How Do I Find a Good Estate Planning Attorney?

About 68% of Americans don’t have a will. With the threat of the coronavirus on everyone’s mind, people are in urgent need of an estate plan.

To make sure your plan is proper and legal, consult an experienced estate planning attorney. Work with a lawyer who understands your needs, has years of experience and knows the law in your state.

EconoTimes’ recent article entitled “Top 3 Estate Planning Tips When Seeing An Attorney” provides several tips for estate planning, when seeing an attorney.

Attorney Experience. An estate planning attorney will have the experience and specialized knowledge to help you, compared to a general practitioner. Look for an attorney who specializes in estate planning.

Inventory. List everything you have. Once you start the list, you may be surprised with the tangible and intangible assets you possess.

Tangible assets may include:

  • Cars and boats
  • Homes, land, and other real estate
  • Collectibles like art, coins, or antiques; and
  • Other personal possessions.

Your intangible assets may include:

  • Mutual funds, bonds, stocks
  • Savings accounts and certificates of deposit
  • Retirement plans
  • Health saving accounts; and
  • Business ownership.

Create Your Estate Planning Documents. Prior to seeing an experienced estate planning attorney, he or she will have you fill out a questionnaire and to bring a list of documents to the appointment. In every estate plan, the core documents often include a creating a last will and powers of attorney, as well as coordinating your Beneficiary Designations on life insurance and investment accounts. You may also want to ask about a trust and, if you haver minor children, selecting a guardian for their care, if you should pass away. You should also ask about estate taxes with the attorney.

Reference: EconoTimes (July 30, 2020) “Top 3 Estate Planning Tips When Seeing An Attorney”

What are Power of Attorney Options?

FedWeek’s recent article entitled The Options in Granting Powers of Attorney” explains that a power of attorney designates someone else to handle your affairs, if you can’t.

Here are the major types:

  • Limited power of attorney. This allows an agent to act on your behalf under specific circumstances, like a home sale closing that you can’t attend, and/or for a defined period of time.
  • General power of attorney. Gives broad authority to your agent, who at any time can write checks to pay your bills, sign contracts on your behalf and take distributions from your IRA.
  • Springing power of attorney. This isn’t effective when you execute it, but rather “springs” into effect upon certain circumstances, such as your becoming incompetent. You can say in the document what’s needed to verify your incompetency, like letters from two physicians stating that you no longer can manage your own affairs.

A power of attorney is important because your agent can act, if you become incapacitated. To serve this purpose, a power should be “durable,” so it will remain in effect if you become incompetent. Other powers of attorney may not be recognized, if a judge determines that you no longer can manage your affairs.

Without a power of attorney, your family may have to ask a judge to name a guardian to act in your best interests. A guardianship proceeding can be expensive and contentious. You might also wind up with an unwelcome interloper managing your finances. To avoid this situation, designate a person you trust as agent on your durable power.

A health care power of attorney, also known as a health care proxy or a medical power of attorney, should be a component of a complete estate plan. This document names a trusted agent to make decisions about your medical treatment, if you become unable to do so.

The person you name in your health care power doesn’t have to be the same person that you name as agent for a “regular” power of attorney (the POA that affects your finances).

For your health care power, chose a person in your family who is a medical professional or someone you trust to see that you get all necessary care.

Depending on state law, it may go into effect when a doctor (whom you can name in the POA) determines in writing that you no longer have the ability to make or communicate health care decisions.

Reference: FedWeek (Aug. 26, 2020) “The Options in Granting Powers of Attorney”

Estate Planning Needs for Every Stage

Many people decide they need an estate plan when they reach a certain age, but when an estate plan is needed is less about age than it is about stages in life, explains a recent article “Life stages dictate estate planning needs” from The News-Enterprise. Life’s stages can be broken into four groups, young with limited assets, young parents, getting close to retirement and post-retirement life.

