As millennials (born 1981 to 1996), you are well known for your distinctiveness as a group. Your generation has followed paths and set goals that are decidedly different from those chosen by previous generations. You are highly diverse, better educated, more socially conscious, and wait longer to have families than your parents and grandparents. But one thing you have in common with other generational groups is the need for estate planning. Unfortunately, a startling 79% of millennials do not have basic estate plans in place. Your needs and goals may vary, but having an estate plan in place is crucial for every adult, including millennials. You do not know what the future holds, and we can help you make sure that plans are in place that not only provide for your own future needs but also those of your loved ones and pets.

Will and/or Trust

As a millennial, you may not have accumulated as much wealth as members of older generations, but it is important for you to make sure that your money and property will go to the family members or loved ones you have chosen if something happens to you. If you do not have a will or trust, your money and property will pass to the person designated by state law, which may not be the person you would want to inherit your prized possessions and money. In addition, if you are married and have young children, you need to take steps to ensure that your spouse and children are provided for. A trust is often the best solution: If your spouse inherits your money and property outright under a will, and your spouse eventually remarries, your assets could go to the second spouse instead of your children. In addition, the inheritance will be vulnerable to claims made by your spouse’s creditors. A trust can avoid these results by allowing you to choose who receives your property and money, as well as the timing and size of the gifts.

Pet Trust

If you are one of many millennials, especially those who live in large urban areas, who chose either to delay having children or to remain childless, you may have adopted pets that you love and dote upon just as you would a child. Especially if you are single, you should consider a pet trust to provide for your pet’s care if something happens to you. The pet trust can allow you to make arrangements for your pet if you die or are physically unable to care for them yourself. The pet trust can not only specify a caregiver for your pet, it can also provide care instructions and set aside funds sufficient to care for your pet’s needs (medical care, grooming, exercise, etc.). You also have the ability to name an additional person to manage the money you have set aside for your pet, if you would rather have someone other than the caregiver in charge of the money.

Charitable Remainder Trust

Millennials are well known for being socially conscious and wanting to make a positive difference in the world. If you want your money and possessions to support a charitable cause when you pass away, you may be interested in establishing a charitable remainder trust, which enables you to benefit from a stream of income for your own life, with the remaining money in the trust going to a charity you have selected upon your death.

Planning for Student Loans or Credit Card Debt

As the cost of college tuition continues to increase, the level of debt millennials have begun their adult lives with is startlingly high. The average student loan debt of adults aged 25 to 34 is $33,000 per borrower. Federal student loans typically are forgiven upon the borrower’s death, but the estates of borrowers who obtained private loans can be pursued by those lenders. In addition, high credit card debt is prevalent among millennials. If you have incurred substantial debt, life insurance sufficient to cover income tax on the cancellation of debt in the case of a federal student loan or to cover the debt itself if a student loan is owed to a private lender or money is owed to a credit card company may be a good solution if you are concerned about the burden your debt could place on your loved ones upon your death.

Digital Assets 

If you are like many millennials, who are the first generation who grew up using the internet, you have likely amassed a much greater quantity of digital assets than members of previous generations. These assets may include social media accounts, blogs, photographs and videos, financial accounts, and email accounts, among many others. A comprehensive list of these of these assets, which may be among your most prized possessions, as well as the accompanying usernames and passwords, and instructions for their management, is essential to ensure that your wishes are honored if you pass away or become too ill to manage them on your own. Depending upon your wishes, you can appoint a separate person to wind up (or continue managing, e.g., in the case of a blog) these assets and accounts, or you can choose to have your executor or trustee handle this aspect of your estate. The list, which can be incorporated by reference into your other estate planning documents, should be stored in a secure place along with your will and/or trust.

Powers of Attorney

Medical Power of Attorney

If you are a younger millennial, you may not realize that your parents no longer automatically have the right to make medical decisions on your behalf if you become too ill to make them on your own or if you are unable to communicate your wishes. Even if you are married, your spouse may still need to be properly named in a medical power of attorney to make decisions for you when you cannot. It is also important to designate a trusted person to act on your behalf if your spouse is unavailable. If you fail to have a medical power of attorney prepared, a court proceeding may be necessary to appoint someone to fill that role if, e.g., you are in an automobile accident and are unconscious. You should also consider completing a living will spelling out your wishes regarding medical treatment you want--or don’t want--at the end of your life or if you are in a persistent vegetative state.

Financial Power of Attorney

Another document that is essential for your care if you were to become unconscious or too ill to make your own financial decisions is a financial power of attorney. It allows a person you have named to pay bills, take care of your home, manage your accounts, and make other money-related decisions for you. Even if you are married, a financial power of attorney is important because any bank accounts or other property that are not jointly owned cannot be managed by your spouse without it—unless your spouse goes to court and asks to be appointed as your guardian, causing unnecessary stress in an already distressing situation. A financial power of attorney can also be helpful if you do a lot of international travel and may occasionally need someone to handle your financial matters while you are out of the country. 

Let Us Help You Prepare for the Future

You may think that estate planning is only for the elderly. However, even if you are young, an estate plan is crucial, regardless of whether you have accumulated much money or property. A properly executed estate plan provides not only for the well-being of your family, loved ones, and pets, but also allows you to put plans in place if you become ill or are severely injured and cannot make medical and financial decisions for yourself. Call us today at 775-823-9455 to learn more about how we can help you prepare for your future.

