Estate Planning Is Best When Personalized

Just as a custom-tailored suit fits better than one off the rack, a custom-tailored estate plan works better for families. Making sure assets pass to the right person is more likely to occur when documents are created just for you, advises the article “Tailoring estate to specific needs leads to better plans” from the Cleveland Jewish News.

The most obvious example is a family with a special needs member. Generic estate planning documents typically will not suit that family’s estate planning.

Every state has its own laws about distributing property and money owned by a person at their death, in cases where people don’t have a will. Relying on state law instead of a will is a risky move that can lead to people you may not even know inheriting your entire estate.

In the absence of an estate plan in Virginia, the Circuit Court makes decisions about who will administer the estate and the distribution of property. Without a named executor, the court will appoint a local attorney to take on this responsibility. An appointed attorney who has never met the decedent and doesn’t know the family won’t have the insights to follow the decedent’s wishes.

The same risks can occur with online will templates. Their use often results in families needing to retain an estate planning attorney to fix the mistakes caused by their use. Online wills may not be valid in your state or may lead to unintended consequences. Saving a few dollars now could end up costing your family thousands to clean up the mess.

Estate plans are different for each person because every person and every family are different. Estate plan templates may not account for any of your wishes.

Generic plans are very limited. An estate plan custom created for you takes into consideration your family dynamics, how your individual beneficiaries will be treated and expresses your wishes for your family after you have passed.

Generic estate plans also don’t reflect the complicated families of today. Some people have family members they do not want to inherit anything. Disinheriting someone successfully is not as easy as leaving them out of the will or leaving them a small token amount.

Ensuring that your wishes are followed and that your will is not easily challenged takes the special skills of an experienced estate planning attorney.

Reference: Cleveland Jewish News (Dec. 9, 2020) “Tailoring estate to specific needs leads to better plans”

 

estate planning

How Can Blended Families Use Estate Planning to Protect All of the Siblings?

If two adult children in a blended family receive a lot more financial help from their parent and stepparents than other children, there may be expectations that the parent’s estate plan will structured to address any unequal distributions. This unique circumstance requires a unique solution, as explained in the article “Estate Planning: A Trust Can Be Used to Protect Blended Families” from Colorado’s The Daily Sentinel. Blended families in which adult children and stepchildren have grandchildren also require unique estate planning.

Blended families face the question of what happens if one parent dies and the surviving step parent remarries. If the deceased spouse’s estate was given to the surviving step parent, will those assets be used to benefit the deceased spouse’s children, or will the new spouse and their children be the sole beneficiaries?

In a perfect world, all children would be treated equally, and assets would flow to the right heirs.  However, that does not always happen. There are many cases where the best of intentions is clear to all, but the death of the first spouse in a blended marriage change everything.

Other events occur that change how the deceased’s estate is distributed. If the surviving step-spouse suffers from Alzheimer’s or experiences another serious disease, their judgement may become impaired.

All of these are risks that can be avoided, if proper estate planning is done by both parents while they are still well and living. Chief among these is a trust,  because a simple will can never provide the level of control of assets needed in this situation. Don’t leave this to chance—there’s no way to know how things will work out.

A trust can be created, so the spouse will have access to assets while they are living. When they pass, the remainder of the trust can be distributed to the childr

If a family that has helped out two children more than others, as mentioned above, the relationships between the siblings that took time to establish need to be addressed, while the parents are still living. This can be done with a gifting strategy, where children who felt their needs were being overlooked may receive gifts of any size that might be appropriate, to stem any feelings of resentment. Life insurance may be one tool to bring about an equalization.

That is not to say that parents need to use their estate to satisfy their children’s expectations. However, in the case of the family above, it is a reasonable solution for that particular family and their dynamics.

A good estate plan addresses the parent’s needs and takes the children’s needs into consideration. Every parent needs to address their children’s unique needs and be able to distinguish their needs from wants. A gifting strategy, trusts and other estate planning tools can be explored in a consultation with an experienced estate planning attorney, who creates estate plans specific to the unique needs of each family.

Reference: The Daily Sentinel (Dec. 16, 2020) “Estate Planning: A Trust Can Be Used to Protect Blended Families”

 

What Kind of Estate Planning Mistakes Do People Make?

Estate planning for any sized estate is an important responsibility to loved ones. Done correctly, it can help families flourish over generations, control how legacies are distributed and convey values from parents to children to grandchildren. However, a failed estate plan, says a recent article from Tidewater’s Suffolk News-Herald titled “Estate planning mistakes to avoid,” can create bitter divisions between family members, become an expensive burden and even add unnecessary stress to a time of intense grief.

