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Estate Planning for Young Families

By Uncategorized

Estate Planning for Young Families

By Joellen C. Meckley, Esq.

Many people don’t consider estate planning until they get married or have their first child. It’s natural to resist considering your own mortality until it occurs to you that your untimely death could seriously jeopardize the well-being or financial security of someone else. Particularly for young parents, that realization is enough to keep you tossing and turning at night, however, a well-written estate plan can put those worries to rest.

There are 6 basic components to a simple and thorough estate plan for someone with young children. A qualified estate planning attorney can help you sort through all of them and decide which steps are necessary given the unique facts of your situation.

  1. Write a Will

A will, in its most basic form, directs who will inherit your assets when you die. Some assets pass to your beneficiaries when you die regardless of whether or not you have a will, such as joint bank accounts, real estate owned jointly, or any other assets for which you can name a payable on death beneficiary. Other assets will pass to your heirs according to state law if you die without a will. Having a simple will in place enables you to dictate clearly and definitively who will inherit your property and assets when you die. Taking the time to think ahead about how your property will pass on to those you love and then legally documenting that plan also can potentially save your loved one thousand’s of dollars in taxes if done correctly.

  1. Appoint a Guardian

When you have young children, one of the scariest scenarios to contemplate is what will happen to them if something ever happens to you. It can be an uncomfortable conversation to have with your spouse and the rest of your family or friends – but it’s a conversation that needs to happen. When children are involved, one of the primary reasons to have an estate plan is because it gives you a vehicle by which to officially appoint the person of your choice to serve as guardian in the event that you and your spouse are unable to care for them. An experienced estate planner can help you work through that decision making process.

  1. Buy Life Insurance

While an estate planning attorney won’t be selling actual insurance products to you, he or she should be asking you about any life insurance you already have in place and will make sure that the potential proceeds of that life insurance policy are fully incorporated into your estate plan. Term life insurance is often a smart, affordable way to ensure that your loved ones can remain financially stable after your death, and it’s absolutely essential that it be taken into consideration when drafting your estate plan.

  1. Appoint Retirement Account Beneficiaries

When you nailed down that first “real” job, hopefully you were lucky enough to sign up for some sort of employer sponsored retirement plan, or perhaps you have an IRA. Many people don’t realize that if a retirement plan passes directly to your estate upon your death, the proceeds from that account will be subject to significantly higher taxation than if the proceeds passed directly to a named beneficiary. An estate planning attorney can help you go through your current retirement plans to help you determine the most optimal way to distribute those funds to your beneficiaries upon your death.

  1. Include a UTMA provision or a Trust

Providing for your children in the event of your premature death requires more than just choosing someone to serve as their legal guardian. You also need to plan for what will happen to any money that your minor children inherit from you. One common way to address this in an estate plan is to choose who will manage your children’s money under your state’s Uniform Transfers to Minors Act (UTMA), which will enable their money to be managed by a custodian up until the maximum age permitted under state law (often age 21). Alternatively, you can include a trust in your will which would enable you to appoint a trustee to manage your child’s property and money until whatever age you specify. Your will can be drafted to include a UTMA provision or a trust, either of which can meet your needs depending on the unique circumstances of your family and your children.

  1. Durable Power of Attorney and Advanced Directive

The final component of a basic estate plan is to plan for your potential incapacity. In the event that you are unable to manage your own financial affairs, a durable power of attorney enables you to appoint an individual to have the authority to manage it on your behalf.   A similar document should be executed appointing someone to act as your health care decision-maker in the event that you become incapacitated and cannot speak for yourself. With a valid power of attorney, the person who you trust will be legally permitted to take care of important matters for you.

The attorneys at Yardley Estate Planning LLC are ready to meet with you to discuss your family’s estate planning needs at any time. We look forward to walking you through the process to ensure that your family’s needs and interests are protected for years to come.


You Can’t Always Rely on your Financial Planner’s Advice for your Estate Planning Needs

By Wills

Be wary of a Financial Planner who is not an estate planning attorney who thinks she is qualified to review your wills or estate planning documents for their legal substance. She would be stepping into an area in which she is not competent or licensed to advise you, and she may even be breaking the law.

Unfortunately, financial planners do this quite often, usually unaware of what a problem it is or can be. How will your Financial Planner know if there is something fundamentally wrong with your Will, other than if you have a wrong designee, or if it appears old? You might rely on your financial planner’s review and avoid seeking the competent legal counsel that you truly need. If you rely on your planner’s advice that your will is satisfactory for your needs, and it isn’t, there will likely be trouble for you, your beneficiaries, and your planner.

