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Estate Planning

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.

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.

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Estate Planning

Would $23,000 Make a Difference to You?

Imagine discovering thousands of dollars that belong to you, only to be told you can’t have it. This frustrating scenario became a reality for a woman named Dale Benerofe, a Georgia resident when she found $23,000 in unclaimed property from her deceased parents. Her tragic story sheds light on a little-known issue that affects millions of Americans: unclaimed property. 

In this article, you’ll discover what unclaimed property is, how to find it, and why proper estate planning could have ensured Ms. Benerofe received her inheritance. But before we dive into her story, let’s clarify what unclaimed property is and how it could impact you and your family. 

What Is Unclaimed Property?

Unclaimed property refers to financial assets that have been abandoned or forgotten for a specific period, typically three to five years. The financial institutions can’t hold on to your money indefinitely. If no one comes forward to claim the assets, the law requires these assets to be turned over to the state for safekeeping. 

Typical forms of unclaimed property include:

  • Forgotten checking or savings accounts
  • Uncashed dividends or payroll checks
  • Abandoned stocks, bonds, or brokerage accounts
  • Unclaimed life insurance proceeds
  • Refunds and trust distributions
  • Forgotten certificates of deposit and annuities

It’s a startling fact that these assets often go unclaimed because someone dies and their loved ones have no idea that the assets exist. This is a more common occurrence than you might think, with approximately $60 billion across the US remaining unclaimed. 

Consider your reality for a minute. If something happened to you tomorrow, would your family know exactly what you have and where to find it? Are you confident they wouldn’t miss something? If you’re like most people, the answer is no, you aren’t sure. What you are likely specific about is that your family would overlook some of your assets if you were to become incapacitated or die tomorrow. And, if they did, those assets could either disappear entirely or end up in your state’s department of “unclaimed property.”According to the National Association of Unclaimed Property Administrators, approximately one in seven Americans has some form of forgotten property owed to them. As of this writing, the total amount of unclaimed property nationwide is between $50 billion and $70 billion. You read that right. Billions of dollars. With a sum that high, it’s easy to see how it’s possible you, too, may have unclaimed property belonging to you.

What the Process Looks Like

Finding out if you have unclaimed property can be an arduous process. Even though you can search online, you’ll go through many steps before (or if) you can receive your money. Here’s what the process looks like:

Step 1—Check multiple states. Search for your residence and any other states where you’ve lived, worked, or conducted business. 

Step 2 – Search variations of your name. Try different spellings and include your middle name or initial to ensure a thorough search. If your name has changed over the years, you must also check your former names. Again, search all variations of your name in states where you’ve lived, worked, or conducted business.

Step 3 – File a claim. If you find property owed to you, you must file a claim form (usually online) with the state holding your assets. You’ll need to file a form in every state where your assets are held; there is no one-form-to-rule-them-all.

Step 4 – Gather documentation to prove your identity and the identity of your loved one(s). Be prepared to provide documentation to prove your identity and your right to the property. This may include proof of address (at any address you’ve lived), proof of name change, or proof of marriage or divorce. You’ll need to provide similar documentation for your loved ones if you have a claim to their property.

Finally, be patient. Depending on your claim’s state and complexity, the claim process can take weeks, months, or even years.

A Real-Life Experience and Cautionary Tale

Even if you take the above steps to find the property and make a claim for it, you may need help to receive the money rightfully owed to you. This is what Dale Benefore’s story can teach us.

Ms. Benefore discovered $23,000 that had belonged to her parents and should have been passed on to her after their deaths. She was surprised and excited because that sum would have made a significant difference to her and her family. So, in May of 2023, she filed a claim for the money with the State of Georgia’s Department of Revenue. As requested by the State, she provided her parents’ death certificates and other documentation proving their deaths. However, when the department requested her father’s driver’s license, she couldn’t offer it. It had been long gone. 

As of this writing – more than a year since Ms. Benefore filed her claim – she’s still fighting for her money. She’s frustrated, saying the process has been time-consuming and disheartening and that this is not what her parents would have wanted for her. In a news interview, she claimed her “mom would be livid” if she knew what Benefore had been through.

The Easy Way to Ensure Your Assets Aren’t Lost 

There’s an easy solution to this problem and a way to ensure no assets get lost and turned over to the government. It’s called Life & Legacy PlanningⓇ, and it’s the type of estate planning I do. A well-crafted Life & Legacy Plan includes a comprehensive inventory of assets that stays updated so your loved ones know exactly what you have when something happens to you. If her parents had had a Life & Legacy Plan, Ms. Benefore would have received the $23,000 years ago, without the time and stress of fighting with the State of Georgia. This is a powerful tool that can empower you to take control of your financial future. 

My Life & Legacy Planning process starts with education about what would happen to the assets you have, and how you want them distributed after you die. From there, we’ll go through the many options available to you so you can pick the right plan that works for you and your family. 

We work with you throughout the planning process to create a thorough inventory of your assets kept private (maintained and updated throughout your life) until your family needs it. With a Life & Legacy Plan, you have peace of mind knowing that your loved ones can’t access your money while you’re alive (unless you want them to), but they’ll also be able to get to it quickly after you’re gone. No worrying about losing your hard-earned money to the government. 

If you’ve already created your Life & Legacy Plan with us, you know how important it is to keep your asset inventory updated, so keep an eye out for our reminders to review and update your plan. However, if you know now that you need to update your plan due to a life change or a change to your assets, don’t hesitate to call us immediately.

Ready to Secure Your Assets? We Can Help

There is way too much money in the State Treasury Departments not to take notice. But by reading this article and educating yourself, you’re already on the path to protecting your assets for your loved ones. We can guide you the rest of the way. 

We help you create a Life & Legacy Plan so that your plan works when your family needs it. Once you’ve made your plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your property protected. It’s the last and greatest gift you can give to those you love most. 

Schedule a complimentary 15-minute consultation 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.

Categories
Estate Planning

3 Strategies For Navigating Your Child’s Transition Into Adulthood

When your child turns 18, they’re legally an adult even though they have a lot more growing to do. Just like any other adult, their health and financial information is protected by privacy laws. But unlike any other adult, that’s still your child, and you want to support them in a crisis. Your role as a parent is crucial in this transition. Unless you’ve planned, you won’t be able to step in and support your child. 

