Month: September 2024

What Do Lasagna and Estate Planning Have in Common?

Post author By Sara Thomas
Post date September 25, 2024
No Comments on What Do Lasagna and Estate Planning Have in Common?

Have you ever heard horror stories about families fighting over Grandma’s jewelry or getting stuck in a never-ending legal battle after someone passes away? Or how long it can take to sell a house tied up in the court process? What about family members being denied their inheritance completely? Unfortunately, these situations happen every day. Not even the rich and famous are immune! A simple Google search will pull up dozens of celebrity stories about all the conflicts after they die.

But most people don’t realize these things are avoidable – if you understand the process. So, if you’ve thought about creating a will or trust to avoid these outcomes, let’s ensure you’re fully aware of what’s at stake first. We’ll use a food analogy throughout this article, so our apologies if we make you hungry.

Lasagna as an Example of the Difference Between a Will or Trust and an Estate Plan

Let’s start by getting clear on what we’re talking about. You’ve probably heard “estate planning” numerous times, but do you know what it is? Unlike what you may have heard or read about, estate planning and the documents involved – such as a will or trust – differ.

Think of your favorite recipe. We’ll use lasagna as an example. A lasagna recipe includes a few different components: the ingredients needed to make the dish, how much of each ingredient you need, and the steps you have to take to transform the ingredients into a dish. Without the steps, the ingredients are just ingredients—they don’t create anything.

Estate planning is similar. Your estate plan is the recipe, and the documents are the ingredients. A will or trust may be the pasta or the sauce, but they are not the lasagna. Sure, they’re necessary components of the lasagna, but without the other ingredients and steps, they’re just pasta and sauce. Same with estate planning. If you just create a will or trust, you have just documents. They don’t do anything by themselves.

That most people think the documents ARE the estate plan is a common misconception based on a lack of knowledge. Too many people are focused on the documents, even many lawyers, and so think all they need to do is create those documents, sign them, and call it a day. Even so-called financial “experts” will tell you this. And there’s a new tech industry based on this premise, with do-it-yourself programs like LegalZoom. AI has even joined the fold.

All these people and companies are talking about the documents or ingredients. They are not telling you about the recipe. They are not showing you how to make the lasagna, but rather, they’re telling you about some (not even all) of the ingredients you need. The results are the following: families in court and conflict, fights over necessary ingredients, long wait times to sell a house or distribute any of the assets, and even big, unnecessary tax bills.

To truly protect your loved ones and ensure your wishes are carried out the way you want, as easily as possible, for the people you love, you need a comprehensive estate plan. This plan should lay out not only the ingredients you need but also in what amounts and what actions must be taken to make the lasagna.

If you haven’t created a comprehensive plan or your current plan fails for any reason, know that there’s a plan already made for you. It’s a plan in your State’s law and may differ significantly from what you want.

Your State’s Recipe for Lasagna May Be Gross

Let’s return to our lasagna example to illustrate the difference between the State’s plan for you and one you can create for yourself.

Let’s say the State’s recipe for lasagna includes spicy sausage, but you can’t tolerate spicy foods. The state’s plan may contain meat, but you’re a vegetarian. Or, it could be that the State’s recipe includes mushrooms, but your child is allergic to mushrooms. Some ingredients may be missing altogether, and the recipe will probably tell you that you can’t cook the lasagna for months or years (goodness, your family will be hungry!). Whatever the situation, the State’s plan may include some components you don’t like or even one that could be disastrous to your family.

In reality, your State’s plan says how your assets will be distributed, who will get them, and in what amounts. It requires a court process, which can be lengthy and expensive, and sometimes assets are frozen until the court process is over. It’s also set up for conflict, as your family members – even if you’re estranged – must get notice of the court proceeding, what assets you have, and are invited to make a claim for your assets. You may not like any of this.

If not, here’s the good news. The law also says you can create your plan and decide on who you want to inherit your assets and how. If you create your plan, you get to choose to give money to charitable causes that matter to you, which the State’s plan does not allow for. And if you create your plan, you can also decide whether you want your loved ones to go through the court process. Yes, the court process can be optional.

What Recipe Do You Want to Use?

