Tax Lessons to be Learned from Celebrity Estate Plans

A celebrity’s image and likeness can continue to produce considerable income after death. This type of intellectual property is considered part of your estate, and the IRS can tax its value. In the case of pop star Michael Jackson’s estate, that recently meant an IRS bill to the tune of $64.5 million, years after his death, which is about 40% of his likeness’ valuation of $161 million.

Michael Jackson’s estate planning fail could certainly have been avoided by using one of these estate-planning strategies that minimize the taxable value of a person’s image and likeness.

Charitable Bequests

Robin Williams made a charitable bequest of his image and likeness to a foundation. It was set up in his name, allowing his estate to get a charitable deduction against the estate tax.

Time Bans

Williams also established a 25-year time ban to prevent any future exploitation of his image. A time restriction lowers the value of a celebrity’s name and likeness because the value is typically lower at the end of the ban than at the date of death.

State of Residence

Some states don’t recognize inheritable postmortem rights to likeness. This means the estate can’t profit from it. Consider your state’s laws when estate planning so you can benefit from any available tax breaks.

Consult with Multiple Appraisers

Get one appraisal and have another appraiser act as a consultant to point out where there might be room to argue against the valuation.

Celebrity estate planning fails grace the cover of tabloids and news sites as soon as weeks after their deaths. Fortunately, they provide valuable estate planning lessons for the rest of us. While their fails may be more expensive, even a small fail can have a huge impact on your family’s future and well-being. Don’t leave your family holding the bag, especially an empty one.

Your family is worth the time for you to have a Family Wealth Planning Session with us so you can make empowered, informed choices for the people you love. As your Estate Attorney, we can walk you step by step through a process that will minimize your tax liability and keep your family out of court and out of conflict.

Our Family Wealth & Legacy Planning Session guides you to protect and preserve what matters most. Before the session, we’ll send you a Family Wealth & Legacy Inventory and Assessment to complete that will get you thinking about what you own, what’s most important to you, and what you can do to ensure your family is taken care of and you’ll leave the Session with absolute clarity about how to make the best choices for your life and death.

This article is a service of Gratia P. Schoemakers, Estate and Business Attorney. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth & Legacy Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today at 832.408.0505 to schedule a Family Wealth Planning Session and find out how to better protect your family.

The Unexpected Costs of Caring for Elderly Parents In Your Home

Multi-generational households are becoming the new (or maybe it’s really old) in vogue way to handle the care of aging parents. And we’re all for it so long as you consider the implications and set your family up for success.

With Mom or Dad moving in, you can anticipate some extra expenses, not just financially, but possibly emotionally as well. But it’s hard to know what to expect, and you might face costs you didn’t see coming. Having an elderly parent move in with you is a major life event that requires financial and emotional preparation. Here are some unexpected costs of caring for elderly parents to get you thinking about what lies ahead, if you decide to move mom or dad into your home.

Remodeling

Many people don’t think about the modifications they might need to make to their home to welcome an elderly parent. If your parent is living with you long-term, you will want to make him or her comfortable, which might entail adding a new addition to your home, creating a private living space out of a shared area, making accommodations for single-level living if your parent cannot navigate the stairs, or adding mobility adaptations such as a walk-in bath or chair lifts.

Lost Work Productivity

Moving your elderly parent in, helping him or her get acquainted with the area, and checking out activities can all eat into your work week. Expect further loss of productivity if you have to take your parent to run errands, to medical appointments, or to therapy sessions. You can look into senior transportation services if you are unable to take time off from work, but remember to budget for the extra expense.

Home Help

In-home care can be a significant expense, but unless you are able to take time away from your busy day, your elderly parent might need it. Long-term care insurance will sometimes cover some or all of the costs, and you might be able to get assistance from certain programs through the VA or other community organizations.

Miscellaneous Household Expenses

The costs of simply having another household member can be unexpectedly high, especially if that member spends most of his or her day at home. You should expect such extra expenses as increased heat and electricity bills, special foods, and personal care products. Remember that elderly parents have special needs, and those needs can be expensive.

