Father’s Day is coming up in a few weeks, and we all have different things that we love about our dads. Dads might be the protectors of the family, but they might need protection themselves, as they get older. Helping your father with his estate plan is a long-lasting gift that will give him (and you) peace of mind. Here are some ways that kids can help their parents by setting up an estate planning meeting with an attorney. 

Healthcare

As people get older, their health tends to become a little more precarious. Even someone in great shape one day can have a change the next. When it comes to healthcare, there are some major tools in the estate planning toolkit. Namely, you can set up a healthcare directive.

A healthcare directive is a document that lays out your father’s health wishes, whether these include a DNR order, special diet instructions (such as religious restrictions), or other important beliefs. If your father is too incapacitated to verbalize these decisions to the doctors and nurses taking care of him, the healthcare directive will do it for him. 

Finances

A power of attorney is a trusted individual that your dad picks to handle his financial, legal, and/or medical affairs in the even that he isn’t able to make those decisions for himself. There can be more than one power of attorney, and each power of attorney can be limited in scope. 

A general scope POA handles all of the decisions that your dad needs made. A special POA is restricted to just a certain decision-making field, whether it’s healthcare decisions or finances. Your father will pick the power of attorney, and the idea is to pick someone who is stable and level-headed. A power of attorney isn’t forever—it isn’t permanently taking power away. It comes into effect when in the event that your dad needs help when he’s older.

Updating Wills and Estate Plans

The rule of thumb states that you should update and/or review your will and estate plan every three to five years. However, if you experience a major life event, such as new people in the family, divorces, health scares, etc., you should update it earlier to reflect those changes. 

Updating an estate plan can take a long time, especially if there are a lot of documents in the plan. It can take even longer to create a new estate plan from scratch, if your father doesn’t have one in place. Though it takes a lot of time and effort, your dad is worth it. 

Setting Up a Trust

If your father knows he wants to transfer a specific piece of property/money to someone and has been talking about it forever (but hasn’t done it yet), helping him set up a trust is a great idea. A trust is a three-party relationship. Your father is the donor. He transfers title to the property to the trustee. The trustee then transfers the property to the beneficiary, which is the person that your father intended to get the property all along. The trustee keeps the property in his possession until instructed to transfer it—usually, the transfer goes through upon death.

Business Succession 

If your dad owns his own business, making sure that there are business succession plans in the works will keep his company safe after he retires or passes on. Perhaps he wants his company liquidated and the proceeds distributed, or maybe he wants his company to merge with another. Putting in place a concrete plan for what will happen to the business will be hugely beneficial to your father’s financial stability.

Setting up your father’s power of attorney is just one of many ways that the law can help him as he gets older. Estate planning is a way to ensure long-term safety and financial stability of your dad.

2020 has certainly sent us all for a loop. We’ve had months to reflect on our lives and the joys (or lack thereof) of working from home. It’s been a hard few months, but it appears to be coming to a close. Now that quarantine is over and we’re allowed to leave the house, it’s time to check off items on the to-do list that you may have been putting off. Namely, it’s time to review and update your estate plan. 

This article will discuss things to think about when checking over and updating your estate plan. 

I. Updating Your Will

There are several ways you can go about updating your will, and this section will touch on just a few of them, including: codicils, new wills, and personal property memorandums. 

Codicil v. New Will 

If you’ve never heard the term “codicil” before, you’re not alone. It’s a legal term, used to describe a minor change to your will. The codicil is a secondary document that you attach to your original will. On the codicil document, you can include changes to existing items in your will. An addendum, by contrast, is something that adds a new element to your will. It is also a secondary document. 

However, if you want to make big changes to your will, you might want to simply revoke your old will and make a new one. For example, a change of beneficiary is a big deal, so revoking your old will and creating a new will might be the safest choice. Be sure to follow the letter of the law down to a T, or else your old, inaccurate will might be honored. 

Personal Property Memorandum 

A personal property memorandum (PPM) is another type of update to your will. A PPM is a separate secondary document, the same as a codicil. You attach it to your will. In the PPM, you list an accounting of all of your personal property. A PPM doesn’t usually have to be signed or witnessed, but you have to refer to it in your will in order for a court to find it valid. Trusts are often a better way to transfer personal property. 

Don’t DIY It 

If this sounds confusing, that isn’t surprising. A major mistake that people make is thinking they can go onto a legal “DIY” website and write their own will or make changes. It is best to have an attorney help you. The law is tricky and the devil is in the details. 

II. Updating Your Estate Plan

The Rule of Thumb 

The rule of thumb for updating an estate plan and/or will is to do so every three to five years. The thinking is that, in that time frame, there has likely been at least one or two life changes that might require you to take another look. However, there are other times you should update outside of that “3 to 5” framework.