Here are some errors to avoid:

This is not the time for do-it-yourself estate planning.

An unexpected example comes from the late Chief Justice Warren Burger. Yes, even justices make mistakes with estate planning! He wrote a 176 word will, which cost his heirs more than $450,000 in estate taxes and fees. A properly prepared will could have saved the family a huge amount of money, time and anxiety.

Don’t neglect to update your will or trust.

Life happens and relationships change. When a new person enters your life, whether by birth, adoption, marriage or other event, your estate planning wishes may change. The same goes for people departing your life. Death, divorce and tax law changes should also trigger an estate plan review.

Don’t be coy with heirs about your estate plan.

Heirs don’t need to know down to the penny what you intend to leave them but be wise enough to convey your purpose and intentions. If you are leaving more money to one child than to another, it would be a great kindness to the children’s relationship, if you explained why you are doing so. If you want your family to remain a family, share your thinking and your goals.

If there are certain possessions you know your family members value, making a list those items and who should get what. This will avoid family squabbles during a difficult time. Often it is not the money, but the sentimental items that cause family fights after a parent dies.

Understand what happens if you are not married to your partner.

Unmarried partners do not receive many of the estate tax breaks or other benefits of the law enjoyed by married couples. Unless you have an estate plan and a valid will in place, your partner will not be protected. Owning property jointly is just one part of an estate plan. Sit down with an experienced estate planning attorney to protect each other. The same applies to planning for incapacity. You will want to have a HIPAA release form and Power of Attorney for Health Care, so you are able to speak with each other’s medical providers.

Don’t neglect to fund a trust once it is created.

It’s easy to create a trust and it’s equally easy to forget to fund the trust. That means retitling assets that have been placed in the trust or adding enough assets to a trust, so it may function as designed. Failing to retitle assets has left many people with estate plans that did not work.

Please don’t be naive about caregivers with designs on your assets or relatives, who appear after long periods of estrangement.

It is not pleasant to consider that people in your life may not be interested in your well-being, but in your finances. However, this must remain front and center during the estate planning process. Elder financial abuse and scams are extremely common. Family members and seemingly devoted caregivers have often been found to have ulterior motives. Be smart enough to recognize when this occurs in your life.

Reference: Suffolk News-Herald (Dec. 15, 2020) “Estate planning mistakes to avoid”

What’s the Latest on the Zappos’ Founder’s Estate?

Judge Gloria Sturman granted the ex parte motion filed by the attorney representing Zappos’ Founder Tony’s Hsieh’s father Richard Hsieh and brother Andrew Hsieh to serve as co-special administrators and legal representatives for the estate of Hsieh, who seems to have died intestate (dying without a will).

Court filings show that the Zappos’ founder’s family wasn’t aware of a will or other estate planning documents to direct how to handle his financial assets after his death. Because he died without a will, no one can be absolutely sure what he intended.

KTNV’s recent article entitled “Judge awards Tony Hsieh’s father, brother administrative duties over massive wealth, estate,” reports that Tony Hsieh’s wealth could be as much as $1 billion with a variety of assets including real estate and other business dealings. As a result, figuring out Hsieh’s finances will be a time-consuming and complicated process.

The Hsieh family released a statement, part of which says that the hope to “carry on Tony’s legacy by spreading the tenets he lived by – finding joy through meaningful life experience, inspiring and helping others, and most of all, delivering happiness.”

Hsieh was described by some as eccentric, unconventional and wasn’t known for fitting into normal business customs. He lived in a 250 square-foot travel trailer in downtown Las Vegas and had a pet alpaca named Marley and pet chickens. The billionaire internet mogul, during a 2015 interview, remarked that he owned just four pairs of shoes—despite running a company that sold millions of pairs.

In August, Hsieh abruptly left Zappos, the company he oversaw for more than 20 years. Reports say he bought millions in real estate in Park City, Utah around that time, which was seen as peculiar, even for Hsieh, who said he believed more in “experiences” than owning physical items or property.

There were signs of substance abuse.

The fire that caused his death is under investigation in New London, CT. Fire authorities there say they were called to a home at 3:30 a.m. on November 18. Initial reports were that a person was barricaded inside a shed on the property. Dispatch audio says that Hsieh was locked inside, and firefighters found him unconscious.

Reference: KTNV (Dec. 3, 2020) “Judge awards Tony Hsieh’s father, brother administrative duties over massive wealth, estate”

 

COVID worries older Americans

Elder Financial Abuse on the Rise during Pandemic

The same isolation that is keeping seniors safe during the pandemic is also making them easier targets for scammers, reports WKYC in a news report “Northeast Ohio family warns of elder financial exploitation during the pandemic.” While this report concerns a family in Ohio, seniors and families across the country are facing the same challenges.