Medical Expenses

Even with insurance, your parent might have steep out of pocket costs for co-pays, prescriptions, mobility aids, supplements, vitamins, and other uninsured medical expenses. For certain conditions, these costs can quickly add up.

Long-Term Expenses

As your parent ages, his or her needs will change, too. These changing needs can result in unexpected long-term costs. When your parent’s retirement funds are exhausted or when they face deteriorating health, you might have to consider the staggering costs of long-term care in an assisted living facility or nursing home.

Therapy

Moving mom or dad into your home could bring up all of the unresolved emotional issues that have not yet been addressed within your family dynamic. This isn’t something to be afraid of, so long as you have the right support. On the contrary, it can be a great opportunity to heal inter-generational wounds that would otherwise get passed on to you and your children and their children.

Caring for an elderly parent can result in unexpected expenses and unexpected benefits, as well. Now that they have become dependent on you, you might also need to consider making changes to your insurance policies or revising your estate plan. If you are ready to take the step of officially becoming caregiver for mom or dad, meet with us for guidance.

As your Personal Family Lawyer®, we can help you prepare for the unexpected costs (and reap all the benefits) of caring for an elderly parent. We begin all planning with a Family Wealth Planning Session to get to know you, what’s important to you, and to support you to make the most informed, educated and empowered decisions possible for yourself and the people you love. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what’s most important to you, and what you can do to ensure your entire family is taken care of.

 This article is a service of Gratia P. Schoemakers, Estate Attorney. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.

Facing Grief After the Death of a Loved One Can Be the Key to a Life of Health and Wholeness

If you have ever met someone who repeatedly sabotaged their life or seemed to have a hard time moving things forward, despite the best of intentions, it may be that they were dealing with unprocessed grief. Most people have never been taught to deal with grief and as a result are stuck dealing with confusing emotions, relationships that don’t work and lives that can feel like they just don’t work.

This relationship between facing grief and being able to move through it in a healthy way was discussed at length by Prince Harry in a recent podcast with Bryony Gordon of Mad World. In the interview, Prince Harry addressed his personal struggle with dealing with the loss of his mother, grief he spent 20 years denying.

Raised in the spotlight, in a culture where keeping up appearances and holding it together are paramount, Prince Harry struggled through early adulthood and didn’t know why. A few very public drunken escapades and the expectation that feelings were not to be discussed led Harry to a very dark place. Some blamed it on traumatic experiences he’d had while serving in Afghanistan, but deep down Harry knew that wasn’t the cause.

His rage grew and he had no outlet. Thankfully, he started talking – to family members and to a therapist. And things began to shift. He slowly realized that the public grieving he was forced to do as a child did not adequately release his intense emotions. He took up boxing to deal with his anger and started a non-profit organization to help others, passionate about spreading the word that grief should not be suppressed.

Prince Harry discovered that simple and honest conversation about death and grief were the key to healing. In doing so, he processed his feelings and moved on from the death of his mother in a healthy way. Now he enjoys helping others move through grief and other painful emotions by listening to their problems, a technique he says is sometimes all you need to face grief and gain clarity of mind about your feelings.

Clarity in the face of grief is important not only to keep moving forward in your life and process your emotions in a healthy way, but it’s also necessary to be able to make the important decisions often faced when someone dies – and often not considered until it’s too late. The unfortunate result is a tough transition when a loved one dies.

What we can learn from Prince Harry’s experience is that grief should never be ignored. Denial can contribute to self-destructive behavior and an avoidance of dealing with important issues, such as how a loved one’s wishes should be carried out.

To be proactive and reduce the strain on your family when you die, so that they can focus on moving through the grief instead of stuffing the feelings so they can deal with all of the “stuff” you’re leaving behind, create a comprehensive estate plan that makes it easy for the people you love. Doing so will allow your family to focus on processing their grief without having to worry about over-managing your estate.

If you are ready to take that step toward making things as easy as possible for the people you love in the event of your incapacity or death, start by sitting down with us. As your Personal Family Lawyer®, we can walk you through creating an estate plan that will protect what you value most. We always begin with a  Family Wealth Planning Session so you can get informed, educated and empowered to make the right choices for the people you love. . Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what matters most, and how your affairs should be handled when you die.