In 2008, Congress recognized the need for the public to understand the importance and benefits of estate planning by passing House Resolution 1499, which designated the third week of October as National Estate Planning Awareness Week. Nevertheless, according to a 2019 survey carried out by Caring.com, 57% of adults in the United States have not prepared any estate planning documents such as a will or trust even though 76% viewed them as necessary. Many of the respondents said this was due to procrastination, but many others mistakenly believed it was unnecessary because they did not have many assets.

Why should you have an estate plan?

An estate plan can provide significant peace of mind by ensuring your assets are protected, plans are in place if you become ill, and your property is passed down according to your wishes.

What key topics should you consider?

● Do you have a last will and testament and/or a trust? If you do not have these important documents, state law will determine who will inherit your property—and thus, it may not occur in the way you would have chosen. In addition, someone appointed by the court, instead of a trusted person of your choosing, will be in charge of caring for any children or pets. Spelling out your wishes in a will or trust will also prevent unnecessary confusion, anxiety, and expense for other family members when you are gone.

● Have the proper powers of attorney been prepared? A financial power of attorney will allow you to designate an individual to make financial and property decisions for you should you become unable to handle your own affairs. A medical power of attorney enables you to designate a person you trust to make medical decisions for you when you are otherwise unable to speak for yourself.

● Ensure that you have an advanced directive, also called a living will, which memorializes your wishes concerning your end of life care, such as whether you would like to receive life support if you are in a vegetative state or terminal condition.

● Do you have insurance? If you become incapacitated or die, it is important that your family or loved ones have information about your insurance (such as life, health, disability, long-term care, etc.) so that claims can be filed.

● Compile a list of all of your accounts and other important information such as; bank and investment accounts, titles to vehicles and homes, credit card accounts or loans, digital accounts (such as Facebook, LinkedIn, and Twitter) and passwords, Social Security cards, passports, and birth certificates. These documents may be needed to manage your property when you are incapacitated or settle your estate once you are gone. This information should be kept in a safe place and shared only with trusted family members or loved ones.

● A list of legal, financial, and medical professionals who have performed services for you is also essential. The list should include their contact information so your family can easily reach them in the event their help is needed if you become disabled or die. If desired, you should also ensure HIPAA authorizations are in place with medical professionals to ensure your family members can obtain the needed information.

How should you encourage your family members to create an estate plan?

Estate Planning Awareness Week is a great opportunity to take steps to make sure your own estate plan is in place and talk to your family members, especially elderly parents, about creating an estate plan. Estate planning is often a difficult topic to broach, as it brings the unpleasant issues of aging and death to the forefront of our minds. Here are a few tips to help you start the conversation.

Be sensitive to your family members’ feelings. Put yourself in their shoes, and keep in mind that few people are eager to dwell on the subject of their own death. One way to begin the conversation is to talk first about the need to plan for illness and provide instructions if they become too ill to communicate with doctors or handle financial matters for themselves. The conversation can then naturally progress to the importance of having an estate plan that will enable their assets to be transferred in the way they wish, provide for the care of any dependents or pets, and minimize any taxes, court costs, and legal fees. Communicate that you are not trying to control their decisions but only want to ensure that their own wishes regarding their medical care and their property are known—and that all their instructions are in writing to guarantee they are carried out. 

Involve other family members in the conversation. If you are planning to speak to your parents about the need for an estate plan, it is important to include any siblings in the discussion to avoid giving the impression that you are trying to influence or control your parents’ choices. You and your siblings should emphasize to your parents that none of you are asking about what you will inherit but just want to make sure that their wishes are carried out if they become ill or pass away.

Consult an estate planning attorney.

An experienced estate planning attorney can help you and your family members create an estate plan tailored to meet each of your unique needs and carry out your wishes—or help you update a pre-existing estate plan. We can provide each family member with guidance and information about the options available to them. We can help each of you put a plan in place to prevent unnecessary stress, legal expenses and taxes, uneven inheritances, disputes between family members, and delays in passing life savings on to loved ones. In addition, it will provide you and your family members with the peace of mind that comes with knowing there are plans in place for your care if any of you become ill and that your wishes will be honored once you pass away. Call us today to set up a meeting.

supplemental needs trustEstate planning can be a very difficult process. While it’s not brain surgery, making the decision to move forward with the planning requires us to face the fact that we will not live forever. This thought can stop many people right in their tracks. Others talk themselves out of seeing a qualified attorney to put together an estate plan based on some of the following common myths:

Myth #1: Only the Rich Need Estate Planning

When we hear about estate planning on the news or read about it on the internet, it is usually in regards to a wealthy businessman or celebrity who made some error, did no planning, or has family members who are angry about the planning that was actually done. The topic catches people’s attention: Rich people have so much that surely they need planning and can afford to have the planning done correctly. By comparison, when the average person thinks about their own property and planning needs, they assume that it is not necessary because they do not have anything close to Bill Gates’ billions.

However, this could not be further from the truth. Estate planning is about more than just the money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated and someone has to make decisions on your behalf--a far more likely scenario. If you have not done any planning, the court will have to appoint someone to make your medical and financial decisions for you. This can be very time consuming, expensive, and public. It can also wreak havoc on a family if they disagree about who should be appointed and how decisions should be made.

