In the age of computers and mass information, people often think that legal advice is not always necessary. Take, for example, estate planning. In an effort to avoid probate upon death, people sometimes make the mistake of signing over the deed to their home to an adult child, grandchild, brother or sister or making that individual a joint tenant on the deed. While this will accomplish the goal of avoiding probate, it can have a number of disastrous consequences as well. Imagine the following possible scenarios.
Your child/grandchild/sibling is sued as a result of a personal injury accident and a jury awards a large sum to the plaintiff. Insurance does not cover all of the award. Your home could be liened and sold to pay off the award.
Your child/grandchild/sibling gets into debt and the creditors lien and sell the home to pay back the debts.
Your child/grandchild/sibling uses the home as collateral on a loan and them a catastrophe strikes and cannot pay back the loan. The lender then forecloses on home.
Your child/grandchild/sibling dies without leaving behind a valid Last Will and Testament and the home is left to his or her spouse. Do you trust this person to give you back your home or at least allow you to live in it?
Your child/grandchild/sibling is involved in a divorce. Legally, the home may be marital property and could be sold in order to divide the profits or awarded to the spouse instead of your child/grandchild/sibling.
Your child/grandchild/sibling may refuse to sell the property if you need the proceeds to pay for assisted living or long term care.
I recommend that you see a qualified estate planning attorney to discuss other planning options before you take your estate planning into your own hands and transfer ownership of your home to another.
When it comes time to create an estate plan, most parents assume that they should treat their adult children the same under the plan. A parent may not want the children to think they are favoring one child over another. While equal treatment may be the goal, it doesn’t necessarily mean treating them all the same.
Your children have their own individual strengths and weaknesses. They each have chosen separate paths in life. They each, no doubt, want different things from life. Just as they are all individuals, you may treat them as such in your estate plan.
If you happen to have one child who is an attorney, an accountant or a financial advisor, it may make sense to nominate them as the personal representative or trustee as opposed to someone with less business experience.
In deciding who gets what, the same philosophy applies. You may want to give them all equal shares, but you should consider discussing the issue with the children or other beneficiaries. While one may need a home more than cash, before making that choice for them discuss whether it would be fair or prudent to leave them a particular piece of real property or cash to purchase the place they would prefer. Another may have issues such as creditors, special needs or substance addiction, that call for creating a trust instead of outright distribution to her. Yet another may be a philanthropist and prefer that you contribute his share to a charity.
Your estate planning attorney can guide you through this process and help you find solutions to these challenges, so take advantage of the experience and expertise available to you.
Americans are living longer, which is generally good news. The average life span of the ancient Greeks was about 18 years. The average lifespan of an American male is now around 75 years and for females even longer. Advances in medicine and technology as well as a better understanding of how to live a healthy life are allowing us to enjoy not only our grandchildren, but our great-great grandchildren as well. Living longer comes at a cost, though. No one has yet figured out how to stop the natural aging process, meaning that we typically need significantly more help taking care of daily needs and staying healthy as we age. For many, this means that we will need long-term care at some point. Now is the time to consider purchasing a long-term care insurance, or LTCI, policy.
An LTCI policy works in much the same way as any other insurance policy. When the policy holder reaches a point at which long-term care is required, the policy coverage will take effect and cover most of the costs associated with the care. Considering the fact that long-term care costs can run upwards of $100,000 a year, an LTCI policy can be a lifesaver from a financial perspective.
If you decide to purchase an LTCI policy, do your homework before you buy. As with other types of insurance, there are many choices and considerations. Make sure that you fully understand what coverage you are purchasing and what conditions must be met before the coverage will take effect. Research the company as well to make sure it is financially sound. Finally, sit down with your estate planning attorney with any questions or concerns that you have before you commit to purchasing the policy.
Setting aside money for someone to care for your pets after you’re gone is not only for the rich and famous. Creating an estate plan that includes your pet should be the typical practice for all animal owners. You can make sure when someone takes care of your best four-legged friend after you pass away, you are not creating a financial burden. A pet trust must be done right, so be certain to consult with your estate planning attorney. Your attorney can recommend a proper estate plan that includes your pets.
Although creating a pet trust may seem like the most obvious way to care for your pet, you can make sure your beloved pet continues receiving proper care after you’re no longer around by creating a conditional Will. Your estate planning attorney can help you determine whether creating a pet trust or a conditional Will would better accommodate your individual needs.