By creating your estate plan, you get to choose your lasagna recipe. You can decide whether you want meat, veggies, or mild or spicy sausage. You get to exclude ingredients your family members may be allergic to. You even decide if you want to share your lasagna with someone else. And you get to decide when to cook the lasagna, whether you want it to be eaten tonight or assembled, frozen, and saved for another day.

It’s entirely possible that you don’t think the State’s recipe is gross, and you wouldn’t change a thing. But you won’t know that until you know the details of the State’s plan and how those details pertain to you, your assets, and your family. Or, it could be that you think the State’s recipe is entirely gross, and you want to pick one you and your family like. Either way, know what you want to create, be clear on how to do it, and do it correctly. Luckily, we can help.

How We Help You Get it Right

We’ve seen too many families suffer negative, yet unnecessary, consequences after a loved one dies. And if you haven’t experienced it yourself, you probably will. However, with proper education, beginning with correcting the misconception that estate planning and the document are the same, we believe we can break the cycle of strife.

We start with education so you are clear on what the State’s plan is for you and what you can do to create your own plan that aligns with your values, goals, and family, and most importantly, that it works when you need it to.

We call it Life & Legacy Planning. Once you’ve created your Life & Legacy Plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your property protected. Book a call with us today to learn more. Contact us today to get started.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Tags Estate Plan, Estate Planning, Health Care Directives, Powers of Attorney, Wills and Trusts

3 Questions to Ask Yourself Before Creating Your Estate Plan With AI

Post author By Sara Thomas
Post date September 18, 2024
No Comments on 3 Questions to Ask Yourself Before Creating Your Estate Plan With AI

Have you jumped on the AI bandwagon yet? If so, you’ve probably used it to make your life easier. AI can be incredibly helpful, especially when the stakes are low. Need a personalized meal plan or an exercise routine? AI can handle that. But when it comes to estate planning, some people use AI for what they believe to be a simple and cost-effective solution.

The allure of Do-It-Yourself estate planning through AI is strong, especially when you think your situation is straightforward. You may also think you have little money, so your circumstances aren’t complicated. Both of these beliefs are extremely common – and rarely true.

Here’s the truth: estate planning is not just about creating a set of documents, and it’s almost always more complicated than you think. To do it effectively, it must be personalized to fit you, your family dynamics, and the specific types of assets you have. But unless you’re an expert, you don’t know how your circumstances apply to the law and your values – or how your estate plan should be structured to fit the law and your values. AI cannot do any of this. And if you get it wrong, there are legal (as well as financial) consequences. You need a human to guide you, a human who understands you, your family, your assets, your wishes and desires, and how all these things work together with current law.

So before you’re tempted to use AI for your estate plan, ask yourself the following three questions. Then, consider your answers before turning to AI or any other free or cheap legal service. If you’ve already done your estate plan, these questions are essential for you, too.

Question No. 1: What Matters?

First and foremost, who or what matters most to you? When you’re creating a legal plan for what happens if you become incapacitated and when you die, the place to start is by getting clear on what matters. Is it the money you’ve worked hard to earn, or is it the people around you and the relationships you’ve nurtured? Most likely, it’s the people.

Think about this. How are you affected when a loved one passes away? You’re probably filled with grief, and their absence leaves a void in your life. While their money can ease financial strain, the memories and the love you shared truly matter (this is their “legacy”). Your loved ones will feel the same way after you’re gone. What will your legacy be?

Imagine that your family is left to deal with a significant legal and financial mess after you’re gone, all because you didn’t create an estate plan or created one that failed. Are you ok with that being your legacy? Does it matter that people must spend time away from work and their lives to manage your affairs? And what if they ended up fighting or estranged? Does that matter to you?

What about your assets? Does it matter to you if your estate has to pay unnecessary taxes or if your assets get lost and turned over to your State’s Department of Unclaimed Property? Or do you care about supporting a cause you believe in or supporting a family member who needs help?

When you create a Life & Legacy Plan with our office, you gain the power to influence these outcomes in a way that AI cannot do. But first, get clear on what truly matters to you.

Question No. 2: What’s It Worth?

