Revocable Living Trust

Should I Use an Online Will Service?

More than 50% of Americans don’t have a will, according to a 2017 survey by Caring.com. Spelling out how your assets should be divided, is an essential start to estate planning that can be easily overlooked.

A U.S. News & World Report’s article asks “Should You Make a Free Will Online?” According to the article, before writing your will or using an online service, you need to know the legal requirements in your area. In many instances, this is best left to a legal professional in your state.

There are plenty of online tools that will help you create a will. However, before clicking on a website’s promise, you need to evaluate the available options. There are three main ways to write a will:

  1. Do it yourself;
  2. Use a do-it-yourself program; or
  3. Get help from a qualified estate planning attorney.

If you draft a will on your own, you’ll need to be absolutely certain you understand all of the applicable probate, tax and property laws in your state.

If you use an online service, you’ll have access to software that walks you through the process. In this case, you’ll need to be sure that the software company has all the applicable laws covered, as required for your state. You also want a program that lets you make updates later, if your situation changes.

However, if you engage the assistance of an experienced estate planning attorney, you’ll have the opportunity to have an expert help you think through the details. The result will be a well-drafted will. Yes, it will cost a bit more, but for many situations—like those with blended families, families with minor children, complex investments, or property in several states—it’s worth it.

Remember that the probate laws can vary widely from state to state. For example, the basic form requirements may allow a handwritten will in some states, but in other states the will must be typewritten. Some states require only two witnesses, and others require that the will be witnessed, notarized and typed.

If you have a larger estate or heirs with medical conditions, it may be wise to work with an attorney who can counsel you on the best solutions for your situation. For example, if you have a child with special needs receiving government benefits, you should have an attorney create a trust so their inheritance doesn’t negatively impact their benefits.

You should also use an attorney if you want to reduce your exposure to probate fees. Some people transfer their assets into a revocable living trust, so they are not subject to probate fees. An online service can’t give you this type of attention or personalized service.

If you have a complex situation, you may end up paying less by using an attorney. An experienced estate planning attorney has helped numerous families. He or she can offer insight into setting up guardians for minor children or appointing an individual to be in charge of the distribution of the estate. There are frequently estate and gift tax considerations about which the average person doesn’t know or monitor.

Reference: U.S. News & World Report (January 9, 2019) “Should You Make a Free Will Online?”

Here’s Why You Need an Estate Plan

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or have special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently written, so the estate goes to the child when he reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for him by a trustee or executor until a set age, like 25 or 30.

Probate is the default process to administer an estate after someone’s death, when a will or other documents are presented in court and an executor is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. Individuals can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.

With a trust, it makes it easier to avoid probate because nothing’s in an individual’s name, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid conservatorship (guardianship of an adult who loses capacity). It can also help to decrease capital gains taxes, since the property transfers before their death.

If you have minor children, an attorney can help you with how to pass on your assets and protect your kids.

For more information about how to best protect your minor children, download a copy of Mastry Law’s FREE report, A Parent’s Guide to Protecting Your Children Through Estate Planning.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

Another Celebrity Death, Another Estate Mess

With less than half of Americans having an estate plan in place, we are in the same boat as celebrities, like Aretha Franklin or Prince. While our estates may not match their assets, the messes left behind are just as painful to family members.

A recent survey from caring.com found that only 42% of adults have estate planning documents, including a will. That means that almost 60% of Americans are going to leave our families a mess after we die. Here’s what’s even scarier: a recent article from the Chicago Tribune, “Don't leave a mess for your heirs,”reports that only a third of Americans with children under age 18 have an end-of-life plan. They have not named guardians for their own children, in the event of their own deaths.

MP900178564Many of those who haven’t done any estate planning, say they just haven't gotten around to it. That’s understandable, but it’s important that you conquer your anxieties associated with this emotional subject and take control.

For Aretha Franklin's estate, Michigan (her state of residence) will decide who will get what. The local probate court will oversee everything from property, retirement accounts and the residuals that flow from her music catalog. It’s possible that her assets will be split among her four children. However, as many parents know, some kids are more prepared to manage financial distributions than others—a big reason why estate planning is so important.