A pet trust is a written document that you create while you are alive. To establish a valid trust, you need to fund it and appoint a trustee. Most states allow their residents to establish pet trusts for the benefit of their pets. A conditional will allows you to place a condition on an heir’s right to receive an inheritance. Typically, the condition you place on your heir is that he or she must take care of your pet to be able to receive the inheritance. Speak with your estate planning attorney about leaving a conditional bequest to a trusted friend or relative.
Pet Trusts and Conditional Wills: Ways to Include Your Pet in Your Estate Plans
American legend Dick Clark died at the age of 82 this week. Clark suffered a heart attack following a medical procedure on April 18th. It would be difficult to find anyone over the age of 30 who doesn’t identify with Clark for one reason or another. The world mourns his loss. According to reports, the workaholic left behind a fortune that likely reaches into the hundreds of millions of dollars.
As the host of American Bandstand, from 1957 to 1987, Clark has the honor of being the host of the longest running variety show ever on American television. You would be hard pressed to come up with a music group or singer that did not perform on AB during that time period. Clark hardly sat back and took it easy though when AB went off the air. He went on to host the game show Pyramid as well as becoming the host of Dick Clark’s New Year’s Rockin’ Eve broadcast live each year from Times Square. When we all watch the ball drop this New Year’s Eve it will be bitter sweet as well all remember the voice of New Year’s Eve, Dick Clark.
Although no Last Will and Testament has been produced at this point, reports are that Clark left behind a fortune. Given how careful he was in all his dealings, it is probable that he had an elaborate estate plan which included trusts, so the estate will likely never appear in court.
Clark never stopped working, despite his age and a stroke he suffered in 2004. Clark reminds us all that our golden years can continue to be eventful and productive.
Most of us assume that anyone worth millions of dollars would certainly go to the trouble of creating a comprehensive estate plan, or at the very minimum a Last Will and Testament. As with many assumptions, that one would be incorrect. A surprising number of the rich and famous have died intestate, or without leaving behind a valid Will, including the following:
Sonny Bono: Best known early on as half of “Sonny and Cher”, Bono later went on to become the mayor of Palm Springs, California and a member of the U.S. House of Representatives before dying in a tragic skiing accident in 1998. Bono did not leave behind a Will. Shortly after his death, his wife and mother became embroiled in a legal battle over Bono’s estate.
Steve McNair: The NFL star was shot and killed by an alleged girlfriend at the age of 36. McNair left behind a family and a fortune, but no Will.
DJ AM: Although this name may only be familiar to those of a certain age group, the famous DJ died of a drug overdose in 2009 without having executed a Will prior to his death.
Howard Hughes: The eccentric billionaire who was worth in the neighborhood of $2.5 billion when he died in 1976 failed to leave behind a Will. Although one was produced after his death, it was later determined to be a forgery. Eventually, 22 cousins inherited Hughes’s fortune.
Pablo Picasso: The famous artist died at the age of 91 leaving behind homes, cash and artwork valued in the millions, but did not leave behind a Will. Six years later, at an estimated cost of $30 million, his estate was settled.
You may not be famous or rich, but if die intestate you leave the problems for the courts and the state to decide. It leaves children unprotected, special people in your life disappointed and causes undue financial expense on the estate.
Unfortunately, stories of Marines returning home from combat are not uncommon. Likewise, stories of dog owners who form a bond with their pet are also not uncommon. A story, however, that combines the two has moved thousands to get involved and lend support.
Just as law enforcement officers are sometimes paired with a canine partner, military personnel can also be paired with a canine partner. Former Marine Cpl. Megan Leavey, 28, and her military service dog named Sgt. Rex completed over 100 missions together during two six-month tours in Iraq. Upon returning home in 2007, Leavey realized that she could not imagine not having Rex with her in her civilian life. Leavey wanted to adopt Rex; however, adopting a military service dog is far from an easy task to accomplish. Leavey refused to give up her mission. Eventually, her story went public and garnered the support of U.S. Senator Schumer as well as over 21,000 people who signed an online petition asking for Leavey to be given permission to adopt Rex. Her efforts finally paid off -- Leavey was given permission to adopt Rex and they will soon be reunited.
