Category: Estate Planning

A recent lawsuit filed in Florida was brought forward by an astronaut, Buzz Aldrin, who claims that his children have inaccurately accused him of having dementia and have made it impossible for him to manage his own financial affairs. Two of his children and his former business manager are being sued after he claims that they misused his credit cards and transferred money outside of an account without his permission. 

The primary basis for the two children who brought their own legal case is that they allege he is suffering from delusions, paranoia, memory loss and confusion. They both requested that the court appoint them as legal guardians, claiming that the assets being spent by Aldrin were disappearing at an alarming rate and that he had been cohorting with new friends who are attempting to alienate him from his family members.

In this situation, the Florida courts put together an evaluation panel to determine the mental status of Aldrin. Although it remains to be seen how the Aldrin case will unfold, this is an important lesson for those people who are contemplating putting together their estate planning documents, since someone else may be allowed to request legal guardianship over your case by alleging that you are no longer able to make decisions for yourself. Being classified as mentally incapacitated could enable people you don’t want making decisions on your behalf to have all of the power relating to your finances or medical care.

This is why it is so important to schedule a consultation with an experienced estate planning attorney to verify that you have the legal documents empowering the right people in the role of power of attorney and for your health care directives. This is one of the best ways to protect yourself.

A legal separation presents immediate problems if you put your estate planning documents on pause and don’t take the time to protect yourself and your loved ones.

Even if you’re still determining the future of the marriage, leaving the possibility open that your spouse can make decisions on your behalf can be quite problematic. 

Separation does not automatically mean that spousal rights are extinguished entirely. If you want to ensure that someone other than your currently estranged spouse is able to take legal action on your behalf or even plan your funeral, you need to have a health care directive and other documents in place. The tragic deaths of Anthony Bourdain and Kate Spade both illustrate the challenges of estate planning from the perspective of being separated from a spouse.

If someone is not legally divorced from an estranged spouse, this can present problems along into the future and ones that can be easily guarded against by scheduling a consultation with an estate planning attorney. When you get separated, you need to update all of your legal information and have a consultation with a lawyer about what issues need to be clearly and fully addressed in your estate plan.

Selecting a financial advisor, much like choosing an estate planning attorney, is a very personalized process and one that must be done with extra special care. Identification that you have selected the wrong financial advisor could come with many problems. Poor communication, a generic approach that doesn’t take your unique concerns under consideration, and high fees are some of the most common complaints lodged against financial advisors. 

It’s much easier to avoid a mistake in the first place by selecting the right financial advisor, so there are three major things that you should never do when you are thinking about hiring someone to work with. The first is believing everything that an advisor says. Much like any other professional, it’s valuable to get insight from an advisor but you should not take everything they say as completely accurate.

Never enter an important relationship without a high level of trust. Another thing you should avoid doing is believing nothing that an advisor says. If you’ve already been disappointed by someone in the past, there’s no doubt that you’ll be hesitant about whether or not to believe what this current person is telling you. But disbelieving everything they say could be a mistake. Finally, don’t forget the difference between delegating to an advisor and doing some work of your own. Outside professional advice is extremely important in articulating a plan that addresses your individual needs, but it is equally important to ensure that you have done your homework on your end when your advisor gives you materials or suggestions.

If you have valuable collectibles or art that should be a part of your estate plan, make sure these are not accidentally left out. Unfortunately, many people don’t even realize the true value of the art they hold inside their estate. A recent study identified in 2017 that more than 80% of collectors did indeed view their art collections as a form of investment but unfortunately, even these high net worth collectors may not appropriately plan for the distribution of these very valuable assets. 

Thinking well in advance about how you may accomplish particular estate planning goals must incorporate your unique collections. You may assume that your collection has greater sentimental value, but it might also have a financial value that could cause in-fighting among family members or other challenges, should you exclude it from your estate plan or leave confusing or unclear plans. The IRS classifies collectibles as rugs, works of art, antiques, any gems or metal with some exceptions, stamps or coins, alcoholic beverages with a high value or any other personal property that is tangible that the IRS may view as collectible.

There are two primary ways you may be able to distribute your collectible property; donating them to a charitable organization or leaving the assets to your heirs. In either case, you’ll want to ensure that you have the estate planning materials and strategies in place well in advance.

Estate planning involves going one step beyond simply talking about the issues or thinking about how you might want your estate to be handled in the future. Planning and organization are the cornerstones of a successful estate plan and it’s very valuable to sit down with an outside party who can help to ensure that your plans accurately reflect what you intend. 

Many people have a common goal of wanting to make their estate as easily managed as possible because they don’t want their children and other loved ones to have any difficulties after they pass away. Therefore, wrapping up affairs with as few problems or conflicts is a common goal for most people.

