Tag: Estate Plan

Avoid These 4 Common Estate Planning Pitfalls

Post author By Sara Thomas
Post date June 19, 2024
No Comments on 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.

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, Estate Planning Pitfalls, Personal Family Lawyer

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

Post author By Sara Thomas
Post date June 13, 2024
No Comments on 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.

Tags Cheap Estate Plan, DIY Estate Plan, Estate Plan, Estate Planning Lawyer, Personal Family Lawyer, Trust, Will

Estate Planning

A Gift of Peace and Power for Every Parent

Post author By Sara Thomas
Post date May 16, 2024
No Comments on 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.

Tags Asset Protection, Estate Plan, Estate Planning, Personal Family Lawyer, Wealth Preservation

Estate Planning

Here’s What You Should Know About A Will

Post author By Sara Thomas
Post date May 9, 2024
No Comments on 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.

Tags Estate Plan, Last Will & Testament, Personal Family Lawyer

Estate Planning

What Happens To Your Social Media Accounts When You Die?

Post author By Sara Thomas
Post date May 3, 2024
No Comments on 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.

Tags Digital Asset Plan, Digital Assets, Estate Plan, Social Media

Estate Planning

3 Estate Planning Documents Your Parents Need

Post author By Sara Thomas
Post date March 19, 2024
No Comments on 3 Estate Planning Documents Your Parents Need

As your parents gracefully navigate their golden years, ensuring their peace of mind (and yours!) becomes a priority. One of the very best things you can do for your own future, and that of your entire future lineage – your children, grandchildren, and beyond – is to take great care of the people you were born to or raised by.

The questions to start asking are:

How will you help them if they become ill or injured?
Who will take care of their bills and make sure their health needs are met?
How do they want to be cared for, if and when they cannot care for themselves?

The starting place is open conversation and a power trio of estate planning tools swoop in to save the day: the General Power of Attorney, the Power of Attorney for Healthcare (including a Living Will), and the HIPAA Waiver.

Let’s break down why these tools are the unsung heroes of comprehensive estate planning for your parents, and how to bring them up so you can support your parents to get them created or updated, no matter their net worth.

1. General Power of Attorney (POA)

A General Power of Attorney (or POA) grants a person you name (often a family member or trusted friend) the authority to manage your financial affairs if you become unable to do so yourself. From handling bills to making investment decisions, the General POA ensures that your financial matters are handled, whether you’re experiencing a temporary illness or a long-term inability to manage your money, such as in the case of memory problems.

If your parents have assets that you must be able to access easily in the event of their incapacity, you may decide that a POA for accessing their accounts is not sufficient, as it can be difficult to get access to bank accounts even with a POA in place, and will require court action. In that case, the best course of action is to ensure that their assets are titled in the name of a trust, with you or someone you trust as the named successor Trustee, who can step in and handle financial matters for your parents, without any court involvement, when needed.

2. Power of Attorney for Healthcare and Living Will

It’s possible your parents already lean on you for guidance with their healthcare decisions, and it’s equally possible they don’t share details of their healthcare with you at all. No matter which side of the spectrum your parents stand on, the question of what will happen to their healthcare needs if they become seriously ill can feel overwhelming — and trust me, it’s even more overwhelming during moments of medical crisis.

Thankfully, a Power of Attorney for Healthcare and Living Will allow your parents to explain their medical wishes to guide medical providers and family members on what treatments and life-saving measures they’d like to have, even in the toughest of times.

The Power of Attorney for Healthcare designates someone to make these medical decisions on behalf of your parents if they’re unable to do so. This trusted individual becomes the advocate, ensuring that healthcare choices align with your parents’ values and preferences.

Meanwhile, the Living Will – also known as a Declaration to Physicians – outlines your parents’ wishes regarding life-sustaining treatments in the event they’re unable to communicate. From CPR to artificial hydration, this document provides clarity amidst uncertainty, giving both your parents and their loved ones peace of mind that the decisions being made around their care are what they themselves would want.

3. HIPAA Waiver

In the digital age, privacy is paramount – but what happens when privacy becomes a barrier to essential healthcare-related communication? Enter the HIPAA Waiver, the ultimate tool for opening communication roadblocks in times of need.