Other Times to Update 

If you go through a major life change or add new members to the family, you should update your will and estate plan to reflect those. These changes can include divorce, remarriage, new babies and other new family members, or changes in health circumstances. You never know what life will throw at you, so it’s best not to stick to the “3 to 5” rule too stringently. 

What to Update First

These are just suggestions, but it might be wise to update documents that have to do with your kids or health first. Think about what you prioritize and work backwards from there. If you have a complicated estate plan with a lot of documents, updating/reviewing may be a multi-day undertaking. 

Though the rule of thumb says to update your will and estate plan every three to five years, that’s not mandatory. If you’re undergoing a major life change, you should update. Above all, make sure to contact an estate planning attorney to ensure that the process is carried out correctly. 

Probate law is its own field. There are attorneys who practice solely in this complex, multi-faceted field of law, and they know the ins and outs. These estate planning attorneys are the ones you should contact to set up an estate plan, as opposed to joining online sites like LegalZoom to do it yourself.

In this article, we will walk you through a day in the life of a probated estate. For each “step,” there are many sub-topics and sub-steps, as well as ways to avoid probate. This overview should not replace setting up an appointment with an estate planning attorney. 

What is Probate?

If you make a will, probate is the way you can authenticate it. Probate court is the legal body that supervises the distribution of your estate and payoff of creditors. If you die intestate (without a will), your estate still goes through probate, but the court will determine all of the distribution factors. Here is an example of step-by-step probate process.

Step One: Authentication

Whoever has your will must file it with the state after your death as soon as “reasonably possible.” What is “reasonable” or not will be determined by the court. The person with the will also will file a petition for probate, which is a request to kick off the process.

Authentication means ensuring that the will is properly-made, accurate, and not forged. Each state has its own authentication mechanisms and laws, and the possessor of your will must be sure to follow the court’s rules on authenticating before probate can really get going.

Step Two: Appointments 

After authentication, the court will appoint someone to administrate your will. This person is known as an executor. The executor is in charge of conducting transactions on behalf of your estate (including paying off creditors and distributing assets).

Step Two-and-a-Half: Bond

Sometimes, an executor will have to “post bond” before he or she can distribute the estate. Bond acts as an insurance policy in case the executor leaves or commits grievous errors in administrating the estate. Not all states require bond for executors.

Step Three: Find the Assets

Identifying and listing the estate’s assets is a tedious process. The will may include many of them, but there might be “hidden assets.” The executor can find “hidden assets” through reviewing insurance policies or tax returns. 

Step Four: D.O.D. Values

Date-of-death values are the appraisals of the assets—basically, how much an asset is worth on the day the person died. The court can appoint someone to make the appraisals, but the executor can also do the appraisal appointments him- or herself.

Step Five: Creditors

Next, creditors, which are the people to whom you owe debts, must be identified and notified of your death. In many states, an executor must post an ad in the paper to let creditors who are unidentified know that you have died. Usually, once they know you’re dead, creditors will swoop in to try to collect payment. 

Step Six: Pay Debts

And once all the creditors have lined up, it is time for the executor to take the values accumulated in your estate, add them up, and start using the value to pay off debts. Creditors come first in probate, not your family.

Step Seven: Tax Returns

Next, the executor must file tax returns for your estate for the year up until your death. The IRS is considered a creditor, and sometimes, it is necessary to liquidate assets to pay off unpaid taxes.

Step Eight: Final Distribution 

Your family gets what is left, if there is anything after paying off creditors. The executor will look to your will for guidance on the distribution. 

If this sounds terrible, that’s because it can be. There are ways to legally minimize your tax burden and avoid probate court, and an attorney can help you do that. Probate court is a lengthy, difficult process, but it does not have to be that way.

Well, we knew this article would come eventually. Everyone is stuck in the house right now, whether they want to be or not, as Coronavirus rages through the country. Some people are quarantined by themselves, while others are stuck inside with spouses. Being stuck inside with your spouse leads to boredom, and boredom leads to fights. Arguing is just one way to pass the time.

But what happens when these arguments are stuff that your relationship cannot surmount? Old quarrels can lead to divorce and legal separation. If quarantine has driven you to this point, you should probably read this article. Here is some need-to-know info about divorce and its impact on your estate plan.

Divorce Vs. Legal Separation

Firstly, there is a difference between divorce and legal separation. Divorce ends the marriage contract between you and your (ex-) spouse. Legally, you two are no longer married. Legal separation, on the other hand, does not end the marriage contract. In a legal separation, the couple is still married, but they are living apart. A legal separation is a court order that will mandate the rights/duties of the couple during this time period. If you want to be done done, get a divorce.

