According to People Magazine, 33% of Americans say that fall is their favorite season. And, what’s not to love? Changing leaves, toasty fires, and pumpkin spice everything make fall a total treat. Fall also means change. Just like how the leaves go from green to red and orange, life brings with it a lot of changes as well. Some are positive, and some are negative, but all have to be dealt with in one way or another.
In this article, we’ll discuss common major life changes and their impact on your estate plans. Estate planning provides all the tools you need to deal with these changes, but it’s still important to discuss how exactly they can impact your plans.
Common Life Events
Below are some common major life changes that almost everyone runs into. Though some are positive, many are not-so-sunny. While it might be hard to face these events, it’s important to do so, rather than be unprepared if they do happen.
Estate planning isn’t just death planning, so the death we’re talking about here doesn’t have to be yours. If it is, a last will and testament, a trust, and guardianship papers (if you have minor children) are all must-haves to ensure that your assets are divided up the way you want and your kids are cared for.
If someone in your family dies and they were listed in your estate plan, what happens? This is where it gets tricky. There are succession laws that dictate who gets the asset(s) (if anyone), but you’d be better off changing your plan to make the decision yourself. If your intended beneficiary dies, you need to revisit your estate plan, ASAP.
On a happier note, a new baby can mean someone else to add as a beneficiary. If there is a new entrant to your family that you want to ensure is covered, be sure to do that sooner, rather than later. It’s all too easy to forget, but that forgetting can have consequences in the long-run.
As you can imagine, divorce has quite an impact on your estate plan. Your ex-spouse was likely listed as the beneficiary on your insurance, as well as a lot of other estate planning documents. Whether amicable or not-so-nice, you likely don’t want your former spouse coming to collect on your assets when you die. At some point during the divorce process, make sure you remove your ex from the paperwork. Contact an estate planning attorney to ensure you carry out the process thoroughly.
When you’re creating your estate plan, your home like is going to be a huge feature in it, especially if you own it. If you purchase a new home, make sure your estate plan reflects your current address.
Estate planning for businesses is a huge topic, one that could have one-hundred articles all too itself and not be satisfied. When you start a business, you need to include that in your estate planning. A succession plan, tax considerations, and avoiding probate are three topics you should talk to your attorney about.
The Dangers of Waiting too Long
The dangers of waiting too long to make an estate plan change mainly center around one proposition: life is unpredictable. You never know when something drastic will change, and you want to make sure your plan reflects your true wishes.
There are many more changes that can come up in someone’s life, but these are the first major life events that come to mind. Make sure to check your estate plan every three to five years, but you should also make sure that, after an event like the ones listed above, you’re revisiting your plan. Call the attorneys at WFP to schedule an appointment.
For some people, NFL season is a cause for celebration. People love football; they have since the game became a national pastime decades ago. Football season is a regular staple of American life. Watching the game on Sundays is as much of a hobby as anything else is.
Whoever you support or root against is your business, but there’s something we can learn from NFL quarterbacks: how to be covered. Who is your offensive line? What protects you against a tackle?
In this article, we’ll discuss ways to cover yourself against a will challenge. The best offense is a good defense, and executing your will properly will provide you with almost all the protection you need.
What is a Last Will and Testament?
Before we get into will challenges, we should talk about what exactly a will is. A last will and testament is a legally-binding document. It expresses your wishes on how you want your property (savings, home, car, possessions, etc.) distributed after you die. It also delineates who you want to manage the property and execute the will until the final distribution.
The will can also perform other functions as well, such as appoint guardians for your minor children. It is important that a will communicates your wishes clearly, precisely, and accurately. As with any legal document, there are rules attached to how a will must be formed and executed.
What Are the Rules?
Rules vary from state to state. In Florida, there are several requirements for the proper execution of a will. Bulleted below are must-haves for writing a will.
- Writing. Florida courts require that a will be written. There can be no nuncupative wills (oral declarations) or handwritten instructions without witness signatures (holographic wills). These non-written wills are not valid.
