Estate Planning Lawyer

Do I Need a Will?

Yahoo Finance’s recent article on this subject asks “Do You Really Need a Will?” As the article explains, without a will, you’ll be “intestate”—which means you’ll have no say in what happens to your assets and belongings once you pass away.

Do I need a will?
If you don’t have a will your assets will be distributed according to state law.

Many people ask the question, “Do I need a will?” Each state has its laws concerning the distribution of a person’s assets if they die without a will. These laws most likely won’t mesh with your personal wishes. If you don’t have a will, ask yourself why you don’t. Perhaps you think you don’t need one. However, more than likely you do. If you’re putting off starting this important estate planning task, here are some things to consider.

Just about everybody needs a will, but you definitely should have one if you’re married, you have minor children, you have real estate, or you have investments in the stock market. You should also have a will if you have possessions, such as cars, furniture, jewelry, paintings, and computers?

As far as your money and possessions, you probably have some thoughts as to who gets what. You may want to chip in on the education of some younger relatives or give specific pieces of jewelry to those who you know will appreciate them. If you have minor children, you probably have very definite ideas about who should be their guardians if you die.

With a will, you have control. Without a will, the state in which you live will distribute your assets according to its laws, regardless of your wishes.

After you pass away, there could be surprise money coming to you, and without a will, you have no control over where these funds go. Your estate could get some cash from returned security deposits, medical reimbursements, or refunds from utility companies. Furthermore, if you die in a car accident and there’s an insurance settlement, you have no say who gets those funds, which could be substantial.

You also need to think about your pets, and who would be the best person to care for your animals.

So, the answer to the question, “Do I need a will”, is almost certainly, yes.

Reference: Yahoo Finance (July 21, 2019) “Do You Really Need a Will?”

How Should Couples Begin the Process of Estate Planning?

About 17% of adults don’t think they need a will, believing that estate planning is only for the very wealthy. However, no matter how few assets it seems someone owns, completing a few documents can make a huge difference in the future.  Here’s how couples can begin the process of estate planning.

What should couples know about the estate planning process
Often, just getting started with the estate planning process is the most difficult part.

valuewalk.com’s recent article, “Couples: Here’s How To Start The Estate Planning Process” notes that although estate planning can seem overwhelming, taking inventory of assets is a great place to start.

Make a list of all your belongings valued at $100 or more, both inside and outside of the home. After that, think about how these assets should be divided among family, friends, churches or charities.

Drafting a will may be the most critical step in the estate planning process. A will serves as the directions for how assets are to be distributed, which can avoid unpleasant disputes.

A will can simplify the distribution of assets at your death, and it also provides instructions to your family and heirs.

A will can also set out directions for childcare, pet care, or any additional instructions or specifications.

Without a will in place, your assets will be distributed according to state law, rather than according to your wishes. Creating a will keeps the state from making decisions about how your estate is divided up—decisions you may not have intended.

Once you have your assets and beneficiaries set, see an experienced estate planning attorney and have your will drafted immediately. Hey, life is unpredictable.

Another important part of the process is to have a discussion with everyone involved to prevent any legal or familial disputes regarding the estate.

Failure of couples to start the estate planning process can lead to family fighting, misappropriated assets, court litigation and unneeded expenses. Get going!

Reference: valuewalk.com (July 22, 2019) “Couples: Here’s How To Start The Estate Planning Process”

Do I Need a Medical Power of Attorney?

A medical power of attorney is a legal document, also called a healthcare power of attorney or durable power of attorney for healthcare. This document lets you designate an agent to make medical decisions on your behalf. This can give you peace of mind, even if you don’t think you’ll need it, says SmartAsset in the recent article “How to Set Up Medical Power of Attorney.”  

Do I need a medical power of attorney
A medical power of attorney allows you to name another person to make medical decisions on your behalf if you can’t speak for yourself.

A medical power of attorney isn’t the same as a living will. A living will is a document that directs what you’d want healthcare professionals to do if you become incapacitated. This could include the implementation of life support and tube feeding, resuscitation attempts and organ donations.

A medical power of attorney doesn’t simply record your wishes as a living will does. It appoints a specific person to make medical decisions for you if you can’t speak for yourself. You might have both a living will and a medical power of attorney. If decisions need to be made about resuscitation and life support, recording those wishes in a living will takes those difficult decisions out of your agent’s hands.