And, as divorce is the end of the marriage, this article will discuss divorce’s, not legal separation’s, impact on your estate plan. 

Divorce’s Impact on Your Estate Plan 

Power of Attorney

Do you want someone with whom you have been arguing for two straight months (or longer) to be your power of attorney? The power of attorney is allowed to make major healthcare and/or financial decisions for you in the event of your incapacitation. This position can have a huge impact on your life when you are in your most vulnerable state. Switch out the power of attorney to someone you haven’t divorced. This can include a family member or close friend.

Will

Some states have a strikeout provision in a will that essentially ignores your ex-spouse in the event of a divorce. The provisions about your ex are “ignored” by a court. However, not all states have this, and you shouldn’t rely on it anyone. If your ex is a beneficiary of your estate, take them out. You want to make sure your will (or a trust) is updated to reflect your current status.

Retirement/Life Insurance

Your 401(k), pension, or IRA are not passed down as part of your will. Instead, they go to a beneficiary in the event that you die and are unable to benefit. The same goes for life insurance. If your ex-spouse is listed as the beneficiary on these types of accounts, you should take them off. It’s likely that you do not want your ex getting a windfall of cash in the event of your death, so calling the financial/insurance institutions in charge of these is a must-do. 

What About the Kids? Alimony?

Custody and alimony are part of family law, and an estate planning attorney who does not practice family law will likely refer you to another attorney. Custody determinations and alimony determinations are tricky, and they are handled separately than the other, above-mentioned aspects of an estate plan. 

According to Bloomberg News, China has already seen a spike in divorce filings. The pandemic is pretty much over there, so China’s spike in divorces serves as a foreboding warning to the rest of the world. ABC News’s interview with Howard Markman (the Center for Marital and Family Studies’ co-director) came to the same conclusion: a surge in divorce is to be expected. Contact an attorney to ensure that there is as little negative impact on your estate plan as possible.

Mother’s Day is coming up, and the holiday reminds us that very few things are stronger than a mother’s love for her children. In the spirit of that sentiment, this article will be geared towards mothers and their kids. We’ll discuss how mothers can protect their kids through smart estate planning. 

Moms and Their Kids 

While this list certainly is not exhaustive, it does contain some of the most important documents an estate plan should include. Consult an attorney for more information on how to structure your estate plan. Like families, no one estate plan is the same. There is no “one size fits all” option.

Guardianship

One of the last things you probably want to think about with Mother’s Day coming up is what it would be like if your kids did not have a mother. So, we’ll keep this short. Guardianship papers are an essential part of any estate plan. These papers detail who will take care of your kids in the event that you (and your spouse, if you have one) pass away.

Picking a guardian for your kids in the event of a “worst case scenario” means selecting someone who will be there for the day to day. Yes, Disney trips and lavish vacations are fun, but select someone who can stick with your kids for the long haul. Only you know what’s best. Make sure to consult with your proposed guardian before you make the selection, just to ensure that he or she is on board with such a big responsibility.

A Trust

“Can’t I just put my kids in my will and call it a day?” Well, you can, but your will still must go through probate, and that can be a long, drawn-out process that tangles up your assets. A trust, which is a three-party fiduciary relationship, transfers ownership of your asset to your kids immediately.

But, don’t worry. They can’t get their hands on your asset until they are older. You pick the date they receive the trust’s benefits. The person who controls the trust’s distribution is a trustee. Discuss this with an estate planning attorney if it sounds like something you want to set up. A trust is a good way to avoid probate and get your kids what they need immediately.

Updating Regularly 

Don’t forget to update your estate plan regularly to encompass changes in the family, whether these include new kids, grandkids, divorces, or other life changes that might cause your will to look different. You don’t want to exclude anyone (or include someone who shouldn’t be), so a regularly-updated estate plan will benefit you and your kids far more than one that is out of date.

Life Insurance 

Life insurance is an excellent choice for someone who wants to provide for their kids. Life insurance is a contract between you (the policy holder) and an insurance company. You pay a premium to the company. In exchange, the insurance company promises a payout to the beneficiary (your kids) in the event of your death. Life insurance plans, like all insurance plans, vary in terms of expensiveness and coverage. 

Business Succession Plan

For moms out there who own their own businesses, this one is important. Make sure that there is a plan in place in the event that you die. Do you want your business to be passed on to your kids? Or, do you want your company liquidated or sold? Without a succession plan, your kids will be faced with hard, confusing decisions. A succession plan will make this much easier for them.

This Mother’s Day, give your kids the gift of a long-term plan for the future. Consult an estate planning attorney to talk about your options. Above all, be happy and stay safe!