Even for those of modest means, who gets your hard-earned savings when you die is an important consideration. Without any planning, state law will decide who gets what—and many times, what the government’s best guess as to what you would want is contrary to what you actually want. But, because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in and do it for you.

Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything

For many married couples, it is common to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner. In most cases, this is the desired outcome for married individuals.

However, this approach can be dangerous. While it is convenient for assets to pass automatically to the surviving spouse, this outright distribution offers no protection. What happens if, after your spouse dies, you get into a car accident and are sued? If the assets you owned jointly automatically became yours alone, this money and property are available to satisfy any judgment that could be entered against you resulting from a lawsuit.

Additionally, what if, after you die, your spouse gets remarried? If the brokerage account you owned jointly becomes your spouse’s only, your spouse is now able to spend it all in any way he or she wants without any consideration for your wishes or the next generation. Your spouse’s new spouse could go out and buy a sports car with the money you intended to pass to your children. With blended families being common today, this is a real concern for many people.

Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.

Myth #3: A Will Avoids Probate

Many people believe that once they have created a will—whether drafted by an experienced attorney, or using a DIY solution or online form— they have avoided probate. Unfortunately, they are wrong.

While a will is a great way to designate a person to wind up your affairs once you have passed, determine who will get your hard earned savings and property, and, if necessary, appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your money and property. The level of involvement by the probate court can vary depending on the circumstances, but this process is not private, as the will becomes a matter of public record.

Summary Proceedings: In some states, if the value of your estate (i.e., what you own at your death) is below a certain monetary threshold, then anyone who is entitled to inherit from the decedent can file a petition and have the property distributed outside of the traditional probate proceedings. The filing may require a court appearance and formal legal notice to anyone who might be interested before allowing your property to be distributed.

Affidavit Procedure: Some states allow for an affidavit to be used to collect and distribute a decedent’s money and property. In some states, this affidavit can be self-executed, while others require that the document be filed with the court. Generally, affidavits require the passing of time from the date of a decedent’s death—ranging from a few days to a few months. After that, a “successor” to the decedent (a spouse or heir) signs the affidavit and presents the affidavit to collect the decedent’s assets for distribution to his or her rightful heirs.

Supervised Probate: With this type of proceeding, the probate judge oversees every step of the administration process and has to approve of the Personal Representative’s actions. During a supervised probate, all pleadings and required documents have to be filed with the probate court and then served on interested persons or parties. This can be a very time consuming and expensive process. Each time the Personal Representative has to take an action, a legal pleading has to be filed and served on the interested party, which, in contentious situations, opens up the possibility for disagreements and attorneys’ fees.

Unsupervised Probate: In cases where there are no controversies and the parties all get along, an unsupervised probate administration may be the best option. In this situation, although the administration is not supervised by a court, there are still actions the Personal Representative needs to take, but the Personal Representative may not be required to file petitions and documents for each of those steps. However, a Personal Representative may be required to file some steps, such as the preparation of the inventory, with the court and the interested parties, but no corresponding hearing is scheduled. While this is less complicated and possibly less expensive than a supervised probate, it can still be time consuming and your financial and personal affairs would become a matter of public record.

We are here to help answer any questions you may have about estate planning, the estate planning process, or probate. Together, we can craft a one-of-a-kind plan to ensure that you and your family are properly protected. Give us a call today.

 

 

Q: Who will decide where I live?
A:A local judge would have to appoint a Guardian who would make that decision. Of course, the judge may not choose the same person you would have chosen.

Q: Who will decide medical treatment issues?
A: Depending on the state, if your family members agree, they can make that decision. However, if family members disagree, you could be back with the local judge getting a Guardian appointed.

Q: If I have no chance of recovery, will I be kept on life support?
A: Unless you have planned properly, you probably will be kept on life support. In most states, you will be kept on life support unless there is clear evidence you expressed wishes to the contrary; usually this requires something in writing.

Q: How will my bills get paid?

A: Your family or friends must go to your local court and have someone appointed your Conservator. Again, this judge probably does not know you and may not appoint the same person you would choose. In the appointment process, people must testify in open court that you do not have the ability to care for yourself. It can be draining financially and emotionally. Your Conservator would have to report to the court for as long as you are disabled.

Q: What happens if my investments need to be changed quickly due to market conditions or to reflect new circumstances and risk tolerance?

A: A court would have to appoint a Conservator. Nobody but the Conservator would be able to act for you.

Q: What happens if my son needs his tuition paid while I’m disabled?

A: Again, if you haven’t planned, nobody can act for you until the court appoints a Guardian and/or Conservator for you. If bills, such as your son’s tuition, need to be paid in the interim, a friend or family member would have to use their savings or borrow to pay the bill.

Q: How will my income tax return get filed?

A: If you are single, only your Conservator would have that authority.