- Competence. A will must be made by someone who is competent. The Mad Hatter couldn’t write a will. Someone not of sound mind, or someone who is a non-emancipated minor under age eighteen, could not write a will.
- Terminology. As long as a will is executed according to the law, there aren’t any special phrases, language, or forms required to make the will valid.
- Signatures. This one shouldn’t come as a surprise. A will has to be signed by the testator, but the signature can be any letter, symbol, initials, or mark. As long as the person making the will intends that to be their signature, it counts.
- Witnesses. Witnesses have to sign the will in the presence of the person who made the will. They have to sign the will in the presence of each other. Anyone who is competent can be a witness, even if they’re a beneficiary in the will.
In Florida, a will can be revoked or amended, and it can also be contested. Wills are not allowed to have provisions banning people from contesting the will. These provisions are unenforceable. However, attempts to contest the will’s validity cannot take place before the testator dies.
What is a Will Challenge?
A will contest is an adversary proceeding brought during the probate of someone’s estate. The will contest challenges the will’s validity on some specific ground. There are a few grounds for contesting a will, but, first and foremost, only people with legal standing can contest a will. Anyone who is an “interested person” can file a will contest in Florida. “Interested persons” include creditors, beneficiaries, and heirs to the will.
There are three legal grounds on which someone can contest a will. First, they can claim there are irregularities in the execution of the will. Wills that don’t comply with the rules in the above section can be challenged on these grounds.
Second, a contester can claim the person who made the will was not of sound mind. This means they didn’t understand or have the capacity to understand what they were doing and/or the practical effect of the will when they made it. Lack of capacity must be proven at the time the testator made the will.
Third, someone can argue there was undue influence. The contester can say that they felt someone who substantially benefits from the at-issue will forced the testator to change the will and write it to benefit themselves.
These three legal grounds are the basis for will challenges in Florida. Though not always successful, they are time-consuming, expensive, and cause no small amount of family division.
How to Avoid a Will Challenge?
Unfortunately, there is no failsafe way to prevent people from contesting a will. However, if you follow all the rules to the letter and start early, the chances of those people succeeding are very low. Hiring an estate planning attorney to handle the will execution is a must.
The bottom line is that if you want something done right, hire a professional. Taking the DIY route via Legal Zoom or another website might be tempting, but it won’t pay off in the end. Avoid your will and wishes being questioned, and contact an estate planning attorney today.
Labor Day is here! 2021 is far more than half over, and Labor Day is a chance to rest and kick back after you’ve worked so hard. Labor Day began in the nineteenth century, and it is dedicated to the contributions and achievements of workers in America. Traditionally, it is observed every first Monday in September. It wasn’t until 1984 that the federal government officially made it a holiday.
Now, every year, almost all of us have that first Monday in September off work. While you’re firing up the grill or planning a day trip, consider thinking about how you’re protecting everything you’ve worked for. Estate planning can help you keep your hard-earned assets, business, and more from falling into the wrong hands.
Estate Planning Tools
There are a wide range of estate planning tools designed to help you protect your assets after you die. Whether you’re trying to safeguard your business or your home, listed below are some documents to help you do so.
For Your Business
There are estate plans for businesses that handle what happens to your company after you die. These succession plans deal with things like transfer of power or liquidation, as well as insurance and tax issues.
For Your Assets
Wills and trusts are two of the most common estate planning tools for assets. Your last will and testament is a final expression of where you want your assets to go after you die (to certain family members, charity, creditors, etc.). A trust is a little bit different, as it can take place while you’re still alive. With a trust, you transfer title to your property for the benefit of a third party. You transfer to the title to a trustee, who grants it to the beneficiary upon your instruction. Trusts are often preferred to wills because they help people avoid probate court.
For Your Kids
Many people might not know this, but estate planning can help your kids, too. Part of estate planning involves guardianship. Choosing guardians for your kids in the event that something happens to you and/or your spouse is essential to their well-being.
Threats to Your Estate
So, what happens if you don’t have an estate plan, or if your estate plan is poorly executed? Probate court and will challenges are two common threats to your estate and asset division.