When you’re deciding on someone to serve as your healthcare agent, find a person with whom you’re comfortable talking about your health-related issues.  This person should be your advocate, follow your wishes and make sound decisions—even if family says otherwise.

The Commission on Law and Aging of the American Bar Association advises that you select an agent you truly trust. It also offers some general guidelines for agents that you should probably avoid. The ABA says don’t choose an agent:

  • Who owns a health or residential facility that is in charge of your care;
  • Who’s a spouse or employee of anyone that currently serves you medically, like a doctor or residential facility owner;
  • Whose job it is to medically evaluate you, like a doctor;
  • Who’s the same person as your court-approved guardian or conservator; or
  • Who is already a healthcare agent for more than 10 people.

Be sure to name a backup agent, in the event your medical power of attorney can’t make decisions on your behalf.

Talk to a qualified estate planning attorney to get help with this and other legal documents, and to be sure that your documents meet your state’s requirements.

Reference: SmartAsset (May 8, 2019) “How to Set Up Medical Power of Attorney”

How Can I Sell My Parent’s Home Without a Hassle After They’ve Passed Away?

Much of the work of selling his parent’s home after they passed away fell on Carlson, then 28, since the other beneficiary was her older sister, who lives in New York City.

sell my parents home
With the right planning, selling your parent’s home after they’ve passed away doesn’t have to be difficult.

The Philadelphia Inquirer’s recent article, “With proper planning, selling a parent’s house can be a relatively painless process—or not,” says that after finding a real estate agent with estate sale experience, she learned about probate, as well as the local building codes and repairs that needed to be made.

She even had to tell her father’s friend, who’d been bunking in the cabin, that he’d have to move out.

Coping with a death of a parent is challenging enough, and selling their home can be an added stressor for children. It’s even worse, if they die without a will. Grieving family members may be ill-equipped to make decisions, and allow the home to fall into disrepair. Siblings may also have emotional attachments to it and unrealistic expectations about the value of the home.

The job of selling your parent’s home after they’ve passed away can be difficult and long or it can be relatively easy. It depends in large part on the heirs’ ability to ask for help and hiring a professional who knows the local housing market. Experts say the sooner the process starts, the better. Parents can also take actions while they’re alive to help avoid complications. This discussion may be difficult and awkward, but it’s worth it to be informed, so adult children are not scrambling while grieving. Here are some helpful tips:

  • Be certain that both parents have a will.
  • Be prepared to spend some money, because there are costs associated with maintaining and selling the property (you’ll get the money back after the house sells).
  • The executor should change the locks to keep heirs out.
  • Ask a real estate agent to run a competitive market analysis and have an appraisal done by a licensed appraiser.
  • Designate a contact person, so the executor can keep all heirs informed.

A big deterrent to selling a parent’s house after they’ve passed away is typically the emotional attachment of the children.  Experts say that while cosmetic fixes can pay off, more substantial improvements generally don’t.

There are also estate, inheritance, and income taxes that can impact the net sales proceeds. There’s a benefit to selling an inherited property, because when a property is inherited after a death, the property value is “stepped up” to fair market value at the time of the owner’s death.

Reference: The Philadelphia Inquirer (June 22, 2019) “With proper planning, selling a parent’s house can be a relatively painless process—or not”

What Are the Basics About Trusts?

Forbes’s recent article, “A Beginner’s Guide To Reading A Trust,” says that as much as attorneys have tried to simplify documents, there’s some legalese that just can’t be avoided. Let’s look at the basics about trusts and a few tips in reviewing your trust.

Basis about trusts
Understanding basic trust terms is essential.

First, familiarize yourself with the terms. There are basic terms of the trust that you’ll need to know. Most of this can be found on its first page, such as the person who created the trust. He or she is usually referred to as the Donor, Grantor or Settlor (here in Florida we use the term Settlor). It is also necessary to identify the Trustee and any successor trustees, who will hold the trust assets and administer them for the benefit of the Beneficiaries.

You should next see who the Beneficiaries are and then look at the important provisions concerning asset distribution. See if the trustee is required to distribute the assets all at once to a specific beneficiary, or if she can give the money out in installments over time.

