How to Buy Life Insurance Like a Pro

Life insurance is a purchase only made once or twice in a lifetime, so it is common to be unaware of the ins and outs of policy protection. The potential pitfalls are significant, however, so review the following tips before purchasing a life insurance policy.

Get the Right Type and Amounts

Life insurance policies are generally sold by highly commissioned sales people or by order takers. In either case, you need to be sure you are in the know, before you buy, lest you get sold a policy or amount you don’t need, or you overlook the types and amounts that are right for you. We can help you make objective decisions about your insurance needs, with no commissions payable to us, so you know you’re getting our 100% on your side analysis.

Don’t Name a Minor as a Beneficiary

If you’ve named a minor child as a beneficiary, or even a secondary beneficiary, after your spouse, you could be creating double trouble. First, your life insurance would have to go through a court process and subject to the control of a financial guardian, and then second, whatever is left would be distributed to your minor child when he or she turns 18.

You can easily avoid this by naming a trust as beneficiary of your life insurance, thereby keeping your life insurance out of court and ensuring your child doesn’t receive control until he or she is ready. Plus, then you get to decide who takes care of the life insurance money you are leaving behind, until it’s distributed to your child. And, you can even build in protection against your child’s future divorce, or any creditor issues.

Term Insurance to Fund Divorce Settlements

If you receive child support and alimony, insist that your spouse have a  term life insurance policy to guarantee you are able to collect on your settlement, even if your ex-spouse dies while still paying out your divorce settlement.

Compare Quotes for Whole and Term

Experts suggest most people only need life insurance to cover their working years and while they raise a family. Term life insurance is typically affordable and covers you when you need it most. Permanent insurance is best when you know you will have estate taxes to cover OR if you want to use insurance as an investment vehicle with guaranteed returns, but often big commissions to make up in the early years of the policy. One of the services we provide to our member clients is to review all insurance policies, both in place and those being considered, to provide objective evaluation before you buy.

Don’t Overlook Living Benefits

A living benefits rider could allow you to access funds if you were diagnosed as terminally ill or with a chronic and debilitating condition.

If you are ready to purchase a life insurance policy that works for you, start by sitting down with an  Estate Attorney. As your Estate Attorney, we can walk you step by step through creating a financial plan that will help you provide for your family no matter what. At GP Schoemakers, PLLC, we offer Family Wealth & Legacy Planning Sessions that help you protect and preserve your wealth for future generations. 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 matters most to you, and what your wishes are when you die.

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.

Estate Planning Essentials for Parents

A comprehensive estate plan can protect the things that matter most. For many, this means their property and their family.

Including provisions for the care of your children in your estate plan is essential for peace of mind. But many parents struggle with including such provisions as naming a legal guardian for their child in their plan. Indeed, even the fictional parents in the popular television sitcom Modern Family struggled with this issue in a recent episode. While Jay and his new and much younger wife Gloria agonized and argued about who they should name as a legal guardian for their children, their children were left at risk that if something happened to Jay and Gloria before they decided and properly named guardians in a legal document, a judge would make the decision for them. Not ideal, under any circumstances.

When naming a legal guardian for your minor children, there are many factors to consider, such as whether the guardian has similar values to yours or can provide a welcoming home environment. But the toughest decisions are often the most important. Consider the outcome if you died without having legal protections for your children in place. Your children could be subject to conflict between relatives or they could be raised by someone you would never want, or in a way you wouldn’t want.  They could even temporarily be taken into the care of strangers.

Identifying and naming a legal guardian for your children in your estate plan is a difficult and important task. Don’t put off naming a legal guardian for your child. While thinking about what will happen to your child if you die is difficult even for fictional parents, your kids deserve the protection and you deserve the peace of mind that a legal guardian can provide.

