New Years Resolutions?

Is an estate planning tune up on your list of New Years Resolutions?

If yes, you’re in good company!

Check out this fun “punch list” from Above the Law: Estate Planning Resolutions For 2019: How To Be A Grown-Up In The New Year.

This is a great list and includes items I’ve written about here and here.  A short summary of their list:

  1. Write a Last Will and Testament.
  2. Make a Power of Attorney.
  3. Execute a Health Care Proxy.
  4. Purchase a life insurance policy.
  5. Check beneficiary designation forms.
  6. Consider long-term care and disability insurance.
  7. Consult with a financial advisor.
  8. Talk to your parents and grandparents about their estate plans.
  9. Consider burial options.
  10. Inventory your assets.

Estate Planning Considerations for Mothers

How should a mother provide for her children in her will?  A recent article asks this question, pointing out that many women live alone and need to make decisions on their own, and not with a spouse or partner, regarding their estate planning, finances, and inheritance for their children.

“There are 26.7 million women who are aged 65 or older, according to the 2016 profile of older Americans by the U.S. Department of Health and Human Services. Nearly half (46%) of women who are aged 75 or older live alone. These women have homes, financial resources and children, requiring them to make these decisions on their own.”

The author points out that a mother’s desire to treat her children “equally” in her estate planning, may not match the realities faced by her children.  “For many, dividing the inheritance equally among their offspring is a deeply held value. But it isn’t always easy: What if one child is a successful professional with a good pension plan, and the other is a struggling artist who may never have adequate health coverage? Or perhaps one daughter has a special-needs child, and the other has chosen not to have children? What then is the process of balancing their value of equal distribution and the contradictory need to make financially realistically decisions?”

 

Finally Writing a Will

Here’s a journalist’s take on getting (his long put off) estate planning documents in place:

What it was Like to Finally Write My Will, by John Schwartz.

And here’s Mr. Schwartz’s “To Do” list from this piece.  Of course, I recommend always having a lawyer prepare your documents!

“Get a will. Really. Dying without one — “intestate” — is a drag for everyone.

Get a lawyer. Unless your life is wonderfully uncomplicated, you’ll want the help of an adviser. Even if you do it yourself, have an attorney look over your work.

Decide on your beneficiaries, and make sure your insurance policies and other investments are in agreement with what your will says.

Name an executor. It’s a tough and thankless job, so get someone with good judgment; this person can be paid out of your estate.

Got young kids? Name a guardian. If not, the courts will appoint one; why not take care of this essential matter ahead of time?

Secure your paperwork. Once the documents are done, put them in a safe place and make sure your relatives know how to find it.

Revisit it every five years. The world changes; your will should, too.”

This is a great starting list, but I also add:

Get Advanced Directives.  Have decision makers in place in the event of incapacity.

Put a Trust in Place for Minors.  Make sure you protect your children’s inheritance until they are at mature ages.

Prince – Dying Without A Will?

The recent passing of music legend Prince serves as yet another reminder to get your estate plan in place.  As reported in the press, Prince’s sister has filed papers with the Court alleging that her brother died without a will.  Dying without a will in place is called “intestate.”  You can find my summary of Indiana’s intestate laws, here and here.  The intestate laws act as a default estate plan, and very likely may not include all of your intentions.

In Prince’s case, it has been widely reported about his great business abilities and his strong desire to be in control of his music and his public image.  It also appears Prince was generous and was a benefactor to many charitable organizations. If Prince truly did not have a Last Will & Testament (and this remains to be seen), then his great desire for control over his art and his charitable intent will not be realized now that he has passed.  A true loss of opportunity for his great legacy.

For the rest of us, this is a reminder that it is never too early to plan and make sure our intentions will be followed.

Estate Planning and Our Four Legged Friends

Yesterday I visited Indianapolis’s Cat Haven, a wonderful local non-profit that provides homes for abandoned cats.  Many of these cats are elderly (10 years old or older), which gave me pause to consider how a cat that age would end up abandoned.  It seems likely to me that those animals may very well have been loved by an owner who passed away, leaving no one to care for the beloved pet.

High-profile estates, such as Joan Rivers, often provide for well-funded pet trusts.  However, planning for your pet to be cared for upon your death does not  require large sums of money, great wealth, or celebrity.  Pet Trusts are legally-enforceable instruments under Indiana law.  You can set aside a certain sum of money to provide for your pet(s) in a Pet Trust, designating a person or persons to care for your pet(s) and providing funds for your pet’s welfare.  Upon your pet’s death, you can direct for any remaining Pet Trust funds (not used for your pet’s benefit during his lifetime) can be distributed to your human beneficiaries or charities.  Even if you do not wish to provide for a Pet Trust, your Last Will and Testament is an ideal place to identify the person(s) who will care for your pet after your death.   I enjoy assisting estate planning clients with Pet Trusts and planning for beloved pets and would be happy to answer questions about planning for pets.