This article is a service of Gratia Schoemakers, Estate Attorney. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session

Your Rights as the Parent of a Young Adult – What You Need to Know When a Medical Crisis Hits

As a parent, you are most likely quite accustomed to managing the legal and medical affairs of your children, as circumstances require. If your child requires urgent medical attention while away from you, a simple phone call authorizing care usually can do the trick. But what happens when those “children” turn 18, and are now adults in the eyes of the law, and need of urgent medical attention far from home?

The simple fact is that the day your child turns 18, he or she becomes an adult, and have the legal rights of an adult. What this means for you is that you lose your prior held rights to make medical and financial decisions for your child, unless your child executes legal documents giving you those rights back. Without the proper legal documents in place, accessing medical information, and even being informed about your adult child’s medical condition can be difficult and in some cases, impossible.

When sending kids off to college, it is important to consider the legal implications an accident or medical emergency might have on your ability to stay informed and participate in important decision making for your young adult child. Medical professionals have a responsibility to follow the Privacy Rule of the Health Insurance Portability and Accountability Act (HIPAA), which ensures medical privacy protection for all adults. Once your child turns 18, they are (from a legal perspective)no more attached to you than a stranger, making communication about medical issues tricky if your child is incapacitated and not able to grant permission on their own.

In most states, there are three legal documents which can make all the difference when a medical crisis strikes and your young adult child is far from home. When utilized together, they can ensure a parent or trusted adult be kept in the loop about care and treatment when a child over the age of 18 experiences a medical event while they are away at college, traveling, or living far from home. As with most legal documents, the law varies from state to state, so be sure to seek out the counsel of your Personal Family Lawyer® to determine which forms suit your situation best.

HIPAA – Essentially like a permission slip, this authorization allows your adult child to specify who is allowed access to their personal medical information. Specific information can be specifically withheld, such as drug use, sexual activity, and mental health issues can so that additional privacy can be protected if desired.

Medical power of attorney – Designates an agent to make medical decisions for the young adult. This could be you, as the parent or another trusted adult. Each state has different laws governing medical power of attorney, thereby requiring different forms. Be sure to check with your Personal Family Lawyer® to be sure you are following the laws of your state, as well as the state in which your child resides.

Durable financial power of attorney – Allows the parent or another trusted adult to take care of personal business in the event the adult child is unable to do so. This form would allow the parent to take care of such important tasks such as signing tax returns, paying bills, and accessing bank accounts for the incapacitated adult child. A durable power of attorney is indeed powerful and gives broad access to sensitive financial and legal decision making and should only be given to a trusted relative or friend.

The milestones come quickly once children graduate from high school and enter into the big, wide world away from home. As your family navigates these significant rites of passage, be sure to consult us as your Personal Family Lawyer® to determine the steps necessary to ensure excellent communication and peace of mind when a medical emergency arises. Consider including your young adult children in the process. We’re here to help your family establish the legal and medical protections you all need to live the lives you desire.

This article is a service of Gratia P. Schoemakers, Esq. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Begin by calling our office today to schedule a Family Wealth Planning Session.

What Happens to Your Body When You Die? The Choice Can Be Yours!

Many of us are too afraid of death to carefully consider what happens to our bodies after we die. Unfortunately, failing to plan for that event can leave your wishes unattended to and your family grief struck and unsure how to honor your wishes. And the larger truth is that facing your death proactively creates a better life now.

There are many options for disposal of the body when you die, including burial, cremation, and donation to science. These are difficult decisions to consider, especially if you aren’t familiar with the standard body-handling practices used in our society today.

A humorous—and possibility lighthearted—way to learn about these practices is to read Mary Roach’s Stiff: The Curious Lives of Human Cadavers (New York, Norton, 2003), which explores the how and why of what happens to bodies when people die.

In Stiff, Roach takes us on a journey—albeit an unconventional one—to see what happens to human cadavers. From surgical practice to crash test dummies, donated—or unclaimed—bodies make significant contributions to many fields of research. But let’s say donating your body to science is not what you had in mind. Roach also touches on the other options we have such as traditional grave burials and cremation. And within those choices lie other choices such as the type of casket, where the body will be kept prior to funeral proceedings, and how ashes are distributed.