If you have a pet to whom you are equally attached, make sure you think about him or her when you create your estate plan. Just as you create a trust for a family member, you can create a pet trust for your pet, thereby ensuring that he or she will be provided for in the event you are no longer here to do so yourself.
A comprehensive estate plan that was well prepared will include a funeral plan. By creating a funeral plan you will spare your loved ones additional grief and ensure that your wishes are carried out. Once written down, be sure to leave a copy with the trustee or executor of your estate and your estate planning attorney. Consider including the following information in your funeral plan:
A little advance planning can make a very difficult time for your faily much easier.
Each estate plan is as individual as the person who creates the plan. Having said that, one of the most common components to an estate plan is life insurance. Whether or not you should include life insurance as part of your estate plan will depend on a number of factors; however, there are some things you should take into account when making the decision.
Your age and health. Life insurance is less expensive to purchase when you are younger and healthy, meaning you should be able to lock in the best rates. This is also when most people need life insurance for wealth and income replacement -- before they have other estate assets that can be passed down in the event of death.
Know what kind you are buying. Life insurance falls into two basic types -- term and insurance with cash value such as whole life or universal life. Term insurance only provides a death benefit while insurance with a cash value component potentially earns cash value, as the term implies.
Know your objective. If you only want to provide a financial safety net to your family, sticking with term insurance is likely your best bet. Talk to a financial advisor if you are considering whole life insurance. It can be a complicated investment strategy, but there are benefits that are not available to term policy holders.
Decide how much you need. This can change over the years. If you are young and single, you may only need enough to cover debts and your funeral. As you age, you should factor in what it will cost to raise your children if you die before they reach the level of maturity when they will be able to fend for themselves.
Shop around. Just as with other types of insurance policies the policy rates can vary widely. Take your time and compare rates before you commit. You should also be certain you are dealing with a company that is secure, so look at their rating with AM Best or Standard and Poors.
Know when to terminate or convert. Life insurance is rarely the best way to invest your money, but when it comes time to collect, your loved ones will find that you have provided well for them. Review your financial portfolio and your needs on a regular basis not only with your financial adviser, but your attorney, as well. You may find that you no longer need to include a life insurance policy for wealth or income replacement, but it could be useful in your estate plan as protection from estate taxes, expenses of administration, or other financial burdens of which you may not be aware.
We all leave behind a legacy when we die -- what your legacy is depends on how much time and effort you put into creating it prior to your death. You don’t have to have a vast fortune in order to create a legacy plan; however, the wealthier you are, the more important it is to create a legacy plan that is consistent with your objectives.
A legacy plan is your chance to elaborate on your basic estate plan. Your basic estate plan allows you to determine who will receive your assets when you die. A legacy plan allows you to ensure that those assets are preserved for generations to come and/or allows you to continue contributing to causes that have meant something to you during your lifetime. Without a legacy plan, your wealth may be significantly reduced by various taxes levied on your estate at the time of your death. In addition, you will lose the opportunity to direct how your wealth will be managed after your death.
A legacy plan often incorporates trusts and other estate planning tools that can allow you to direct how your assets will be used for generations to come. A generation skipping trust, for example can provide income for your children and ensure that assets are preserved for your grandchildren. A charitable trust can be created to provide a mechanism for you to continue to support a cause that was important to you during your lifetime long after your death. Start planning now so you can create a legacy of which you can be proud.
The voice behind the famous song I Will Always Love You, was found dead of unknown causes in the bathtub of her hotel room just hours before the Grammy Awards. The untimely death of the 48-year old singer/actress comes after a decade of personal troubles including drug and alcohol addiction as well as the end of her highly publicized relationship with Bobby Brown. Just hours after her death, sales of anything “Whitney Houston” started to soar. The ultimate value of her estate has yet to be determined; however, it is clear that, as has been the case with other artists, her death may cause her popularity, and therefore her wealth, to increase substantially. The death of the once darling of both the screen and the radio reminds us all of how important it is to create an estate plan.
People often make the mistake of thinking that creating an estate plan is not necessary unless you have a substantial estate at the time. What many people don’t realize, however, is that the value of your estate can soar at any time. Unfortunately, as the untimely death of Houston reminds us, death can also strike at any time. The seed you plant today, whether it is an investment, life insurance, law suit or fledgling business, could be worth a small fortune tomorrow. Those “seeds” will become part of your estate upon your death. Even if they are not worth a substantial amount at the time of your death, they may continue to grow after your death. Deciding who will receive those assets, therefore, becomes important. The only way to ensure that your assets will be handled in the manner you intend is to create a comprehensive estate plan today.