As an estate planning attorney, I often see families caught off guard when I tell them this. Like those families, you may also assume that as a parent, you’ll always have a say in your child’s medical and financial matters. But you don’t. Under the law, you have just as much access to their medical and financial information as you do for Joe down the street (which is none).

The good news is that with proper planning, you can help your newly minted adult child navigate this transition and ensure you can step in if something happens. Here, I’ll share three strategies to help you and your child make the transition to adulthood as easy as possible. 

Strategy 1: Education

The first strategy for a successful transition to adulthood is education. At my firm, I start every client relationship with education. That’s because I believe that education equals empowerment, which supports you to make the right choices for yourself and your family. Young adults also need to be empowered through education. The more you can teach your child about their new financial and legal responsibilities, the more confident you’ll feel in their ability to make the right decisions.

If you haven’t already started talking with them about legal and financial matters, now is the time. Start with a kind of budgeting we call “money mapping.” Explain the importance of tracking their income and expenses, setting financial goals, and investing wisely, both now and in the future. 

Help them understand the basics of banking, such as how to use checking and savings accounts and the benefits of maintaining a good credit score, and assist them in setting up their bank account if they don’t already have one. Explain how to avoid overdrafts and the significance of keeping track of their balance. Introduce them to how to access credit and use it responsibly. Explain how credit cards work, the importance of paying off balances in full each month, when it’s okay to carry a balance, and the long-term benefits of building a positive credit history.

And let’s not forget your child’s new tax obligations. Teach them how to file taxes, what documents they need, and how to understand their W-2 forms or what it means to be a 1099. Explain the importance of keeping accurate records and navigating essential tax software.

Health care is another critical area where your child needs education. Let your child know that you can’t make medical decisions for them and that you won’t have access to their health records anymore—unless they give them to you. I’ll cover which essential documents they need in a minute, but first, let’s talk about the importance of communication in helping them document their wishes properly.

Strategy 2: Encourage Communication

Adulthood often involves having complicated conversations (as if I’m telling you anything you don’t know!). Two of those conversations with your child have to do with their healthcare and financial decisions in the event of an emergency. 

First off, I want to say that even thinking about your child being in an emergency medical situation is hard to think about, much less talk about. And it will probably be much harder for you than for them. It’s OK. Take a deep breath. You can do this!

After you’ve breathed your way to calm, have an open conversation about what your child would want to happen in various medical scenarios. If they become incapacitated, who would they want to make decisions on their behalf? Both parents or one of you first, then the other? Or do they want anyone else involved in the medical decisions if they cannot make them themselves? Be open to the possibility that they have different people in their lives that they may want to include, and be glad they are telling you about it if that’s the case. 

Do they know what a ventilator is and whether they’d want one if it became an issue? What about a feeding or hydration tube? And what about resuscitation? Talking about these things is necessary so your child’s wishes are honored. Who would need access to them in case of an accident or an illness? Once you know the answers to these questions, you can help your child create a health care directive and medical power of attorney.

Have the same conversations about finances. Do you know which and how many financial accounts they have? If they’re in college, how will you access their account to stop tuition or housing payments if necessary? Can you access their checking account if bills need to be paid? Your child may be reluctant to discuss these matters with you but assure them you have no intent to violate their autonomy. You simply want to be there for them if needed. 

Strategy 3: Legal Planning

Once you and your child have had these difficult conversations, emphasize the need for a legal plan so their wishes are documented and honored. This process may seem daunting, but it’s necessary to ensure your child’s future. At the least, your adult child’s legal plan should include the following documents:

Health Care Proxy and Advance Directive. A healthcare proxy grants someone, usually you, the authority to make medical decisions on your child’s behalf if they cannot. This document is crucial in ensuring that your child’s medical wishes are respected and followed, even if they are unable to communicate them. An Advance Directive complements this by outlining their medical treatment preferences in various scenarios, ensuring their wishes are respected even when they can’t voice them. It’s like a roadmap for their medical care, ensuring that their values and beliefs are considered in any medical decision. 

HIPAA Authorization. The HIPAA Authorization is equally essential. While HIPAA (Health Insurance Portability and Accountability Act) protects patient privacy, it can prevent you from accessing your child’s medical information without explicit permission. By signing a HIPAA Authorization, your child can ensure that you can speak with doctors and receive updates on their condition.

Living Will. A living will is another vital document to consider, as it outlines your child’s wishes regarding end-of-life care, such as whether they want to receive life-sustaining treatments. Documenting these preferences can provide clarity and guidance during difficult times, ensuring their wishes are honored.

Power of Attorney. A Power of Attorney allows your adult child to appoint someone (again, usually you) to manage their financial affairs if they cannot do so. Managing can include paying bills, managing bank accounts, and handling investments. With this document, you might find it easier to step in and help when needed.

It may also be necessary for your adult child to have a plan in place for what happens after death. If that’s the case, they need a will or trust. Reach out to me, and I can educate you and your child on whether post-death planning is necessary at this stage in your child’s life. 

Finally, life circumstances will change, so let your child know it’s essential to review their documents regularly and update them as needed. Encourage your young adult to revisit their decisions periodically, especially if they experience significant life changes such as getting married, moving to a new state, or starting a new job. At my firm, constant contact is part of our process, so our clients never have to remember to update their plans independently. We do the remembering for you. 

Your Next Step

Now that you have three strategies for navigating your child’s transition into adulthood, your next step is to book an appointment with our firm so we can support you in having these conversations and putting your child’s legal plan in place. 

Before you think that you don’t need an attorney and can use a cheap online tool or even AI, I encourage you to think about what’s at stake. Your child’s health and well-being. Your child’s growth. The opportunity to teach your child how to prioritize the things that matter most. When I work with you, one of the best things I can do is to get to know your children as they become adults. Ideally, it will be me (or my firm) that they’ll turn to for guidance throughout their lifetime and to be there for them when you can’t. No cheap legal plan can do that. 

The Support You and Your Child Need

We know that navigating the transition to adulthood can be challenging for you and your child. Understanding the legal changes that come with turning 18 and using the three legal documents (and the conversations that go with them) in this article can help you provide the support and guidance your child needs. But you don’t need to navigate this transition alone. We can educate you and your child about their new legal responsibilities, support you to have hard conversations, and help your child implement a legal plan. 

Schedule a 15-minute call to learn how our Life & Legacy Planning process can help your family make the best decisions about the things that matter most.

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.