HIPAA (the Health Insurance Portability and Accountability Act) protects the privacy of individuals’ medical records. While this is crucial for safeguarding sensitive medical information, it can sometimes hinder the flow of communication between healthcare providers and family members, especially for the elderly and those incapacitated by an illness or injury.

By signing a HIPAA Waiver, your parents authorize specific individuals to access their medical information and speak directly to their medical providers, ensuring seamless communication and informed decision-making. This is essential in medical emergencies but is also extremely helpful if your parents need help hearing their doctor or understanding their medical advice.

How to Bring Up Estate Planning With Your Parents

The best way to bring up estate planning with your parents is to get your own planning handled first. Then, let your parents know that in the process of handling your own planning, your lawyer raised the question of whether you were an agent under anyone else’s power of attorney, or named as a successor Trustee in your parents’ Trust, or if you are going to be caring for aging parents at some point.

And, if you have worked with a lawyer and they didn’t ask you those questions, give us a call and let’s review your plan and your parents’ planning to make sure that everything you’ll need is dialed in. This can all get quite messy very quickly, and now is the time to talk with your parents.

The Sooner the Better

You might be thinking, “Why the rush? Can’t we tackle this later?” Here’s the scoop: Life is unpredictable, and procrastination can be a costly gamble. Waiting until a crisis strikes to get these tools in place can lead to a whirlwind of legal and emotional chaos, leaving your parents’ wishes unfulfilled and their affairs in disarray.

By proactively planning ahead, you’re not just checking items off a to-do list – you’re investing in your parents’ peace of mind and yours.

Don’t wait for a storm to hit – schedule a 15-minute call today to learn how our unique Life & Legacy Planning process is designed with your family’s well-being in mind, offering personalized guidance and support every step of the way.

Tags Estate Plan, Health Care Directives, HIPAA Waiver, Parents, Power of Attorney, Sandwich Generation

Estate Planning

13 Ways to Show Your Finances Some Love This Year – Part 2

Post author By Sara Thomas
Post date March 14, 2024
No Comments on 13 Ways to Show Your Finances Some Love This Year – Part 2

Last week we explored seven ways to show your finances and your family some love with smart, tax-advantaged financial tips for the new year:

Make a Qualified Charitable Distribution (QCD)
Front-load Your 401(k) Contributions
Set Up a Roth IRA for a Child
Make Donations During Spring Cleaning
Give the Gift of Appreciated Stock Shares
Establish a 529 College Plan
Make a Roth Conversion

If you missed it, check out Part 1. This week, we are continuing the financial love with 6 more tips you can use to benefit your family this month and the year ahead.

Let’s dive in.

8 | Spread The Love With The Annual Gift Exemption

Do not underestimate the power of spreading love through financial generosity. By leveraging your lifetime gift tax exemption, you can minimize estate taxes and provide a significant financial boost to your heirs during your lifetime. Did you know you can gift up to $18,000 per person to an unlimited number of people each year without having to file a gift tax return? This allows you to share your wealth with family and friends in a tax-efficient manner. These gifts not only escape the estate tax but also foster stronger connections and deepen relationships with your loved ones. Whether it’s helping with educational expenses, supporting a dream vacation, or simply offering a helping hand, using this exemption allows you to share your wealth and make a lasting impact on those you cherish most. The current high exemption amount of $13.61 million is set to sunset in 2025, so if your estate is greater than $5M, now is the time to plan.

9 | Allocate More Funds To The Generation Skipping Tax Exemption

As you plan for the future, it’s essential to consider the next generation. By allocating additional funds towards your generation-skipping transfer tax exemption (of up to $13.61 million), you provide a seamless transfer of assets to your grandchildren or future beneficiaries. This strategic move not only minimizes tax implications but also lays the groundwork for preserving your family’s wealth for generations to come.

10 | Make an Extra Mortgage Payment

Your home is more than just a place to live—it’s also a valuable asset that can offer tax advantages. By making an extra mortgage payment on your primary home loan, you can increase your mortgage interest deductions on your tax return. Not only does this reduce your taxable income, but it also accelerates your path to homeownership, saving you money in the long run.