Today, divorce is commonplace. Various studies conclude that just over 50 percent of all marriages end in divorce. It is also estimated that the divorce rate is around 60% for second marriages. Divorce can have a devastating emotional impact on both spouses, as well as for children who are caught in the middle. Aside from the emotional consequences of a divorce, a divorce can also have a significant financial impact on both spouses. Divorce typically leaves at least one, and often both, spouses in a worse financial situation than before the divorce. If you have recently been through a divorce, or are currently in the middle of one, it is critical that you also consider the effect of the divorce on your estate plan.
A number of estate planning documents should be reviewed and amended incident to a divorce. Most people will want to remove an ex-spouse as a beneficiary under their will or trust. If you have minor children, you should also consider appointing one or more people as potential guardians of your children in the event your ex-spouse becomes incapacitated or passes way. Retirement plans and life insurance policies may also need to be changed in order to remove your ex-spouse as the beneficiary. While many state’s laws automatically remove your ex-spouse as beneficiary under your will, trust, retirement plans and life insurance policies, you should make the actual changes so there is no question who you intended to receive your estate and to avoid your family having to take a likely trip to court. Lastly, durable powers of attorneys for both property and health care decisions should be reviewed and amended to remove an ex-spouse from having decision making authority under these documents.
Some of the changes described above should be considered and completed even before your divorce is finalized. However, caution needs to be exercised because certain actions, such as changing beneficiary designations on life insurance policies and retirement plans or transferring assets out of a trust, is forbidden under the divorce laws of most states. Any changes to your estate plan incident to a divorce should only be done at the direction of both your divorce and your estate planning attorneys.
There are various outlets available for bare bones estate planning documents. Some contend that estate planning is as simple as filling in the blanks. Obviously, there are many reasons why one document does not fit all situations.
Something as important as planning for your potential disablity and transferring all the assets that you have accumulated throughout your life to your loved ones is not something to entrust to documents found on the Internet from an unknown drafter. This is a highly sensitive matter that requires professional expertise.
This is true even if you have a seemingly uncomplicated family situation. The truth is most American families are not of the "cookie-cutter" variety. There are often children from previous marriages involved and these blended family situations create the need for specialized estate planning. Some people have business succession issues to deal with. You may have beneficiaries with disabilities or special needs on your inheritance list. There are many other factors that can enter into the equation that require very specific actions.
Since most families are unique the best way to ensure that your estate plan properly addresses your situtaiton is to discuss it with a qualified Reno estate planning lawyer. Once he gains an understanding of your wishes and evaluates your circumstances he can recommend a course of action that is carefully crafted for your needs.
Owning a dog is rewarding in a number of different ways, and for seniors a dog could provide a very welcome companion at a time when loneliness can be an issue. There is no replacing your family of course, but for many people, dogs are indeed man's best friend. You may find that a canine in the household will uplift your mood and perhaps even provide you with protection.
If you are a dog owner you should consider who would be caring for your pet if you were to pass away before the animal. This is obviously a serious consideration for senior citizens who own pets, but it is also important for anyone who owns an animal just as a precaution because life is uncertain at any age.
Your first task is going to be choosing a capable caretaker. It is very possible that a particular person will immediately come to mind. You may have a friend or family member that knows the pet well and who already has somewhat of a relationship with the animal.
Once you determine who would become the pet's caretaker in the event of your death you have to consider the financial side of things. You can provide financial resources to the caretaker by giving this individual a direct inheritance earmarked for the pet's care. A better option, however, would be to create a pet trust for the benefit of your dog. Doing so will keep your pet from becoming a burden to those left to care for it.
If you have any questions about pet planning, simply take a moment to arrange for a consultation with a good Northern Nevada estate planning lawyer.
Statistics tell us that only around half of Americans have any type of estate plan in place. Going through life without an estate plan is taking a risk that can easily be eliminated. If you need some motivation, simply envision where your family would be if you were to pass away today. When you make plans for all contingencies you are protecting those that you love.
If however you deceased without an estate plan in place the intestacy rules of succession would apply. "Dying intestate" means dying without having executed a valid last will. There are those who understand that there are intestacy laws of succession. They may not take estate planning very seriously because they assume that their next of kin will inherit their estate. This could be a crucial mistake. You may be shocked who would actually inherit your estate under the laws of intestacy.