Categories
Estate Planning

What Probate Is and How To Avoid It — Part 2

Unless you’ve created an estate plan that works to keep your family out of court, when you die (or become incapacitated) many of your assets must go through probate before those assets can be distributed to your heirs. Like most court proceedings, probate can be time-consuming, costly, and open to the public, and because of this, avoiding probate—and keeping your family out of court—is often a central goal of estate planning. 

In part one of this series, we explained how the probate process works and what it would entail for your loved ones. Here in part two, we’ll discuss the major drawbacks of probate for your family, and outline the different ways you can help them avoid probate with wise planning. 

What’s At Stake For Your Family 

Probate court proceedings can take months, and sometimes even years, to complete. In the immediate aftermath of your death, that’s the last thing you likely want your loved ones to have to endure. 

Without easy and immediate access to your assets, your family could face serious financial hardship at a time when they need the most support. Not only that, but to help them navigate the legal proceedings, your loved ones will almost certainly need to hire a lawyer, which can result in hefty attorney’s fees and the real risk of them hiring a lawyer who is uncommunicative, which only creates more stress for them. All of that is on top of the court costs, executor’s compensation, and all of the various other administrative expenses related to probate. By the time all of those costs have been paid, your estate could be totally wiped out, or at the very least, seriously depleted. 

Another drawback of probate is the fact that it’s a public process. Whether you have a will or not, all of the proceedings that take place during probate become part of the public record. This means that anyone who’s interested can learn about the contents of your estate, who your beneficiaries are, and what they will inherit, which can set them up as potential targets for scammers and frauds. 

Probate also has the potential to create conflict among your loved ones. This is particularly true if you have disinherited someone or plan to leave significantly more money to one relative than the others, in which case, a family member may contest your will. And even if those contests don’t succeed, such court fights will only increase the time, expense, and strife your family has to endure. 

How To Avoid Probate

Before we discuss the more advanced ways you can use estate planning to allow your loved ones to avoid probate, it’s important to point out that not all of your assets will have to go through the probate process—and that’s true even if you don’t have any estate plan at all. 

Assets That Do Not Require Probate

Certain assets will pass directly to the individuals or organizations you designated as your beneficiary, without the need for any additional planning. The following are some of the most common assets that use beneficiary designations and therefore, bypass probate:

  • Retirement accounts, IRAs, 401(k)s, and pensions
  • Life insurance or annuity proceeds
  • Payable-on-death (POD) bank accounts
  • Transfer-on-death (TOD) property, such as bonds, stocks, vehicles, and real estate

Outside of assets with beneficiary designations, other assets that do not go through probate include assets with a right of survivorship, such as property held in joint tenancy, tenancy by the entirety, and community property with the right of survivorship. These assets automatically pass to the surviving co-owner(s) when you die, without the need for probate. 

However, it’s critical to note here that if you name your “estate” as the beneficiary of any of these assets, those assets will go through probate before being distributed. The same goes if you overlook a beneficiary designation, or if you die at the same time as a joint property owner—each of those assets will also go through probate, even though they have beneficiary designations.

In addition, we generally recommend that you do not rely on beneficiary designations to handle the distribution of your assets. These designations give you little to no control over how your assets are distributed, and they can result in negative outcomes you did not intend, especially if you have a blended family with children from a prior marriage or if you have no children at all.

Although there are several different types of assets that automatically bypass probate, the majority of your assets will require slightly more advanced levels of planning to ensure your loved ones can immediately access them, without the need for any court proceedings in the event something happens to you. The primary estate planning tool for this purpose are trusts.

Avoiding Probate With A Revocable Living Trust

Trusts are a popular estate planning tool for avoiding probate. Although there are a variety of different types of trust, the most commonly used trust for probate avoidance is a revocable living trust, also called a “living trust.”

A trust is basically a legal agreement between the “grantor” (the person who puts assets into the trust) and the “trustee” (the person who agrees to manage those assets) to hold title to assets for the benefit of the beneficiary. With a revocable living trust, this agreement is typically made between you as the grantor and you as the trustee for the benefit of you as the beneficiary. You act as your own trustee during your lifetime, and then you name someone as a “successor trustee” to take over management of the trust when you die or in the event of your incapacity.

It might seem odd to make an agreement with yourself to hold title to assets for yourself in order to benefit yourself. Yet by doing so, you remove those assets from the court’s jurisdiction in the event of your incapacity or when you die. Instead, those assets transfer to your successor trustee, without any court intervention required. At that point, your successor trustee is responsible for managing the trust assets and eventually distributing them to your beneficiaries, according to the terms you spell out in the trust agreement. This is how a trust avoids probate, saving your family significant time, money, and headache.

The Key Benefits Of A Living Trust

Unlike a will, if your trust is properly set up and maintained, your loved ones won’t have to go to court to inherit your assets. Instead, your successor trustee can immediately transfer the assets held by the trust to your loved ones upon your death or in the event of your incapacity. And since you can include specific instructions in a trust’s terms for how and when the assets held by the trust are distributed to a beneficiary, a trust can offer greater control over how your assets are distributed compared to a will. 

For example, you could stipulate that the assets can only be distributed upon certain life events, such as the completion of college or marriage, or when the beneficiary reaches a certain age. And as long as the assets are held in trust, they’re protected from the beneficiaries’ creditors, lawsuits, and divorce—which is something else wills don’t provide. 

Finally, trusts remain private and are not part of the public record. So, with a properly funded trust, the entire process of transferring ownership of your assets can happen in the privacy of your attorney’s office, not a courtroom, and on your family’s time.

Transferring Assets Into A Living Trust

For a trust to function properly, it’s not enough to simply list the assets you want the trust to cover. When you create your trust, you must also transfer the legal title of any assets you want to be held by the trust from your name into the name of the trust. Retitling assets in this way is known as “funding” a trust.

Funding your trust properly is extremely important, because if any assets are not properly funded to the trust, the trust won’t work, and your family will have to go to court in order to take ownership of that property, even if you have a trust. In light of this, it’s critical to work with us to ensure your trust works as intended. We will make sure all of your assets are properly titled when you initially create your trust, and also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust. This will keep your assets from being lost, as well as prevent your family from being inadvertently forced into court because your plan was never fully completed. 