Unfortunately, even if you have made the hard decisions and worked with a lawyer to name legal guardians in a Will, your kids could still be at risk, because that would not take into account what happens if you become incapacitated, or if your named guardians all live far from your home, and it wouldn’t protect against anyone who may challenge your decisions. The only way to ensure your kids are raised by the people you want, in the way you want, never taken into the care of strangers (even temporarily) and that your kids would never be raised by anyone you wouldn’t want, is by creating a comprehensive Kids Protection Plan®, which only a select few lawyers, like us, are trained to prepare.

If you are ready to take that step, start by sitting down with us. As your Personal Family Lawyer®, we can walk you step by step through creating a comprehensive Kids Protection Plan® that not only names a legal guardian for your child in your Will, but also ensures your kids care is fully provided for, in the short-term and the long-term, and in the event of your incapacity.

Working with a trusted Personal Family Lawyer® will ensure your entire family is protected and cared for no matter what.

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.

If you would like to create or update your estate plan, call our office today to schedule a time for us to sit down and talk.

(Re)Defining Family: Estate Planning for the Post-Nuclear Family

Blended families, unmarried couples, assistive reproductive technology (ART) and same-sex unions and marriages challenge the traditional concept of “family” as it’s been known for legal purposes up until now.

Significant changes in the way we define family culturally means more families are left without the valuable protection they need, in the event of a death or incapacity of a loved one.

As these legal definitions and our personal situations expand, so do the priorities of the modern estate plan.

No longer is estate planning just for the wealthy, who wish to save money on their taxes; it’s for all of us who want to ensure our legal system recognizes the one’s we love.

For example, if you are in a life partnership (or more than one), married in the eyes of your community, but not married in the eyes of the law, your partner would have no legal right to see you or make decisions on your behalf, if you were hospitalized.

Even if you are married, your spouse or partner would not be able to access your financial accounts, without court intervention, without proper legal planning in advance. And, if you are not married, the Court is unlikely to give a non-legal spouse access and would instead appoint a professional fiduciary before allowing your unmarried partner access.

If you are part of a blended family (meaning one or both spouses have children from a prior relationship) or have children who aren’t biologically both yours and your spouse’s (or non-spouse partner), you need to include provisions in your estate plan that clearly define the inheritance rights of all children, biological or not.

It is vitally important that you clearly define any legally established relationships between you, your spouse (or non-spouse partners and loved ones) and your children, biological or otherwise, to ensure your wishes will be carried out in the event of your death or incapacity. If you do not do this, your kids could end up in the care of someone you would never want and taken out of the home of the non-biological parent they are living with.

Whatever your family’s configuration may be, estate planning is your chance to safeguard the people you love and your assets on your own terms and according to your own definitions. With the uncertainty of the current political and social climate, developing a carefully crafted plan tailored to your family’s needs is more important than ever.

If you need help crafting estate-planning instruments that adequately protect your family and your wealth but are flexible enough to be relevant as our legal definitions of family change, start by coming in to meet with us for a Family Wealth Planning Session. As your Personal Family Lawyer®, we can guide you in creating a comprehensive estate plan that protects and preserves your family’s values, as well as your assets. 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 to you and what you want to leave behind and ensure that none of your assets are lost to the Court or government processes that don’t really serve your desires.

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 Sessio.

Estate Planning After Marriage Equality: What All Couples Should Know

In the wake of the Supreme Court’s landmark ruling in Obergefell v. Hodges, same-sex couples nationwide finally enjoy marriage equality. And, whether you are legally married in the eyes of the law, or not, there are important additional legal planning steps you need to take to ensure your wishes are honored in the event of your disability, or your death.

Marriage affords certain legal rights – and responsibilities – that domestic partnerships, civil unions and simply living together with or without a written agreement do not. By, ensuring your estate planning documents are up to date, you can safeguard your surviving spouse’s federally protected rights. And, if you are not married in the eyes of the law, for whatever reason, you can use estate planning to replicate many of the marital rights, as well.