11 | Complete Repairs on Rental Property

Investing in your rental property not only enhances its value but also offers tax benefits. By completing repairs on your rental property, you can offset rental income on your tax return while providing a better living environment for your tenants. It’s a win-win situation that improves your property’s profitability and strengthens your relationship with your renters.

12 | Create a Lifetime Asset Protection Trust

Planning for the unexpected is an act of love towards your spouse and children, and when you know the right tools to use (like we do) you can make sure your family is provided for and protected for generations to come. One of my favorite ways to do this is using a Lifetime Asset Protection Trust. This tool allows you to protect the assets you leave for your children from any future financial trouble, like lawsuits or divorces.

13 | Create Your Estate Plan

Finally, don’t overlook the importance of estate planning in showing love to your family. By finalizing your Will, Revocable Trust, Power of Attorney, and Advance Medical Directive, you ensure that your wishes are carried out and that both you and your loved ones are protected in the event of incapacity or death. It’s a vital step towards providing peace of mind for you and your family, allowing you to focus on enjoying life’s precious moments together. And remember, a plan is more than a set of documents. It’s a lifetime of wise decisions about your life and legacy.

Show Your Love Where It Matters Most

It’s never too late to make loving financial and planning decisions for your loved ones – and yourself!

We know the value of planning for the future. But we also know the value of planning for the life you want today and the legacy that extends far beyond your assets.

Schedule a complimentary 15-minute call to learn how we can help you create a Life & Legacy Plan that will take care of everyone and everything you love.

Tags Annual Gift Exclusion, Estate Plan, Family Finances, Generation Skipping Tax Exclusion, LAPT, Mortgage, Personal Family Lawyer, Rental Maintenance

Estate Planning

13 Ways to Show Your Finances Some Love This Year – Part 1

Post author By Sara Thomas
Post date March 7, 2024
No Comments on 13 Ways to Show Your Finances Some Love This Year – Part 1

While thoughtful financial planning doesn’t sound as fun as a fancy night out or a night in with Netflix, making smart planning decisions with your assets is one of the best gifts you can give – and a gift that keeps giving over time.

This week, we explore seven tax planning tips that not only secure your financial future but also spread love and prosperity to those you cherish most.

1 | Make a Qualified Charitable Distribution (QCD)

Want to spread love to a charity you’re passionate about? Is your retirement account looking good? Consider making a Qualified Charitable Distribution from your account directly to charity. Not only does this fulfill your required minimum distributions, but it also exempts the amount from your taxable income. By giving back to causes close to your heart, you can make a meaningful impact while reducing your tax burden.

2 | Front-load your 401(k) contributions

Show love to your future self by maximizing your 401(k) contributions early in the year as opposed to spreading them out evenly over 12 months. By reaching the 2024 limits of $23,000 sooner, your investments will have more time to grow, potentially enhancing your retirement nest egg even more. It’s a proactive step toward securing financial stability for yourself and your family down the road.

3 | Set Up a Roth IRA for a Child

Want to inspire financial skills in your kids while getting a tax advantage? Teach the next generation the value of financial planning and responsibility by setting up and contributing to aRoth IRA for a child who has earned income. If your child has earned from babysitting or odd jobs, you (and they!) can contribute to a custodial Roth for their benefit, and every dollar invested grows tax-free, providing a solid foundation for their future financial well-being.

4 | Make Donations During Spring Cleaning

Ah, the annual ritual of spring cleaning. This year, let’s infuse this mundane task with a dose of love and generosity. As you sift through your belongings, consider the items that no longer serve you but could bring joy to others. From gently used household furnishings to clothing and books, each item holds the potential to make a difference in someone’s life.

Here’s the cherry on top: for items in good condition, you may claim a charitable deduction on your 2024 income tax return, making your act of kindness even sweeter. So, as you purge the old and welcome the new, keep receipts of your donations – it may add up to some real tax savings.

5 | Give the Gift of Appreciated Stock Shares

Strengthen familial bonds while supporting charitable causes by giving appreciated securities and stock shares directly to your sibling’s favorite charity. By donating your appreciated stock instead of selling it, you can potentially avoid recognizing the gain as your income, maximizing the impact of your charitable giving while minimizing your tax liability. Sweet deal, right?