The first thing to do is to have a plan and to have clear storage locations designated for each of these materials. Hiring an attorney may seem overwhelming or like it can be easily skipped, however, there are far too many pitfalls in the process of estate planning that could cause you numerous problems and leave your loved ones paying the price in the form of a disorganized estate. It’s much better to sit down and walk through one document at a time to verify that your documents reflect what you actually intend that they will be viewed as valid by the state.

Don’t put off the process of estate planning, such as articulating important agreements like a power of attorney or your will because you assume that the worst will not happen to you. 

This is a catastrophic mistake that could end up causing problems for your loved ones down the road. It is far better to schedule a consultation with an experienced estate planning attorney today to ensure that your primary needs and concerns have been addressed.

The support of a dedicated attorney is extremely valuable when you find yourself in this situation. Looking ahead to the future means thinking about unanticipated events. A sudden disability or diagnosis of a medical condition tied to a car accident, for example, could represent significant changes in your life and you need to be prepared for how to address these. Having an estate plan or business succession plan, already stipulated in these cases, can make it much easier to adjust in the heat of a moment when you must be able to respond effectively and appropriately.

The support of an experienced attorney is highly valuable when thinking about how your estate plan will translate into individual actions. Schedule a consultation with an experienced estate planning lawyer today.

You can make things easier for your family members and your own peace of mind by setting up a plan you can count on in the event of a worst-case scenario.

Estate planners already know and share often that many plans don’t produce the results the owner expected. The skills necessary to inherit the wealth may not have been passed down from one generation to another, meaning problems when assets are transferred between generations. Furthermore, heirs are not often prepared emotionally for the transition of their loved one passing and receiving a generous inheritance. Many of the failures associated with typical estate planning are not linked to the language in the will or tax strategies. 

Instead these failures are most often accumulated with the non-technical aspects of the plan, such as the human side. In fact, approximately 70% of estates incur losses or a reduction in family harmony.

According to research, there are two primary reasons for estate planning failures, and these have to do with the heirs not being prepared for the financial transition or not being familiar with the estate details. Setting aside time well in advance to sit down with an experienced estate planning attorney is the best way to review your concerns and needs.

When you have a lawyer from the outset of your decision to plan your estate, you’re in good hands with an experienced attorney.

The death of a spouse can generate numerous challenges for the surviving person in terms of the familiar, estate and financial responsibilities.  This is particularly challenging for someone who must suddenly step into a leadership role in these areas of their life when those tasks were previously associated with the now-deceased spouse.  

One of the most important steps for both spouses to take now in order to avoid one spouse being negatively affected in the future is to get a list of assets and where they are all located.  Finding these assets quickly in the event of a crisis or emergency can be very difficult if one person has not been primarily responsible for the family’s finances.

Managing the household budget or paying bills doesn’t always equate to being informed about life insurance policies, survivor benefits or brokerage accounts.  In the event that one spouse doesn’t know the other’s password, this can add an additional barrier that causes problems down the road.  Scheduling a consultation today with an experienced estate planning attorney is strongly recommended if you wish to have a better plan of your next steps.

Everyone has heard some type of nightmare tale about what has happened to a person’s assets when they weren’t properly included in an estate plan. Often it is the remaining family members left behind after a loved one passes away, left to cope with the problems associated with lack of estate planning or improper estate planning. 

Procrastination can generate a great deal more frustration, problems, and grief for your loved ones, all because you simply refused to sit down with an estate planning attorney. Procrastination can put your loved ones in a very difficult situation if something happens to you while you are still alive, such as becoming incapacitated and having no one appointed to make decisions on your behalf, as well as for the management of your assets if you were to suddenly pass away without an estate plan in place.

This empowers the state to make critical decisions about what happens to your remaining property and this can cause numerous different problems in the handling of your future. It is far better to consult with an estate planning attorney well in advance and hope that you don’t need the support provided by an incapacitation plan. However, if you are concerned about incapacitation, having these documents properly created, signed and stored can greatly increase your chances of comfort, knowing that someone else is appointed to step in and make decisions on your behalf if you become unable to do so.

There are many different estate planning challenges facing families, individuals and businesses today, but a new study reveals that family conflict tops the list of estate planning challenges. Although tax reform is on the tip of everyone’s tongue when it comes to looking ahead, it’s not the number one issue facing families at this current point in time. 

A TD Wealth survey of 109 different attendees of an institute on estate planning revealed that family conflict is the leading concern for estate planning today. In fact, 44% of planning professionals shared that the biggest threat to estate planning was family conflict, followed by tax reform and market volatility.

