" relationship with the father and that there are suspicious circumstances. If so proved, the burden of proof shifts to the step-mother to show that she didn’t unduly influence the father.

This process can become very technical, and each case is very fact specific. If the father was working at his job at the time of his death, it will be extremely difficult to prove he lacked free will. However, if he’d stopped working and had diminished capacity, it would be easier to show undue influence.

Talk to an experienced estate planning attorney about pursuing this type of action.

Reference: nj.com (February 8, 2019) “My step-mother changed my dad's will. I got nothing. What can I do?”

What Does a New Study Say About Dying?

“Americans aren't worried so much about passing away at a young age, as they are about dying in pain or with dementia, according to a new study.”

A survey of 3,000 U.S. residents, with most age 55 and older, found that people's biggest fear was dying with dementia (34%), followed by dying in pain (32%), according to a report released by Merrill Lynch. In addition, dying young was the chief fear of just 14% of respondents. Dying alone was next at 13%, then dying broke and in debt, 7%.

Financial Advisor’s article, “Dementia, Pain Biggest Client Fears About Dying, Survey Says,” explains that the data was part of a report that looked people's feelings about their heirs, their estate planning and their feelings about death.

Some of the results may not be surprising, since the subject of death and the preparations needed to get ready for it can be a sensitive topic. For example, the study predictably found that nearly 50% of U.S. residents age 55 and over don’t have a will. Only 18% in that age group have a will, a health-care directive and a durable power of attorney. The study also explored feelings that are sometimes hard to uncover, like their fears and hopes about their final days and the legacy they leave their heirs.

Based on the survey results, one possible takeaway is that folks aren't as hesitant to discuss their own deaths, as is typically believed. About 90% of respondents said they’re open to discussing their end-of-life preferences with family and friends, the report said. Of those 55 and older, 87% said it’s a parent's responsibility to initiate a conversation with their children about their legacy.

When asked about what they most want to be remembered, leaving wealth to heirs was last on the list. The top response, cited by more than two-thirds of respondents, was "the memories I've shared with my loved ones," followed by the quality of their marriage or partnership; their passions, interests and hobbies; a successful career; and, lastly, the amount of wealth they leave to heirs.

When asked how they would define a "a life well lived," the most common response was "having a family and friends that love me" (94%), making a positive impact on society (75%), being successful in my career (27%), accumulating a lot of wealth (10%) and being well-known or famous (3%).

"The accomplishments we want mentioned in our eulogies aren't those featured on our resumes," said Ken Dychtwald, CEO of research firm Age Wave, which teamed with Merrill Lynch in producing the report. "It's who we are as people, who we loved and who loved us and how we made an impact on the lives of others."

Reference: Financial Advisor (February 7, 2019) “Dementia, Pain Biggest Client Fears About Dying, Survey Says”