Stiff provides an entertaining and educational look at death and the practicalities surrounding it, which leads to the important issue of including your wishes in your estate plan. Most people don’t want to leave their loved ones with so many unanswered questions. Creating a comprehensive estate plan ahead of time is a way to ensure your family members are not left with such a burden.

You get to decide what will happen to your body after you die, but to ensure your family can carry out your wishes faithfully, you will want to work with a lawyer to clarify your choices in your estate plan.

You have many options including:

Donate your body to science. You can even specify a particular medical school, university program (called Willed Body Programs) or research organization you want to receive your body. Roach reviews many uses for human cadavers such as crash test dummies, surgical practice for medical students, ballistics testing, transplant experiments, and research on decomposition. You can also specify if you want to designate specific organs to go to science, Roach explains. This is something to consider for those with diseases or disorders that researchers can learn from.

Grave burial. You can specify where you want to be buried, how you want your body transported, what kind of casket you want, and how you want your burial proceedings to take place. You might need a permit if you want your body to cross state lines or travel internationally to arrive at your grave plot. If you haven’t already purchased a grave plot, now is a good time. You might also want to specify what you want printed on your gravestone.

Cremation. You can specify who will handle your cremation and who will receive your ashes. If you want your ashes brought to a particular place, used for a certain purpose (e.g. as fertilizer to grow a plant) or held in a special urn, those wishes should be clearly stated in your estate plan. While cremation can be economical for both the surviving family and the funeral director, Roach explains, many are not comfortable with the thought of their body being converted to ashes and bone fragments, and some religions even frown upon it. Consider your options, and discuss them with your family.

You might also want to include a provision regarding your funerary proceedings in your estate plan. The cost of funerals can be staggering, and the event itself can be a logistical nightmare for the family member struggling to grieve, honor your memory, and make significant decisions. Including specific provisions for your funeral can alleviate some of the burdens your loved ones will face.

When you die, your family will be left with many decisions and many tasks to carry out. It can be a confusing time leaving family members vulnerable financially or emotionally. Including specific instructions in your estate plan can ensure they are not left having to make difficult decisions at a time when they already have so much to deal with. Your family will also need the contact information for any organization(s) that will be involved in this process. Including provisions for details such as your grave plot, casket, funerary proceedings, and accounts you have set up to cover those costs can reduce the financial and emotional strain on your loved ones significantly.

Your estate plan should ensure your loved ones will be taken care of when you die. If you are ready to take the next step toward protecting your wishes and providing for your loved ones both emotionally and financially, start by sitting down with us. As your Estate Attorney, we can walk you step by step through creating an estate plan that will protect what you value most.

This article is a service of Gratia P. Schoemakers, your Estate Attorney. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Begin by calling our office today to schedule a Family Wealth Planning Session.

Growing Family? Time to Audit Your Insurance Policies

As your family size grows, there is lots to prepare for and consider. Welcoming a new family member can be a joyous occasion, and requires some planning. Adding a new family member can affect your finances and create a need for more protections. Reassessing your insurance coverage might not be at the top of your list, but policies should always be audited when changes in your family life occur to ensure your coverage will adequately protect your growing family. Remember this: insurance says I love you to the people you love.

Life Insurance

It’s always a good idea to increase your life insurance coverage whenever you add a new member to your family. Life insurance can provide your loved ones with valuable financial support when you die. Determining the right type and amount of life insurance coverage takes assessing your current financial standing and the future financial needs of your family. As your family grows, future financial needs will as well. Think long-term, take into account inflation and any expected big-ticket investments, such as education over the years, plus the needs of a single parent or named legal guardians to care for your children, if you pass on while they are unable to care for themselves.

And always remember that you can name legal guardians to care for the education and health of your children, while directing your insurance to pay to a trust for the benefit of your children, with a separate trustee named to care for the finances. This Trustee would work together with your named guardians to make decisions in the best interest of your children, until they could receive and control the inheritance themselves.