Living Trusts, Taxes, Creditors & Lawsuits

When you create a revocable living trust, you are free to change the trust’s terms or even completely terminate the trust at any point during your lifetime. Because you retain control over the assets held by a living trust during your lifetime, those assets are still considered part of your estate for estate tax purposes. Similarly, assets held in a living trust are not protected from your creditors or lawsuits during your lifetime. This is an important and often misunderstood point.

Again, a revocable living trust does not protect your assets from creditors or lawsuits, and it has no impact on your income taxes. However, as mentioned earlier, as long as the assets are held by a living trust or a Lifetime Asset Protection Trust, those assets can be protected from your beneficiaries’ creditors, lawsuits, and even divorce settlements. Be sure to ask us about the different trust-based estate planning options we offer to find one that’s best suited for your particular situation.

The primary benefit of a living trust is to pass your assets to your loved ones without any need for court or government intervention, and to ensure your assets pass in the way you want to the people you want.

Life & Legacy Planning: Do Right By Those You Love Most

Although a living trust can be an ideal way to pass your wealth and assets to your loved ones, each family’s circumstances are different. This is why we will not create any documents until we know what you actually need and what will be the most affordable solution for you and your family—both now and in the future—based on your family dynamics, assets, and desires.

Sitting down with us will empower you to feel 100% confident that you have the right combination of estate planning solutions to fit with your unique asset profile, family dynamics, and budget. We see estate planning as far more than simply planning for your death and passing on your “estate” and assets to your loved ones—it’s about planning for a life you love and a legacy worth leaving by the choices you make today.

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.

Categories
Estate Planning

What Probate Is and How To Avoid It — Part 1

Unless you’ve created a proper estate plan, upon your passing many of your assets must first go through the court process known as probate before those assets can be distributed to your heirs. During probate, the court supervises a number of different legal actions, all of which are aimed at finalizing your affairs and settling your estate. It’s open to the public, expensive, can take a long time, and be highly inconvenient, and sometimes, even downright messy.

By implementing the right estate planning strategies, however, you can help your loved ones avoid probate all together—or at least make the process extremely simple for them. Here in this two-part series, we’ll first explain how the probate process works and what it would entail for your loved ones, and then we’ll outline the different ways you can avoid probate with wise planning.

When Probate Is Required

As mentioned previously, if you fail to put in place a proper estate plan, your assets must go through probate before they can be distributed to your heirs. In general, this includes those individuals who have no estate plan at all, those whose estate plan consists of a will alone, and those who have a will that’s deemed invalid by the court. 

It’s important to point out that even if you have a will in place, your loved ones will still be required to go through probate upon your death. Therefore, if you want to keep your family out of court and out of conflict when you die, you cannot rely solely on a will, and you’ll need to put in place additional estate planning vehicles. 

If you die without a will, it’s known as dying intestate, and in such cases, probate is still required to pay your debts and distribute your assets. However, since you haven’t expressed how you wish your estate to be divided among your heirs, your assets will be distributed to your closest living relatives based on our state’s intestate succession laws. These laws typically give priority to spouses, children, and parents, followed by siblings and grandparents, and then more distant relatives. If no living heirs can be found, then your assets go to the state.

Some states allow estates with a relatively low value to bypass probate and use an abbreviated process to settle the estate. In those cases, beneficiaries can claim the estate’s assets using simpler legal actions, such as by filing an affidavit or other form. Additionally, when an individual’s debts exceed the value of their assets, or a person has no assets at all, probate is often not initiated, and the estate is settled using alternative legal processes.

How Probate Works

How probate plays out is largely determined by whether or not you had a valid will in place at the time of death. However, even in cases where no will exists, or the will is deemed invalid, the probate process is quite similar. Indeed, once the court appoints someone to oversee the probate process on your behalf, the process unfolds in a nearly identical manner, regardless if you had a will or not.

01 | Authenticating The Validity Of Your Will: 

Following your death, your executor is responsible for filing your will and death certificate with the court, and this initiates the probate process. From there, the court must authenticate your will to ensure it was properly created and executed in accordance with state law, and this may involve a court hearing. 

Notice of the hearing must be given to all of the beneficiaries named in your will, along with all potential heirs who would stand to inherit under state law in the absence of a will. This hearing gives these individuals the opportunity to contest the validity of your will in order to prevent the document from being admitted to probate.

02 | Appointing The Executor Or Administrator: 

If you created a will, the court must formally appoint the person you named in your will as your executor before they can legally act on your behalf. If you died without a will, the court will appoint someone—typically your closest living relative—to serve in this role, known as your personal representative or administrator.

In some cases, the court might require your executor to post a bond before they can serve. The bond functions as an insurance policy to reimburse the estate in the event the executor makes a serious error during probate that financially damages the estate.

03 | Locating & Valuing Your Assets: 

Once probate begins, the executor must identify, locate, and take possession of all of your assets, so they can be appraised to determine the total value of your estate. This includes not only those assets listed in your will and other estate planning documents, but also those you may have not included in your estate plan. This is why keeping a regularly updated inventory of your assets is so important. 

Any assets the executor is unable to locate will end up in our state’s Department of Unclaimed Property. Across the U.S., there is more than $58 billion of assets stuck in state Departments of Unclaimed Property.  

In the case of real estate, although the executor is not expected to actually move into your home or other residence, he or she is required to ensure that your mortgage, homeowners insurance, and property taxes are paid while probate is ongoing. These and all other debts can be paid from your estate. 

Once all of your assets have been located, the executor must determine their value, which is typically done using financial statements and/or appraisals. From there, the combined value of all of your assets is used to estimate the total value of your estate.

04 | Notifying & Paying Your Creditors: 

To ensure all of your outstanding debts are paid before your assets are distributed, the executor must notify all of your creditors of your death. In most states, any unknown creditors can be notified by publishing a death notice with your local newspaper. 

Creditors typically have a limited period of time—usually one year—after being notified to make claims against your estate. The executor can challenge any creditor claims he or she considers invalid, and in turn, the creditor can petition the court to rule on whether the claim must be paid.

From there, valid creditor claims are then paid. The executor will use your estate funds to pay all of your final bills, including any outstanding medical and funeral expenses.

05 | Filing & Paying Your Taxes: 

In addition to paying all of your outstanding private debts, the executor is also responsible for filing and paying any outstanding taxes you owe to the government at the time of death. This includes personal income and capital-gains taxes, as well as state and federal estate taxes, if your estate is valuable enough to qualify. 

