Garland Law Offices, P.A.

More Good Reasons to Review Your Estate Plan

“While a thorough assessment of an estate plan is encouraged yearly, these eight items are important when considering if it’s time for a refresh.”

It’s not that tough for your estate plan to easily outdate itself. Given the changing tax laws, regulations, and situations in life, estate plans should be looked at as fluid documents, not as unchanging set-in-concrete plans.

AZ Big Media’s recent article, “Here are 8 reasons to revisit your estate plan,” provides some common reasons to make this important review:

Changes in Tax Laws. One needs only look back to 2001, when Congress passed broad tax legislation that started a dramatic shift in estate planning. Are you one of those whose estate plan was created before these changes were enacted? Without a review by a qualified estate planning attorney, you may be facing higher exemption amounts that may unintentionally impact married couples relying on traditional marital-non-marital trusts.

Changes in Marital Laws. Since 2013, federal law has recognized same-sex marriage. In 2015, the recognition of same-sex marriage became mandatory in all 50 states, which means potential new planning opportunities for these couples.

Different Family Dynamics. There are going to be marriages, divorces, new children and grandchildren, as well as family members passing away or adding responsibility for an individual with special needs. Any change in circumstances should trigger a review of your estate plan—especially when a person needs to be removed from a plan because of death or divorce.

Moving Out-of-State. Moving can affect tax rates, tax types, probate laws and even the availability of certain types of trust. Some states are also community property states. There has also been the expansion of decanting, which is the amending of an irrevocable trust by pouring it into a new trust document, which should necessitate a review of these issues.

Beneficiary Designations Need a Review. Beneficiary designations must be reviewed periodically to  ensure that they are consistent with the overall estate plan.

The Up-to-Date Financial Picture. Your investment portfolio is dynamic and changes over time. For instance, the addition of real estate or a business to a portfolio requires being sure that a trustee, durable power of attorney, or a personal representative knows and is authorized to carry out the wishes regarding succession or sale.

Changes in Views on Charitable Giving. Perhaps you want to add a charitable gift or a new cause to the plan. You should do this and make sure that all charitable beneficiaries are properly identified.

Review your estate plan to make sure it meets your current wishes, is properly funded, the assets are properly titled and any necessary changes have been made. An updated estate plan is the best way to be sure that your wishes are clearly stated and executed when the time comes.

Reference: AZ Big Media (September 1, 2017) “Here are 8 reasons to revisit your estate plan”

Estate Planning Reminders for Same-Sex Couples

“Most couples can benefit from estate planning to ensure their assets land in the right hands after they die and their health care wishes are followed. But same-sex couples often have special situations that require extra planning.”

The Palm Beach Post’s recent article, “Estate Planning 101 for Same-Sex Couples,” lays out some steps that same-sex couples can take to get moving with their estate planning.

What’s your marital status? The U.S. Supreme Court’s 2015 decision in Obergefell v. Hodges legalized same-sex marriage throughout the nation. However, the mishmash of prior state laws has had some unintended consequences in estate planning. Assets typically pass to a spouse upon death, so it’s critical to know that past relationships have been dissolved. Prior to 2015, some same-sex couples were married in states that recognized their marriages, then moved to states that didn’t recognize those marriages and then subsequently ended their relationships. Believing that their nuptials “didn’t count” in the non-legal states, some couples split up but didn’t legally dissolve their marriages. Some states have automatically converted registered domestic partnerships or civil unions into legal marriages. Therefore, there are people who are married and don’t know it.

What you need besides a will. A will is critical for couples with children from previous relationships or those who had children before legally marrying. If you don’t have a will, it can be unclear where assets should go when the last partner dies. In addition, same-sex couples should sign a power of attorney to give a spouse or someone else the power to act on your behalf in certain situations. Creating a trust can also be an excellent idea, especially if there are concerns about fighting over your assets when you die. A trust is established during your lifetime. Couples can place assets into the trust—when one dies, there’s less of an opportunity to contest it, because trusts don’t go through probate.

Consider your medical needs. Same-sex couples need to document their wishes, and there are several options. Two of the most popular are a health care proxy or a power of attorney for medical treatment. This lets a person of your choosing, make medical decisions for you, if you’re incapacitated and can allow physicians to share your medical information with those you name in the document. A living will—or a do-not-resuscitate (DNR) or other kind of health directive—also states your preferences for medical treatment when you can’t communicate.

What about your kids? When parents die, their assets typically pass to their children. However, to be certain that your property goes to your kids, same-sex parents may want to make adoption part of their estate planning. Frequently, just one parent is biologically related to the child. Some states have second-parent adoption, otherwise known as a step-parent adoption or a confirmation adoption. This process confirms that the children are related to everybody.

Not the time to freelance! Same-sex couples should avoid do-it-yourself estate planning services online, because these typically don’t account for the needs of same-sex couples. LGBT couples need to remember that their situation is a little bit different. They need to talk to a lawyer who understands what those potential issues are.

Reference: Palm Beach Post (June 7, 2017) “Estate Planning 101 for Same-Sex Couples”

Same Sex Marriage Estate Planning

“Before gay marriage became legal, wealth managers had limited options to help clients.”

When same-sex marriage was legalized in the U.S. in 2015, it made for some real changes in the financial planning of some Americans. For these couples, this planning wasn’t an option before.

The Wall Street Journal’s article, “Estate Planning for Same-Sex Couples," explains that estate planning is the most important area for advisors to discuss with their same-sex clients. Prior to the Supreme Court ruling allowing same-sex marriage, if one spouse planned on leaving a bequest to a partner, there needed to be enough life insurance in place for the surviving partner to cover the potential estate tax. Now, same-sex couples also have the unlimited marital-tax deduction, allowing them to free up liquidity in their financial planning.

It’s important to remember to update beneficiaries and insurance plans. If you have an individual retirement account or other retirement plan, a partner can change their beneficiary to “spouse.” You should also review your health-insurance options. By adding a spouse to insurance coverage, same-sex couples can save thousands in premiums.

Same-sex couples also bring children to the relationship, so be sure to understand who’s bearing the financial responsibility. Also, guardianship needs to be discussed because there are differences in state and federal laws over guardianship and parenting rights.

Another consideration is the fact that same-sex couples seeking guidance are typically older than heterosexual couples who are beginning the planning process, because the lesbian, gay, bisexual, and transgender community hadn’t had the opportunity to marry before 2015. Older people are likely to have a retirement-planning strategy.

These may sound like some basic planning needs, but same-sex couples haven’t had to consider the issues faced by married couples for very long.

Reference: The Wall Street Journal (November 7, 2016) “Estate Planning for Same-Sex Couples”