Probate court doesn’t always mean that something has gone wrong with your estate plan. Wills need to be authenticated in probate court for them to go into effect, and, if they’ve been properly executed, there shouldn’t be any issue. Where there is a problem is with intestacy.
Dying intestate means that you have no estate plan. In that case, a probate court judge will divide up your assets after you die. The aim of the division will be, first and foremost, to pay off your creditors. This means that ideas and plans you might have had for your assets won’t be carried out, and your estate will be divvied up by the court. It is a hectic, time-consuming, and burdensome process for your family.
Even if you have a will, there’s a chance it might not be executed properly. If you have a good attorney, that chance shrinks to next-to-nothing. However, in today’s era of Legal Zoom, things tend to go wrong. A will is filled with little technicalities, and, if you miss them, you run the risk of a relative challenging your will. Will challenges aren’t uncommon, and they can put a huge wrench in your estate plan.
When it comes to what you’ve worked for, no measure is too great for you to keep it safe. A comprehensive estate plan can keep your assets and business from falling into the wrong hands. If you have a specific idea for what you want to have happen to your possessions after you die, contact our attorneys at WFP to discuss setting up an estate plan.
The Delta variant is upon us. This evolved form of Covid-19 is nearly twice as transmissible as the original virus, and it has several genetic features that make it more severe and resistant to treatment. The Delta variant has the potential to wreak havoc for months. This article won’t be a plea for you to get the vaccine, as, chances are, you have already made up your mind about whether you will or won’t get the Covid-19 shot.
This “variant of concern,” as the CDC calls it, comprises 83% of new cases in the U.S. With this deadlier version of the virus looming, it’s time to think about the harsh reality of the situation. You should ask yourself whether your last will and testament is up to date—assuming you have one. If you’re new to the estate planning game, then read this article, as it will serve as a guide for why you should create a will (or update your current one, if you have it).
What is a Last Will and Testament?
We all have “assets.” Our money, house, the possessions in our house, car, and more constitute assets for the purpose of a last will and testament. A last will and testament is, effectively, a legal document that tells everyone what you want to do with your stuff after you die. You can outline what you want to do with your assets, who you want to give your assets to, and what you want to happen your dependents, financial investments, and bank accounts after you pass on.
There are a few requirements for a valid last will and testament in Florida. First, your will has to be written. Second, your will has to be witnessed and notarized according to the law. Third, it is necessary to follow Florida law’s formalities to the letter when executing a will. Lastly, to go into effect, your will has to be proven valid and permitted by Probate Court (usually not a problem, as long as the law was followed correctly).
Pros and Cons of a Last Will and Testament
As with anything, there are advantages and disadvantages to making a last will and testament.
The “pros” of a last will and testament include:
- You avoid the Florida laws of intestacy.
- You have a legal document that reflects your wishes for your assets.
- You may be able to minimize federal and state estate taxes, should your estate be subject to them.
- You can keep assets within your family.
- You might be able to protect against creditors.
- You can name your guardians for your kids in your will
There are some “cons” to a last will and testament. These are:
- You cannot plan for incapacity.
- The will must be filed in Probate Court.
- The will does not take effect until you die.
- Your affairs might become part of public record, if your inventory is filed with the Probate Court.
- There are sometimes will contests and claims against the estate based on the will’s language.
Do I Need a Last Will and Testament?
After reading the pros and cons, you might be wondering if you need a last will and testament. There is a lot to think about, and there are alternatives to a will, including a trust and other legal instruments.
You likely do need a will. Without one, you’ll die intestate, which means that a court will take charge of distributing your assets. They’ll pay off creditors, and it’s possible your kids won’t get anything, if there aren’t any assets left over after your debt is paid. However, you shouldn’t feel as though a will is your only option. There are plenty of ways to ensure your affairs are properly arranged after death, and these alternatives, especially trusts, have become increasingly popular over time.