  1. Revocable Living Trust: A device used to avoid probate and provide management of your property, both during life and after death.
  2. Property Power of Attorney: Instrument used to allow an agent you name to manage your property.
  3. Health Care Power of Attorney: Instrument used to allow a person you name to make health care decisions for you should you become incapacitated.
  4. Annual Gift Tax Exclusion: Technique to allow gifts without the imposition of estate or gift taxes and without using lifetime exclusion.
  5. Irrevocable Life Insurance Trust: A trust used to prevent estate taxes on insurance proceeds received at the death of an insured.
  6. Family Limited Partnership: An entity used to:
    1. Provide asset protection for partnership property from the creditors of a partner
    2. Provide protection for limited partners from creditors
    3. Enable gifts to children and parents maintaining management control
    4. Reduce transfer tax value of property.
  7. Children’s or Grandchildren’s Irrevocable Education Trust: A trust used by parents and grandparents for a child’s or grandchild’s education.
  8. Charitable Remainder Interest Trust: A trust whereby donors transfer property to a charitable trust and retain an income stream from the property transferred. The donor receives a charitable contribution income tax deduction, and avoids a capital gains tax on transferred property.
  9. Fractional Interest Gift: Allows a donor to transfer partial interests in real property to donees and obtain fractional interest discounts for estate and gift tax purposes.
  10. Private Foundation: An entity used by higher-wealth families to receive charitable income, gift, or estate tax deduction while allowing the family to retain some control over the assets in the foundation.

By Mary Ann and James P. Emswiler

  1. Are you always irritable, annoyed, intolerant or angry these days?
  2. Do you experience an ongoing sense of numbness or of being isolated from your own self or from others? Do you usually feel that you have no one to talk to about what’s happened?
  3. Since your loved one died, are you highly anxious most of the time about your own death or the death of someone you love? Is it beginning to interfere with your relationships, your ability to concentrate or live as you would like to live?
  4. Do you feel that you are always and continually preoccupied with your loved one, his or her death or certain aspects of it even though it’s been several months since his or her death?
  5. Do you usually feel restless or in “high gear”? Do you feel the need to be constantly busy… beyond what’s normal for you?
  6. Are you afraid of becoming close to new people for fear of losing again?
  7. Do you find yourself acting in ways that might prove harmful to you over time: drinking more than you used to; using more prescription or non-prescription drugs; engaging in sexual activity that is unsafe or unwise; driving in an unsafe or reckless manner (beyond what’s normal for you); or entertaining serious thoughts about suicide?
  8. Are you taking on too much responsibility for surviving family members or close friends? (What’s too much responsibility? That varies greatly and depends on the situation, but if you’re feeling heavily burdened by it, angry or like the situation is “suffocating” you, it might be time to speak with someone.)
  9. Do your grief reactions continue, over time, to be limited in some way? Are you experiencing only a few of the reactions or emotions that usually come with grief? Are you unable to express your thoughts or feelings about your loved one and his or her death in words or in actions? Do you remember only certain aspects of your loved one or your relationship together, for example only the good parts as opposed to a more complete and balanced view of him or her?
  10. Is there some aspect of what you’re experiencing that makes you wonder about whether you’re normal or going crazy? Do you feel stuck in your grief in some way, unable to move on, even though it’s been quite some time since your loved one’s death?

Beyond these ten signs, trust your own judgment. If you think that talking to a professional might help, talk to one or more people to see who you are comfortable with. Take advantage of one who seems helpful to you. After all, grief is painful enough without trying to do it all by yourself.

Upon the death of a loved one, great emotional sadness sets in as family and friends support each other during this time of loss. After finding a firm emotional foundation, it is time to address the task of administering the estate set up by the deceased.

Included below is a brief list of the actions which you or your Personal Representative and Trustee should take immediately upon death. (Many of these actions may similarly be required in the event of incapacity). This is not intended as an exhaustive or detailed explanation of all actions which should be taken. Rather, it is for use as a checklist to help the appointed representatives step in and handle as expeditiously as possible those items which demand immediate attention.

  1. Consider advising any surviving family member who is alone to telephone a friend who can share the next few hours. Shock and trauma due to the death of a relative can take unexpected forms.
  2. Notify a funeral director and clergy, and make an appointment to discuss funeral arrangements. Request several copies of decedent’s death certificate, which you’ll need for his or her employer, life insurance companies, and/or decedent’s attorney for legal procedures.
  3. Contact by phone and notify the immediate family, close friends, business colleagues and employer.
  4. Arrange for care for members of the immediate family, including appropriate child care, having people at the decedent’s house, etc.
  5. Locate the decedent’s important papers. Gather as many of the decedent’s papers as possible, and continue to do so for the next few weeks.
  6. Contact our office for a consultation or notify the attorney who will be handling the decedent’s affairs. Make an appointment immediately because a tax return may be due within nine (9) months of death. This meeting is important to review decedent’s estate planning documents and to discuss state and federal death taxes that may be payable. The attorney will also determine the extent to which it is necessary or advisable to open a probate estate. (In the event of incapacity, the attorney may suggest additional steps which should be taken for estate planning purposes, particularly if death is imminent.)
  7. Telephone decedent’s employee benefits office with the following information: name, Social Security number, date of death (or incapacity); whether the death (or incapacity) was due to accident or illness; and your name and address. The company can begin to process benefits immediately.
  8. If decedent was eligible for Medicare, notify the local program office and provide the same information as in Step # 7.
  9. Notify life, accident or disability insurers of decedent’s death or disability. Give the same information as in Step # 7, and ask what further information is needed to begin processing your claim. Ask which payment option decedent had elected, and select another option if you would so prefer. If there is no payment option, you will be paid in a lump sum.
  10. Notify the decedent’s Social Security office of the death. Claims may be expedited if a surviving family member goes in person to the nearest office to investigate making a claim for survivor’s benefits. Look for the address under U.S. Government in the phone book.
  11. If you need emergency cash before insurance claims are paid, a cash advance may be available from life insurance benefits to which you are entitled.
  12. If decedent was ever in the military service, notify the Veterans’ Administration. Surviving relatives may be eligible for death or disability benefits.
  13. Record in a small ledger all money you or the immediate family spends. These figures may be needed for tax returns.
  14. Remember that a surviving family member may be in a highly emotional state. Therefore, they should avoid entering contracts for anything, and avoid spending or lending large sums of money. For our clients, consult the section of the Portfolio entitled “Other Documents” before proceeding further.
  15. DO NOT CHANGE THE TITLE OF ANY ASSETS! This can create unnecessary problems for you. Please contact our office for a consultation before you start this process.