Homeowner’s Insurance

For some, a bigger family means a bigger home. If you are purchasing a new home or building a new addition to your current home, it’s a good idea to reevaluate your homeowner’s policy. Key factors to look for include whether your existing policy has sufficient coverage to repair or replace your home and whether your policy would replace your belongings if necessary. Also, consider adding riders to your existing policy to cover things like damage from natural disasters, which standard policies typically don’t cover.

Auto Insurance

You might need a larger or safer car to meet the needs of your growing family. A new car can affect your auto insurance rates, so check with your provider before you make a new purchase

to see how your rates may change. Also, some auto insurance providers offer policy discounts for married couples, so talk to your agent about the discounts you may qualify for.

Parents want to protect their family from the unexpected. Insurance can help provide this protection, but you need to tailor your policies to meet your family’s needs. Periodically review your insurance policies as your family grows to make sure you have optimal protection for what you value most. And, use us to support you.

If you’re growing your family and want to protect your loved ones, consider sitting down with us. As your Personal Family Lawyer®, we can walk you through creating a comprehensive Kids Protection Plan®. Before the session, we’ll send you a Family Wealth Inventory and Assessment that will get you thinking about what you own, what matters most to you, and how you want to protect your growing family.

This article is a service of Gratia P. Schoemakers, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office to schedule a Family Wealth Planning Session TODAY!

Commit to Your Estate Plan Before Committing to a Trip Away

If you are planning a vacation, you probably have a lot to prepare for before you get away. Between structuring your itinerary, getting plane tickets or train reservations, and booking hotels, creating an estate plan is probably not something you thought to add to your to-do list. But, think again and consider that now is the time to take action on this vital piece of your legal life planning.

If something were to happen to you while away on vacation, whether an illness, injury or even death, your family would be stuck with a huge mess to clean up.

The Barber family of Southern California is an unfortunate example. Mom, dad and three kids went on a roadtrip to Arizona where they were in a terrible accident. Mom and dad died, and their three boys were injured, but alive.

It took the authorities a couple of days to locate any relatives, during which time the boys were in the protective custody of strangers. A fate no parent ever wants for their children in a time of tragedy, fear and grief.

The family member that was located first was a sister of the mom and she promptly took the boys back to her home and didn’t let any other family members see the boys.

It took many hundreds of thousands of dollars and at least 7 lawyers to sort out the family fighting that ensued over both the boys and the assets left behind by the Barber parents.

And it all could have been easily avoided with a small amount of planning in advance.

Making the commitment now to create a comprehensive estate plan will ensure your loved ones will not be stuck in court or conflict, if the unexpected happens while you are on vacation.

At least 8 weeks before you leave, schedule a Family Wealth Planning Session with us. During that Session, we’ll get you more financially organized than you’ve ever been before (ensuring none of your assets are lost if you are injured on your vacation) and guide you to make informed, empowered and educated choices for yourself and the people you love most. If you are leaving sooner than 8 weeks from now, call our office and let us know you need a rush Family Wealth Planning Session and we will see what we can do to get you started.

Whatever you do, do not just think a standard set of estate planning documents will serve you or your family. What you and your family need is a plan that properly addresses the care of your children (if you have minors at home), your assets and the parts of your life that go beyond just the money. We can explain more during the Family Wealth Planning Session.

This article is a service of Gratia P. Schoemakers, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session!

How (and Why) to Disinherit a Child or Grandchild

Completely disinheriting a child or grandchild should be reserved for extreme circumstances.  And, if those circumstances exist in your family, it’s critical to ensure that you’ve taken the proper planning steps so that you are not leaving your loved one’s with a guaranteed lawsuit or other conflict after you are gone. Read on, if you are considering disinheriting a child or grandchild.

First, let’s get clear when it is a good idea to disinherit a child or grandchild, and when it is not. Disinheriting a child or grandchild to punish them for a lifestyle choice you do not agree with is usually not the best course of action. Instead, consider whether it may be time to release your need to control the people you love with your assets and instead recognize that each person deserves to be accepted and loved for the choices they are making.