Every adult should have an estate plan. Without one, we can’t determine who will take care of our financial and legal matters, if we are incapacitated or die unexpectedly. We also don’t have a voice in how any property we own will be distributed after death.

The first stage—a young individual with limited assets—includes college students, people in the early years of their careers and young couples, married or not. They may not own real estate or substantial assets, but they need a fiduciary and beneficiary. Distribution of assets is less of a priority than provisions for life emergencies.

Once a person becomes a parent, he or she needs to protect minor children or special needs dependents. Lifetime planning is still a concern, but protecting dependents is the priority. Estate planning is used in this stage to name guardians, set up trusts for children and name a trustee to oversee the child’s inheritance, regardless of size.

Many people use revocable living trusts as a means of protecting assets for minor dependents. The revocable trust directs property to pass to the minor beneficiary in whatever way the parents deem appropriate. This is typically done so the child can receive ongoing care, until the age when parents decide the child should receive his or her inheritance. The revocable trust also maintains privacy for the family, since the trust and its contents are not part of the probated estate.

The third stage of life includes people whose children are adults, who have no children or who are near retirement age and addresses different concerns, such as passing along assets to beneficiaries as smoothly as possible while minimizing taxes. The best planning strategy for this stage is often dictated by the primary type of asset.

For people with special situations, such as a beneficiary with substance abuse problems, or a person who owns multiple properties in multiple states or someone who is concerned about the public nature of probate, trusts are a critical part of protecting assets and privacy.

For people who own a primary residence and retirement assets, an estate plan that includes a will, a power of attorney and medical power of attorney may suffice. An estate planning attorney guides each family to make recommendations that will best suit their needs.

Reference: The News-Enterprise (Aug. 25, 2020) “Life stages dictate estate planning needs”

What Must I Decide before Retirement?

Many of retirement decisions are uncomfortable because they involve changing aspects of one’s life that may have been routine for years or facing the prospect of one’s deterioration in health or death.

Forbes’ article “5 Crucial Planning Steps To Take Before You Retire” lists several planning steps to take as you plan for a less stressful and much more enjoyable retirement.

Downsize. Owning a big home requires numerous financial expenditures, including higher property taxes, insurance coverage, upkeep costs and more. There is also the mental stress that comes with the upkeep of your home.

Practical solutions to housing for retirees should focus on the financial cost, safety, mental health, physical limitations and being around people on whom you can rely. The sooner you make the decision to downsize, the more trouble you can save yourself in the future.

Investments. Determine a proper asset allocation, an appropriate withdrawal strategy and coordinate various income streams.

Estate Plan. It’s critical to have an updated estate plan as you get older, accumulate more wealth and need to plan for the transition of that money to the next generation.

The main documents for a proper estate plan include a will, power of attorney for finances, power of attorney for health and a health care directive. Work with an experienced estate planning attorney.

Long-Term Care. A person turning 65 today has a 70% chance of needing some type of long-term care services in their lifetime. As we continue to live longer, this care will be a reality for many people.

Activities. Very few people have a strategy for how they will spend their time in retirement. You may want to work part-time, volunteer and to have regularly scheduled visits with family and friends. These activities help provide daily structure, social interaction and intellectual stimulation, which are all essential for preventing rapid physical and mental decline.

Don’t procrastinate! Start thinking about these issues today.

Reference: Forbes (Aug. 3, 2020) “5 Crucial Planning Steps To Take Before You Retire”

What Does Pandemic Estate Planning Look Like?

In the pandemic, it’s a good idea to know your affairs are in order. If you already have an estate plan, it may be time to review it with an experienced estate planning attorney, especially if your family’s had a marriage, divorce, remarriage, new children or grandchildren, or other changes in personal or financial circumstances. The Pointe Vedra Recorder’s article entitled “Estate planning during a pandemic: steps to take” explains some of the most commonly used documents in an estate plan:

Will. This basic estate planning document is what you use to state how you want your assets to be distributed after your death. You name an executor to coordinate the distribution and name a guardian to take care of minor children.