There are mixed reactions from numerous planning professionals about the new estate and tax rules. Although approximately half of planning professionals believe that the tax reforms will help their client, another third are not sure what the impact will be and others anticipate a negative aspect. However, many believe that problems associated with family conflict and family infighting are one of the leading reasons and issues that will affect families going forward. Lack of clarity about planning intentions and fall out including probate conflicts and administration may cause concerns after the fact. Having a comprehensive estate plan is the best way to avoid these issues.

Perhaps the best test of how much you care about your survivors and the legacy you’ll leave behind is the organization of your estate. There are two crucial components of your estate to consider. When you work on your estate planning in additional to your physical belongings throughout your life, it makes things easier for you and your loved ones. 

The first is your physical estate and for many people, this refers to their personal possessions as well as their home. Many people have had a personal experience with the physical estate of their parents and many have had unfortunate stories about how many belongings they have had to sort through and dispose of. Your physical estate, in addition to lack of proper planning documents, can present problems for your loved ones. You likely don’t want to leave behind a lot of work for your family members because you haven’t combed through your belongings carefully.

Many people accumulate belongings over their lifetimes and rarely will streamline it. These possessions can compound over the decades and many, by default or through deliberation, allow their children to deal with the consequences. Survivors than feel obligated to sort through all of these things because they may be looking for valuable or sentimental items.

It can take days, weeks or even longer for loved ones to sort through these belongings and you can do your family members a favor by considering the steps you can take in advance.

The child actor popular on the show, Diff’rent Strokes, passed away in 2010 in Utah. His less than perfect estate plan provides critical lessons for people of all asset levels to consider. 

Coleman was only 42 years old when he passed away. Although he had gotten divorced from his wife, Shannon Price, they lived together following their divorce. An advanced medical directive that was honored by the hospital allowed Price to remove life support when Coleman passed away.

Even though the advanced medical directive provided that it was his desire to live as long as possible within generally accepted health care standards, his former wife chose not to honor these desires. The medical directive was signed by Gary Coleman prior to divorcing Price, meaning that Price did not have the authority to make medical decisions unless specified in the divorce decree or another advanced medical directive.

The hospital honored Price’s directions anyways despite the fact that she was not entitled to make such a decision. If you are divorced and do not want an ex-spouse pulling the plug or making other medical decisions on your behalf, you need to update your materials as soon as possible after the divorce is final. Doing so could save your life.

You need to ensure that your estate plan incorporates unique considerations about changes in your life. Far too many people create their estate plan once and then promptly forget about it. Updating your documents like your life insurance policies and your wills is a must do if you experience any major changes in your life such as the birth of a child or grandchild, a divorce or even a remarriage. 

Few things are as important as estate planning as far too many families find out after the fact when a loved one who failed to put together the necessary documents or to update them after a major change in circumstances, left behind a mess.

In general, if you are having difficulty approaching the mortality aspect of putting together an estate plan, begin to think about it as who you want to make medical decisions, legal documents that will spell out who gets your assets when you pass away, and who can make financial decisions on your behalf. Ideally, your estate plan helps your loved ones make critical decisions at a time when they need it most. Another common and disruptive life change that can turn everything in your world upside down is the loss of a spouse.

You will need to update your contingent beneficiaries on life insurance and other policies after a first spouse passes away. Doing it yourself can be a big mistake when you are approaching the estate planning process with the end goal of protecting your loved ones in mind.

Millennials and estate planning sounds like it might not necessarily go together but far too many millennials jump to this conclusion and their family members are left dealing with the aftermath. No matter how much money is generated over the course of a lifetime, it is not real wealth if it is not effectively transferred to future generations. Estate planning is one of the most neglected aspects of wealth building and personal finance today, even among high-income professionals and successful entrepreneurs. 

An increasing number of both of these individuals happen to be millennials. Many people assume that they are neither rich enough nor old enough to make estate planning a top priority. Millennials are managing their money just as effectively as baby boomers and generation X, according to recent studies, may have a lot to lose falling for this myth. Estate planning can be a misnomer because it does seem to imply that it is only for the wealthy, leaving far too many of these millennials to ignore the estate planning process and expose themselves and their family members to problems in the event of an accident.

Sudden incapacity or death of millennial without an estate plan can lead to probate disputes and other problems after the fact. Estate planning is simply a prudent look ahead to protect family members and loved ones in the event that something unexpected happens and is increasingly important for millennials who are garnering more and more wealth in the current economy.

Have you put off an estate plan because you don’t think you need it? Far too many families wind up dealing with the impact of a loved one’s loss without any planning in place. 

Many people don’t realize the value of estate planning until it’s too late. Most people set up their initial consultations with an estate planning attorney after they’ve had a negative experience with a friend or family member, or perhaps after they have seen a news about a celebrity’s death that prompted numerous estate planning issues.

Estate planning involves so much more than simply ensuring that your stuff ultimately gets passed on to your loved ones.