Estate planning law is different all over the country and it changes constantly, if usually subtly. Only someone who actually practices in it can provide competent advice. Even lawyers go to other lawyers to have their Estate Planning work done. Yes, it costs money to hire a lawyer. But what will it cost if you don’t?

Your financial planner, providing she is not an attorney, will not be able to interpret or provide legal advice about your legal documents, but if you show them to her, she can at least be assured of their existence. If your documents seem old or obsolete, your planner might advise you to consult your attorney.

I am not advocating the unauthorized practice of law by your planner, but if she sees that your will was drafted thirty years ago, or if all of your beneficiaries are deceased, she may correctly advise you to seek legal counsel to see if it is necessary to update your will. She will also serve to remind you of your need for estate planning documents, no matter the size of your estate. Those are the types of things you can rely on from your Financial Planner. That’s all.


Dying Without a Will is not an Acceptable Plan #intestacy

By Wills

I know I have gone seven years without a blog post on this site and now I’m putting out 2 today. I need to test some stuff and this is the best way. Thanks for your patience.

Did anybody see this article in the New York Times on the 97 year old worth $40,000,000 who died without a Will? He Left a Fortune, to No One

Roman Blum, a Holocaust survivor and New York real estate developer who was worth almost $40 million when he passed away last January, apparently died at the age of 97 without writing a Will.  A worldwide search for heirs hasn’t turned up any living relatives.  If, after three years, there’s still no sign of his doing any Estate Planning and they can’t find any heirs, all the money will go to New York State.

Mr. Blum’s wife had died before him, and they had no children, so maybe there was no one to come to mind immediately to receive Mr. Blum’s fortune.  However, I think if you had asked Mr. Blum a few years ago what he would have wanted to do with his money, I’d have to think that giving it to New York State probably wouldn’t have ranked too far up on his list.  He could have taken a little time and decided exactly where he wanted it to go, but by dying without a Will, he lost that chance.

If you haven’t done it yet, take a couple of hours and get your Estate Planning done. Think of it as a present to yourself this holiday season. You will be very happy that you did.

Why do you need a Will? To protect your loved ones #Wills

By Wills


What is a Will and why do you need one? A Will is a written document that provides instructions for the disposition of a decedent’s (dead person’s) property. The Will is also the document in which a person names a guardian for her children in case she dies while they are still minors. The term “Last Will and Testament” is simply a more complicated name for a Will.

If a person dies with a Will, which is called dying “testate,” the probate court determines if the Will is valid, hears any objections to the Will, orders that creditors be paid and supervises the process to assure that the Executor distributes the remaining property in accordance with the terms and conditions of the Will.

If a person dies without a Will, which is called dying “intestate,” the probate court appoints a person to receive all claims against the estate; pay creditors; distribute all remaining probate property in accordance with the laws of the state; and determine the guardian for the decedent’s minor children.

The major difference between dying testate and dying intestate is that an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; a testate estate is distributed in accordance with the instructions provided by the decedent in his or her Will.

So if you die without a valid Will, your property is distributed according to state law and the courts will decide who raises your children. Let’s repeat that because it is important and people really don’t seem to think through the ramifications of not having a Will. If you don’t have a Will, your property will be distributed according to state law and the courts will decide who raises your children.

 In addition to property that people can pass by Will (“probate property”), most people also have “non-probate” assets. Non-probate assets don’t go through the probate process because the ownership arrangement you have dictates who will receive the property at your death. Thus, non-probate assets are unaffected by the existence of a Will because the assets pass at death by operation of law regardless of whether a Will exists and irrespective of what it may provide.

Non-probate property typically includes life insurance, pension or profit sharing plans, IRAs, living trusts, and certain joint property. With such assets, the property passes according to the terms of the policy, plan, and/or trust or to the surviving joint owner, and not in accordance with your Will. For example, if you have a life insurance policy or an IRA that names your husband as a beneficiary, the proceeds of the policy will pass directly to your husband regardless of what your Will says.

Therefore, it is usually not enough just to execute a Will. To ensure that your non-probate assets are distributed the way you want them to be, you should make sure that the appropriate documents are correctly filled out, including the beneficiary designations on your life insurance policies and retirement accounts. You should check these every few years to make sure that they are accurate and reflect your current wishes.