If you want to update your will, create a will, or find alternatives to a will, the next step you should take is contacting the attorneys at WFP. It’s not advisable to create your own will, as there are a lot of minor legal technicalities that you could miss, if you’re not trained. Getting it done professionally could save you and your family a lot of hassle down the road. Visit our website to learn more.
Well, it’s that time of year again, when you get to send your kids back to school. Hopefully, there won’t be any more lockdowns, and kids will be able to get an education as normal, even though they’ll likely be wearing masks. It’s been quite a ride these past eighteen months, and most parents are excited that they’ll get a break.
With the back-to-school season approaching, are your affairs in order? Parents with minor children face a specific set of considerations when they’re estate planning. In this article, we’ll discuss some must-have documents for those estate planning with kids.
No Wealth Required
If you’re a young couple with kids, you’re usually nearer to the beginning of your career than the end. Young couples don’t usually have an estate large enough that they’re concerned about the estate tax. However, just because your estate plan won’t revolve around tax minimization, that doesn’t mean you can neglect to create one.
An estate plan usually refers to an advanced medical directive, power of attorney, and will. However, parents with kids must think about what will happen to their children if they both die. Though it is unlikely, and there’s no reason to feel doom and gloom when devising your estate plan, it’s important to have one in case the worst possible situation happens.
Children under eighteen are required to have a legal guardian. If their parents are alive, one or both parents are the kids’ legal guardian(s). However, if neither parent is in the picture, guardianship becomes a little trickier. In your estate plan, you can lay out documentation that designates your kids’ guardian in the event that you and your spouse pass away.
Naming a guardian in your will is the best evidence of which individual the parents want to make decisions for their kids. Parents should take into account the guardian’s beliefs, lifestyle, financial situation, and proximity to the kids’ current place of residence. Both parents should name the same guardian in the will to avoid confusion. Guardianship is a major responsibility, and you should talk to your proposed guardian to ensure they’re on board with caring for your children in the event of your death.
Transfer of Assets
If there is no estate plan and both parents die, the child inherits their share of the parents’ estate, though said estate is held in a minor account. The child can access the money by requesting distribution from the guardian, who in turn must then contact the court for permission to remove the assets from the account.
However, if parents do have an estate plan, they can make things easier for their kid(s). They can create a trust to hold the assets, naming a trustee to manage the trust and distribute assets to the child as they want. A trust in an estate plan is a far better asset-distributor than what your kids will get if you die intestate. An estate planning attorney will help you devise a trust or something similar, making sure your child is taken care of, even if you’re gone.
Administration of the Estate
If both parents die, a successor executor will oversee the administration of the estate. Usually, a surviving spouse is the executor of the will, but, if there is no surviving spouse, someone who is over eighteen must take that spot. This person will be responsible for handling, liquidating, selling, and/or distributing the assets under the terms of the will. Each spouse can name their own executor and co-executors when creating an estate plan. Naming an executor is just another detail that will ensure your kids’ assets are kept safe and distributed fairly.
Contact the attorneys at WFP to learn more about the specific considerations that parents face when arranging their affairs.
If you’ve been watching the news at all, you’ve probably run into the term “cryptocurrency” a few times. Cryptocurrency is far from a fad, though that’s what economists believed it would be back in 2009 when Bitcoin was first invented. Over the past twelve years, cryptocurrency has taken off, and, while it’s far from being as ubiquitous as cards and cash, it’s not going anywhere.
In this guide, we’ll take you through the ins and outs of crypto. Cryptocurrency is a new asset class that estate planning attorneys are seeing in their clients’ portfolios. For more information, watch my YouTube channel, where I discuss different topics relating to cryptocurrency and estate planning.
What is Cryptocurrency?
At its heart, cryptocurrency is a type of payment. You can use this online payment to purchase goods and services. Cryptocurrency exists on a blockchain, which is a decentralized technology that stores ledgers of individual coin ownership. Blockchain is spread across many different computers that record and manage transactions. When you pay for something using cryptocurrency, your ledger reflects that. When you amass more crypto, your ledger reflects that too. Unlike a central bank’s digital currency, cryptocurrency has no central issuing authority.
