Six step checklist of your estate plan

Steve Shaw an estate planning attorney practicing in South Carolina and Florida offers this Six-step checklist of your estate plan.

1. Define your goals

2. Gather and organize your data

3. Analyze your situation

4. Develop your strategies

5. Implement your plan

Read the full article for details on each step. Shaw on the Law: Six-step checklist of your estate plan

Elder Abuse: How to stop it

The following is an excerpt from a recent article in The Mercury by Kathy Martin regarding elder abuse.

Our aging population is increasingly vulnerable to abuse, with financial exploitation having risen to the third most common form of elder abuse (following self-neglect and caregiver neglect). The message is that we need to step up and report abuse, or suspected abuse, when we see it.
Elder victimization is most concentrated in the very old, most victims are Caucasian and female, and a large proportion of older adult victims have cognitive difficulties. These statistics on victims are not surprising since cognitive issues increase in frequency in direct proportion to age, and the more help someone needs in their home, the greater chance of exploitation. Perpetrators spend time with their victims, and this time and attention results in gaining the trust of the victims. Many older adults are socially isolated, and the family member or other person who spends time with the older person becomes their new best friend and lifeline.
Victims fail to report exploitation even if they realize it is happening. They might fear the perpetrator, or fear being taken to a nursing home, or even fear losing the attention and time that the perpetrator is giving them. People have the right to make their own decisions, even if that decision seems like a poor choice. However, sometimes those choices are made out of fear or undue influence, and it becomes an invisible but very real problem.
As people age, everyone has changes in cognitive ability, especially in processing new information. This change in ability to understand new information, or even a great deal of information at once affects financial decision making ability. Add any cognitive deficits such as from depression or early dementia, and the senior’s ability to make good independent financial decisions can be compromised. It is easy for bad intentioned family members, or scammers, or new “friends” to step in.
What can we do to help our older family members or friends? One step is to make sure that older persons have good Power of Attorney documents in place before signs of dementia start occurring. If there are early signs of dementia, such as new aggressive behavior, anxiety, depression and/or confusion, assist the senior in seeking help and early intervention. Power of Attorney documents can be abused, but it is more protection than allowing a thief to gain control of the senior’s assets by gaining their trust when incapacity is already evident.

5 Estate planning documents all parents should have in place

When you're a parent, you can't imagine a time when you won't be around for your children. The reality is, however, that there is a possibility that during your lifetime, there might be a time when you are incapacitated or otherwise unable to make decisions about your care or your assets.

With that in mind, the best gift you can give to your children is a well thought-out estate plan. Kelly Phillips Erb lists the estate planning documents all parents should keep in one place.

1.Will

A will is a formal document which controls the disposition of probate assets following your death. Probate assets are those things that you own in your own name; non-probate assets, such as joint accounts or life insurance, do not pass according to your will but rather by titling or designations of beneficiary.

“WILLS AREN'T JUST FOR THE RICH.”

Wills aren't just for the rich. In addition to the assets you associate with wills — like bank accounts in your own name — a will allows you to designate how your personal tangible property will be distributed. You can think of personal tangible property as things in your home you can touch — your jewelry, furniture, car and other personal items.

You also have the opportunity to name fiduciaries under your will. This would include an executor, who would be responsible for handling the administration and disposition of your estate — including the filing of any income and inheritance tax returns. This would also include a trustee, who would manage any trusts created under your will for your children, who might not be old enough to properly manage assets on their own. Finally, if your children are still minors, you are able to designate a guardian under your will, who would care for your children after you are deceased. The executor, trustee and guardian can be — but don't have to be — the same person or persons. All of your fiduciaries should be a person or persons that you trust to make decisions.

2. General power of attorney

A general power of attorney is a document that allows you to name an agent to handle your financial affairs in the event that you become incapacitated or are unable for any reason to administer your finances during your lifetime. There are two kinds of powers of attorney — a durable power of attorney, which survives incapacity, and a nondurable power of attorney, which is generally used for limited transactions such as the sale of a home. A power of attorney can be immediate or springing — an immediate power of attorney is effective at signing while a springing power of attorney is effective only upon a triggering event, such as incapacity.

3. Healthcare power of attorney

A healthcare power of attorney is a document that allows you to name an agent to make health care decisions for you in the event you are incapacitated. A healthcare power of attorney only acts on your behalf if you are unable to do so and have not otherwise communicated your wishes. It's important to keep in mind that a healthcare power of attorney does not supersede your living will (see immediately below). Your healthcare power of attorney doesn't have to be a family member and should be someone you trust to understand your wishes and act accordingly.

4. Living will

A living will doesn't involve your assets at all, but rather focuses on your end-of-life care.

Also called an advance directive, health care directive, or a physician's directive, a living will allows the people you care about and your medical professionals to know what type of care you do (or don't) want to receive should you be permanently unconscious. A living will is only effective when you are not able to express your own wishes.

5. Temporary guardianship

In some states, you can also execute a temporary guardianship for your children. If you need to turn over the care of your children temporarily to another adult because you are having a medical procedure or are out of town on business, you may want to set up temporary guardianship. A formal temporary guardianship allows another person the right to approve medical treatment, sign permission slips for school or otherwise make decisions for the benefit of your children while you are not able to care for them.

Nobody wants to talk about estate planning when you're young. But you should — especially if you have children. Do yourself and your family a favor and make sure you have your estate planning documents in place now so that you don't force your family to worry about it later. If you need assistance with these documents, I’m available to meet with you.