The estate will be administered under the jurisdiction of the probate court if you die intestate. Tthe probate process can be extremely time-consuming, expensive and public in nature. Also, iterested parties can delay the process with objections and creditor claims.
The fact of the matter is that estate planning is not optional if you truly care about the well-being of your family. If you are currently unprepared now would be a good time to take action and arrange for a consultation with a good Reno Estate Planning attorney.
Most people tend to procrastinate when it comes to estate planning. In fact less than half of people in the United States have a last Will or a Living Trust in place. Since so many people procrastinate before they put an initial estate plan in place, they are also prone to procrastinate when it comes to updating their existing estate plans.
Life is never constant - except, of course, for constant change. Circumstances in your life will change over the years, and these changes may call for an estate plan revision. There may be people who join the family, others who leave, and your financial situation could change dramatically. A review of your estate plan will reveal if there are needed changes.
In addition, a high percentage of marriages end in divorce and most of these people remarry. Changes in marital status are almost definitely going to make an estate plan update necessary.
We have just entered a brand-new year and as you turn the page on the calendar you may want to make a mental note to yourself regarding an estate plan review. This is especially true in this election year with the distinct possibility of the sunset of a very generous estate tax exemption.
In addition to the things that happen to you personally, of which you would be well aware, there are also legislative changes and alterations to the tax code that take place on an ongoing basis. Many of these can be relevant to your existing estate plan.
It is a good idea to review your plan at least ever three years with professional guidance, and if you're ready to do so simply take a moment to arrange for a consultation with a qualified Reno Estate Planning lawyer.
You have a trust or a will in place, so you have determined how the distribution of your assets will take place upon your death. That is great, because now you are at least assured that the "government plan" or intestate succession is not necessarily your plan. Further, with a funded trust, your estate will also avoid unnecessary and unwanted probate.
Your estate plan will also avoid unnecessary disputes about the distribution of the estate. Each family is different but how do you think a typical family may react if it was up to them to agree upon how the assets of a loved one should be distributed? Clearly, in many cases, consensus would be hard to come by. You don't have to worry about this when it comes to your estate, but there is an issue that is often ignored. That issue is the funeral planning.
If you were to pass away without leaving behind any instructions regarding your funeral details your family members could wind up disagreeing. Of course, this comes at a very difficult time for families. If one family member takes charge and arranges for cremation when other family members have moral or religious objections, it can create a rift in the family. Even choices of caskets, the amount spent on the funeral arrangements and the choice of burial clothing can create hard feelings at a highly emotional time.
Even if there are no particular disagreements among family members, someone is going to have to take up serious time in making these arrangements at a time when they are grieving and in no mood for it.
If you take the time to make your funeral arrangements in advance, you can even select the facility, casket and clothing of your choice and pre-pay should you choose to do so. To learn more about including final arrangements in your estate plan, get in touch with an experienced northern Nevada estate planning lawyer to arrange for a consultation.
The dictionary definition of the word "legacy" will tell you that your legacy involves gifts of property and monetary assets after your passing. This is of course a large part of it, but there could be more to shaping your legacy than simply arranging for the passing of your assets to your family members.
Depending on your resources exactly how you go about this can vary considerably. There are those who will make a donation that is specifically used to finance some type of building project. This may carry your name into perpetuity, which can be quite rewarding for many people.
Some people will leave behind the resources to provide a scholarship or scholarships to worthy students. This too can be an enriching portion of an individual's legacy.
You can also choose to pass along the wisdom that you have acquired throughout your life by committing your experiences to writing. Some people choose to write a full-blown autobiography and leave it behind for future generations to draw from. Others will author an ethical will that passes along their moral and spiritual values. Today, there are many resources to assist in writing an interesting personal history that can be found online or in bookstores. The same is true of writing an ethical will.
Carefully selecting certain family heirlooms and/or personal possessions and handing them on to particular respective heirs for specific reasons can also be part of a carefully planned legacy.
There are many possibilities to take into account when you are preparing for the latter portion of your life and your eventual death. If you're interested in taking estate planning to a higher level, don't hesitate to get in touch with a Northern Nevada legacy planning attorney to arrange for an informative consultation.
