Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Monday, April 21, 2014

8 Essential Estate Planning Documents

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Before you are gone, it is important to have your estate planning documents in order to make life easier for those you leave behind.  Below is a list of eight documents you need right now:

  1. Last Will and Testament. A will allows you to decide what will happen with your possessions after you are gone.  Without a will, your assets will go through probate, which can be expensive and time consuming.  Be sure to update your will as changes in your life occur such as marriage, divorce, inheritance, or purchases of real estate.
  2. Revocable Living Trust. A revocable trust is another tool to pass assets to heirs while avoiding probate.  Your trust can be used to distribute your property now, or after death.  It may also provide tax savings if you have substantial wealth. 
  3. Designate Beneficiaries. Beneficiary designations are imperative and take precedence over instructions in a will.  Update beneficiaries as your life changes.
  4. Power of Attorney. Elect someone to act on your behalf, financially and legally, in case you cannot make decisions. 
  5. Durable Health Care Power of Attorney. A health care power of attorney enables someone to make medical decisions for you if you are incapacitated.  Drafting a living will also lets you say what type of care you prefer, if you are unable to communicate. 
  6. Digital Assets.  Decide what to do with your digital information, such as your computer hard drive, online accounts, and photo collections when you are gone. 
  7. Letter of Intent. For important personal or financial information that does not belong in your will, write a letter to convey your wishes for what you hope to be done.  This might include instructions about how you want your funeral performed.
  8. List of Documents. Make certain your family knows where to find everything you have prepared.  Create a list of documents where each is stored. 

See Marilyn Lewis, Estate-Planning Documents You Need Right Now, Money Talks News, Apr. 18, 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 21, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

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)

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)

Thursday, April 10, 2014

Elderly Investors Financially Vulnerable

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New findings in psychological and neuroscientific research are explaining why elderly investors can end up as victims of financial predators.  As people age, they become focused on maximizing positive emoticons and social interactions, and thus pay more attention to those who make them feel comfortable.  At the same time, this leads older people to neglect warning signs that may expose them to theft and fraud. 

Even highly intelligent retirees find it more difficult to distinguish safe investments from risky ones.  Some research indicates that compared with younger investors, those over the age of 65 “showed striking and costly inconsistencies in their financial behavior.”  For example, elderly individuals tend to make simple errors that younger investors avoid, and these problems only worsen with dementia.

It becomes important to monitor the financial health of aging parents as closely as their physical health.  For younger investors, experts recommend consulting with trustworthy people such as a spouse, wealth adviser, or accountant before making any changes to a financial plan. “Train yourself not to make a lot of fast decisions. . . Set up a simple plan and stick to it.” 

See Jason Zweig, Finances and the Aging Brain, Wall Street Journal, March 28, 2014. 

April 10, 2014 in Disability Planning - Property Management, Elder Law, Estate Planning - Generally | 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

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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"

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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)

Thursday, March 20, 2014

Six Steps for Every Estate Plan

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Here are six essential steps everyone should take when designing an estate plan:

  1. Create an inventory.  Keep a list of assets, debts, account numbers, and contact information.  Keep it in a secure location and provide a copy to your executor.
  2. Develop a contingency plan.  Have a disability plan for your property and your healthcare.  Get yourself disability insurance.
  3. Provide for children.  Identify a guardian for your children and be sure to provide for children from a previous marriage as well as individuals with special needs.
  4. Protect assets.  Maintain assets for your heirs by minimizing expenses, covering estate taxes, and outlining strategies to transfer businesses, real estate, and investment property.
  5. Document your wishes.  Update your will, living will, and powers of attorney.  Also, confirm beneficiaries for life insurance and retirement accounts.
  6. Appoint Fiduciaries.  Designate the executor of your will, the trustee for your assets, the legal guardian for your dependents, and the power of attorney if you were to become incapacitated. 

See Northwestern MutualVoice Team, 6 Essential Steps for Every Estate Plan, Forbes, March 12, 2014.

March 20, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)