What are the Different Types of Cryptocurrency?
Though you’ve no doubt heard of Bitcoin, there are more than 10,000 different, publicly-traded cryptocurrencies. More cryptocurrencies continue to proliferate through ICOs (Initial Coin Offerings, which fund the new coins’ development). As of July 23, 2021, the total value of all crypto was $1.3 trillion. Common coins include Bitcoin, Ethereum, XRP, Stellar, Cardano, Chainlink, USD Coin, and Uniswap.
The Pros and Cons of Cryptocurrency
If you’re intrigued so far, you probably want to weigh the pros and cons of crypto. Everything has its advantages and disadvantages, and cryptocurrency is no exception. Some “pros” of cryptocurrency include: the potential for high returns, immediate settlement for international and domestic transactions, payment fraud protection because of the nature of the blockchain, portfolio diversification, and greater liquidity.
On the flip side, there are “cons” of cryptocurrency, such as the potential for large losses because the coins’ value is so volatile. Also, crypto has been used in black market activity, as it is unregulated, unbacked, and there aren’t really refunds when you conduct transactions because the price of the coins is so unstable. Also, though you’re largely protected from payment fraud, there’s always the offhand chance of cyber-hacking.
Is Cryptocurrency Safe?
After reading the cons, you might be wondering if cryptocurrency is safe. According to TIME, the blockchain tech behind crypto is “inherently secure” because the ledger is decentralized and public. Every transaction undergoes its own encryption process. Even though there is a risk of cyber-hacking, as stated above, that risk is low. The blockchain is constantly reviewed by bitcoin users, and that makes it hard to hack.
At the same time, is blockchain a secure investment? When compared to blue-chip stocks, the answer is a flat-out no. Cryptocurrency is uncertain, and Consumer Reports describes crypto as one of investing’s riskier choices. Digital currency might be a hot commodity, but the prices are volatile. Bitcoin might be worth a ton of money one day and then plummet the next.
How Do I Invest?
If you want to go forward and invest in cryptocurrency, the first thing you’ll want to do is find an exchange. You’ll need to choose a platform, such as Bitcoin.com, Changelly PRO, Coinbase Exchange, or ZT to get started buying cryptocurrency. The exchange will likely require you to verify your identity, go through a registration process, and deposit non-crypto money into your account.
After you’ve gotten that process set up, you’ll want to pick a coin. Most coins have a symbol. For example, Ethereum is “ETH,” Bitcoin is “BTC,” and Dogecoin is “DOGE.” Once you’ve picked your coin, you can begin buying and selling.
Hopefully, this guide has given you somewhat of a start on cryptocurrency and estate planning. It’s a complicated field, and there’s no denying that crypto is volatile. However, it can be lucrative. Call the attorneys at WFP to find out if investing in cryptocurrency is the best choice for your wallet.
The Summer Olympics, for the first time in an extremely long time, were postponed in 2020 as the world huddled from the coronavirus pandemic. Now that things are reopening and becoming more safe, especially thanks to the hard work of doctors, nurses, and researchers, the Olympics are back on!
They’re scheduled to take place Friday, July 23, 2021 through Saturday, August 8, 2021 in Tokyo, Japan. People are hyped over the Games, especially since we’ve been waiting for them an extra year. There will be fans there, but capacity is limited at 50%.
Postponement, limited capacity, and more reveal just how much life can change in an instant. What we think will last forever ends up just being a temporary feature in our lives. That’s right, we’re talking about the D-word: Divorce.
Divorce: The Facts
Few things take as much of a hard left turn as divorce. The statistics on marriage certainly look bleak, and the APA says that 40-50% of first marriages end in divorce. Second and third marriages fare even worse. Divorce is one of the most stressful things you can do, both financially and mentally.
Financially, ending a marriage in Florida costs $13,500 if you have no kids (StateLaws.FindLaw.com). If you have kids, the average cost is $20,300 (StateLaws.FindLaw.com). Though this could be more or less expensive, depending on the issues that need to be resolved and the process of resolving them, divorce almost always costs in the thousands.
