You might take steps to list everything you can inside your estate, but it’s still possible to leave items out. When you’re working to help administer someone else’s estate or thinking ahead about your own, it could be the case that not every asset is accounted for in a trust or a will.
Some assets won’t ever fit inside those estate plan vehicles anyways. These include life insurance plans, individual retirement accounts, and 401(k) plans. It’s all too easy to forget something like a former spouse still being listed as the beneficiary on a life insurance policy.
In the U.S., we’re seemingly adding new assets to our estate
all the time, especially when it comes to digital materials. You’ve got photos,
online accounts, and plenty of passwords stored up in your computer. But have
you thought about who will have access to those if you pass away?
Most people’s first thought when they acquire something new or
start a new online account is not to add it to their estate plan. But sitting
down once every six months or at least once a year gives you a clear chance to
review everything you have and to determine if you need to update any of your
A lawyer can be essential in helping you walk through this
process so that you can avoid some of the most common pitfalls and ensure that
you’ve done as much as possible to make things easier for your loved ones.
When it comes to the fluid process of estate planning, you
don’t have to put all the hard work of asset tracking on your own. Be prepared regular
updates so that you get the peace of mind that your loved ones will be set up
for their own future thanks to your hard work.
The end of the year is the perfect time for reflection. If this year didn’t add up to all you’d hoped it would be and you want to start off on a better foot in the New Year, there are at least four goals you can’t afford to miss on your list.
Start by looking at your biggest debt, which is probably your home. Even if you know that it’s not feasible for pay off that mortgage totally in 2020, having a future date in mind when you do think that goal is achievable gives you something clear to work towards. If you’re nearing retirement age, factor in how this might influence your retirement spending, too. Can you target a payoff date early on in your retirement?
The next phase should be setting up a six month emergency
fund. This is money you can tap into during a worst case scenario like a
critical home repair or a sudden medical bill. Most people in the U.S. have no
emergency savings fund at all.
The third phase to accomplishing your financial goals in
2020 is creating a full plan for how to look at your big financial picture. If
you’re concerned about running out of money in retirement or whether you’ll
need long-term care, the best time to put a place in motion for these issues in
well in advance of an emergency situation.
If you are a few years away or even a decade away from retirement,
expand your debt payoff plan from beyond just your home. Think about car
payments, student loan debt, and credit card debt. All of these can create big
expenses when you’re on a fixed income in retirement and don’t want to dip into
your emergency fund or your overall savings to pay for regular costs.
Need help fitting your financial plan with your estate plan?
Now is a great time to schedule a chance to speak with a dedicated estate
planning lawyer about your options.
Getting together for the holidays or to celebrate the new year gives you a great opportunity to reconnect with your loved ones. But if one of the things on your to-do list this year is to discuss estate planning arrangements, you might be concerned about the possibility for conflict.
The good news is that there are delicate ways to handle this situation
to decrease your chances of ending up in an argument with your loved ones.
Estate planning is a very personal and individualized process, which means that
the great deal of thinking you might have put into the process, won’t
necessarily translate to your loved ones. And yet, planning before disability
or death is one of the best gifts that you can give your family.
Many family members are embarrassed to discuss the topic of money, but
might miss out on beneficial financial strategies like putting together trusts.
If you’re thinking about using a trust as one of your estate planning
strategies, however, you can increase your chances of success by communicating your
financial values to your children early on.
When you have a conversation about trust and estate planning, approach
this topic with care and respect. Be both considerate and candid. The next
thing to consider is to rely on the insight from a knowledgeable estate
planning attorney to verify that your estate planning is customized to the
goals you intend to accomplish.
The investment that you spend in putting together an estate plan,
especially involving a trust can payoff in spades for your loved ones when they
understood why the trust was being used and when you have properly funded it.
Schedule a consultation today with a dedicated estate planning lawyer to talk
through more benefits of trust funding.
Deciding to disinherit someone in your family is fraught with emotional considerations and concerns. Wondering whether or not you should inform the family member about your intention to exclude them from your estate planning can be a very difficult question to answer and one that you should discuss directly with your estate planning lawyer.
An estate planning attorney can help you put together the relevant
strategies and tools to ensure that your estate planning goals are
accomplished. In the event that you decide to inform your children that they
are not receiving an inheritance, this conversation should be handled with
One common reason to decide not to pass on an inheritance to your
children is because you believe that your money could serve a bigger and better
purpose in your community. This doesn’t necessarily mean, however, that your
loved ones will understand this decision that you have made.
If you intend to leave your assets behind to someone other than your
family members, it’s important to communicate that plan now if you feel
confident in your decision. Fleshing out your plan with your loved ones does
allow them to be a part of the process, and ensures that you leave behind funds
to pay for your final expenses. The last thing you want is to become a burden
for your family financially.