Upon the death of a loved one, great emotional sadness sets in as family and friends support each other during this time of loss. After finding a firm emotional foundation, it is time to address the task of administering the estate set up by the deceased.

Included below is a brief list of the actions which you or your Personal Representative and Trustee should take immediately upon death. (Many of these actions may similarly be required in the event of incapacity). This is not intended as an exhaustive or detailed explanation of all actions which should be taken. Rather, it is for use as a checklist to help the appointed representatives step in and handle as expeditiously as possible those items which demand immediate attention.

  1. Consider advising any surviving family member who is alone to telephone a friend who can share the next few hours. Shock and trauma due to the death of a relative can take unexpected forms
  2. Notify a funeral director and clergy, and make an appointment to discuss funeral arrangements. For our clients, consult the “Location List” and the “Estate Planning Letter” sections in your Portfolio for the names and phone numbers of the appropriate parties and any special requests of the decedent. Request several copies of decedent’s death certificate, which you’ll need for his or her employer, life insurance companies, and/or decedent’s attorney for legal procedures
  3. Contact by phone and notify the immediate family, close friends, business colleagues and employer (for our clients, see “Location List” section for persons to contact)
  4. Arrange for care for members of the immediate family, including appropriate child care, having people at the decedent’s house, etc
  5. Locate the decedent’s important papers. For our clients, consult the “Location List” section in your Portfolio. Gather as many of the decedent’s papers as possible, and continue to do so for the next few weeks
  6. Contact our office for your consultation or notify the attorney who will be handling the decedent’s affairs. Make an appointment immediately because a tax return may be due within nine (9) months of death. This meeting is important to review decedent’s estate planning documents and to discuss state and federal death taxes that may be payable. The attorney will also determine the extent to which it is necessary or advisable to open a probate estate. (In the event of incapacity, the attorney may suggest additional steps which should be taken for estate planning purposes, particularly if death is imminent.
  7. Telephone decedent’s employee benefits office with the following information: name, Social Security number, date of death (or incapacity); whether the death (or incapacity) was due to accident or illness; and your name and address. The company can begin to process benefits immediately
  8. If decedent was eligible for Medicare, notify the local program office and provide the same information as in Step # 7
  9. Notify life, accident or disability insurers of decedent’s death or disability. Give the same information as in Step # 7, and ask what further information is needed to begin processing your claim. Ask which payment option decedent had elected, and select another option if you would so prefer. If there is no payment option, you will be paid in a lump sum
  10. Notify the decedent’s Social Security office of the death. Claims may be expedited if a surviving family member goes in person to the nearest office to investigate making a claim for survivor’s benefits. Look for the address under U.S. Government in the phone book
  11. If you need emergency cash before insurance claims are paid, a cash advance may be available from life insurance benefits to which you are entitled
  12. If decedent was ever in the military service, notify the Veterans’ Administration. Surviving relatives may be eligible for death or disability benefits
  13. Record in a small ledger all money you or the immediate family spends. These figures may be needed for tax returns
  14. Remember that a surviving family member may be in a highly emotional state. Therefore, they should avoid entering contracts for anything, and avoid spending or lending large sums of money. For our clients, consult the section of the Portfolio entitled “Other Documents” before proceeding further
  15. DO NOT CHANGE THE TITLE OF ANY ASSETS! This can create unnecessary problems for you. Please contact our office for a consultation before starting this process.

Review the questions below to see if it is time for an Estate Plan Check-Up

  1. Has it been more than 3 years since you last conducted Nevada estate planning?
  2. If you have minor children, have there been any changes to the Guardians named for them, or does the plan omit guardianship?
  3. Since creating your estate plan, are your children now adults?
  4. If you have a Trust, are there any assets that you have not transferred into your Trust?
  5. If you become disabled, is your Power of Attorney document for financial decisions older than 5 years?
  6. If you become disabled, is your Power of Attorney document for health care decisions older than 5 years?
  7. Are there any gifts you would like to make to charities at your death that have not been clearly set forth in your planning documents?
  8. Is there any personal property that you would like distributed that have not been clearly set forth in your planning documents, including the care of any surviving pets?
  9. Since you signed your planning documents, have you changed your mind about any aspect of the plan?
  10. Has the value of your assets changed since you signed your planning documents?
  11. Have you added or changed the kind of assets you own since your planning documents were signed?
  12. Have you recently been married, divorced or widowed since your estate planning documents were signed?
  13. Have you had children since your estate planning documents were signed?
  14. Have your children had children?
  15. Have any of your children been married, divorced or died since your planning documents were signed?
  16. Have you, your spouse or child become physically or mentally incapacitated since your planning documents were signed?
  17. Have you bought or sold a house or other piece of property since your planning documents were signed?
  18. Are you contemplating selling stock or other valuable assets with a low cost basis?
  19. Have you moved between states since your planning documents were signed?