That said, the federal estate tax exemption is currently set at $13.61 million for individuals and $27.22 million for married couples, so most families won’t have to worry about estate taxes. And for those who do exceed that threshold, there are several strategies you can use to reduce the size of your estate to avoid these taxes. Any taxes due are paid from estate funds. In some cases, this may require liquidating assets to raise the needed cash. 

06 | Distribution Of Your Remaining Assets: 

Once the court confirms all of your debts and taxes have been paid—which typically requires the executor to file an accounting of all transactions he or she engaged in during the probate process—the executor can petition the court for authorization to distribute the remaining assets in your estate to the beneficiaries named in your will, or according to state intestate succession laws, if you didn’t have a will.

Once all assets have been distributed, the executor must file a petition with the court to close probate. If all creditors and taxes have been paid, your assets have been distributed, and there are no other outstanding issues to be addressed, the court will issue an order formally closing the estate and terminating the executor’s appointment.

Keep Your Family Out Of Court & Conflict

One of our primary goals when creating your estate plan is to keep your family out of court and out of conflict no matter what happens to you. Yet, as you can see, if your family must go through probate, your estate plan falls woefully short of that goal, leaving your loved ones stuck in an unnecessary, expensive, time-consuming, and public court process.

Fortunately, it’s easy for you to spare your family the burden of probate with proactive planning. Next week, we’ll look at the ways you can do just that in the second part of this series. Until then, if you haven’t put an estate plan in place or have one that would force your family to go through probate, schedule a complimentary 15-minute consultation call.

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.

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Estate Planning

Avoid These 4 Common Estate Planning Pitfalls

If you’re a parent, you’ve always strived to provide the best for your family, ensuring their well-being and securing their future. However, even the most well-intentioned plans can falter if you overlook the complexities of estate planning. Let’s explore some common pitfalls that parents often encounter, then offer practical strategies to navigate them successfully. 

Heads up before we dive in; I’ll provide some stories below that illustrate what happens when a parent hasn’t created an estate plan or hasn’t updated it over time. (The names of the people below are made up, but the scenarios I’ll describe are common.) 

Pitfall No. 1: Procrastination 

Even the most well-intentioned plans can fail if you overlook the complexities of estate planning. One of the most significant pitfalls is procrastination, or postponing the process under the assumption that you have ample time or that your assets are currently too modest to warrant formal planning. But the truth is that estate planning is crucial for individuals of all ages and asset levels! Unexpected events can occur at any time, leaving your loved ones in a bad situation if you haven’t properly documented your wishes.

Take for example, John, a 45-year-old father of three, who put off creating a will, thinking he had decades ahead of him. You can’t really blame him, can you? Many of us are in the same boat. However, he passed away tragically and unexpectedly, leaving his family to deal with his affairs in the court process called probate. The probate process was lengthy, and his assets were frozen and unavailable for his kids until the court process played out. In addition, probate drained his assets, so there wasn’t as much to leave his kids in the end. 

I doubt this is what John would have wanted.

So parents, to avoid the procrastination trap, it’s essential to approach estate planning with a sense of urgency. Start the process as soon as possible, and review your plan regularly to ensure it remains aligned with your evolving circumstances and family dynamics (keep reading for more information on how I can help!).

Pitfall No. 2: Failing to Update Your Plan Over Time

This brings us to another pitfall: failing to update your plan after significant life events, such as marriages, divorces, births, or deaths. Life is inherently dynamic, and your estate plan should reflect those changes. Your plan should reflect your life as closely as possible, otherwise it could become ineffective or even invalid. And if that happens, you end up like John, even if you already have an estate plan. 

Make a habit of reviewing your plan at least every three years, preferably annually, or whenever a major life event occurs. When you work with me, I will help you ensure your plan accurately reflects your current wishes and aligns with any changes in state or federal laws. 

Pitfall No. 3: Not Communicating With Loved Ones

Contrary to common belief, estate planning is not solely about legal documents, such as a Will, Trust or Power of Attorney. Documents are merely the byproduct of good estate planning. The real power of estate planning is in having open and honest communication with your loved ones. However, many parents make the mistake of keeping their estate plans a closely guarded secret, leaving their families in the dark about their intentions and wishes. This lack of transparency can breed misunderstandings, conflicts, and resentments that can undermine the effectiveness of your plan and strain family relationships.

Let’s look at Darla’s story for a greater understanding. Darla, a successful business owner and loving mother, always assumed her oldest son would take over the family business after her passing. So Darla’s estate plan included a provision wherein her oldest son inherited the business. When Darla died, however, her son revealed that he had different career aspirations and didn’t want to run the business. This led to family conflict – because Darla didn’t have a “Plan B” in her estate plan. 

As a result, the family had to go to probate court, spending lots of time, energy, attention, and money, to get the business transferred to the one family member who wanted to run the business. Had Darla discussed her wishes openly, the family could have addressed their concerns together and arrived at a mutually agreeable solution that would have saved them the unnecessary hassle of probate court.

So what can you learn from Darla’s story? Share your wishes with your family members, explain your reasoning, and address any concerns they may have. This open dialogue can foster a deeper understanding and strengthen the bond between you and your loved ones. It also allows your loved ones to provide valuable insights and perspectives that can help refine and improve your plan. What a loving gift to give your family!

Pitfall No. 4: Not Working With a Professional 

The last pitfall I’ll address is doing it yourself, or doing your plan cheaply online. As I pointed out above, estate planning is not just about creating a few documents and putting them away on a shelf until something happens. There’s much more to it. 

Instead, work closely with an estate planning firm like ours, who can help you craft a plan that fits your unique family dynamics, wishes and assets, as well as keep in touch over time to ensure your plan is updated and works when you need it to. At my firm, we support you with all this and more, including helping you structure your plan in a tax-efficient manner, minimizing the impact of taxes on your assets and ensuring your loved ones receive the maximum benefit from your estate. 

I also help you address any unique circumstances within your family, such as a family business, a child with special needs or a family member with addiction issues, ensuring that your plan is tailored to meet the specific needs of your loved ones. 

How We Support You to Avoid These Common Pitfalls

We understand that protecting your family goes far beyond just legal documentation. Our mission is to empower you to enshrine your hopes, values, and profound love for your children into a comprehensive plan that preserves your family’s integrity for generations to come. We take the time to truly understand what family means to you—the struggles you overcame, the values you hold dear, the future you envision. And then we help you craft a tailored estate plan that meets your needs and stays updated over time.