You might need to adjust your estate plan in the future if you change
your mind. This is why having an established relationship with an experienced
estate planning lawyer can make this process easier. Explain to your children
your reasons and decisions behind opting to pass on an inheritance or assets to
other organizations or people than them.
This clears up expectations, but it doesn’t mean that this conversation
will be easy. Discussing your missions, values and goals for your assets after
you pass away can help your loved ones better understand the decision you’ve
Do you know how to decide whether or not you need a trust, a will, or both? Most people partner with an experienced estate planning lawyer when putting together their strategy for their estate.
A lawyer can help you review existing estate planning
documents and help you decide what assets will be passed through a trust versus
Attorney Neel Shah recently shared the difference between a will and a trust with the Tribune. He says, “A will is like leaving your family a recipe to bake a cake after you’ve passed away.” In this analogy, someone in your family would have to go buy the ingredients to make the cake and prepare them in the right order.
Putting together a trust, however, allows you to make the
initial recipe while you’re still around. When you create a trust, you’d
control how the cake is made and then you can decide who you’ll share this with
through your trust.
One common reason people turn to a trust is because you put
in the work today to make things easier for your loved ones in the future.
Even though a will might be easier and faster to put together,
a trust equips you with more control and the flexibility many people prefer.
With the added layer of privacy afforded by a trust, you also get peace of mind
that your plans will be kept private between your trustees and your
beneficiaries alone rather than becoming a matter of public record.
Far too many Americans overlook the potential benefits of estate
planning because they believe it’s too difficult, not necessary for their
specific situation or too expensive. But there can be major costs to ignoring
components of your estate plan. Most people are familiar with the benefits
afforded by a will, but a new study shows that up to 66% of Americans don’t
have a healthcare directive.
A healthcare directive is a legal document in which you lay out your decisions for caregivers in the event that you suffer from dementia or another similar ailment.
It can also provide important guidance around whether or not you want life-sustaining care. Healthcare directives sometimes go under other names depending on your specific location, including medical directives, living wills, or durable health care powers of attorney.
In general, most of these documents serve the same function to provide
direction and guidance around how the death and medical decisions affecting you
should be made. Health care directives are truly a relatively new legal
document because they only came into existence in 1976 in California when the
first law was passed enabling health care directives.
By 1992, however, all 50 states across the country had similar laws.
Make sure that you have incorporated your intention for a health care directive
into your estate planning by sitting down and consulting with an experienced
and knowledgeable estate planning lawyer.
Have you thought about using various estate planning strategies, such as a trust, to establish some level of control and clarity during your estate planning process? The establishment of a family trust might be one specific way in which you intend to accomplish this goal.
There are several different key players involved in the establishment of
a family trust, including the creator of the trust who is most often the person
who possesses family wealth and has established an estate plan for the benefit
of his or her family.
In addition to the trust creator, there are the beneficiaries of the
trust who are typically the grandchildren or the children of the trust maker or
settlor. These beneficiaries are the recipients of assets inside the trust in
alignment with the terms established in the trust itself. Additionally, there
are other parties, such as secondary beneficiaries who are eligible to receive
the trust assets in the event that some even occurs that triggers the passing
of assets to another generation, such as if the primary beneficiary has passed
away. The final key person involved in the management of a family trust is the
trustee who manages or oversees the operation of the trust and directs assets
inside the trust in accordance with the settlor’s instructions when the trust
One party who might also become eligible to trust assets is a
non-beneficiary spouse, i.e. someone who is married to a beneficiary in the
trust. Many families using the family trust will engage in the process of asset
protection planning to attempt to minimize the possibility that a soon to be
ex-spouse will be able to tap into those assets.
If you own a company, you can’t afford to think just about the day to day. In fact, even planning ahead for your own company’s future while you are still involved might not be enough to protect your business from success long into the future. This is because you can’t afford to neglect the power of a process known as succession planning.
Succession planning refers to the process for developing, identifying,
hiring and training new leaders who are eligible to replace older leaders when
those leaders retire, pass away or leave. This process greatly increases the
chances of capable and experienced employees being able to step in and assume
these roles as they become available.
There are many different facets involved in succession planning and this
process is most successful when it is implemented many years in advance of an
owner thinking about leaving. This is because there are many components to
establishing a leadership and transition plan and identifying and training the
proper timeline to take over the company.
Organizations use succession planning as one process to ensure that the
right employees have been recruited, developed, and trained to fill key roles
within the company. Top talent employees should then exercise their skills,
abilities, and knowledge to be prepared for a promotion and advancement into
increasingly more challenging roles.
This gives the owners of the business and other key employees who are
planning an exit in next several years the peace of mind that someone is there
to step in to these important roles as needed in the future. If your business
has not yet incorporated a succession planning into its long range goals,
schedule a consultation with an experienced business succession planning lawyer
In the event that you become incapacitated, it will be important for anyone you have named as a power of attorney agent to be able to make decisions on your behalf.