If you have answered ‘YES’ to any of these questions, it is a good idea to schedule a Nevada estate planning appointment.

  1. Revocable Living Trust: A device used to avoid probate and provide management of your property, both during life and after death.
  2. Property Power of Attorney: Instrument used to allow an agent you name to manage your property.
  3. Health Care Power of Attorney: Instrument used to allow a person you name to make health care decisions for you should you become incapacitated.
  4. Annual Gift Tax Exclusion: Technique to allow gifts without the imposition of estate or gift taxes and without using lifetime exclusion.
  5. Irrevocable Life Insurance Trust: A trust used to prevent estate taxes on insurance proceeds received at the death of an insured.
  6. Family Limited Partnership: An entity used to:
    1. Provide asset protection for partnership property from the creditors of a partner
    2. Provide protection for limited partners from creditors
    3. Enable gifts to children and parents maintaining management control
    4. Reduce transfer tax value of property.
  7. Children’s or Grandchildren’s Irrevocable Education Trust: A trust used by parents and grandparents for a child’s or grandchild’s education.
  8. Charitable Remainder Interest Trust: A trust whereby donors transfer property to a charitable trust and retain an income stream from the property transferred. The donor receives a charitable contribution income tax deduction, and avoids a capital gains tax on transferred property.
  9. Fractional Interest Gift: Allows a donor to transfer partial interests in real property to donees and obtain fractional interest discounts for estate and gift tax purposes.
  10. Private Foundation: An entity used by higher-wealth families to receive charitable income, gift, or estate tax deduction while allowing the family to retain some control over the assets in the foundation.

Contact Anderson, Dorn & Rader Ltd. to learn about other estate planning techniques. 

Feel free to make an appointment with our firm to review your estate plan.

estate planningWhen you are being introduced to the benefit program at your first “real job,” you typically get initial exposure to a couple of long-term planning concepts that you may have never considered before. Most packages come with a certain level of life insurance, and you can typically participate in a 401(k) plan to save for retirement.

In many instances, the employer will match your contributions up to a certain percentage. This is nothing more or less than free money that you can receive on a sustained basis for decades if you stay with the same job. You absolutely must take advantage of this golden opportunity.

Many people will plan their retirement with the knowledge that they are going to extract money from their retirement savings account to fund their golden years. This is what it’s all about in general, but if you never need the money, an IRA can be quite useful from an estate planning perspective.

Types of Retirement Accounts

Generally speaking, there are two different types of individual retirement accounts that are utilized: traditional accounts, and Roth IRAs. There are some similarities, and there is one major difference between the two of them. First, we will look at the aspects that are the same.

You cannot withdraw money from either type of individual retirement account without being penalized until you are 59 ½ years old. However, there are a handful of exceptions to the rule. If you are buying your first home, you can extract up to $10,000 to assist with the purchase.

Under the rules governing individual retirement accounts, you can pay school tuition with assets in the account without incurring any penalties. If you have non-reimbursed health care expenses that exceed 7.5% of your adjusted gross income, you are not penalized if you pay them with funds from the account.

Now we can get into the differences. The contributions that you make into a traditional account are not taxed, and this reduces your taxable income. This is a positive when you file your returns, but it all comes back around full circle when you take distributions.

The withdrawals are subject to regular income taxes, and you don’t have the luxury of keeping the money in the account untouched for the rest of your life with estate planning in mind. Because the IRS wants to start getting their cut at some point, you are forced to take mandatory minimum distributions when you are 70 ½ years old.

With a Roth IRA, you pay taxes on the income before you contribute into the account. You do have to wait until you are 59 ½ years old to avoid penalties, but the distributions are not taxed.

The Internal Revenue Service does not require you to take mandatory minimum distributions at the age of 70 ½ or any other age, because they don’t have to try to retroactively collect taxes.

Stretching a Roth Individual Retirement Account

Because of the nature of Roth IRAs, they can be used quite effectively in an estate planning context. The beneficiary (assuming it is not your spouse) would be required to take mandatory minimum distributions upon assumption of ownership of the account. This being stated, the word “minimum” is quite operative here.

The minimum that is required would depend upon the age of the beneficiary; a younger beneficiary could take less than someone that is older, because it is about life expectancy.

Assets in the account will grow consistently if the economy is functioning, so it is wise for the beneficiary to take only the minimum to maximize the tax-free growth for as long as possible. Whenever distributions are taken, they would not be subject to taxation.

Access Our Special Report!

We have provided a basic explanation of this concept here, and there is another resource that you can access through this website that takes it to another level. Our firm has established a library of special reports that cover many different estate planning topics. One of them is devoted to this topic, and you can click the following link to gain access: Estate Planning With IRAs.

estate disputeFor a lot of people, estate planning is simply a matter of slicing up a pie. You decide who will have a seat at the dessert table and how large the respective slices will be for each individual. In a very basic sense, there is truth to this, but there is much more to take into consideration if you want to plan your estate effectively.