Once you’re clear on what matters, the next question is: what are those things worth? How important is it to preserve your family’s relationships, for example? How important is it that your assets don’t get used to pay taxes when there’s an option to give them to your loved ones? It’s critical to know not only what’s important but how important it is so you know how much time, energy, attention, and money to dedicate to it.

One of the main reasons people may use AI to draft their estate plans is that they think estate planning is simple. However, estate planning is much more complex than most people realize. Even licensed attorneys who practice estate planning often find themselves overwhelmed by the intricacies of the law, which changes regularly and varies from state to state. AI is a one-size-fits-all approach that doesn’t take into account the complexities. So, if you rely on AI, you’re leaving a lot to chance. Is it worth it to you to take a chance on what matters? There is no wrong answer here; it may be yes, or it may be no. The key is that you’re being true to yourself.

Question No. 3: Is AI Actually Cheaper and Easier?

And now we’re at the third and final question: is AI or Do-It-Yourself legal cheaper and more accessible than working with an expert? If the program makes a mistake in your estate plan and your family ends up in court, embroiled in conflict, with relationships irreparably broken, was it worth the supposed savings? What if your assets were lost to the government, eaten up by unnecessary taxes, or depleted by lawyers’ fees and court costs due to litigation?

When you weigh the potential costs—financial, emotional, and relational—against the upfront savings you might achieve by using AI, the true worth of those things that matter to you becomes more apparent. You see that estate planning is about much more than just money; it’s about protecting the people you love and ensuring your legacy is honored as you intend.

You and Your Family Deserve More Than a Quick and Cheap Fix

The way to ensure that your plan works when you and your loved ones need it to and saves you and your family money is by working with me to create a Life & Legacy Plan. With my Life & Legacy Planning^Ⓡ process, I’ll guide you to get clear on what matters; together, we’ll create a complete plan that honors your wishes and creates a loving legacy at a price that fits your budget. When it comes to something as important as your estate plan, it’s worth taking the time to do it right. Your legacy deserves more than a quick fix—it deserves the thoughtful attention of someone who understands your unique situation and can help you navigate the complexities of the law to achieve your goals.

We understand that estate planning isn’t just about the documents you sign or the money you leave behind. It’s about ensuring that the people and things that matter most to you are protected and honored in the way you intend. Once you’ve created your plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your legacy preserved.

Schedule a complimentary 15-minute consultation to learn more. Contact us today to get started.

Tags AI Estate Plan, DIY Estate Plan, Estate Planning, Life & Legacy Planning, Personal Family Lawyer

Estate Planning

Reflections on Your Legacy

Post author By Sara Thomas
Post date September 11, 2024
No Comments on Reflections on Your Legacy

As the seasons change and we transition from the warmth of summer, it’s a perfect time to reflect on the contributions and achievements that have shaped your life. The work you’ve put into building your home, family, and career is a testament to your dedication. As you enjoy some well-deserved relaxation, take a moment to consider everything you’ve worked hard for throughout your life. Let’s reflect on these together.

Reflection No. 1: Remember When?

Do you recall your first job? It could be babysitting for a neighbor or mowing lawns as a kid. You may have worked part-time during high school, balancing classes, extracurricular activities, and work. How did it feel to earn your first paycheck and experience a sense of independence? It was likely empowering, marking the beginning of your journey toward financial and personal responsibility.

Even if you didn’t work as a teenager, you probably worked hard in other areas—whether striving for good grades, excelling in sports, or mastering a musical instrument. Each of these experiences contributed to your growth, instilling a sense of pride and accomplishment as you saw the results of your efforts.

Take a moment to reminisce. Think about those early achievements and the sense of independence they brought. What memories stand out that you’d like to share with the younger members of your family?

Reflection No. 2: In the Thick of It

As you grew older, your work evolved. Whether you pursued higher education or jumped straight into the workforce, you eventually landed that first “real” job, bringing with it both financial rewards and adult responsibilities. Perhaps you bought your first home, started a family, or took on significant financial commitments like a mortgage or student loans.

This stage of life is often intense, filled with the demands of balancing work, family, and other responsibilities. It may feel like all you do is work, but there’s a deep satisfaction in seeing the fruits of your labor—especially when it comes to your children. Watching them grow, learn, and become independent adults is a reward for all the hard work you’ve invested in them.