Here are some additional sources of information about planning for a pet’s care in the event of the owner’s death:

Humane Society of the United States: Providing For Your Pet’s Future Without You

ASPCA: Planning for your Pet’s Future

Prof. Gerry W. Beyer: Frequently Asked Questions About Pet Trusts

 

 

Estate Planning Beyond Documents

See the New York Times today for an article titled There’s More to Estate Planning Than the Will.  It is an excellent article and well worth the read.  I agree with the conclusion that documents are not enough.  While it is truly a gift to your family and loved ones to have all of your documents in place and up to date, the gift of well organized affairs — paperwork, passwords, records all in one place and organized — cannot be overstated.   I have seen firsthand the relief and deep appreciation of surviving family members when their deceased loved one has left everything “all in order.”  It is a true gift.

The article describes the book by author Erik A. Dewey.  His Big Book of Everything can be downloaded for free here.  What a nice gift!  His form, or a similar one, could be a good place to start — in addition to estate planning documents — to “get your affairs in order.”

 

 

What Can Celebrity Deaths Teach Us?

High profile celebrity deaths are regularly in the headlines. The ongoing legal battle faced by Anna Nicole Smith, and now her Estate, continues.  That case included allegations of interference with inheritance.  Casey Kasem‘s last months raise questions about guardianship, elder abuse, fiduciary roles, and end of life decision making.  Philip Seymour Hoffman‘s estate plan, lacking in planning for the Federal Estate Tax and failing to include a child born after the his Will was executed, was largely seen as incomplete protection for his family.  Similarly, James Gandolfini’s Will was panned.  As one commentator summarized, “the most common tag-line is that his will is a tax disaster.”   In contrast, Robin Williams’ estate plan, is viewed by some as an example of a solid planning.

These estates serve as reminders for all of us to revisit our estate plans.  Key among the lessons are that even if you have a plan in place, you need to revisit that plan every couple of years or after a change in life, such as after the birth of a child or a divorce.  Questions to consider:

Do you have an estate plan?  Do you have a Will?  Could a Trust be a helpful instrument for you?

When is the last time you reviewed your plan?

Are all of your children included in your plan?  Who do you name as their guardians?  Are these still the right people?

Do you have trusts to provide for your children until the are the appropriate ages to handle money?

Do you have incapacity documents in place?  Who have you named to be decisionmakers in the event you are incapacitated?  Are they still the right people?

Could your Estate be subject to Federal Estate Tax?  Do you have a plan in place to minimize potential Federal Estate Tax liability?

Dying Without a Will in Indiana – Part II: Indiana’s “Default” Estate Plan for Married Persons

First Marriage and no children:  Your surviving spouse will receive three-fourths (3/4ths) of your estate and your surviving parents will receive one-fourth (1/4) of your estate.  If your parents predecease you, then your surviving spouse will receive all of your estate.

Who does this default “plan” exclude?  In the event your parents survive you, your spouse is not fully provided for by your estate.  This plan also excludes everyone else for whom you may wish to provide, including your stepchildren, siblings, friends, and charities.

Married and children with your spouse:  Your surviving spouse will receive one-half (1/2) of your estate and your surviving children will share one-half (1/2) of your estate.

Who does this default “plan” exclude?  Neither your spouse nor your children are fully provided for by your estate.  This plan also excludes everyone else for whom you may wish to provide, including your parents, stepchildren, siblings, friends, and charities.

Second (or subsequent) Marriage, and no children with current spouse:  Your surviving spouse (who did not have children with you) will receive one-half (1/2) of your estate personal property, but only one-fourth (1/4th) of your net real estate.  Your surviving children (from a prior marriage) will share one-half (1/2) of your estate and three-fourths (3/4ths) of your net real estate.

Who does this default “plan” exclude?  Neither your spouse nor your children are fully provided for by your estate.  This plan also excludes everyone else for whom you may wish to provide, including your parents, stepchildren, siblings, friends, and charities.

Four Essential Documents

Estate planning can sometimes appear complicated, full of acronyms and sophisticated sounding concepts. While it is true that estate planning can be complicated, in its simplest form, an Indiana estate plan should consist of at least the following four documents:

  1. Last Will and Testament. In its most basic form, your Will provides for you to direct the distribution of your assets titled to your name individually upon your death and appoint a person (or persons) to administer your estate upon your death. If you die without a Will, assets titled in your individual name may be subject to intestate administration.
  1. Appointment of Health Care Representative. Also called Health Care Proxy and Health Care Power of Attorney, this document provides for the appointment of a person (or persons) to make medical decisions for you in the event that you are incapacitated and unable to make decisions for yourself.
  1. General Durable Power of Attorney. In your General Durable Power of Attorney, you name a person (or persons) to make financial decisions for you in the event of your incapacity.
  1. Living Will. Your Living Will allows you to state your preferences regarding end of life decisions in the event of an incurable illness or persistent vegetative state.