Divorce and Estate Planning
Divorce affects pretty much every aspect of your life, and that includes your estate plan. It’s a major life change, and you have to make sure that your estate plan reflects it. Taking your ex-spouse out of your estate plan is a must do. When you got married, you likely created an estate plan that involved your spouse. Now, it’s time to undo that.
Revising Your Will
You’ll want to remove provisions that benefit your ex-spouse, and take your ex-spouse off the will as trustee and executor, assuming that you had them in that role. Make sure your ex doesn’t get any of your assets after you die, and don’t allow them control over your trust or estate.
Update Power of Attorney
If you don’t want to be married to them, chances are, you don’t want them making decisions regarding your finances and healthcare if you’re too incapacitated to do so. If your old PoA named your ex to that position, revoke it. You can execute a new PoA, naming a relative, friend, advisor, or just someone you’re not divorcing.
Update Healthcare Proxy
There aren’t many people who would want their ex making decisions about their end-of-life care. If you had your spouse listed in a proxy position for those healthcare decisions, take them off that list and replace them with a non-hostile party.
Rethink Guardianship (If Necessary)
Sometimes, in a divorce, your spouse isn’t just a bad spouse—they’re a bad parent, too. If that’s your feeling about your spouse, you might want to name someone else as the guardian of your kids if something happens to you. For example, if your divorce is caused by your spouse’s substance abuse, they’re no who you would want as a guardian for your kids if you die. This will likely be a litigated issue that extends beyond estate planning. It’s very important to talk to a lawyer if this sounds like the situation you’re experiencing.
Consider a Trust
If you don’t have a trust for your minor kids, that means that, if your ex is the kids’ guardian, he or she will have control over the kids’ finances until they reach majority (age 18). If you set up a revocable trust or a similar instrument, you can choose a trustee that isn’t your ex to control and access the money on your kids’ behalf if you die.
You might have an obligation to maintain your life insurance under the divorce agreement. Review this with your estate planning attorney to avoid litigation in the future.
Last but not least, don’t forget to take your ex-spouse off your retirement plan beneficiary designations. Your 401(k) or IRA designations should be consistent with the terms of the divorce agreement between you and your ex.
The bottom line is that you need to include an estate planning attorney and maybe even a financial advisor, in addition to your divorce lawyer. Don’t let this estate planning update wait. Place it at the top of your priority list. Schedule an appointment with WFP today.
Well, it’s finally happening. It appears (knock on wood) that life is going back to normal after the COVID-19 epidemic. While there’s a good chance this disease won’t ever be fully eradicated, things are in control enough to allow places to open back up, even without masks.
That is welcome news for small business owners, who have had it rough throughout the pandemic. Now that things are nearly back to semi-normal, are you prepared? Go through this checklist of paperwork for your business. Though not exhaustive, it will give you an idea of what you should have, as far as estate planning goes.
A will and basic estate plan are a good place to start. A will talks about your wishes for what you want to have happen to your assets after you die. A power of attorney and healthcare directive, though both different, concern decision-making when you’re incapacitated. Without a last will and testament, the business will be divvied up according to your state’s laws. Having a plan in place ensures that someone you trust will inherit business property (or, at least, that your business’ fate will be what you want).
A big part of estate planning involves tax laws. These laws are constantly changing, so you’ll be knocking on your lawyer’s and financial advisor’s door pretty regularly. Estate planning can help you legally minimize your tax burden. For example, you might be able to create a family limited partnership or divide your estate into several trusts as a way to minimize your burden. Even if you think that inheritance or estate taxes don’t apply to you, other considerations, related to your 401(k) are still at play.
Family-Owned Company Issues
Though family-owned businesses have their benefits, they also have their downsides. There are special concerns about keeping the business’ assets in the bloodline, and you don’t see these types of concerns when businesses aren’t family-owned. An estate planning attorney can help you quash fights and conflicts. Sometimes, having a third-party step in is exactly what FOBs need. Especially in today’s delicate, post-COVID times, you need to make sure you hit the ground running, not bogged down by familial drama.
