Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

A Member of the Law Professor Blogs Network

Wednesday, April 16, 2014

5 Estate-Planning Mistakes to Avoid

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Common mistakes made on an estate plan can be costly.  Some errors can compromise what your heirs inherit when you die, and other mistakes may leave you vulnerable if you become incapacitated.  To ensure your estate does not fall victim to predators, creditors, or taxes, avoid these 5 estate-planning oversights:

  1. Choosing Unwisely.  A large part of your estate plan is selecting durable power of attorney and medical power of attorney.  It is crucial to carefully appoint these individuals, as you are literally putting your life in their hands. 
  2. Leaving Your IRA to Your Estate.  Naming your estate as your individual retirement account beneficiary will subject it to claims and creditors during probate.  Your entire IRA could be used to pay any outstanding debt or loans.  However, by naming a live person as the IRA beneficiary allows those assets to escape probate and creditors. 
  3. Neglecting to Revise Beneficiaries. This is imperative especially where IRA beneficiaries are concerned.  If you forget to change the designated beneficiary to your IRA, the person named to your IRA is legally entitled to that asset when you die. 
  4. Foregoing a Health-Care Directive. Failing to create an advance health-care directive, or living will, can be detrimental as it lets your family, physicians, and friends know your end-of-life preferences.  This simple piece of paper saves your family the emotional angst of guessing your wishes in an already difficult time. 
  5. Leaving a Living Trust Unfunded. A living trust allows you to pass assets to heirs outside probate but proves useless if you fail to put assets into the trust.  “Once you set up a living trust, you must retitle your assets under the name of the trust.”   

See Shelly Schwartz, The 5 Biggest Estate-Planning Blunders, CNBC, Apr. 14, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

April 16, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 15, 2014

The Secrets to Longevity

Sushi

According to the world’s oldest person, the secret behind her longevity is sushi and sleep.

Misao Okawa turns 116 years old tomorrow and credits oily fish such as mackerel for her longevity as well as her eight hours of rest every night.  Okawa moved into a care home 18 years ago at the age of 98.  Her husband Yukio passed away in 1931.  She has an elderly son, 94, daughter, 92, four grandchildren, and six great-grandchildren.

See Sushi and Sleep Are the Secrets to Longevity, According the World’s Oldest Person, Fox News, Mar. 3, 2014.

April 15, 2014 in Disability Planning - Health Care | Permalink | Comments (0) | TrackBack (0)

Monday, April 14, 2014

Is It Hard to Find Your Documents?

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Your estate planning efforts may be wasted if your family can’t find your documents.  Here are some tips to ensure your documents are readily accessible when the time comes:

Wills and trusts.  Have a trusted advisor keep your original will or trust documents and give your family his or her contact information.  Be wary of keeping these documents in a safe deposit box because a court order may be needed to access it.

Financial documents.  Make sure your family and representatives know where to find life insurance policies, deeds, stock certificates, and other important documents.  Include contact information for your key advisors as well.  Options include a safe deposit box, a fireproof lockbox, or an online storage system.  Just make sure your family knows how to obtain access.

Health care documents.  Give copies of powers of attorney, living wills, and health care directives to your agents as well as your physicians.

See E. Hans Lundsten, Joseph Marion, III, David Riedel, and Christina Scola, Estate Planning Pitfalls: Your Documents Are Hard to Find, JDSupra Business Advisor, Apr. 9, 2014. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

April 14, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Saturday, April 12, 2014

Biggest Retirement Mistakes

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Mistakes are very common when it comes to retirement, and most of them have to do with not planning.  Here are seven big mistakes couples tend to make:

  1. Not talking about expectations in retirement.
  2. Not knowing how to deal with adult children needing money, especially in blended families.
  3. Failing to properly calculate the amount of money they need for retirement.
  4. Not planning for emergencies.
  5. Not considering the costs of long-term care.
  6. Allowing only one partner to handle finances.
  7. Assuming you will have power of attorney just because you’re married.

See Rodney Brooks, Seven Big Mistakes Couples Make in Retirement, USA Today, Apr. 8, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

April 12, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Friday, April 11, 2014

Why an HSA May Benefit Your Estate Plan

Healthcare

The recent implementation of the Affordable Care Act has left many people questioning their own health care plans.  A popular arrangement is to pair a high-deductible health plan with a Health Savings Account (HSA).  An HSA is a tax-exempt account funded with pretax dollars.  Similar to a 401(k) plan, employers and/or employees may make contributions.  Not only do HSAs save on health care, but they also provide many estate-planning benefits:

  • Unused HSA balances can supplement your retirement income or continue growing on a tax-deferred basis.
  • Contributions made to your HSA can reduce your income tax liability.

  • HSAs allow you to withdraw funds tax-free to pay for qualified medical expenses.