If you’ve started a business, you’ve likely poured much of your time, energy, and resources into turning your vision into reality. You’ve created jobs, solved problems, and contributed to your community.

Reflect on your achievements during this period. Have you enriched the lives of others and supported loved ones in reaching their potential? Have you created something meaningful in the world? Consider both the tangible results, like a successful career or business, and the intangible ones, like the love and guidance you’ve given. How do you feel about your life at this stage? What wisdom would you like to pass on to those you care about?

Reflection No. 3: What Happens Next?

As you enter the later stages of life, your work shifts once again. You may be considering retirement, winding down a business, or simply enjoying the accomplishments of your earlier years. If you have children, you might now be watching them build their own careers and families.

This is a time to savor the fruits of your labor, but it’s also a moment to think about the future. What steps can you take to ensure that everything you’ve worked for is protected and passed on according to your wishes? How can you prevent your assets from being lost, mismanaged, or causing conflict among your loved ones?

Now is the time to make important decisions and document them in a Life & Legacy Plan. Such a plan is a comprehensive estate strategy that ensures your assets are distributed as you intend, keeps your family out of court, and preserves the relationships you’ve cultivated over the years. It also helps you control how you’ll be remembered—your legacy.

Before dismissing the idea of a legacy as something only for the wealthy or famous, consider this: Legacy is about how you’ll be remembered. Through a Life & Legacy Plan, you can ensure your life’s work is honored and that your story is preserved for future generations. Many people find this aspect of planning to be the most meaningful part of the process.

Warning! Life Doesn’t Always Go as Planned, So Don’t Wait

Ideally, you’ll have the time to make it through each of these stages of life, but there are no guarantees. Life is unpredictable, and while it’s unpleasant to think about, planning for the unexpected is essential. By facing your mortality and planning accordingly, you can ensure that your legacy is one of love and careful stewardship.

Estate planning isn’t just for the wealthy or elderly—it’s for everyone, regardless of your stage in life. If you haven’t created a plan, the state will have one for you, but it likely won’t align with your wishes. By taking control of your plan, you can dictate how your life’s work will be remembered and passed on.

How We Help Secure Your Life’s Work

Your life’s work is a testament to your dedication and perseverance. From your first job to your current achievements, you’ve built a legacy worth protecting. As you reflect on your journey, consider how you want that legacy to endure. Take control of your future and protect what matters most by creating a comprehensive Life & Legacy Plan with us. Book a consultation call today to learn how we can tailor a plan that honors your life’s work and ensures your legacy lives on. Let’s work together to secure your family’s future and celebrate the fruits of your labor for generations to come.

Schedule a complimentary 15-minute consultation to learn more. Contact us today to get started.

Tags Estate Planning, Family Legacy, Life & Legacy Planning, Reflections on Your Legacy

Estate Planning

How Relying On Beneficiary Designations Put Your Family at Risk (And How To Fix It!)

Post author By Sara Thomas
Post date September 5, 2024
No Comments on How Relying On Beneficiary Designations Put Your Family at Risk (And How To Fix It!)

You’ve worked hard to build your assets and secure your family’s future. Like many responsible adults, you’ve named beneficiaries on your retirement accounts, life insurance policies, and maybe even your banking and investment accounts. It feels good to know you’ve put something in place for your loved ones.

While beneficiary designations serve a purpose, they’re not a comprehensive estate planning solution. Relying solely on them can lead to unintended consequences and potential financial disasters for your loved ones. Let’s delve into why beneficiary designations fall short and the risks you may unknowingly take with your family’s financial future.

The Dangers of Naming Minor Children As Your Beneficiaries

You love your children and want to ensure they’re cared for if something happens to you. Naming them as beneficiaries on your accounts is a straightforward way to achieve this goal. However, this approach can backfire spectacularly when your children are minors.

Designating a minor as a beneficiary creates a legal and financial predicament. Financial institutions cannot hand over large sums of money to children, so the court will likely appoint a guardian to manage the funds. This process can be time-consuming, expensive, and may not align with your wishes.