Financial power of attorney: This legal document allows you to name an agent with the authority to conduct your financial affairs, if you’re unable. You let them pay your bills, write checks, make deposits and sell or purchase assets.

Living trust: This lets you leave assets to your heirs, without going the probate process. A living trust also gives you considerable flexibility in dispersing your estate. You can instruct your trustee to pass your assets to your beneficiaries immediately upon your death or set up more elaborate directions to distribute the assets over time and in amounts you specify.

Health care proxy: This is also called a health care power of attorney. It is a legal document that designates an individual to act for you, if you become incapacitated. Similar to the financial power of attorney, your agent has the power to speak with your doctors, manage your medical care and make medical decisions for you, if you can’t.

Living will: This is also known as an advance health care directive. It provides information about the types of end-of-life treatment you do or don’t want, if you become terminally ill or permanently unconscious.

These are the basics. However, there may be other things to look at, based on your specific circumstances. Consult with an experienced estate planning attorney about tax issues, titling property correctly and a host of other things that may need to be addressed to take care of your family. Pandemic estate planning may sound morbid in these tough times, but it’s a good time to get this accomplished.

Reference: Pointe Vedra (Beach, FL) Recorder (July 16, 2020) “Estate planning during a pandemic: steps to take”

Why Should I Think about My Death?

Planning for the end of life isn’t about you, says NPR’s recent article entitled “End-Of-Life Planning Is A ‘Lifetime Gift’ To Your Loved Ones.” As the owner of the estate, you really don’t get to see the benefit of your estate planning. The NPR article gives us some easy and practical steps to planning for the end of life.

Name your executor. If you’re an adult, you should have a last will. This is because estate planning isn’t just for the rich. With a last will, you name an individual you trust to take care of everything when you die. That is the executor or personal representative. It’s a good idea to choose someone from your family or a person with whom you have a good relationship. This person also should have a good attention to detail, because an executor would have to locate all your financial assets and communicate with everyone you’ve named in your last will.

Conduct an inventory. Create a list of everything you own. This includes financial assets—such as bank accounts, retirement savings or car—as well as things that have sentimental value, like jewelry, furniture and mementos. Once this is done, specify in writing those persons you want to have these items. If you have young children, designate a guardian for their care, in case you and your spouse are no longer alive. This person will be responsible for your child’s schooling, health care decisions and value system. Digital accounts are also part of your property, such as your social media accounts, online photos, and whatever is in your Google Drive or iCloud. This also includes any online subscriptions and airline or credit card rewards. Create a secure list of all those accounts and the login and password details. Let your executor know where to find it. Make specific instructions about what you’d like to have happen with your online information.

Your decisions will change over time, so review and update your last will.

Think about your health care decisions. Your last will addresses what happens after you die. However, an advance directive is a legal document that addresses your health care and protects your wishes at the end of your life. There are two parts to an advance directive: a medical power of attorney, which is granted to someone to make decisions for you if you’re incapacitated; and a living will, in which you detail how you should be cared for by healthcare professionals.

Remember the emotional and spiritual aspects of death. The way in which you want to die is personal and about much more than just the medical aspect. It may be about being at peace with God or having your pets nearby.

Plan ahead to give you and your family peace of mind.

Reference: NPR (June 30, 2020) “End-Of-Life Planning Is A ‘Lifetime Gift’ To Your Loved Ones”

What Basic Estate Planning Documents Do I Need?

AARP’s recent article entitled “Sign These Papers” suggests that the following documents will give you and your family financial protection, as well as peace of mind.

Advance Directive. This document gives your family, loved ones and medical professionals your instructions for your health care. A living will, which is a kind of advance directive, details the treatment you’d like to have in the event you’re unable to speak. It covers things like when you would want doctors to stop treatment, pain relief and life support. Providing these instructions helps your family deal with these issues later.