A significant concern of many same-sex couples is whether one spouse will retain beneficiary rights if the other spouse dies. Unfortunately, before marriage equality, it was often the case that same-sex partners were deprived of certain rights that opposite-sex spouses enjoyed. These rights pertain to assets such as retirement accounts, social security benefits, and insurance policies.

The Employee Retirement Income Security Act (ERISA) requires same-sex spouses be treated equally in the event one spouse dies.  This means ERISA governed retirement plans such as 401Ks are handled just as they would be in any marriage; the surviving spouse is the automatic beneficiary of the plan. Retirement accounts not governed by ERISA may have different rules, so check with your individual plan regulations. The Social Security Administration treats all marriages equally, and so the SSA’s rules and restrictions apply to married same-sex couples.

This means that if you want your 401k to go to anyone other than your surviving spouse, you need to take specific action, beyond merely naming another beneficiary.

Marriage offers many important rights.  And, sometimes, creates a reality that you may not have intended. Conversely, if you are partnered, but not married in the eyes of the law, your life partner could be cut out of your affairs are the end of your life, or in the event of a disability.

Regardless of marriage equality, it is still critical to understand exactly what will happen to the people you love and everything you own and care about, when something happens to you, under the State’s plan for you. . That’s what our Family Wealth Planning Sessions are all about — you making informed, empowered, educated decisions for the people you love.

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 and mention this article to find out how to get this $750 session at no charge.

Kelly Clarkson Starts Blended Family: What She Needs to Consider

Starting a new family is always exciting and even a tad scary. This natural apprehension can be enhanced when a couple creates a blended family. Bringing children from different parents together presents challenges – and those challenges are multiplied when the couple have new children of their own.

Former American Idol star Kelly Clarkson recently added a new baby to her family. Kelly and her husband, Brandon Blackstock, have been married a little over three years. Kelly and Brandon already had a little girl together and Brandon brought two children into the marriage. So the new baby, Remy, brings the couple’s children to four.

The big risk of conflict for Kelly, Brandon and their children is that if Brandon dies before Kelly and specific and clear provisions are not made for Brandon’s children from his prior marriage, significant conflict could result between Kelly and her step-children that is totally avoidable with advance planning now.

Merging two families into one presents financial issues which can cause significant disruption later if a couple does not deal with them early on.

Three significant issues include: differing opinions on prenuptial agreements, different financial goals, and different ideas about how assets should be handled after death. While these are not insurmountable problems, dealing with them upfront can prevent grief and hard feelings later.

A well-drafted prenuptial agreement can prevent later misunderstandings. Some people are concerned that asking for a prenuptial agreement shows they lack confidence in the marriage right out of the box. In truth, however, a prenuptial agreement actually protects both parties and the relationship by surfacing hard issues while there is significant love in the field.

This is particularly important in blended families, where the partners may have different expectations of how assets will be split if the marriage ends or when one of the partners dies. With skilled counsel (who actually knows how to counsel not just lawyer), the prenuptial agreement conversation can actually create more closeness.

Newly married couples may also have differences of opinion about budgets and financial goals. These issues are generally magnified in blended family situations. One or both partners may have accumulated assets or debts before their marriage, so it is critical that both consider and discuss their full financial picture including assets, debts, cash flow, budgets, and goals.

It is especially important that partners in blended families talk about what they want to happen with their assets when they die. Working with a Personal Family Lawyer specifically trained in counseling blended families will help the couple clarify and document their goals so there is not a fight between the survivor’s children and the survivor of the partnership after the death of the first to die.

Solid estate planning is always important, but it is even more so in blended families.  If you have a blended family or are in the process of merging two families, we can help you build a foundation for success.

This article is a service of Gratia P. Schoemakers, Personal Family Lawyer,®  who develops trusting relationships with families for life.  That’s why we offer a Family Wealth Planning Session,™ where we can explain financial management techniques and help identify the best strategies for you and your family. You can begin by calling our office today to schedule a time for us to sit down and talk because this planning is so important.