If you have property you want to go to specific individuals, you should create a document with instructions as to who gets what.

Some people think that because they don't have a high net worth, they don’t need to worry about such things. However, estate planning isn’t just about money—anyone with young children should have a will, because a will names the guardians of minor children. You want to be certain that you, and not the courts, designate your children’s guardians.

When you’re ready to start or revisit the planning process, talk to a qualified estate attorney (yes, pay for a lawyer and don’t do it yourself), here are the basic documents to consider:

  • Will: A document that makes certain your assets are passed to designated beneficiaries in accordance with your instructions. The will designates an executor who will oversee the distribution of your assets. If you have minor children, you must name a guardian for them.
  • Letter of Instruction:This may include the appointment of someone who will ensure the proper disposition of your remains. That can be important, if you’re choosing a method that’s contrary to your family's traditions.
  • Power of Attorney: This gives a person you select the authority to act as your agent, in certain circumstances.
  • Health Care Proxy:This gives a person you select, the power to make health care decisions on your behalf, if you lose the ability to do so.
  • Trusts: Revocable (changeable) or irrevocable (not-changeable) trusts may be useful, depending on family and tax situations. You need an experienced trust attorney to help you decide, if this is a sound strategy and to properly prepare the documents.

Even if your funeral plan does not include a gold-plated coffin (like Aretha) or a multi-million estate (like Prince), sit down with an estate planning attorney and prepare these documents to protect your family sooner, not later.

Reference: Chicago Tribune (August 30, 2018) “Don't leave a mess for your heirs”

Can an Estate Plan Become a Legacy Plan?

Creating a legacy might give you better odds of success.

The old saying that the first generation builds the business, the second generation struggles to maintain it and the third squanders everything, is sadly, statistically true. However, creating a legacy might give you better odds of success.

Bigstock-Extended-Family-Outside-Modern-13915094If you’ve been responsible and had an estate plan created, you are way ahead of most of your peers. You’ve planned for your family and your heirs with a will, powers of attorney, an advanced directive and likely created the appropriate trusts to hold life insurance policies to minimize estate taxes and protect the proceeds from creditors. You may have even done some succession planning, using family trusts and other planning vehicles. However, will this be enough for a lasting legacy?

Forbes’ recent article, “How To Turn Your Estate Plan Into A Legacy Plan,” says that perhaps you’ve heard that legacy planning is the solution to your problem.  However, you are worried about the expense. If you create a legacy plan, does it mean you’ve wasted time and money? No, it doesn’t. The documents you’ve already prepared for estate planning can most likely be used and incorporated into a more effective legacy plan. Let’s look at how to turn an estate plan into a legacy plan.

Form A Legacy Team. This effort takes a team. You need a team of professional advisors working together to move you towards success. A legacy team will typically begin with three main areas of expertise: legal (estate planning attorney), tax (accountant) and wealth/financial planning (wealth advisor). From there, the legacy team may expand, based on your needs and circumstances. Your team’s makeup will depend on you and your family’s specific needs and circumstances.

Get A Legacy Mindset. Think “process” versus “plan.” Traditional estate planning is often seen as complete, once estate planning documents have been prepared and signed. However, the reality is that after you’ve created legal entities and a structure for your estate and/or legacy, you’re just at the start of the process. The legacy plan is a recipe for your success and the framework through which your legacy is going to thrive and grow.

Educate Yourself on What You’ve Already Created. With your legacy team in place and with your legacy mindset, understand what your existing estate plan does and doesn’t do. Review your estate plan and determine if it distinguishes between legacy and non-legacy assets (which almost always should be handled differently on your death). You also need to plan for your life and how to build the legacy you ultimately want to leave behind through specific assets in your estate.

Put the Plan into Action. Creating the plan is the first step, the second is implementing the plan. That will ensure that your legacy will continue, ideally for generations to come.

Reference: Forbes (August 22, 2018)“How To Turn Your Estate Plan Into A Legacy Plan”

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