6 | Establish a 529 College Plan

Invest in the educational future of your loved ones by setting up a 529 plan. While the contributions you make to a 529 account aren’t tax deductible, contributions to these plans grow tax-free and can be withdrawn tax-free when used by your loved one for qualified education expenses like housing, books, tuition, and more. Whether it’s for your child, grandchild, niece, nephew, or another family member, a 529 plan is a gift that keeps on giving.

7 | Roth Conversion

Show love to your retirement savings by considering a Roth conversion on a traditional IRA. If your traditional IRA has declined in value, now is the ideal time to convert it to a tax-saving Roth. Doing so can reduce your income tax liability later on and let you potentially enjoy tax-free withdrawals in retirement. It’s a strategic move that can optimize your retirement income while minimizing tax obligations.

Let Us Help You Show Your Finances Some Love

There’s no time like the present to demonstrate love through practical Life & Legacy Planning®. By incorporating these tax planning tips into your overall planning strategy, you can secure a brighter future for yourself and your loved ones while making a positive impact on your community.

Not sure where to start? We’re here to guide you through every step of your planning journey, from taking inventory of what you have and what’s important to you, to the practical steps of how to plan for the life and legacy you dream of.

Schedule a complimentary 15-minute call with our office to learn more.

Tags 401(k), 529, Appreciated Stock Shares, Assets, Donation, Estate Plan, Finances, IRA, Personal Family Lawyer, QCD

Estate Planning

How to Save for Retirement and Pay Off School Loans at the Same Time

Post author By Sara Thomas
Post date February 23, 2024
No Comments on How to Save for Retirement and Pay Off School Loans at the Same Time

Navigating your financial journey with the heavy burden of student loan debt on your back can feel overwhelming. You’re faced with a critical decision: should you prioritize paying down those loans, or should you focus on the future, contributing to your workplace retirement plan? It’s a tough call, especially when choosing loan payments means missing out on the opportunity to grow your savings through employer retirement matches.

But there’s good news on the horizon, thanks to the SECURE 2.0 Act. This groundbreaking legislation is here to offer a helping hand, allowing your student loan payments to qualify for employer retirement matching contributions. It’s a win-win, enabling you to tackle your debt while also building your nest egg.

Are you wondering if this financial boost applies to you? Keep reading, because we’re about to explore how the SECURE 2.0 Act could be the solution you’ve been searching for.

What The SECURE 2.0 Act Means for The Student Loan Dilemma

For many of us, juggling student loan debt is a bit like trying to balance a coffee cup on a stack of books—tricky and maybe a bit messy, especially when we’re also trying to save for retirement. Those monthly loan payments can take a big bite out of our budgets, making it hard to stash away cash for our future selves. And when we skip on contributing to our retirement plans, it’s like missing out on the whipped cream in our favorite latte—those employer retirement matches that could seriously boost our savings.

Enter the SECURE 2.0 Act, ready to smooth out this balancing act. This new legislation suggests to employers a clever workaround: treating your student loan payments as if they were direct deposits into your retirement savings account.

This shift is subtly brilliant. It means the money you’re dedicating to student loans can now help you unlock those employer retirement contributions, offering a streamlined path to beef up your retirement savings. It’s a bit like finding a shortcut on your daily commute that makes life just a little easier and a lot more rewarding. So, let’s explore how this can help secure your financial future.

How It Works

The SECURE 2.0 Act is like a breath of fresh air for employees weighed down by student loan payments. It gives employers the green light to get creative with retirement benefits, turning those hefty student loan payments into a force for good in your retirement savings plan. By treating these payments as if they were contributions to your retirement account, employers can now match them, just like they would with traditional retirement contributions. Imagine that—your student loan payments not only help you chip away at your debt but also build your nest egg, without you having to put extra money into your retirement account.

This twist means you can focus on paying down your student loans without missing out on the magic of compounding interest in your employer-sponsored retirement account. It’s a game-changer for anyone who’s felt stuck between a rock and a hard place, trying to decide between paying off debt and saving for the future.