 

Are You Leaving Your Retirement Account at Risk Due to Poor Planning?

You’ve spent your entire life building up your retirement account. It may even be the biggest asset you’ll leave behind for the people you love.

If that’s the case, you may want to consider creating a special trust designed specifically to receive your retirement account assets in the event of your death.

If you leave your retirement account to the people you love outright, simply by naming them as beneficiaries on your retirement account rather than through a special trust, here are the risks:

  1. Some studies indicate 80% of retirement account beneficiaries immediately liquidate the account and frivolously spend the assets (and on top of using the assets in ways you may not agree with, they also lose significant tax benefits for these assets you worked so hard to create);
  2. If your beneficiary is married and does not properly handle the retirement assets you leave behind, and then gets divorced, your hard-earned assets could end up in the hands of the future ex-spouse of your beneficiary;
  3. If you are in a second marriage situation with children from a prior marriage, you may be setting your spouse and children up for conflict after you are gone, due to the way you have planned (or not planned) for the passage of your retirement account.
  4. If your beneficiary is ever in a situation where he or she has creditors or may have to file bankruptcy, and you’ve left your retirement account to him or her without a special trust, your retirement account would go to satisfy those creditors first.

Here’s the good news, it’s not hard to protect your retirement account for your beneficiaries with the right planning. We use a variety of special trusts to ensure the retirement assets you’ve worked so hard to build up throughout your life are passed on to the people you love so they are totally protected from a future divorce, creditors, bankruptcy and so that they do not create conflict for your loved ones.

If you have a significant retirement account whose designated beneficiary  is your spouse or children, or even your regular revocable living trust, call us to have your planning reviewed immediately.

This article is a service of Gratia P. Schoemakers, Personal Family Lawyer,®  who develops trusting relationships with families for life.  If you’re ready to begin planning what you’d like to happen in case of unfortunate emergency, or even your death, schedule a Family Wealth Planning Session™ today. We can help you make plans for how you want to provide for your loved ones when you can’t be there. Contact us today to schedule an appointment to discuss your future and we’ll identify together how to best prepare for you and your family.

Family Financial Traditions

To some degree or another, we are all a function of the social environments in which we were raised. Of course, that encompasses both positives and negatives. When it comes to money, the first exposure we have to its management is in our families. That makes good money management practices a real gift that parents can pass on to their children.

Don’t Buy Your Kid a Car

The greatest motivator there is for a teenager is freedom and their path to that freedom is a car. When you buy your kid a car, rather than supporting him or her to learn to earn money to buy the car him/herself, you are overlooking one of the greatest opportunities you have to support your child to learn to be self-sufficient.

If you have an extra car available for your child, at least require your child to pay for the gas and insurance, which will support him or her to begin to be prepared for the requirement of life in the future, when you aren’t there to provide for all the needs they have.

Kids Playing the Stock Market?

Introducing children to the stock market is not a far-fetched idea. There is plenty of information available that can be understood by kids. First off, children are very aware of products — toys and games like the CashFlow Board Game, for example. They can be introduced to the fact that the companies that make these toys are owned by people like their parents, who hold shares of stock. From there, they can be shown the daily stock prices and how they change. As they grow older, your children can begin making small stock purchases and become comfortable with investing.

Family Vacation Saving

Family vacations are usually looked back on fondly and may even be considered family traditions. Saving during the year, by children as well as parents, for an annual vacation can also be part of that tradition and help teach good money management techniques. Whether it be from jobs kids have like grass cutting or babysitting, or just from allowance savings, it will serve children well later in life to have learned the value of setting money aside for a deferred pleasure.

Charitable Giving

If you give to charity regularly, you may want to consider setting up a private foundation that can be used to consolidate your giving plus be used to educate your children about investing (all of the assets of the charitable foundation need to be invested) and giving.