If the lifestyle choice you disagree with is something like a drug, alcohol or gambling addiction, which could be exacerbated by an inheritance, consider creating a trust that would allow your assets to be used for treatment programs, and that may even incentivize treatment. We can help you draft appropriate provisions into your trust to address a scenario like this.

If you are considering disinheriting a child or grandchild because you are concerned that they may not make good use of their inheritance, or could even possibly lose the inheritance to a future spouse or divorce, we can support in preparing a special trust that would allow you to leave the inheritance to your child or grandchild and keep it protected from future spouses or divorces, ensuring the inheritance stays in your family, no matter what.

If you are considering disinheriting a child or grandchild because they have special needs issues and you want to ensure they qualify for governmental benefits, contact us because we can create workarounds to ensure that your inheritance can be used for their support and they can qualify for governmental benefits.

Finally, if you truly do want to disinherit a child or grandchild, be sure to do it very carefully so as not to create unnecessary family conflict. Do not attempt to do this on your own.

Be sure to document your capacity and that you are making the choice to disinherit based on your own free will, so that the disinherited family member cannot challenge the disinheritance claiming incapacity or duress.

After you’ve made these difficult decisions, make sure you review your estate plan every 1-3 years to ensure your wishes still align with your legal documents. Families are dynamic, so you should refresh your estate plan at regular intervals or after significant changes in your family take place, such as births, deaths, or marriages.

Because the decision to disinherit a child or grandchild requires significant consideration, you should not make it alone. Consult with us to help you clarify your wishes and include them in your estate plan, so they are legally enforceable and do not create additional conflict.

Working with us when considering disinheriting a child or grandchild will ensure you make the wisest decision and that your wishes will be followed when you die. If you are considering this significant decision, meet with us for guidance, we can help you articulate your wishes and include them in a comprehensive estate plan so your desires—and your beneficiaries—are clear.

This article is a service of Gratia P. Schoemakers, esq. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love.

7 Steps to Creating an Estate Plan That Keeps Your Family Out of Court

Many people fail to create an estate plan because they don’t truly understand what is involved and therefore believe it is too complicated. But the real truth is that creating an estate plan during your lifetime is far less complicated than what your family will deal with after you are gone, if you don’t:

  1. Create a Trust. When most people think of preparing for the end of life, they think of writing a Will, but having a Will without a Trust is fast track to put your family in the Courthouse after you are gone.  Instead, to keep your family out of Court, you’ll want to set up a Trust and title all of your assets to be owned by that Trust.  While it might feel like a lot of effort, it will save your family a LOT of trouble after you are gone.
  2. Designate beneficiaries. Designating beneficiaries for your retirement accounts and insurance policies is critical because these assets do not pass through your Will or Trust.  Filling out beneficiary designation forms for each of your accounts will ensure these assets pass to the people you want to have them and stay out of the Court system.  Be sure to review your beneficiary designations periodically to be sure they align with your current circumstances. Hot tip: never name minor children as beneficiaries of your retirement account or life insurance policies AND if you have more than $150,000 in a retirement account, consider a special trust called a Retirement Trust to ensure the most beneficial tax treatment for your loved ones.
  3. Avoid estate taxes. Most of us will not have to worry about estate taxes since the federal estate and gift tax exemption is $5.49 million ($10.98 million for married couples) in 2017 and indexed every year for inflation.  However, if you are married and wish to take advantage of portability – where spouses are entitled to each other’s unused exemption – the surviving spouse must file the required paperwork to claim the exemption.

Plus, 15 states and the District of Columbia have state estate taxes, so you could still owe even if your estate is too small to owe federal tax. The big key here is to not just leave a set of documents that your family will have to figure out after you are gone, but give them the gift of a trusted advisor to turn to; call us if you’d like to consider having us be that trusted advisor for your loved ones.