Two brothers enjoyed spending their time together throughout their lives. However, for the last three years, one of them, Michael Pekar, has been trying to undo a neighbor’s theft of his brother Ronnie’s estate. A few months before Ronnie died from cancer, a neighbor got involved with his finances, gained Power of Attorney and began stealing Ronnie’s life savings.

The money, more than a million dollars, had been saved for the sons by their mother. Pekar went to see an attorney, who helped uncover a sum of about $1.6 million that had been transferred from Ronnie into other accounts. A civil complaint was filed against the woman and $700,000 was eventually recovered, but nearly $1 million will never be recovered.

How can you prevent this from happening to your loved ones, especially those who are isolated during the COVID-19 pandemic?

An elderly person who is isolated is vulnerable. Long stretches of time without family contact make them eager for human connection. If someone new suddenly inserts themselves into your loved one’s life, consider it a red flag. Are new people taking over tasks of bill paying, or driving them to a bank, lawyer, or financial professional’s office? It might start out as a genuine offer of help but may not end that way, elder lawyers say.

The possible financial abuser does not have to be a stranger. In most cases, family members, like nieces, nephews or other relatives, prey on the isolated elderly person. The red flag is a sudden interest that was never there before.

Changes to legal or financial documents are a warning sign, especially if those documents have gone missing. Unexpected trips to attorneys you don’t know or switching financial advisors without discussing changes with children are another sign that something is happening. So are changes to email addresses and phone numbers. If your elderly aunt who calls every Thursday at 3 pm stops calling, or you can’t reach her, someone may be controlling her communications.

According to the CDC, about one in ten adults over age 60 are abused, neglected, or financially exploited.

Be sure to check in more frequently on elderly family members during the pandemic because increased isolation can lead them to rely on others, making them vulnerable to abuse.

Reference: WKYC (Nov. 19, 2020) “Northeast Ohio family warns of elder financial exploitation during the pandemic.”

 

The New Orleans woman who fought the longest court battle in US history

In an 1850 pamphlet summarizing the ongoing estate litigation of a New Orleans woman, Myra Clark Gaines, journalist Alexander Walker wrote, “The wildest romance ever written, could not contain a greater variety of strange incidents, more affecting details, more strongly marked characters, a more constant succession of stirring events, and stronger exhibitions of folly, intrigue, deception and crime.” If we ever needed a reminder that it is best to keep your estate out of probate and the courts, a story from NOLA’s The New Orleans Collection in 2020 was it.

Walker’s report was published less than a third of the way through the marathon case, a 57-year estate battle involving hidden paternity, a destroyed will, and a multimillion-dollar fortune. The case touched all levels of the judicial system and appeared before the United States Supreme Court a total of 17 times. It remains the longest continuous litigation in the history of the country. The legal fight was covered extensively over the decades, granting Gaines a public platform that she used to advocate for women’s rights and suffrage.

The Gaines case is a real-life American equivalent of Jarndyce v Jarndyce, a fictional court case in Charles Dickens’ Bleak House (1852–53), which progressed at a wounded snail’s pace in the English Court of Chancery. The case is a central plot device in the novel and has become a byword for seemingly interminable legal proceedings.

Make it a New Year’s resolution to protect your family from “interminable legal proceedings” by updating your estate plan, and talk with an estate planning attorney about ways you can do just that, especially with a revocable living trust.

Happy 2020. And to read about the unfortunate, if ultimately successful Mrs. Gaines, check out the NOLA historical tale here:

https://www.hnoc.org/publications/first-draft/new-orleans-woman-who-fought-longest-court-battle-us-history?button&utm_source=wordfly&utm_medium=email&utm_campaign=FirstDraft2020EOYRound-Up&utm_content=version_A&promo=

How will President-Elect Biden Help Seniors with COVID-19?

Before you object, take note. This is not a political “post”.  Whenever there’s a change of Administration, it makes sense to look to the winning candidate’s platform and policy aspirations to predict how new leadership may impact things we care about. And I care about care for seniors. Home Healthcare News’s recent article entitled “‘Our Work Begins with Getting COVID Under Control’: What a Biden Administration Means for Home-Based Care” says that long-term care and protecting America’s senior population will need to be at the very center of President-Elect Biden’s response.

“Our work begins with getting COVID under control,” Biden said during his victory speech. “We cannot repair the economy, restore our vitality or relish life’s most precious moments — hugging a grandchild, birthdays, weddings, graduations, all the moments that matter most to us — until we get this virus under control.”