Read the story of Bob and Wendy Graham, of the Namaste Foundation, and how they used charitable giving via a private foundation to educate the kids and create cohesion and connection in their blended family.

Estate Planning

Involve your children in your estate planning as soon as they are old enough to understand. They will feel secure knowing you’ve planned well for what would happen to them, if and when something happens to you. Have them meet the lawyer they will work with, tell them about how they will receive their inheritance and when. And, begin to talk now about how you can increase the overall family wealth you have and how you want to be cared for by them at the end of your life.

If you feel uncertain about how to approach these issues, contact us. Or read the books Die Wise, Being Mortal and Family Wealth: Keeping It in the Family, all books that inform our personal process as your family lawyers.

Early Entrepreneurship

Supporting your children to think like entrepreneurs can be one of the greatest gifts you give them. As the world shifts, we are moving into a new economy in which reliance on traditional jobs no longer provide the security they once did. Technology will replace many of the jobs people relied on in the past and the only real security going forward is resourcefulness, creativity and community, all of which is learned via the path of entrepreneurship.

Consider reading the book The Last Safe Investment by Bryan Franklin and Michael Ellsberg for some more ideas around this topic.

This article is a service of Gratia P. Schoemakers, Personal Family Lawyer®.  We believe in developing trusting relationships with families for life. That’s why we offer a Family Wealth Planning Session,™ where we can explain financial management techniques and help identify the best strategies for you and your family. You can begin by calling our office today to schedule a time for us to sit down and talk because this planning is so important.

Estate Planning for Blended Families

The term “blended family” has become commonplace in our society and refers to a family where one or both spouses were previously married and have children from the prior marriage. In some instances, the new couple goes on to have children of their own. With children, stepchildren and ex-spouses involved, estate planning can get quite complex.

When you are trying to take all the different interests involved with your blended family into account, you need help to ensure you provide for everyone adequately. And to ensure you avoid conflict after your death or incapacity, as that’s quite common in blended family situations.

Without a well-crafted estate plan to establish how you want your surviving spouse and children to receive your assets, the distributions made pursuant to the law (or a poorly drafted plan) could lead to tremendous conflict among your loved ones and significant unintended consequences.  . To create a comprehensive estate plan that achieves the results you want, it is imperative that you consult with an experienced lawyer.

Deciding how to divide your wealth and assets between your surviving spouse and your biological children can be difficult. If you are close with your stepchildren or you have adopted them, you must take their interests into account as well. This means that you may need to address issues such as child custody and support once you are gone. You will also want to avoid mistakes such as:

  • Your children being unintentionally disinherited (by everything going to your spouse)
  • Your children’s inheritance being postponed until your spouse dies (that’s often the fastest path to family conflict)
  • Your ex-spouse making a claim on your estate
  • Family fighting or litigation over your estate or to gain the authority to act

With so many issues to consider, it is necessary to make these decisions while you are healthy and you have the time to create the best strategy for drafting your estate plan whether you have a lot of money or not. If you want to take action to protect your blended family, contact us to schedule an appointment. Let us help minimize the chance of family conflict and ensure your wishes are carried out when you are gone.

One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your family through thoughtful estate planning.  Call our office today to schedule a time for us to sit down and talk through a Family Wealth Planning Session, where we can identify the best strategies for you and your family.

 

What Every Single Parent Needs to Know About Estate Planning

If you are a single parent, life for you right now probably couldn’t get any busier. You are likely being pulled between work, school activities, sports teams and the inevitable emergencies that fill the lives of single parents everywhere.

Being a single parent is a huge responsibility. You may have taken it on willingly or not but your children’s lives are now largely in your hands.  So what would happen to them if something happened to you?  Who would take care of them?  Who would pay for their housing and food?  Who would pay for their education?  These are questions you need to get answered, and the best way to do that is through estate planning.

