Should I use Software for my Estate Planning Needs?

By | Estate Planning, Food for thought, Wills

Something that we’ve seen in the last couple of months that I’d like to point out, is that we’ve had three different set of married clients come in, having had done their prior Wills using software. They all used different packages, but they used software.

While it’s tempting to do that because the price tag is pretty cheap (I think they paid like fifty or seventy-five dollars each) and it’s tempting to do it in a pinch, I would be cautious. The software doesn’t know your entire situation within the context of the estate planning landscape and it doesn’t know the practical realities of the decisions you are making.

A lot of the decisions that clients need to make, it’s hard for clients to know what the repercussions are when they are going through the workflow of the software program.

I’m not bashing software, because we actually use software to create and draft our documents. We also have over 20 years of practical experience, so we know what will happen with the different choices clients make. We can talk to clients and guide them as they make some difficult decisions and let them know things that they’re not thinking about, the practical realities of administering their Wills or dealing with their advanced directives or any of the other documents. I’m not bashing software, but I’d be wary about using it for documents like these.

Don’t Die Without a Will

By | Estate Planning, Wills

The other night I was out, and I heard people talking about the fact that, the Queen of Soul, Aretha Franklin died without a Will; and they thought that that meant that her money went to the state. It does not.

I think that the problem is that the term for it is really an unusual term. What happens if you die without a Will is that your stuff goes by intestate succession. So each state lays out its own rules for how your stuff would be divided if you died without a Will, and it typically goes to family members like spouses and children and parents.

It’s a little bit different in the different states, but it doesn’t go to the state. Even though it doesn’t, you should still have a Will, because what if you don’t want your spouse, your kids, or your parents or whoever to get your stuff?

You need to take the time to figure out and settle your affairs. You need to figure out what you want to happen and make it happen. Don’t be like the Queen of Soul and countless other celebrities, that didn’t plan; it’s really a shame.

Fully Fund or Even Over Fund a #529 Plan Account?

By | Estate Planning, Food for thought, Wills

If you have the means, and want to support your kids’ or grandkids’ educational efforts, I would consider funding or even overfunding 529s for them.

If you use a 529 plan, and you use the Pennsylvania plan, it escapes inheritance taxes and grows tax free if the money is used for education for as long as the money is in the plan. Now that means, you might want to consider funding it more fully than it might have been in the past or fully funding it if you can keep it in the plan for a long time.

It’s tricky with education because you don’t know how much they’re going to need because few pay the sticker price for private schools, and you don’t want to overfund it because it is stuck with education; but if you think about it, if you do have the means, and you have enough for your own retirement and are otherwise secure, if there’s more in the child’s plan then they need and there’s money left over, that money can stay in that plan and then you can change it to another beneficiary, like say their children, and grow tax free and compounding for a generation.

That can really have a nice snowball effect, it might even be able to keep up with the cost of college inflation! Anyway, it’s not something that a lot of people can think about or do, but it’s something that I’ve been thinking a lot about the past couple months and I think for some, it’s something to consider. Think about full funding your 529 fully or even putting in more than you necessarily need. Again, if your retirement is secure and you don’t otherwise need the money. You could get some great tax and investment gains out of that.

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

By | Wills | No Comments

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 | No Comments

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 | No Comments

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.