It is also important to determine if the distributions are completely left to the discretion of the trustee, so the beneficiary doesn’t have a right to withdraw the trust assets.  You’ll also want to check to see if the trustee can distribute both income and principal.

The next step is to see when the trust ends. Trusts usually end at a specific date or at the death of a beneficiary.

Other important basic trust provisions include whether the beneficiaries can remove and replace a trustee, if the trustee has to provide the beneficiaries with accountings and whether the trust is revocable or irrevocable. If the trust is revocable and you’re the settlor, you can change it at any time.

If the trust is irrevocable, you won’t be able to make any changes without court approval. If your uncle was the donor and he passed away, the trust is most likely now irrevocable.

In addition, you should review the basic trust boilerplate language, as well as the tax provisions.

Talk to an estate planning attorney about any questions you may have and to help you interpret the basic trust terms.

Reference: Forbes (June 17, 2019) “A Beginner’s Guide To Reading A Trust”

Why Would I Need to Update My Will?

OK, great!! You’ve created your will! Now you can it stow away and check off a very important item on your to-do list. Well, that’s mostly correct.  You’ll still need to update your will from time-to-time.

Update your will
Your will should be reviewed every 3 to 5 years and updated as your life changes.

Thrive Global’s recent article, “7 Reasons Why You Need to Review your Will Right Now,” says it’s extremely important that you regularly update your will to avoid any potential confusion and extra stress for your family at a very emotional time. As circumstances change and major life events take place (like the birth of a child or grandchild, the purchase of a home, or retirement, to name just a few), you need to update your will reflect changes in your life. As time passes and your situation changes, your will may become outdated, obsolete or even create confusion when the time comes for your will to be administered.

New people in your life. If you do have more children after you’ve created your will, review your estate plan to make certain that the wording accounts for your new children. You may also marry or re-marry, and grandchildren may be born that you want to include. Make a formal update to your estate plan to include the new people who play an important part in your life and to remove those with whom you lose touch.

A beneficiary or other person passes away. If a person you had designated as a beneficiary or personal representative of your will has died, you must make a change or it could result in confusion, when the time comes for your estate to be distributed. You need to update your will, if an individual named in your estate passes away before you.

Divorce. If your will was created prior to a divorce, and you want to remove your ex from your estate plan, talk to an estate planning attorney about the changes you need to make.

Your spouse dies. Wills should be written in such a way as to always have a backup plan in place. For example, if your husband or wife dies before you do, their portion of your estate might go to another family member or another named individual. If this happens, you may want to redistribute your assets to other people.

A child becomes an adult. When a child turns 18 and comes of age, she is no longer a dependent.  Therefore, you may need to update your will in any areas that provided additional funds for any dependents.

You experience a change in your financial situation. This is a great opportunity to update your will to protect your new financial situation.

You change your mind. It’s your will, and you can change your mind whenever you like.

Reference: Thrive Global (June 17, 2019) “7 Reasons Why You Need to Review your Will Right Now”

What Should I Keep in Mind in Estate Planning as a Single Parent?

Most estate planning conversation eventually come to center upon the children, regardless of whether they’re still young or adults.  So what should you keep in mind in estate planning as a single parent?

Talk to a qualified estate planning attorney and let him or her know your overall perspective about your children, and what you see as their capabilities and limitations. This information can frequently determine whether you restrict their access to funds and how long those limitations should be in place, in the event you’re no longer around.

Kiplinger’s recent article, “Estate Planning for Single Parents” explains that when one parent dies, the children typically don’t have to leave their home, school and community. However, when a single parent passes, a child may be required to move from that location to live with a relative or ex-spouse.

After looking at your children’s situation with your estate planning attorney to understand your approach to those relationships, you should then discuss your support network to see if there’s anyone who could serve in a formal capacity, if necessary. A big factor in planning decisions is the parent’s relationship with their ex. Most people think that their child’s other parent is the best person to take over full custody, in the event of incapacity or death. For others, this isn’t the case. As a result, their estate plan must be designed with great care. These parents should have a supportive network ready to advocate for the child.

Your estate planning attorney may suggest a trust with a trustee. This fund can accept funds from your estate, a retirement plan, IRA and life insurance settlement. This trust should be set up, so that any court that may be involved will have sound instructions to determine your wishes and expectations for your kids. The trust tells the court who you want to carry out your wishes and who should continue to be an advocate and influence in your child’s life.