First, you have to recognize the fact that there are different types of “pies” as it were. The way that assets are distributed if you use a last will is different than the process if you decide to go with a revocable living trust, or another type of trust. You should certainly explore all the options so that you can make fully informed decisions.

Arranging for the asset transfers is a large part of the equation, but you should also consider the estate administration process that will unfold before the assets can be distributed to the heirs. Gaining an understanding of the different possibilities could definitely influence your perspective.

With the above in mind, we will look at the potential for inheritance disputes that can enter the picture after you are gone if some people are not going to be happy with the decisions that you have made.

Will Challenges

When a last will is used as an asset transfer vehicle, the executor would be the estate administrator. This person or entity is not permitted to act in a vacuum. Under the laws of the state of Nevada, the probate court must provide supervision during the administration process.

The estate will remain open while it is being probated for the better part of a year. During this interim, anyone that feels as though there must be some problem with the decedent’s will can come forward and contest the validity of the will.

It is not easy to convince the court that something is amiss, but in some instances, compelling evidence is presented. The thing that is relatively simple is the ability to issue the challenge in the first place. This is one of the drawbacks of probate, but there are others.

Living Trusts

If you use a living trust instead of a last will, there is no readily available window of opportunity for people that may want to issue challenges. This is something to think about if you do have concerns about how someone will react to your distribution decisions.

A disgruntled party could file a lawsuit under these circumstances, but it would be complicated and expensive. Plus, you can provide a powerful disincentive when you create the trust declaration. A no contest clause can be included, and this would trigger the total disinheritance of any beneficiary that sues to challenge the trust terms.

The Human Element

Most people keep their monetary affairs close to the vest throughout their lives, and they don’t have a conference call with everyone in the family every time they make a financial decision. This is understandable, and you can apply the same principle to your estate planning efforts.

The final decision is yours, but the dynamic is quite a bit different than it is during your life when you are handling your personal affairs. This financial matter involves everyone that would expect to receive an inheritance, so your choices are impacting them quite directly.

If you know that someone is going to be very displeased, you may want to have a conversation with this person in advance. Clearly, this is not always going to be the way to go, but it is something to seriously consider. While it is true that you will not be around to experience the blowback, other family members will be in the crosshairs.

In a perfect world, you would probably like your surviving family members to maintain good relationships with one another and provide support when they can. When someone feels slighted and isolated from the rest, there can be ongoing resentment that never goes away.

Attend a Free Webinar!

We are holding a number of Webinars in the near future, and you can learn a great deal if you attend the session that fits into your schedule. There is no charge at all, and you can see the dates and obtain registration information if you visit our Reno estate planning Webinar page.

 

 

estate planningWhen we consult with clients, we often hear many of the same questions. With this in mind, we present a hypothetical question-and-answer session with a Reno estate planning lawyer in this post.

Doesn’t the state take care of everything when you die without an estate plan?

To die without an estate plan is called dying intestate. Under the rules of intestacy, the probate court would supervise the administration of the estate. Creditors would be given an opportunity to come forward seeking satisfaction, an estate is inventories and valued, disputes are resolved, and ultimately the assets would be distributed under intestate succession laws.

That’s the good news, but the bad news is that it is very possible that your assets would not be distributed in accordance with your wishes. For example, if you are happily married, you have no children, and your parents are still living, you would probably want your spouse to inherit everything. In Nevada, under intestate succession rules, your spouse would inherit half of your separate property, and your parents would inherit the rest.  Intestacy law does not appropriately deal with most issues that arise with separate property.  Further, intestacy law does not account for many modern day families, such as blended families with step-children, non-traditionally married couples, and a myriad others.

There is no reason to surrender control of your estate to the judicial process when it is so easy to engage the services of a licensed Reno estate planning lawyer.

Trusts are only for wealthy people, right?

It is true that there are some types of trusts that are used by high net worth individuals that are exposed to the federal estate tax. However, there are other types of trust that can be quite useful for people of relatively ordinary means.

Far and above the most common is the revocable living trust. If you use a last will, it would be admitted to probate after you die. The court would provide supervision, and the executor would handle the estate administration tasks.  But this process will take eight or nine months to a year to run its course, and inheritors receive nothing during this interim. There are also innumerable expenses that pile up during probate, often at a cost between 4% up to 8% of the estate value.

If you use a living trust instead, the trustee that you name in the trust agreement would be empowered to distribute assets to the beneficiaries outside of probate. This is one advantage, but there are a number of others, including the option to protect an inheritance through a trust against lawsuits, creditors, divorcing spouses, or other predators.

A living trust is beneficial whenever a client has a goal to avoid probate and make the process easy for their loved ones.  It's not only for wealthy people, but for people who want to better take care of their life planning.

Are inheritances subject to taxation?

Since the Internal Revenue Service requires you to report all sources of income, you may assume that inheritances that you leave to your loved ones would be taxed. In actuality, inheritances are not subject to taxation, with the exception of inheriting retirement accounts (such as traditional IRA or 401(k) accounts).