  1. Leave a letter of instruction. Not everything you may wish to pass on to your heirs – like instructions for your funeral – should be put in your will or Trust.  Leaving a letter of instruction with your family or attorney can ensure your final wishes are respected.  And take it one step further with a Family Wealth Legacy CD or DVD in which you record your values, insights, stories and experiences for your loved ones to refer back to for generations to come.  We provide this service at no additional charge for our clients because we know this is one of the things families value the most and is least often handled.
  2. Sign a durable power of attorney. Estate planning is not just about death, but also ensuring your family can handle things in the event you become incapacitated.  Signing a durable power of attorney that designates someone to handle your financial affairs will save time, money and hassle for your family that, without it, will have to go to court to have a guardian or conservator appointed to manage your financial affairs. This could cost tens of thousands of dollars and is easily handled with one simple document and a trusted advisor for your family to turn to in a time of need.
  3. Create an Advance Healthcare Directive. This document designates a decision maker of your choosing to make sure your wishes are followed when it comes to the medical care you want – or do not want – to receive when you are incapacitated or near death.  You will also need to sign a HIPAA release form so your medical records can be released to your health care agent and medical professionals can discuss your medical care with that person.
  4. Organize your paperwork and digital files. Since many of us live our lives online these days, make sure your executor has access to all your digital information, including website addresses and the log-in information for those sites.  Put all your important paperwork – deeds, insurance policies, bank and brokerage statements, etc. – in one file and let your executor know where it is.

Bonus tip: If you have minor children at home (or adult children with special needs), don’t rely on naming guardians in your Will alone. Create a comprehensive Kids Protection Plan to ensure your children’s care is covered not just for the long-term, but for the immediate term as well and no one you don’t want raising your kids ever has a chance to take control.

Contact us about scheduling a Family Wealth Planning Session so we can sit down and talk about designing a plan that fits the needs of you and your family.  Surprisingly, sometimes the less you have, the more important it is to plan.

 

Why DIY Estate Planning is a Bad Idea For the People You Love

America is a nation of do-it-yourselfers, but building a deck and creating a legally valid estate plan are two entirely different things – and a less-than-perfect deck won’t devastate your family’s financial future or the relationships among the people you care about most.

The prevalence of online legal services has led many people to believe that they can create legal documents cheaply and those documents will be just as effective as if they had visited an estate planning attorney.  And this is why that is wrong:

No legal advice – these sites are little more than document mills that churn out the same generic forms over and over.  They are not attorneys and cannot advise or warn you if you make a mistake. Plus, who will be there for your family when something happens to you if you’ve used an online document drafting service?

Think your family doesn’t need an advisor to support them when you are gone?  Think again.

Consider this: Erica’s father was killed in a motorcycle accident. Dad didn’t leave much behind, but he did leave an estate plan prepared by a trusted family attorney.  Had the family attorney not been there for Erica and her brother, they would have taken what dad did leave and drowned their sorrows in a European backpacking trip.  Thanks to this family attorney, though, Erica and her brother now have a healthy trust fund set up for them for life with the proceeds of a successful wrongful death case.

Leaving it to your family to know what to do after you’re gone is a big mistake for the people you love.

One size doesn’t fit all – your family is different from everyone else’s family.  Just like every state has different inheritance laws, every family has different situations.  An online form will not help you protect a special needs child or relative, or protect a child’s inheritance from creditors or a nasty divorce.  An online form cannot tell you how to protect assets from taxes or help you achieve your goals.

And, an online form cannot keep your family out of conflict during a time of grief.  Even if you don’t have a lot of assets you are leaving behind, whatever you do have will be subject to distribution between the people you care most about.  Some of the biggest disagreements we’ve seen after death, aren’t about loads of money, but about the little things and those little things aren’t going to be dealt with well with form documents.

Save now, pay later – you may think you are saving money by using an online service to create your will or trust, but it is impossible to make a fair comparison since the services provided are entirely different.

An estate planning attorney creates an entire plan tailored to your individual needs in a legal document that will stand up in court, and advises you on ways to cut taxes and save for retirement and long-term care.  No online service does that.

In addition, your trusted advisor is going to be there for your family when you cannot be. The people you love will need someone to turn to after you are gone.  Do you want them to be stuck with figuring out who that should be during their time of grief? Or do you want to leave behind the gift of having taken care of things well during your lifetime and a trusted advisor to hold their hand when you no longer can?

We invite you to take advantage of our specialized legal services for families with a Family Wealth Planning Session.  Call our office today to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.