If you are incapacitated, you are unable to make these decisions for yourself, but without appropriate estate planning documents, appointing someone else to do this, this can create confusion, chaos or even court hearings for your family members.
It’s important to also think about how the Health Insurance Portability
and Accountability Act known as HIPAA limits disclosure, release or use of any
individually identifiable health information.
Power of attorney agents and a legal heir could be eligible to get
access to this information in order to use it to act on your behalf. However,
even though there might be other people that you want to be informed about your
current health status, it is important to include these people in your estate
For example, if you have a significant other to whom you are not
married, that person is not necessarily entitled to automatically receive
information about your health status. If your parents are approved to receive
information about your health status, but do not have a good relationship with
your significant other or are unlikely to inform your significant other about
current condition, this can generate problems.
Make sure that you think about who else should be included as a power of
attorney agent when establishing your estate planning documents.
The end of the year will quickly be here upon us. Many people have already started their holiday planning, but you can’t afford to neglect the opportunities that come with the burst of momentum to knock things off your to-do list and plan ahead for a successful 2020.
Yearend financial planning sets you up for success throughout the entire
next year. Now is an excellent opportunity to review all of your key
beneficiary designation forms and other documents in line with your estate
plan. But don’t neglect the opportunity to establish a better and deeper
understanding of what’s going on with your retirement contributions.
Now is a great time to evaluate whether or not you’re on track to max
out your retirement contributions for the year. Whether you have an SEP IRA, a
401(k) or a 403(b), you might need to change how much you contribute if your
plan allows for it. Think about any holiday bonuses that you might receive and
these might be put into the plan as well. The contribution limit for your IRA
for 2019 is $6000, but this jumps to $7000 if you are aged 50 or older.
This could be a good time to sit down with your financial professional to discuss setting up a Roth IRA by transferring your traditional IRA funds. All qualified withdrawals and future gains would be tax free even though you would pay taxes on the amount that you do convert.
For more information about getting ahead of your planning and tackling your financial goals before the end of the year, don’t neglect the opportunity to sit down with your estate planning attorney.
There’s a good chance that if you’ve been active with philanthropy and charitable giving, that it’s been a part of your life for as long as you can remember. But it might be time to adjust that strategy before and after retirement after speaking with a knowledgeable and experienced estate planning attorney.
An estate planning attorney can help you to navigate this process and
ensure that you have the information you need to leave a lasting impact on the
charities of your choice.
Making the most of charitable gifting and giving can require some advanced strategy and the best way to give to charity in a tax intelligent way might depend on your age.
Effective tax planning can also give you peace of mind that a bigger
portion of your donation has gone towards supporting the philanthropic goals
and priorities that are most important to your family.
Many more families today are taking the standard deduction than ever
before as a result of the Tax Cuts and Jobs Act. This means that fewer families
are eligible to qualify for tax benefits from cash donations to charity. These
strategies will depend on whether or not you’re required to take distributions
from an employer sponsored 401(k) or an individual retirement account.
For those donors younger than age 70 and a half, appreciated securities
can be a powerful way to support the charities you care about. Once you have
reached age 70 and a half, under the new standard deduction, one of the best
strategies is to gift a portion of your RMD or all of it to a charitable
organization as a qualified charitable distribution. QCDs cannot be greater
than $100,000 but can still be very powerful strategies for gifting to a
charity you care about. Schedule a consultation with an experienced estate
planning attorney today to learn more.
Most of your organization today is probably digitized. There’s a good chance you own a scanner and have taken every effort to store what you can online.
But even though electronic wills might be a wave of the future in estate planning, they’re not here in full yet since most states don’t have a method for electronic will filing.
A true electronic will is one that can be drafted, reviewed,
and validated all in electronic form. As of right now, e-wills don’t eliminate
the current need for a traditional will. Over time, however, state legislatures
might review the requirements for electronic wills to provide insight about how
this might work.
It’s very likely that future versions of an electronic will
still require the formal creation of the document as well as signatures by
witnesses. Some state courts have already begun to analyze and recognition
electronic wills, but those circumstances are limited up to this point.
Recently, the Uniform Law Commission has accepted an e-wills
act known as the Uniform Electronic Wills Act. This organization is a group of
legal professors and practitioners who are often the first voice of change in
various practice areas. Many states tend to adopt similar laws after the ULC
releases information about laws they’ve accepted.
If you’d like to talk about how to create a will that works
for your life circumstances now and in the future, set up a time to speak with
an experienced and dedicated estate planning lawyer. A lawyer can guide you
through how to incorporate the most appropriate estate planning strategies for
your needs and your family.