Even more concerning is what happens when your child reaches the age of majority, typically 18 or 21, depending on your state. At this point, they gain complete control of the inherited assets. Ask yourself: Is your 18-year-old ready to manage a six or seven-figure life insurance policy? What about your retirement account? For most young adults, the answer is a resounding no.

Imagine your child receiving a windfall at an age when they’re still learning to navigate adult responsibilities. They might make impulsive financial decisions, fall prey to manipulative friends or partners, or simply lack the maturity to handle sudden wealth. By relying solely on beneficiary designations, you’re potentially setting your child up for financial mismanagement or even exploitation. It’s a sobering thought that underscores the need for comprehensive planning.

When a Beneficiary Dies Before You

Life is unpredictable, and tragedy can strike at any time. While it’s uncomfortable to contemplate, your named beneficiaries may predecease you or die with you in an accident. This scenario can throw your estate into chaos if you’ve relied entirely on beneficiary forms.

When a named beneficiary dies before you, the fate of those assets becomes uncertain. Some accounts may have provisions for contingent beneficiaries, but many people neglect to name backups. In other cases, the asset may revert to your estate, potentially subjecting it to probate – a time-consuming and potentially expensive legal process you likely wanted to avoid by using beneficiary designations in the first place.

The situation becomes even more complex if you and your primary beneficiary die simultaneously or in quick succession. In such cases, determining the order of death can have significant implications for how your assets are distributed. Without a comprehensive estate plan, your assets may go to unintended recipients or get tied up in lengthy legal battles.

Establishing a will or trust can create a chain of inheritance that accounts for multiple contingencies, ensuring your assets are distributed according to your wishes regardless of the circumstances. This level of control and reassurance is a key benefit of comprehensive planning.

The Risks of “Set-It-and-Forget-It” Planning

Life is dynamic and filled with changes, both big and small. Your financial situation evolves, relationships shift, and laws change. Yet, all too often, people treat beneficiary designations as a “set it and forget it” solution. This static approach to estate planning can lead to severe problems.

Consider how much can change over a few years or decades.
You may divorce or remarry, dramatically altering your family structure.
Children grow up, and your relationship with them may change.
Your financial situation could improve significantly, making previous designations inadequate.
Tax laws and regulations around inherited assets may be revised.
You might develop new philanthropic interests or want to include charitable giving in your legacy.

If you don’t regularly review and update your beneficiary designations, they may no longer reflect your current wishes or circumstances. It’s not uncommon for people to unknowingly leave substantial assets to ex-spouses or estranged relatives simply because they failed to update their beneficiary forms.

In addition, beneficiary designations don’t allow for the nuanced distribution of assets that many people desire as their wealth grows. You should establish conditions for inheritance, protect assets from creditors, or provide for family members with special needs. These complex wishes simply can’t be accommodated through standard beneficiary forms.

The Peace of Mind That Comes From Careful Planning

To truly protect your legacy and ensure your wishes are carried out, you need a Life & Legacy Plan rooted in education about what would happen to you, your family, and your assets if you become incapacitated and when you die. From there, we craft a plan that reflects your wishes, works when needed, and fits within your budget. This might include a will, one or more trusts, powers of attorney, healthcare directives, and carefully considered beneficiary designations. When we complete your original Life & Legacy Plan, you’ll have peace of mind knowing that it will:

Protect minor beneficiaries and ensure assets are managed responsibly;
Provide for multiple contingencies, including the death of beneficiaries;
Minimize taxes and avoid probate when possible;
Reflect your values and complex wishes for asset distribution;
Adapt to changes in your life, finances, and the legal landscape.

Don’t leave your legacy to chance or expose your loved ones to unnecessary financial risks. Your family’s future security is worth the time and monetary investment in proper planning. Remember, a truly effective estate plan is a living document that grows and changes with you, providing peace of mind today and security for generations to come.

Know, too, that if you’ve already created your Life & Legacy Plan with me, keep an eye out for reminders to review and update your plan. If you know that you need to update your plan before we remind you, don’t hesitate to call us immediately.

Schedule a complimentary 15-minute consultation to learn more about how we support you. Contact us today to get started.

Tags Beneficiary Designations, Estate Plan, Estate Planning, Personal Family Lawyer, POD, TOD

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