Durable Power of Attorney for Health Care. This document, regularly included in an advance directive, lets you name a trusted person (plus a backup or two) to make medical decisions on your behalf, when you’re unable to do so.

Revocable Living Trust. Drawn up correctly by an experienced estate planning attorney, this makes it easy to keep track of your finances now, allow a trusted person step in, if necessary, and make certain that there are fewer problems for your heirs when you pass away. A revocable living trust is a powerful document that allows you to stay in control of all your finances as long as you want. You can also make changes to your trust as often as you like.

When you pass away, your family will have a much easiest task of distributing the assets in the trust to your beneficiaries. Without this, they’ll have to go through the probate process.  It can be a long and possibly costly process, if you die with only a will or intestate (i.e., without a will).

Will. Drafting a will with the guidance of an experienced estate planning attorney lets you avoid potential family fighting over what you’ve left behind. Your will can describe in succinct language whom you want to inherit items that might not be in your trust — your home or car, or specific keepsakes, such as your baseball card collection and your Hummel Figurines.

Durable Financial Power of Attorney. If you’re alive but incapacitated, the only way a trusted person, acting on your behalf, can access an IRA, pension or other financial account in your name is with a durable financial power of attorney. Many brokerages and other financial institutions have their own power of attorney forms, so make sure you ask about this.

These five documents (sometimes four, if your advance directive and health care power of attorney are combined) help you enjoy a happier, less stressful life.

In drafting these documents, you know that you’ve taken the steps to make navigating the future as smooth as possible. By making your intentions clear and easing the inheritance process as much as you possibly can, you’re taking care of your family. They will be grateful that you did.

Reference: AARP (August/September 2018) “Sign These Papers”

Estate Planning Different for Business Owners and Top-Level Executives

Do you need an estate plan? If you have children, ownership shares in a business, or even in more than one business, a desire to protect your family and business if you became disabled, or charitable giving goals, then you need an estate plan. The recent article “Estate planning for business owners and executives” from The Wealth Advisor explains why business owners, parents and executives need estate plans.

An estate plan is more than a way to distribute wealth. It can also:

  • Establish a Power of Attorney, if you can’t make decisions due to an illness or injury.
  • Identify a guardianship plan for minor children, naming a caregiver of your choice.
  • Ensure that assets are controlled through beneficiary designations rather than simply through a will and pass privately when owned through trusts. This includes retirement plans, life insurance, annuities and some jointly owned property.
  • Create trusts for beneficiaries who are younger, disabled, or others you feel need some kind of protection.
  • Identify professional management for assets in those trusts.
  • Minimize taxes and maximize privacy through the use of planning techniques.
  • Create a structure for your philanthropic goals.

An estate plan ensures that fiduciaries are identified to oversee and distribute assets as you want. Business owners, in particular, need estate plans to manage ownership assets, which requires more sophisticated planning. Ideally, you have a management and ownership succession plan for your business, and both should be well-documented and integrated with your overall estate plan.

Some business owners choose to separate their Power of Attorney documents, so one person or more who know their business well, as well as the POA holder or co-POA, are able to make decisions about the business, while family members are appointed POA for non-business decisions.

Depending on how your business is structured, the post-death transfer of the business may need to be a part of your estate plan. A current buy-sell agreement may be needed, especially if there are more than two owners of the business.

An estate plan, like a succession plan, is not a set-it-and-forget it document. Regular reviews will ensure that any changes are documented, from the size of your overall estate to the people you choose to make key decisions.

Reference: The Wealth Advisor (July 28, 2020) “Estate planning for business owners and executives”

What Does My Estate Plan Look Like after Divorce?

Planning an estate after a divorce involves adopting a different type of arithmetic. Without a spouse to anchor an estate plan, the executors, trustees, guardians or agents under a power of attorney and health care proxies will have to be chosen from a more diverse pool of those that are connected to you.