Your will should also designate the child’s intended guardian, as well as an alternate, in case the surviving parent can’t serve for some reason. The trust should detail how funds should be spent, as well as the amount of discretion the child may be given and when, and who should be involved in the child’s life.

A trust can be drafted in many ways, but a single parent should discuss all of their questions with an estate planning attorney.

Reference: Kiplinger (May 20, 2019) “Estate Planning for Single Parents”

What Do I Tell My Kids About Their Inheritance?

knowing whether to tell your kids about their inheritance can be tough decision

For some parents, it can be difficult to discuss family wealth with their children and knowing whether to tell your kids about their inheritance can be tough decision. You may worry that when your kid learns they’re going to inherit a chunk of money, they’ll drop out of college and devote all their time to their tan.

Kiplinger’s recent article, “To Prepare Your Heirs for Future Wealth, Don’t Hide the Truth,” says that some parents have lived through many obstacles themselves. Therefore, they may try to find a middle road between keeping their children in the dark and telling them too early and without the proper planning. However, this is missing one critical element, which is the role their children want to play in creating their own futures.

In addition to the finer points of estate planning and tax planning, another crucial part of successfully transferring wealth is honest communication between parents and their children. This can be valuable on many levels, including having heirs see the family vision and bolstering personal relationships between parents and children through trust, honesty and vulnerability.

For example, if the parents had inherited a $25 million estate and their children would be the primary beneficiaries, transparency would be of the utmost importance. That can create some expectations of money to burn for the kids. However, that might not be the case, if the parents worked with an experienced estate planning attorney to lessen estate taxes for a more successful transfer of wealth.

Without having conversations with parents about the family’s wealth and how it will be distributed, the support a child gets now and what she may receive in the future, may be far different than what she originally thought. With this information, the child could make informed decisions about her future education and how she would live.

Heirs can have a wide variety of motivations to understand their family’s wealth and what they stand to inherit. However, most concern planning for their future. As a child matures and begins to assume greater responsibility, parents should identify opportunities to keep them informed and to learn about their children’s aspirations, and what they want to accomplish.

The best way to find out about an heir’s motivation, is simply to talk to talk to your kids about their inheritance.

Reference: Kiplinger (May 22, 2019) “To Prepare Your Heirs for Future Wealth, Don’t Hide the Truth”

Complete Your Financial Plan with Estate Planning

Here at Mastry Law we’ve always referred to estate planning as the final piece of your financial planning puzzle.  If you are among those who haven’t put together a basic estate plan, you should make every effort to accomplish this in 2019. Your family and friends will thank you.

The Minneapolis Star-Tribune’s recent article, “No financial plan is complete without a basic estate plan” reports that, while Americans are living longer, it was emphasized in a session at the American Society on Aging’s 2019 conference in New Orleans that 56% of Americans don’t have a will.

Estate Planning is the final piece of your financial planning puzzle.

The basic list isn’t particularly daunting. Talk to an experienced estate planning lawyer to create a will to get your affairs in order.

You should also sign a health care directive and a durable power of attorney. It is also important to decide where you want to be buried or cremated.

You should discuss your late-life goals and desires with your family, relatives and close friends. This gives everyone a better idea about your values and thinking. An estate plan makes things much less stressful on your family.

Many people want to leave at least some money to their loved ones. However, instead of waiting for death to pass on assets, more people are now deciding to “give while living.”

For example, grandparents can help to fund their grandchildren’s education expenses. Nearly two-thirds of people 50 years and older are giving some financial support to family members, according to a survey by the financial services firm Merrill Lynch and demographic consulting firm Age Wave.

Since you are already thinking about your life while devising an estate plan, it is important to understand that far more valuable than your money and assets is your accumulated experience, knowledge and skills. You can tap into your experience later in life to help others succeed.  Your experience and judgment can help family members decide how to have both purpose and a paycheck.

Perhaps you can serve as a mentor for those in your community in areas where you have some expertise?

The desire to leave our families with a legacy is powerful. Don’t leave them without an estate plan.  Remember that giving of our experience can make a significant difference to the community around us.

Reference: Minneapolis Star-Tribune (May 4, 2019) “No financial plan is complete without a basic estate plan”

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