There is, however, a federal estate tax that might apply to your estate before everything is distributed to the beneficiaries as an inheritance.  But, the vast majority of people do not have to be concerned about the estate tax because there is a VERY large exclusion. Only the portion of your estate that exceeds the amount of this exclusion would be taxed. At the time of this writing in 2019, the exclusion stands at $11.4 million.

Attend a Free Webinar!

These are a few short questions that we frequently hear from our clients, and you can ask your own if you attend one of our upcoming Webinars. The information sessions that we hold provide a treasure trove of useful information, so we strongly encourage you to attend the Webinar that fits into your schedule. To get all the details, visit our Webinar page and follow the simple instructions to register for the date that works for you.  Starting in 2019, we are offering Webinars semi-monthly in the evening to accommodate those people that cannot attend during the middle of the day.

Some need the money and postpone retirement or get a part-time job; others simply have the urge to keep  busy in some constructive way during retirement and choose to do some type of work.
These days financial planning experts often write about the value of working longer. This can be necessary if you simply need more time to accumulate the resources that you need to retire. Others who don't absolutely have to work choose to do so because they want to have plenty of discretionary income so they will never be pinching pennies. Some simply feel the need to remain productive.
When you think about working during what would otherwise be retirement you can expand your vision; you are not limited to what you have been doing throughout your career. There are many different ways that you can make money from the comfort of your own home from freelance opportunities within your areas of expertise to maintaining an online store.
You could also consider going into business for yourself outside the home in a store or office. Many people incorporate their passions into a business later in their lives, such as a flower shop or a restaurant.
It is certainly nice to have a source of significant income going into your retirement years to make your Social Security benefit more of a supplement and less of a staple. You are in fact allowed to earn any amount of money while receiving Social Security without being penalized once you reach the age of full eligibility.
If you look ahead and take the appropriate steps you can potentially step right into your own business and work a bit on your own terms during your retirement.
 
 

It is said that there are some things that money can't buy, and wisdom would certainly be one of these things. When you are planning your estate your primary concern is going to involve our valuables. However, you may be able to pass on your values as well by maintaining a blog during your retirement years.
A lot of people have an interest in writing their memoirs once they have the time to devote to the project. This is a great way to share formative experiences with people that you care about. There is no substitute for learning by experience and some of these stories may be very instructive to the people that you will be leaving behind.
But what about publishing? And what if you don't finish the book prior to your passing?
There is a very simple solution these days in the form of self publication on your own blog. You can actually start your own blog without having any particular technical expertise by using very user-friendly platforms that are offered on sites such as WordPress.org.
When you have your own blog you can publish your work incrementally as you see fit so your family and friends can always have something new to read if you are updating it regularly. If you work on your blog throughout your retirement years you will have assembled a significant body of work by the time you pass away.
While it will forevermore exist in cyberspace, most blog sites provide a publication service, so you can print off a book of your blog. Now family members and even future generations of your family can draw from your experiences into perpetuity. There is no time like the present, so get started!

If you are like millions of Americans, you probably own at least one pet. Have you taken the time to consider what will happen to your pet when you die? If you haven’t, now is the time to do so before it is too late.
When you die, your assets will all be secured until your executor or personal representative has the chance to inventory them and file the proper documents with the probate court. But what about your pet? Someone needs to look after your pet immediately after you die. A well meaning loved one may step in for a few days, but what happens after that? Who will pay for his or her care? Sadly, thousands of cats and dogs end up in shelters each year because their owner failed to make plans for the animal in the event of their death. You can ensure that your beloved pet is not one of these animals by creating a pet trust.
A pet trust takes all the guesswork out of your pet’s future after your death. Not only can you appoint a trustee whose job it is too ensure that the pet is well cared for, but you can also leave behind sufficient funds that are earmarked just for your pet to cover the cost of his or her care. Don’t take any chances with your pet. Take the time now to create a pet trust and give both you and your pet some peace of mind.

Anyone who owns a pet knows the love that can be shared between a human and an animal. Not surprisingly, many people want to make sure their pet is properly cared for in the event of their death in the same way they want to make sure family members are taken care of financially. One way to do that is to create a pet trust. Although a pet trust is a wonderful estate planning tool, be sure that you do not create a probate nightmare as a result of the terms of your pet trust as did the late Leona Helmsley.
For anyone not familiar with the story, Leona Helmsley was a New York hotel heiress who was known as the “Queen of Mean”. Upon her husband’s death, Helmsley bought a Maltese puppy whom she named Trouble. Trouble was an apt name as it turns out.
Helmsley created a pet trust for her beloved pooch and designated a whopping $12 million to fund the trust. As if this excessive amount was not enough to raise the attention of the probate court charged with overseeing her estate upon her death, she also disinherited many close family members, including some of her grandchildren. After a lengthy court battle, the trust was decreased by the court to $2 million and Trouble lived out the rest of his life in luxury.
Given Helmsley’s reputation, it may actually have been her intention to cause a probate battle upon her death; however, most people strive for the opposite--an estate free from challenges and lengthy probate battles. If your goal is to be sure your pets are cared for, by all means fund the trust with sufficient funds to care for your pet after your death.  In most states that authorize a pet trust, there is a provision that requires the principal of the trust to be a reasonable amount.  This opens the trust to challenge in a court if the remaining beneficiaries consider the amount you have specified to be unreasonable. Take a lesson from Leona -  steer clear of an excessive amount that begs for an estate challenge to be filed.

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