Wealth Advisor’s recent article entitled “How to Revise Your Estate Plan After Divorce” explains that beneficiary forms tied to an IRA, 401(k), 403(b) and life insurance will need to be updated to show the dissolution of the marriage.

There are usually estate planning terms that are included in agreements created during the separation and divorce. These may call for the removal of both spouses from each other’s estate planning documents and retirement accounts. For example, in New York, bequests to an ex-spouse in a will prepared during the marriage are voided after the divorce. Even though the old will is still valid, a new will has the benefit of realigning the estate assets with the intended recipients.

However, any trust created while married is treated differently. Revocable trusts can be revoked, and the assets held by those trusts can be part of the divorce. Irrevocable trusts involving marital property are less likely to be dissolved, and after the death of the grantor, distributions may be made to an ex-spouse as directed by the trust.

A big task in the post-divorce estate planning process is changing beneficiaries. Ask for a change of beneficiary forms for all retirement accounts. Without a stipulation in the divorce decree ending their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy may still receive the proceeds at your death.

Divorce makes children assume responsibility at an earlier age. Adult children in their 20s or early 30s typically assume the place of the ex-spouse as fiduciaries and health care proxies, as well as agents under powers of attorney, executors and trustees.

If the divorcing parents have minor children, they must choose a guardian in their wills to care for the children, in the event that both parents pass away.

Ask an experienced estate planning attorney to help you with the issues that are involved in estate planning after a divorce.

Reference: Wealth Advisor (July 7, 2020) “How to Revise Your Estate Plan After Divorce”

Are People Avoiding Estate Planning in the Pandemic?

A survey by Quest Research Group in the wake of COVID-19 wanted to see how prepared people would be, if something were to happen to them. They asked 1,000 people how much planning they’d done in the past, and if the pandemic encouraged them to start planning now.

Forbes’ June article entitled “The Three Reasons People Avoid Estate Planning” says that with all the uncertainty in the world, the study reveals that people are taking action, even though it’s something people typically try to avoid. Why do people avoid it? The article narrows it down to the three most common excuses:

  • I’m much too busy. I can barely keep up with my life as it is.
  • It’s complicated and/or expensive.
  • I’m just too superstitious. I’ll just jinx my life by thinking about death.

All of these excuses are followed by a sentiment such as “I know it’s something I should do” and “I’ll get around to it one day.” No matter how it’s said, people just don’t feel that it is urgent.

First, are those who are superstitious and think doing this somehow curse their life. However, people buy car seats for their children, and no one refuses to buy a car seat because they think it would make them more susceptible to an accident. Instead, you buy one, because you’re a responsible adult who cares for your child.

The other two excuses are similar, because when people say that planning is a time consuming or expensive task, they’re automatically too busy or frugal to even consider taking on such a task. Then we do all that we can to procrastinate.

To address these excuses, here are some things you can do right now at little or no expense that can help your family, if there’s an emergency. It will also make you feel more responsible for your life, in the same way parents do when they purchase car seats.

Password Sharing. Passwords are the keys to modern estate planning. To have access to your accounts in the event of an emergency, someone you trust should have access to your passwords. There are password managers, like Dashlane or LastPass, which coordinate all your passwords, so you only have to remember one. You can later share it.

Draft a Medical Directive. This document instructs your family what you want done in a medical emergency (Living Will) and who should speak on your behalf, if you’re unable to communicate (Health Care Proxy). These make up an Advance Directive.

Create a Will and a Power of Attorney. A will is the document that instructs your executor how to distribute your assets. A will also names a guardian for any minor children. A Power of Attorney (POA) is like a Health Care Proxy for your money and lets an agent make financial and legal decisions on your behalf, when you are unable.

Ask an experienced estate planning attorney to help you create these to avoid any issues down the road.

Reference: Forbes (June 24, 2020) “The Three Reasons People Avoid Estate Planning”