One must-have for businesses is an owner with a life insurance policy. Usually, small business owners need to buy two life/disability policies: one that names their family as the beneficiary and one that names their business as the beneficiary. If you die, the policy will provide an income stream that will keep your company afloat in that difficult time.
Term life insurance covers you if your death occurs within a certain time frame, while whole life insurance, also known as permanent life insurance, is an investment, and it will remain in place for the duration of your life. You can add disability coverage separately or purchase it as a rider.
Key person insurance works similarly to personal life insurance, but your company is the beneficiary, as opposed to a family member. If a “key person” in the business (generally the owner) becomes disabled or dies, the business will get a payout. Usually, the payout s equal to a multiple of the key person’s salary or the company’s profits. Key person insurance is often a lifesaver for mom-and-pop business, where the owner is critical to the day-to-day operations and success of the business.
Of course, we can’t talk about estate planning for a business without discussing a succession plan. Your succession plan will delineate how your company and family will prepare for an ownership transition. The idea behind succession planning is simple: keep the business running until the new owner takes over or inherits the company. The written plan will contain how-to instructions and information about your business’ background, among other important details.
Update When Needed
Once you’ve gotten your business’ estate plan squared away and included all the documents you need to include, don’t just leave it and forget it ever existed. Update and review your estate plan every few years, and take a look at it again whenever you, your family, or your business experience a major life change.
Contact an estate planning attorney today to review your current plan and ensure that it is comprehensive. As the country opens back up, remember that preparation is key.
The Fourth of July is here! Also called Independence Day, we celebrate this holiday as a way to celebrate America’s declaration of independence from Great Britain. The Declaration of Independence was adopted on July 4, 1776, and we haven’t looked back since. Though the British colonies took a little time to adjust, with the help of muskets and cannon-fire, they saw things America’s way.
Centuries later, the Fourth is now a chance to let off fireworks, grill burgers and hot dogs on the barbecue, and spend time with family and friends under the red, white, and blue. It’s a shame life can’t always be fireworks and parties, and reality sets back in whenever the holiday is over.
Planning for the Good Times
Though life can’t always be a party, there are some instances in your life where things will go really well. Marriages, new babies, and job changes are usually a cause to celebrate. Each one has its own ramifications, as far as estate planning goes.
When you’re a married couple, your responsibilities change, and that goes double if you have kids. Marital property is defined as the property you share with your spouse, that is jointly owned between the two of you.
Example of marital property includes property that you bought with money earned during the marriage, property held by you and your spouse in certain legal structures, and gifts from family and friends that were meant to be shared between the two of you (wedding gifts are a common example of that). Active asset appreciation—the increase in value of marital property—is also on the list of marital property. Creating a prenuptial agreement, transferring shared property, and setting up trusts and wills are all things that you might need to do when setting up your married estate plan.
With children comes even more responsibility. Naming a guardian for your kids is a worst-case scenario precaution. This would mean that both you and your spouse have passed away, and your children now are passing in custody to a relative or close friend. Talk to your proposed guardian before assigning them custody. You can update your will or other legal documents to reflect this change.
It’s also likely that you’ll want to name your kids as the main beneficiaries of you and your spouse’s estate. You can create trusts and other legal documents that will determine how their inheritance will be managed.
If job changes mean changes in income, 401(k), and insurance, those all might need to be reflected in your estate plan. A job change is usually a positive thing, assuming that it was of your own free will, but it doesn’t come without its considerations. Though not as major as a new spouse or new baby, you should still make sure that it is reflected in the plan.
And the Bad
Obviously, the fun times don’t always last. That’s the beauty of life—there’s ups and downs, and, though the downs don’t really get easier, proper planning can make them more manageable. Sickness and death are two of the biggest “bad times” we can think of, and each come with their own part in your estate plan.
A power of attorney can help you through sickness. You appoint this trusted individual to ensure that your medical and/or financial decisions are taken care of, even if you’re too sick to handle them yourself. The PoA will pay bills, choose treatments, and manage your bank accounts until you’re back on your feet and able to handle those decisions yourself.