Having an estate plan that covers the care of your children in case you should die suddenly or even become incapacitated provides welcome peace of mind for the single parent.  Here are the elements that can help you:

Will.  A will lets you name the person responsible for your estate as well as who will inherit your assets. Most importantly is the legal vehicle you use to name a guardian for your children,  without a will, the state will decide their fate.

Revocable Living Trust.  There are so many benefits of a living trust for single parents.  First, a trust enables you to still control your assets while you’re able, but if you die or become incapacitated, it transitions that decision-making authority immediately to the person you have named as your trustee (obviously someone you can trust and count on to do what you would have wanted).  If your children are still minors or even young adults their inheritance can be handled for them until the time comes when they are capable (and you decide that time).  Plus, if you have a trust, your estate doesn’t have to go through probate, which can be costly and time-consuming. Also probates are not the best idea if your children need to continue living in their home and having their expenses paid.

Durable Power of Attorney.  As a single parent, you are likely the only signatory on your mortgage, your bank accounts, and other financial instruments.  What would happen if you became incapacitated and there was no one to pay the mortgage or the bills?  That is why it is important to have a durable power of attorney in place. When choosing your power of attorney, it should be someone you trust managing your financial affairs, while also make legal decisions on your behalf if you are unable to do so.

Advance Medical Directive.  An advance medical directive gives you the legal power to have someone you select make your health care decisions in case you are not capable of doing so yourself.

Beneficiary Forms.  Your life insurance policy, retirement accounts and brokerage accounts all require beneficiary designations.  Those you designate to receive the assets in these accounts will only receive them if you execute the proper beneficiary forms!  They cannot pass to your heirs via a will or trust. And minor children should never be named as beneficiaries as they are not legally able to own assets. Talk with your Personal Family Lawyer® about strategies to leave these assets to your children without court intervention.

Kids Protection Planning Kit®.  Developed by a nationally recognized attorney who is a single mom herself, the Kids Protection Planning Kit® provides single parents with the legal planning tools they need to make sure there is never a question about who will take care of your kids if you are in an accident. The kit includes legal documents to name short- and long-term guardians, instructions for those guardians, medical powers of attorney for your minor children and more.  There are also audio CDs to guide you through the process.

One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your family through thoughtful estate planning. Call our office today to schedule a time for us to sit down and talk through a Family Wealth Planning Session, where we can identify the best strategies for you and your family.

 

7 Reasons to Consider a Trust for Your Family

Do you consider trusts to be instruments of the wealthy?  While it is true that many Americans of means have trusts to protect and pass their wealth, there are some reasons why trusts can also be useful for middle-class families.  Here are 7 of them:

  1. Control distribution of assets.

You would not hand over your car keys to a child who has had no proper preparation for driving, and chances are you would not want to hand over all your assets to a teenager either.  However, if both parents die at the same time, the children would inherit all the assets upon their 18th birthdays.  A trust allows you to specify how and when you want your children to inherit.

  1. Protect assets from creditors.

Placing an inheritance in a trust ensures that those assets are protected from your heir’s  — or their spouse’s – creditors. Consider a Lifetime Asset Protection or Wealth Creation Trust.

  1. Protect inheritance from spendthrift heirs.

Not everyone is good with money.  If your heirs fall into that category, you can use a trust to ensure the assets are not frittered away due to spend-thrift behavior.

  1. Protect inheritance for children of prior marriage.

You can use a trust to both provide for your current spouse and any children from a previous marriage.

  1. Provide for a special-needs heir.

Leaving assets outright to an heir with special needs could disqualify them from receiving important government benefits.  Leaving those assets in trust bypasses this potential risk.

  1. Avoid probate.

Assets can pass to heirs without going through probate by using a trust, saving beneficiaries the time and expense of the probate process. Probate is an expensive, public and unnecessary court process you can keep your family from having to deal with.

  1. Protect privacy.

Once a will is entered into probate, it becomes public; a trust is a private document that will protect your family’s privacy.

If you would like more information about protecting your loved ones, call our office today to schedule a time for us to sit down and talk.