Book a call with our office to learn how we can support you, and by extension, your entire family.

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.

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Estate Planning

4 Reasons Why a Cheap Estate Plan Won’t Work For Your Family

Most people, regardless of stature and wealth, likely do not know how to evaluate estimates when shopping for an estate plan.

Shopping for an estate plan based on getting the lowest cost plan possible is often the fastest path to leaving your family with an empty set of documents (maybe in a beautiful binder, but not worth the paper they are written on) that won’t work for your family when they need it.

Unfortunately, we see the negative effects of cheap estate planning when grieving family members come to us with that fancy binder that sat on the shelf for years, full of out-of-date estate planning documents, and are shocked to find themselves stuck in what could have been an avoidable court process or even conflict when that’s exactly what their loved one thought they had paid someone to handle for them.

Here’s why selecting the cheapest estate plan is likely to leave you with a plan that won’t work for your family… and could leave them with a big mess instead.

01 | The least expensive plan isn’t worth the paper it’s written on once you’ve left the attorney’s office—your life changes, the law changes, and your assets change over time; your plan needs to keep up with those changes.

And the truth is, a lawyer can’t afford to provide anything more than documents that won’t get updated when you only pay a few hundred dollars for a plan. The business model doesn’t work for the lawyer and won’t work for you. 

An attorney who has built a practice specifically to serve your family in their best interests would not sell $399 (or even $1,500 or $2,000) Wills, Trusts, or estate plans. A lawyer selling you a cheap plan would only provide documents—not the long-term relationship, updates, and ensuring that assets are properly titled in a Trust. Buyer beware!

02 | Forms and documents won’t be there for your family when you can’t be—you want to leave your loved ones a relationship with a trusted advisor with whom you have built a relationship during your lifetime and who has met them and they already trust.

Working with a lawyer who focuses on “the best documents” at the “lowest price” or doesn’t charge enough for their services cannot provide more than form documents. These days, especially with the rise of AI, template form documents are free for anyone to use, which makes it difficult to know how those documents are handled when it comes to protecting the people you love.

Shopping around for the least expensive plan may get you the cheapest documents, but those documents won’t be there to guide the people you love when they need someone to turn to in a crisis or grief.

03 | You get what you pay for, but it’s your family that will pay the price. 

Traditional law firms usually use generic forms and documents. These firms are called “Trust mills” and are a firm that drafts plans but don’t ensure assets are owned correctly or stay up-to-date over time. You might think that’s malpractice, but it’s not. It’s common practice, leaving your family at risk if and when something happens to you!

04 | An estate plan isn’t a set-it-and-forget-it kind of thing; it needs to stay updated with changes in your life, the law, and your assets. 

There’s currently more than $50 billion in unclaimed property held in departments of unclaimed property across the United States. Yep, that is billion with a B.  Assets often land there when someone dies or becomes incapacitated, and their family loses track of it because it wasn’t tracked well during life.  And that’s just one way your family loses out if you’ve shopped around for the cheapest estate plan rather than having a plan that works for the people you love.

Is Something Better Than Nothing?

Sometimes, having something in place is better than nothing, but this is not one of those cases. In this case, having a “something” plan leaves your family holding the expensive, or even empty bag, when it’s too late for them to do anything about it. It’s risky business to leave your loved ones with a set of documents you aren’t sure are going to work, and our guess is that you love your people too much for that. 

Bottom line: don’t waste your time shopping around town for the cheapest plan possible. You don’t want the cheap plan; you want the plan that will work for the people you love when they need it.

If you already have an estate plan in place that you may have bought based on price, and are concerned you may have gotten a set of documents that won’t serve your family when they need it most, call us and ask about our 50-point assessment. We can help you save some money by giving it to you to do yourself, or you can pay us for a plan review to make sure your loved ones won’t get stuck with an expensive and painful and unnecessary court process or loss of assets.

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.

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Estate Planning

A Gift of Peace and Power for Every Parent

Parents spend their days and nights thinking about how to make sure their children are happy, healthy, and safe. If you’re a parent, you know. Every parent deserves the peace of mind and power to create financial security for themselves and their children with thoughtful estate planning.

Most people have a general concept of what “estate planning” means, but in reality, don’t fully understand it. Believe it or not, estate planning is far more complex than just drafting a Will, and it’s not just for rich people, though doing it will leave your family much more “rich” than if you don’t. Once you appreciate the power of estate planning, you’ll know why it has the power to “gift” you peace of mind.

So let’s start by parsing out what estate planning really is and why it matters for every parent you know, including yourself if you are a parent. 

Why Estate Planning Matters for Parents 

Imagine having a roadmap that clearly shows how your financial assets, the guardianship of your children, and even your most cherished possessions are handled should anything happen to you. Now imagine that your roadmap is a legal document and the people receiving that roadmap are required to abide by your wishes and are able to easily do so because your wishes are so clear and you’ve left a guide for your family along with the roadmap. 

That’s what estate planning is: a legally enforceable plan for your future, and ideally a guide to help your loved ones navigate the plan. And contrary to what most people think, estate planning isn’t just for the wealthy or those who are nearing the end of life. It’s for everyone, including you! Thoughtful estate planning gives you the power to make decisions now that will impact your and your family’s future, giving you peace of mind to know you aren’t leaving a mess for the people you love. 

Estate planning allows you to specify who will care for your children if you are unable to do so yourself. It’s undoubtedly a tough subject, but choosing a guardian you trust to raise your kids as you would brings immense comfort, and may even guide you to build deeper relationships with the people you’d call upon to care for your children, if you cannot. Knowing that your wishes are written down and legally protected can relieve a lot of stress, and relax any of those “stressful in the background” thoughts about that one person you would never want raising your kids.  

Without a plan, a judge would decide who takes care of your children if you cannot, and they might not choose the person you would have wanted. Or worst of all, they may even choose the one person you’d never want raising your kids because maybe they look great on paper. Think about it: a judge knows nothing about you or your kids. They only know what they see in court filings. That’s it. They’d have to make decisions with no input from you. Kinda scary, right?

When done right, estate planning also lets you direct the distribution of your property and finances. Specifically, it ensures your assets are transferred to the people you choose without unnecessary delays, legal hurdles, or family conflict. 