Estate planning: it's ok to be charitable

Christopher W. Yugo, Times Business Columnist answers a frequent question in estate planning:

Q: I intend to leave all of my money to two charities but I'm concerned that my children will object. I'm worried they will challenge the will. Is there anything I can do to make sure that my wishes are carried out? Should I name someone other than a child executor?

A: First off, you can leave your property to whomever you want. If you want to leave it to a charity or the neighbor, you can do it. Now don't get me wrong, I understand why a child might be upset they are excluded. However, that doesn't mean that you can't or shouldn't do it.

As I've written before, will challenges are rare and successful will challenges are even rarer than that. There really needs to be a compelling reason to set aside a will. For example, a will can be set aside if it can be shown that the testator was subject to undue influence or if he wasn't competent to execute a valid will in the first place.

I wish there was a magic bullet to prevent a will challenge, but there isn't. If your kids want to challenge your will, they can do it. Fortunately, or unfortunately if you are the child, will challenges are expensive. That in itself could be enough to discourage a challenge.

I suggest you discuss your options with your attorney. He or she will be able to help you plan for trouble. Your attorney may suggest you obtain a letter from your doctor demonstrating your competency or perhaps suggest a video recording of the will signing be made. The attorney will almost certainly want to meet with you alone so the chances of a successful undue influence claim are greatly reduced. The key is bringing your concerns to your attorney's attention.

As for naming someone other than a child personal representative, I'm kind of torn. On one hand, naming a child personal representative may help your family understand why you were so charitable. On the other hand, it seems a little twisted to request a child you disinherited to administer your estate. If you decide to name someone other than a family member, you could contact your bank's trust department and inquire about it serving as personal representative. The bank will do its best to assure your instructions are carried out.

Finally, you might consider discussing it with your family ahead of time so they aren't surprised when you pass. Maybe explaining to them why you are leaving your property to the charity will help them understand and perhaps avoid hard feelings, and possible litigation.

Protecting your future: Inheritance can come with unintended consequences

Some people might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out facts only when the estate is settled. However, waiting until the end opens the door to potential feuding and costly legal challenges.

The goal of proper planning is to make transfers as seamless and efficient as possible. Meeting that goal requires others to know what to expect when the time comes.

The article titled “Protecting your future: Inheritance can come with unintended consequences” by Bonnie Kraham, an elder law estate planning attorney in Wallkill, NY talks about how sometimes an inheritance can be unwelcomed, in which case the recipient can file a legal “disclaimer” (a legal form of saying “no” to avoid or reduce state estate taxes.

Failing to follow the rules properly can lead to many complications. If you are concerned that someone may want to disclaim their inheritance from you, or if you need to disclaim an inheritance, I’m available to answer questions and to meet with you.

Who are the biggest estate planning procrastinators?

One-in-five investors have yet to create an estate plan. Adrian Reyneri writes in her March 19^th  article in Spectrum’s Millionaire Corner  who’s most likely to put off this important aspect of personal financial planning:

1. Young investors
2. Main Street investors
3. Investors with little or no knowledge
4. Women

Do you fall into any of these estate plan procrastinator groups? If so, give me a call to set up a meeting to discuss your plan.

Plan a family meeting

Estate planning is vital to ensuring your family is properly taken care of after your passing, but almost equally important is communicating that plan to your family in advance. The below commentary was written by Estate planning columnist Curtis Kaiser.

Last year, I met with a prospective client whose wife had passed away a decade or so ago. He wanted to check in to make sure his estate plan was on track – as it hadn’t been reviewed or updated since his wife’s passing.

He was a delightful and extremely organized person. His plan – which had been drafted by an attorney who had since retired - was in reasonably good shape – the assets were properly funded and the trust accurately reflected his wishes: a simple division of assets upon his death to his three adult children. I suggested that he make some minor changes to his plan, but reported that otherwise he appeared to be on track.

Earlier this year, I received a frantic call from one of that client’s beloved daughters – her father had unexpectedly developed a serious illness and was unable to manage his financial and health affairs. She had no idea where her father’s estate planning documents were, what they said, or what they meant. Instead of being able to focus on supporting her father during his illness, she was consumed by an additional layer of worry.

It appears that my client didn’t want to “burden” his children with having to think about the possibility of him falling ill or passing away – he just told them that things were “taken care of” if anything should happen to him.

I arranged a time with his daughter to visit my client and his family to discuss how his estate planning documents were designed to make sure that his family could properly assist with his financial and medical affairs – like paying his bills and talking with his doctors. Unfortunately, shortly before the meeting, my client’s illness took a turn for the worse and he required hospitalization. The family needed to focus on him — they didn’t have time to meet with me to go over the documents.

My client was a conscientious, loving and thoughtful father – he already had done so much for his children in terms of preparing an estate plan and having his affairs in order – what else could he have done? The ideal solution here would have been a “family meeting.”

Coordinated with either his financial advisor or his estate planning attorney (or ideally, both), this family could have sat down for an hour to allow my client to explain his wishes and allow the estate planning attorney to discuss with the children how the plan would work in the event of his illness or passing. Through the family meeting, family members could ask appropriate questions and reach an appropriate level of understanding so that when the time came, they would be ready to help – and not burdened with an extra layer of complexity.

I’ve done a number of family meetings for clients. Both the clients and their loved ones often approach the meeting with a bit of anxiety, but in every single case that I’ve been involved with, the experience has had a positive end result. Even when there are controversial issues discussed – for example, if the parents don’t feel that a certain child is financially ready to manage an inheritance – putting that issue out in the open eventually leads to an increased level of understanding.

Another benefit of the family meeting is that it builds a relationship between the client’s advisors and family members so that when the time comes, the surviving family members feel comfortable.

Call if you need help setting up such a meeting with your family.