As the U.S. nears the mark of 18 million total coronavirus cases, the Biden administration’s response to the ongoing pandemic will need to be wide-ranging and thorough, impacting everything from vaccine development and distribution, to additional rounds of relief for health care providers.

“I will spare no effort — or commitment — to turn this pandemic around,” Biden continued.

The 78-year-old Biden has commented that he has a deep appreciation of home-based care. In July, he outlined a $775 billion plan to overhaul the nation’s caregiving infrastructure, which primarily consists of women and people of color. Biden said he wants to create upwards of three million new caregiving and education jobs over the 10 years and provide pathways for former caregivers to re-enter the workforce. That plan also called for a $450 million increase in funding for senior care. Some of those funds would be earmarked to improve wages and labor conditions for in-home care workers.

“Home health workers do God’s work, but aren’t paid much,” the then presidential candidate said on social media. “They have few benefits, and 40% are still on SNAP or Medicaid. It’s unacceptable. I’ll give caregivers and early childhood educators a much-needed raise.”

Biden has repeatedly brought attention to very specific, innovative programs that typically only industry insiders know about. This includes making specific references to CAPABLE, the program from the Johns Hopkins School of Nursing aimed at supporting aging in place, by coordinating nursing, therapy and handyman services in the home.

Biden and his Administration will likely try to get more resources for home-based care providers and other long-term care operators. In its official policy plan for nursing home regulations, for instance, the Biden team stated it would invoke the Defense Production Act to increase the overall supply of PPE. Right now, “protecting older Americans” is one of the main priorities featured on the Biden-Harris Transition website, which hasn’t been overlooked by those in aging services.

“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” President-Elect Biden said recently.

Regardless of how you voted, I hope you’ll join me in wishing the new team success in that fight.

Reference: Home Healthcare News (Nov. 9, 2020) “‘Our Work Begins with Getting COVID Under Control’: What a Biden Administration Means for Home-Based Care”

Estate hassles start here

Is Probate Required If There Is a Surviving Spouse?

There is a common misconception is that you do not have to probate a Will when your spouse dies. As the old song said, “It ain’t necessarily so”. Probate, also called “estate administration,” is the management and final settlement of a deceased person’s estate. It is conducted by an executor, also known as a personal representative, who is nominated in the will and approved by the court. Estate administration needs to be done when there are assets subject to probate, regardless of whether there is a will, says the article “Probating your spouse’s will” from a colleague in The Huntsville Item.

Probate is the formal process of administering a person’s estate. In the absence of a will, probate also establishes heirship. In some regions, this is a quick and easy process, while in others it is a lengthy, complex and expensive process. The complexity depends upon the size and value of the estate, whether a proper estate plan was prepared by the decedent prior to death and if there are family members or others who might contest the will.

Family dynamics can cause a tremendous amount of complications and delays, especially if the family has blended children from prior marriages or if a child has predeceased their parents.

There are some exceptions, when the estate is extremely small and when probate is not required. However, in most cases, it is required.

A recent Court case affirmed the rule that a will not admitted to probate is not effective for proving title and thereby ownership, to real estate. A title company was sued for defamation after the title company issued a title report that included the statement that the decedent had died intestate, that is, without a will.

The decedent’s son, who was her executor, sued the title company because his mother did indeed have a will and the title report was defamatory. The court rejected this theory, and the case was brought to the Appellate Court to seek relief for the family. The Appellate Court ruled that until a will has been admitted to probate, it is not effective for the purpose of proving title to real property.

If a person owns real estate, they must have an estate plan to ensure that their property can be successfully transferred to heirs. When there is no estate plan, heirs find out how big a problem this can be when someone decides they want to sell the property or divide it up among family members.

Problems also arise when the family finds that they must pay taxes on the property or that there are expenses that must be paid to maintain the property. Without a will, the disposition of the property is determined by the state’s estate law. Things can become complicated quickly, when there is no will.

If the deceased spouse has children from outside the most recent marriage, those children may have rights to the property and end up owning a portion of the property along with the surviving spouse. However, neither the children nor the surviving spouse can sell the property without each other’s approval. This is a common occurrence.

There are also limitations as to how probate can be used to distribute and manage an estate. In some states, the time limit is four years from the date of death.

An estate planning attorney can help the family move through the probate process more efficiently when there is no will. A better situation would be for the family to speak with their parents about having a will and estate plan created before it’s too late.

Reference: The Huntsville Item (Nov. 22, 2020) “Probating your spouse’s will”

 

man thinks about what went wrong

What Happens If You Fail to Submit a Change of Beneficiary Form?