This not only secures your children’s future but also simplifies the administrative process at a time when your family should have space and time to mourn and heal, not get tangled in legal complexities. And if they do get tangled up in conflict, it’s highly likely that those relationships will be forever destroyed. That also happens. Again, more often than you may think. 

Here’s the bottom line. When you get these things in order, you can die in peace, and that means you live life more fully. 

Estate Planning Equals Empowerment

Estate planning puts the power in your hands. It’s a declaration of your values and your voice, legally secured to guide your family when you can’t be there. By setting out your wishes clearly, you prevent disputes and ensure your legacy lives on exactly as you intend. After all, someone will have to wrap up your affairs after you die, so it may as well be you, now, while you’re living. So step into your power, safeguard your children’s future, and cement your role as the heart and protector of your family. 

Financial Protection In Case of Loss

Estate planning is especially vital if the unthinkable happens and your spouse or partner dies. Many parents face not only devastating emotional loss but also the potential for significant financial instability – especially if you aren’t the primary breadwinner in your family. An effective estate plan, however, includes setting up mechanisms such as life insurance, trusts, and instructions for pension or retirement benefits, which can provide you with financial support when it’s most needed. There’s absolutely no reason you and your children need to compromise your lifestyle should something happen to your partner. 

Let Us Give You the Gift of Peace and Power

At our law firm, we don’t just give legal advice or draft documents. We take your power and peace of mind seriously. We also know that you’re busy. We have processes in place that make getting your estate plan in place as easy as possible, all while being thorough, thoughtful, and mindful of your time and budget. 

If you want to learn more about how we can help you create an estate plan that gives you the gift of power and peace of mind – so you can live life to the fullest – schedule a complimentary 15-minute call with our office.

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.

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Estate Planning

Here’s What You Should Know About A Will

Having a Will, otherwise known as a Last Will & Testament, is important—and all adults over age 18 should have this document in place.  Yet for all but a few people, creating a Will is just one small part of an effective estate plan that works to keep your loved ones out of court and out of conflict. With this in mind, we’ll look at exactly what having a Will in place will—and will not—do for you and your loved ones in terms of estate planning. 

What A Will Does

A Will is a legal document that outlines your final wishes in regards to how your assets are distributed to your surviving family members. Here are some of the things having a Will in place allows you to do:

1. Choose how assets are divided upon your death: A Will’s primary purpose is to allow you to designate how you want your assets divided among your surviving loved ones upon your death. If you die without a Will, state law governs how your assets are distributed, which may or may not be in line with your wishes. However, a Will only covers assets owned solely in your name. Other types of assets, such as those with a beneficiary designation and assets co-owned by you with others, are not affected by your Will.

2. Name an executor: In your Will, you can name the person, or persons, you want to serve as your executor, sometimes called a “personal representative.” Following your death, your executor is responsible for wrapping up your final affairs. This includes numerous responsibilities, including filing your Will with the local probate court, locating and managing all of your assets, paying off any debts you have outstanding, filing and paying your final income taxes, and finally, distributing your remaining assets to your named beneficiaries.

3. Name guardians for your minor children: If you are the parent of minor children, it is possible to name legal guardians for them in your Will. However, naming guardians for your children in your Will alone is seriously risky, and doing so may even leave your kids vulnerable to being taken into the care of strangers if something happens to you. This is true even if you’ve worked with another lawyer to create your Will, because most lawyers haven’t studied and been trained on  what’s necessary for ensuring the well-being and care of minor children.

Fortunately, whether you’ve named guardians for your kids in your Will or have yet to take any action at all, you’ve come to the right place. We can put a full Kids Protection Plan® in place, and determine if there is anything else your family might need to ensure the well-being and care of your children.

4. Serve as a backup for a living trust: Because it can be difficult to transfer the legal title to every single one of your assets into a revocable living trust before your death, most trusts are combined with what’s known as a “pour-over” Will. This type of Will serves as a backup to a living trust, so all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the probate process.

What A Will Won’t Do

While a Will is a necessary part of most estate plans, your Will is typically a very small part of a comprehensive estate plan. To demonstrate, here are the things you should not expect your Will to accomplish:

1. Keep your family out of court: Following your death, in order for assets in your Will to be transferred to your beneficiaries, the Will must pass through the court process known as probate. During probate, the court oversees the Will’s administration, ensuring your assets are distributed according to your wishes, with automatic supervision to handle any disputes. Probate can be time-consuming, costly, and open to the public. Moreover, there’s also the chance that one of your family members might contest your Will, increasing the time and cost in court. 

 2. Pass on certain types of assets: Since a Will only covers assets solely owned in your name, there are several types of assets that your Will has no effect on, including the following:

  • Assets with a right of survivorship: These types of assets automatically pass to the surviving co-owner(s) when you die.
  • Assets with a designated beneficiary: When you die, assets with a designated beneficiary pass directly to the individual, organization, or institution you designated as beneficiary, without the need for any additional planning. 
  • Assets held in a trust: Assets held by a trust automatically pass to the named beneficiary upon your death or incapacity, so these assets cannot be passed in your Will. This includes assets held by both revocable living trusts and irrevocable trusts.

3. Pass ownership of a pet and money for its care: Because animals are considered personal property under the law, you cannot name a pet as a beneficiary in your Will. If you do, whatever money you leave it would go to your residuary beneficiary, who would have no obligation to care for your pet. This person could legally keep all of the money and drop off your pet at a shelter.

The best way to ensure your pet gets the care it deserves following your death is by creating a pet trust. We will help you set up, fund, and maintain such a trust, so your furry family member will be properly cared for when you’re gone.

4. Leave funds for the care of a person with special needs: There are a number of unique considerations that must be taken into account when planning for the care of an individual with special needs. In fact, you can easily disqualify someone with special needs for much-needed government benefits if you don’t use the proper planning strategies. For this reason, a Will should never be used to pass on money for the care of a person with special needs.

If you want to provide for the care of your child or another loved one with special needs, you must create a special needs trust. However, such trusts are complicated, and the laws governing them can vary greatly between states. We can make certain that upon your death, the individual would have the financial means they need to live a full life, without jeopardizing their access to government benefits.

5. Reduce estate taxes: If your family has significant wealth, you may wish to use estate planning to reduce your estate tax liability. However a Will is useless for this purpose. To reduce or postpone your estate taxes, you will need to set up special types of trusts. If you are looking to reduce your estate tax liability, consult with us to discuss your options.