It might be easy to think of estate planning as simply putting together a will and outlining how your physical possessions will pass on to future generations, but you should consider that a good estate plan takes care of you during the course of your life, as well as your individual family members after you pass away.

Tools like wills, trusts, powers of attorney and more can help to articulate the individual decisions and desires you have if something were to happen to you unexpectedly. The right estate planning attorney is an invaluable asset as you navigate these complex processes and articulate a plan that protects you and your loved ones now and well into the future.

The new federal exemption amount has increased as a result of the new tax law, which means that the amount you or your estate can pass on to your heirs free of taxes has increased to approximately $11 million this year from $5.49 million in 2017. 

An existing will that already includes a reference to the federal exemption amount rather than a specific amount for calculating children’s inheritance could mean that more is going to the children and less to your spouse than intended. If you intend to pass on significant wealth to your children and your spouse, you may need to consider reevaluating estate plan based on the wording inside your will. Your spouse could end up with a smaller portion of your estate than you intended due to the new estate tax rules if you have unclear wording in your will. For wealthy individuals who have wills drawn up prior to 2018, there’s a chance that no specific dollar amount is included directly inside the will. This means that it may not be clear how much money goes into a trust for your children.

Rather, the will might refer to the current federal estate tax exemption amount which has changed since you put together the original will. This is why it is worth scheduling a consultation with an experienced estate planning lawyer as soon as possible to give you the clarity you need to restructure your will or include new wording that is clear.

Eleven years after the death of James Brown, his estate planning has fallen short in the plan to distribute his wealth efficiently. None of the beneficiaries in the will have received even a dime of the money. This includes underprivileged children in South Carolina and Georgia. Mr. Brown intended to donate significant amounts of money to these entities, however, a number of legal disputes have emerged and kept the estate dispute alive for more than 10 years. A dozen separate lawsuits related to the estate were initially filed after Mr. Brown passed away in 2006 on Christmas Day. The most recent of these was filed last month in California. 

Nine of the children and grandchildren of Mr. Brown are suing the widow and the estate administrator, arguing that copyright deals made by the widow were improper and illegal. Another lawsuit alleges that the widow was not actually ever James Brown’s wife. His will initially set aside $2 million to underwrite scholarships for his grandchildren and it gave his household effects and costumes to the six children he did recognize, a bequest that was estimated approximately $2 million.

The will was challenged, however, and an initial settlement was proposed that would give the children and grandchildren a quarter of the estate and the widow another quarter. However, that was overturned by the Supreme Court due to asset distribution that did not appear to be in line with James Brown’s original goals.

Although in the previous three blogs, we’ve discussed getting rid of unnecessary paperwork and clutter after three months, one year and seven years, some documents should be kept on hand forever. 

This is because they are so important that you may need to reference them at any point in time and it may be a good idea to keep copies and backups. These should always be stored in a safe location, such as a box that is safe from a fire. These documents should be maintained forever:

• Personal identification documents like your social security card or birth certificate.
• Income tax returns.
• Legal documents such as lawsuit settlements, divorce and marriage certificates, and estate planning materials, unless they have been replaced by amended materials.
• Loans for your car and vehicle titles. These should be kept for at least three years from the date the transaction is finalized. This information can prove helpful long after the transaction is finished, however, so you may wish to keep it forever.
• Educational records such as transcripts, degrees and diplomas.
• All major receipt purchases.
• Any relevant financial planning documents and records, like pension plan documents, power of attorney designations, burial information, medical details, and living trusts and wills.

Talk to your estate planning lawyer to learn more about how to safely store these items.

It can be difficult to figure out which documents you’ll need to have on hand, which ones should be stored in a safe deposit box and have a copy at your lawyer’s office, and those that you can eventually get rid of after some time. 

This is because there are so many different periods of time associated with holding on to particular documents, and in an effort to clear out clutter and ensure that you are legally protected in the event of a problem, you’ll need to be mindful of both. Some documents need to be kept for at least seven years before you can dispose of them safely. These include:

• 1099 and W2 forms that can be used for tax audits and prove your income for loans
• Tax related receipts which can become helpful if the IRS comes asking questions
• Bank statements which should be kept for at least a year in electronic or printed form. These can be helpful if you have issues of identity theft, fraud or other challenges with your account.
• Cancelled checks for mortgage, home improvement, business and tax purposes. Some people like to keep all of their cancelled checks, but this is an unnecessary process if you want to cut down on clutter.
• Disability records or unemployment income stubs. Any paperwork you receive that is directly from the government related to an income source should be kept.

Consulting with an experienced estate planning lawyer in addition to other professionals on your team can be valuable for ensuring that you have the appropriate paperwork, and drafting the paperwork for your estate planning purposes when you don’t have it yet.