A healthcare directive is also an important part of the decision-making process for when you’re incapacitated and unwell. If you’re too sick to communicate with doctors and nurses about your wishes, a directive will outline those. Usually, the decisions delineated in the directive pertain to end-of-life care or something equally as personal and serious.
When you think of death, a last will and testament usually pops into your head. A will lays out where you want your assets to go after you die. Do you want them inherited, liquidated and used to pay off creditors, or something else? A trust is a way to pass assets on before you die, allowing those assets to avoid probate court. When thinking about your after-life asset transfer plan, talk to an estate planning attorney about what will be the most beneficial for your family.
Talk to a lawyer about your options for estate planning. Once you have a solid plan in place, you should update it every three to five years, or when you experience a major life change. Visit our website to learn more.
Summer is here! It’s June, which means it’s time to vacation in the sand, sun, and surf. Before you go on a vacation (and hopefully, you get to go, as the past year has been stressful for us all), it’s important to take care of some estate planning essentials. This article will serve as a guide to how to estate-plan before taking a vacation.
Why Before a Vacation?
Though vacations are fun and laid-back, the real reason that you should estate-plan before a vacation takes into account the less-fun side of things. Bad things can—but hopefully won’t—happen on a vacation. If you die or become ill or injured on a vacation, an estate plan will keep your assets and medical decisions from being taken over by third parties who don’t know you and don’t know your family.
What to Have
Below are a few legal tools and documents that you should have in your estate plan. These aren’t the be-all, end-all of estate planning, but they will get you off to a pretty good start. Though certain websites and services offer to let you write these documents yourself, it’s best to let a professional do them for you, as lawyers can best navigate the tricky legal waters.
Beneficiary designations on things like 401(k) and life insurance documents provide someone to receive these accounts in the event that you pass away. Usually, it’s a spouse or child who is given the money, but it can be anyone you name (if you’re divorced, make sure your ex isn’t on the account). If there’s no beneficiary named, it will likely be the court who decides who gets what.
Will or Trust
Wills and trust are two legal documents, each different in their own ways, with similar purposes. They both are designed to lay out where your assets will go if you die. You can couple these with a letter of intent, which you write to your executor spelling out your intentions for your assets. Both wills and trusts are cornerstones of asset division.
If you have minor children and something happens to you and your spouse on vacation, who will take care of them? Though the idea of getting eaten by a shark or contracting some random deadly disease seems far off, you never know. Name your kids’ guardians in your estate plan. Choose people who will give them the best day-to-day quality of life, and make sure you talk to your proposed guardians beforehand, as you want to make sure they are on board with such a huge, life-changing responsibility.
Power(s) of Attorney
Powers of attorneys are trusted individuals that you choose to make healthcare and/or financial decisions for you in the even that you’re unable to make them yourself. Taking from the example above, let’s say you contract a rare disease and are too sick to pay your bills. A financial POA will take care of those responsibilities for you until you are well enough to return to those tasks.
Also known as living wills, advanced healthcare directives are important documents for anyone with strong opinions about their medical care. If you have certain religious or moral wishes (such as Do Not Resuscitate) about your healthcare, you can delineate them in an advanced directive. Doctors, nurses, and specialists will rely on this document when providing you with care. The advanced directive is highly personal, reflecting what you truly want and don’t want.
What If I Don’t Have These?
Basically, not having an estate plan and running into peril will require third parties—courts—to make decisions for you. For example, if you don’t have guardianship designations set up for your kids and you die, a judge, who doesn’t know your family, will step in and make the decision for you. The court process is costly, impartial, and can seem invasive. Estate planning will help you sidestep all of that.
Though estate planning might seem like a bummer before a vacation, consider it a boring—yet necessary—part of the vacation planning process. Contact an attorney to plan out some of the documents discussed above, as the lawyer will be able to quickly sort out what you need, getting you on your way to the sand and sun as fast as possible.