6. Protect you from incapacity: Because a Will only goes into effect when you die, it offers no protection if you become incapacitated and are no longer able to make decisions about your financial, legal, and healthcare needs. If you do become incapacitated, your family will have to petition the court to appoint a guardian to handle your affairs, which can be costly, time-consuming, and traumatic for your loved ones. And there’s always the possibility that the court could appoint someone as a guardian that you’d never want making such critical decisions on your behalf. 

However, using a trust, you can include provisions that appoint someone of your choosing—not the court’s—to handle your assets if you are unable to do so. When combined with a well-prepared medical power of attorney and living will, a trust can keep your family out of court and out of conflict in the event of your incapacity, while ensuring your wishes regarding your medical treatment and end-of-life care are carried out exactly as you intended.

Get Professional Support With Your Estate Planning

Although creating a Will may seem fairly simple, you should always consult with an experienced estate planning lawyer to ensure the document is properly created, executed, and maintained. And as we’ve seen here, there are many scenarios in which a Will won’t be the right estate planning solution, nor would a Will keep your family and assets out of court.

We see estate planning as far more than simply planning for your death and passing on your “estate” and assets to your loved ones—it’s about planning for a life you love and a legacy worth leaving by the choices you make today.

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.

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Estate Planning

What Happens To Your Social Media Accounts When You Die?

When you die, what happens to your online life? Each social media platform has its own rules for dealing with the accounts of deceased users, ranging from permanent deletion to transforming accounts into places for mourning and memory. Understanding these options is essential for managing digital assets responsibly and respecting your wishes. So let’s take a look at the various policies of major social media sites and what you can do to make sure your accounts are handled the way you want. After all, our social media accounts reflect our personalities, interests, and memories, so we want them handled with care.

What Each Platform Allows

Let’s take a look at the practical aspects and discuss what each digital platform allows or requires. Note that these provisions are updated as of April 2024.

Facebook. Facebook offers two options for accounts of deceased users: either close the account permanently or convert it into a memorial account where loved ones can share memories. The platform allows you to designate a “Legacy Contact” while you’re alive; someone who can manage your memorialized account by updating your profile picture, accepting friend requests, and posting memories. Importantly, they cannot log into the account or view your private message history.

Instagram. Instagram also allows accounts to be either memorialized or permanently deleted. A memorialized Instagram account will display a “Remembering” label and will not appear in public spaces like the “Explore” section. The process requires proof of death, such as a death certificate, so someone will need to provide that after you’re gone.

TikTok. TikTok permits family members or legal representatives to request the deactivation of a deceased user’s account by providing appropriate proof of death. Unlike Facebook and Instagram, and at the time of this writing, TikTok does not currently offer a memorialization option, so your account is permanently removed once the request is processed.

X. X (formerly known as Twitter) allows the family to close the account of a deceased user. This involves submitting proof of death, after which your account and its contents are permanently deleted. X does not provide a memorialization option.

YouTube. YouTube is covered by Google’s overall policies, which offer a proactive feature called the Inactive Account Manager. This allows you to set instructions for your account if you become inactive for a specified period. You can also choose to have your data shared with trusted contacts or have the account deleted.

LinkedIn. On LinkedIn, immediate family members or colleagues can request to remove a deceased member’s profile by providing proof of death. LinkedIn focuses on maintaining a professional network and so does not offer account memorialization.

How to close or memorialize an account

It’s important to know that social media platforms generally discourage logging into a deceased person’s account as it poses privacy and security risks. To close or memorialize your account, family members must directly contact the service and provide the necessary documentation. They won’t be able to make a phone call, either – they’ll have to find out how to close or memorialize your account on each site separately, which can be time-consuming and frustrating. But there’s a better way! You can create a plan that helps your loved ones navigate the process. To do that, you need a trusted estate planning lawyer.

What an Estate Planning Attorney Can Do

A trusted estate planning attorney plays a crucial role in helping manage your digital legacy, ensuring that your wishes for your online accounts are carried out after your passing. Here’s what a skilled attorney can do to help ensure that your loved ones have the necessary information and authority to manage your accounts:

1. Create a Digital Asset Plan

An estate planning attorney can help you draft a digital asset plan that details your wishes for each of your online accounts. This plan can specify which accounts should be closed and which should be memorialized. It includes all kinds of digital assets, from social media accounts and emails to digital wallets and personal blogs.

Your attorney can also guide you in appointing an executor, a person who will be responsible for managing your online assets according to your wishes. A knowledgeable attorney will explain the responsibilities involved and help ensure that the executor has the legal authority they need to act on your behalf with various digital platforms.

2. Provide Necessary Legal Documentation

A skilled attorney can prepare necessary legal documents that authorize your executor to access your accounts. This might include special powers of attorney and directives that are included in your will, trust, or in a separate document. 

3. Secure Your Account Information

A trusted attorney can suggest secure ways to store your account usernames, passwords, and any other necessary information. This information can be kept in a way that respects privacy and security but becomes accessible to the digital executor or designated individuals after your death. 

4. Update the Plan Over Time

As laws and platform policies change, a trusted estate planning attorney can help update your digital estate plan. This ensures that it remains compliant with new regulations and continues to reflect your wishes accurately.

However, it’s important to know that most estate planning attorneys treat their clients as a “one and done” transaction. Once your plan is signed, they won’t contact you again to ensure that your plan stays updated over time. And they won’t explain that failure to update your plan regularly means your plan won’t work when you need it to. Instead, work with an estate planning attorney who will keep in touch for your lifetime to ensure your plan works. 

How We Can Help

We don’t merely dispense legal counsel; we safeguard all your assets and guide you to make the right decisions for your unique situation. We take the time to fully understand what’s important to you, and then together, we’ll craft a thoughtful and holistic plan so you and your family can avoid the stress, conflict, and chaos that comes with incomplete planning – including incomplete digital planning.

To learn more about how we approach estate planning from a place of heart and understanding, schedule a complimentary 15-minute call with our office.

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.

The August Law PLLC team will work hard to deliver good quality information upon subscription. However, if you decide that you no longer want to receive emails from us, feel free to click the "unsubscribe" button at the bottom of the email received.

The August Law PLLC team will work hard to deliver good quality information upon subscription. However, if you decide that you no longer want to receive emails from us, feel free to click the "unsubscribe" button at the bottom of the email received.