See E. Hans Lundsten, Joseph Marion, III, David Riedel, and Christina Scola, ABCs of HSAs: Learn How an HSA Can Benefit Your Estate Plan, JD Supra Business Advisor, Apr. 7, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

April 11, 2014 in Disability Planning - Health Care, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 8, 2014

Paralyzed with Fear

Hospital

After suffering from a stroke, 43-year-old Jim Fritze from Sweden became completely paralyzed.  Doctors took x-rays of Fritze’s brain and concluded that he would not live.  Yet, unbeknownst to doctors, Fritze was slowly regaining consciousness and listened as doctors talked to his girlfriend about organ donation, “I could hear her crying the whole time, but I couldn’t do anything.” 

Fortunately, a more experienced doctor re-examined Fritze and determined his chances of living were high.  Now, two years later, Fritze is able to speak and move, though he still undergoes rehabilitative therapy. 

Hoping to prevent such a harrowing incident from reoccurring, Fritze filed an official complaint against Gothenburg’s Sahlgrenska Hospital last month. 

See Richard Orange, Swedish Stroke Patient Hears Doctors Discuss Removing His Organs, The Telegraph, Apr. 4, 2014. 

Special thanks to Kristen Vander-Plas (2016 Candidate for Doctorate of Jurisprudence, Texas Tech University School of Law) for bringing this article to my attention.

April 8, 2014 in Disability Planning - Health Care, Malpractice | Permalink | Comments (0) | TrackBack (0)

Monday, April 7, 2014

3 Nontax Items You Need to Review

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Tax time is also an effective time for an annual financial checkup.  Here are three essential nontax items retirees should be reviewing at tax time:

  1. Core Holdings.  These investments are your survival insurance, assets you never plan to sell unless it really hits the fan.  They should make up about 10% of your net worth and include precious metals, farmland, or other investments that historically hold their value against inflation.
  2. Long-term care coverage.  Whether it’s nursing home insurance, self-insurance, or something else, you need to have a way to pay for the likelihood of needing long-term care.  And if you think you will be able to rely on Medicaid as your backup plan, consult an elder-law attorney to be certain.
  3. Estate Plan.  Make your intentions clear in an up-to-date and properly executed will.  And make sure people know where to find it.  Consider a pour-over will to save your family from the headaches of probate.  And consider a Grantor Retained Annuity Trust or a Crummey trust if you’re worried about the estate tax.

See Dennis Miller, 3 Essential Nontax Items to Review at Tax Time, Market Watch, Apr. 2, 2014.

April 7, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 2, 2014

End-of-Life Planning Websites Gaining Popularity

Http

Websites geared towards helping people with end-of-life planning and document storage are on the rise.  Here’s a look at three of the main ones:

  • Everplans:  After taking a short assessment, this site creates a to-do checklist and tells you how to prioritize.  Once you’re done with the checklist, your account serves as a repository for legal documents and other important information.  Specific “deputies” you assign can then find everything neatly in one place.  
  • Principled Heart:  This site focuses on providing a safe place for passwords or instructions on how to find passwords.  There are sections for instructions on caring for pets, last letters of instruction, contact lists, and places to upload up to 60 documents. 
  • Aftersteps:  This site begins by asking you to name three people to be notified after your death.  These “verifiers” will then receive a list of people to contact as well as access to stored information.  You can also store photos, passwords, instructions for digital accounts, and wishes for your funeral arrangement.

See Tara Siegel Bernard, Navigating the Logistics of Death Ahead of Time, The New York Times, March 28, 2014.

Special thanks to Matthew Bogin and Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention. 

April 2, 2014 in Death Event Planning, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Monday, March 31, 2014

The Other "Talk"

WellsFargo_FamilyMeet_sm1

70% of those 65 or older will need long-term care services at some point in their lives, and in many cases, their kids will become their caretakers.  People in their later years need to talk to their adult children about this fact, but many may have trouble having that “talk.”

Just like the talk about the birds and the bees, people may have trouble talking about their aging because it’s uncomfortable and it’s hard to face losing control.  But according to Tim Prosch, author of The Other Talk: A Guide to Talking with Your Adult Children About the Rest of Your Life, parents need to at least discuss the following:

  • How to pay for long-term care; 
  • Where to live if they need to move out of the home;
  • Who is going to advocate for their medical needs; and    
  • What are their end-of-life instructions.

See Michelle Singletary, Having ‘the Other Talk’ with Your Kids—Not Storks, But Aging, The Washington Post, March 28, 2014.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

March 31, 2014 in Death Event Planning, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Saturday, March 29, 2014

Alzheimer's and Estate Planning

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Alzheimer’s disease will affect one in eight American families.  Here are a few things you should keep in mind if you ever fear being diagnosed with Alzheimer’s:

  • Collect Documents.  Keep all of your estate planning documents in one place and tell a trusted person exactly where they are and what is included. 
  • Property Management.  Hire a financial professional to help create a plan for managing and disposing property as you become further incapacitated.  
  • Advance Directives.  Make your health care decisions early on with a durable power of attorney, a living will, and a do-not-resuscitate order if you wish. 
  • Living Trusts.  This versatile tool can be tailor made for the needs of an Alzheimer’s patient.

See Tom Nawrocki, 4 Things to Know About Alzheimer’s and Estate Planning, LifeHealthPro, March 11, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

March 29, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)