This is a story about robbing Peter to pay Paul’s heirs. Wealth Advisor’s recent article entitled “I’m being denied an inheritance. Can they do that?” explains the situation where an individual, Peter, was given a CD/IRA by a friend named Paul. If you fail to submit a beneficiary designation form your lifetime, your estate planning may have unexpected results. It is one of the key estate planning mistakes.

Paul told Peter that he wanted him to have it, in case anything happened to him. Paul was married and didn’t tell his wife about this. Paul’s wife was the beneficiary of several other accounts.

A beneficiary form document was signed before Paul died, and they got it notarized.

Paul died somewhat unexpectedly, and Peter took the signed and notarized beneficiary designation form to the bank to see about collecting the money.

However, the bank told Peter that there was no beneficiary designation given to them prior to Pauls’ death.

Is there anything that Peter can do?

The article explains that it’s a matter of timing, and it’s probably too late. That’s because it looks like Paul failed to submit a written beneficiary change form to the financial institution prior to his death. (The bank or brokerage firm may have its own rules about when you must support a change.)

As a result, the financial institution must distribute the CD to the person or entities that otherwise would be entitled to receive it, which varies from state to state.

In most states, you can choose any IRA beneficiary you want. However, in nine community property states, you are required to name your spouse as your heir. If you want to name anyone else, your spouse must give written permission. The same laws apply, if you want to change your beneficiary designation.

The nine community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In Virginia, you can name anyone you like, except with work-related plans like 401k’s. On those, you’ll need your spouse’s permission to name anyone else (like kids or a trust).

The only way for Peter to see the money, is if he can show that Paul intended for him to receive the asset. That bank doesn’t want to be sued by another person, who claims they’re entitled to the CD. And litigation to straighten it out can be lengthy and expensive.

This is a complex issue. In a situation like this, it’s best to speak with an experienced estate planning attorney who can examine the specifics of this type of issue.

Reference: Wealth Advisor (Nov. 24, 2020) “I’m being denied an inheritance. Can they do that?”

 

What are Young People Doing to Help Seniors in Isolation?

With the pandemic continuing to be a part of our world, family caregivers are increasingly concerned about loved ones’ isolation at home or in facilities. What can others do to help?

Many older adults and their family caregivers have little human interaction in “normal” times, and the pandemic makes it even worse.

Research shows that isolation and loneliness are as detrimental to health as smoking 15 cigarettes a day, says AARP’s recent article entitled “Teens Reach Out to Isolated Older Americans Through Online Programs.”

However, some new programs and approaches that have come about in the coronavirus quarantine can have a positive impact far beyond the pandemic. Let’s look at three virtual intergenerational programs that bring hope for the future.

Music and Games to Brighten Spirits. Fifteen-year-old Maya Joshi and her twin sister, Riya, started daily video calls with their grandparents when the pandemic took hold. Seeing how much their grandparents enjoyed it, Maya decided to do something to help other isolated older adults. She launched Lifting Hearts with the Arts in April. The intergenerational program involves teen volunteers connecting online with residents in 17 Illinois nursing homes and assisted living facilities. They present musical performances, games and 1:1 video chats.

These virtual activities are making a significant impact and are improving the residents’ moods, said the director of programming at a nursing home in Springfield, Illinois. After one resident grew more comfortable with the technology, she began initiating video calls with her friends and family. These seniors now have something to look forward to and they like seeing young smiles on the screen.

Meals and conversation To Eliminate Loneliness. The Los Angeles-based Youth Movement Against Alzheimer’s (YMAA) YouthCare program, in partnership with the University of Southern California, has been training students to provide in-home nonmedical respite and cognitively stimulating activities for people living with dementia.

The program was suspended when the COVID-19 lockdown began. As a rapid response to the pandemic, YMAA reached out to their chapters in high schools and college campuses across the country to create Meals Together. It’s a program where students have virtual visits during mealtime with those in early stages of dementia and their caregivers.

In only three months, 39 YMAA chapters are participating in the expanding program. They now serve 175 users. They partner with nonprofits, like Meals on Wheels and assisted living facilities, to identify older participants. Seniors can also sign up on their own.

Natashia Townsend, YMAA’s director of caregiving programs, says they describe the program to participants in early stages of dementia as a way to help the students as they prepare for their careers. “It makes them feel empowered to help someone else,” Townsend explains. The youth volunteers also find it rewarding. “It’s just a great way to connect, and a lot of our seniors are feeling lonely at this time; they just want to feel like they have a friend,” she says.

Reference: AARP (July 27, 2020) “Teens Reach Out to Isolated Older Americans Through Online Programs”

 

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