However, there’s a catch… Not every employer will automatically jump on this bandwagon. The SECURE 2.0 Act opens the door, but it’s up to individual companies to walk through it. This means the availability of this perk will vary from one employer to the next.

So, what’s your next move? Start a conversation with your employer to see if they’re planning to offer this innovative benefit starting in 2024. It’s an opportunity too good to miss for anyone looking to make their student loan payments do double duty.

Helping You Navigate Towards Financial Wellness

If you’re one of the many people grappling with student loan debt, the SECURE 2.0 Act offers a ray of hope. Now, individuals can navigate the intricate landscape of student loan relief without sacrificing their long-term retirement goals. As employers have the option to align student loan payments with retirement savings, employees can effectively manage their finances and work towards a more stable financial future.

No longer bound by the dilemma of choosing between student loan payments and retirement contributions, individuals who qualify for the benefit can strategically plan their finances for a brighter future.

Want to take control of your financial future and that of the ones you love most? Then I invite you to meet with us. We look at everything you own and everyone you love to determine whether your assets and your loved ones will be cared for exactly as you want if you die or become incapacitated. And if the way things are currently set up doesn’t serve you, your assets, or your family exactly as you want, we can help you develop a Life & Legacy Plan that will protect everything you love for generations to come.

Schedule a complimentary 15-minute call.

Tags Estate Plan, Personal Family Lawyer, Retirement, SECURE 2.0 Act, Student Loans

Estate Planning

This Change to the FAFSA Rules Could Help Your Grandkids Qualify for More Student Aid

Post author By Sara Thomas
Post date January 25, 2024
No Comments on This Change to the FAFSA Rules Could Help Your Grandkids Qualify for More Student Aid

Want to contribute to your grandchild’s future college education? The FAFSA Simplification Act, which went into effect in December, now makes it possible for grandparents to do even more to help finance their grandchild’s education.

In the past, any contributions or distributions from a grandparent’s 529 college savings plan were subject to FAFSA reporting, potentially impacting the student beneficiary’s eligibility for federal financial aid. The new changes, however, bring a breath of fresh air.

In this blog, you’ll learn what has changed under the new rule and how grandparents can leverage it to support their grandchild’s educational pursuits.

Understanding the 529 Account

First things first – what exactly is a 529 college savings account? It’s a special savings account designed to help individuals, including grandparents, set aside money for future college expenses. Contributions aren’t federally tax-deductible, but the good news is that earnings within the account grow tax-free. When funds are withdrawn for qualified education expenses, they remain untaxed.

What The New Rule Changes

When the account owner is a dependent student or custodial parent, the total value of the 529 plan is reported as an investment asset on the Free Application for Federal Student Aid (FAFSA). Previously, if a grandparent owned the 529 plan, any distributions were considered untaxed income for the student, potentially affecting financial aid eligibility. The upcoming change eliminates this concern.

In a nutshell, a 529 plan owned by a grandparent will no longer require reporting on the FAFSA. Even more impactful is that distributions from this grandparent-owned 529 plan will not be deemed as untaxed income for the student. This opens up opportunities for grandparents to contribute to their grandchild’s education without jeopardizing financial aid eligibility.

Maximizing Grandparent Contributions

It’s important to keep the following in mind when you make contributions to a 529 account for a grandchild:

1 | Funds Must Be Used For Qualified Educational Expenses

Grandparents can use 529 plan funds for a range of qualified educational expenses, including tuition, room and board, books, supplies, laptops, and internet access. However, certain expenses like insurance, student health fees, transportation, and extracurriculars are not covered and may incur a ten percent penalty if 529 plan funds are used toward these expenses.

2 | The Annual Gift Exclusion

While grandparents can contribute to their grandchild’s 529 plan, it’s essential to be mindful of the federal annual gift exclusion, which is the amount of money a person can gift to someone else without needing to file a gift tax return. The limit currently stands at $18,000 for an individual and $36,000 for those filing jointly with a spouse. A special rule allows gift givers to spread larger one-time gifts across five years to stay within their lifetime gift exclusion.

3 | Reconsider Payments Made Directly to The School

Distributions directly paid to the school from grandparent-owned 529 accounts will not affect aid eligibility. However, for now, it’s recommended to pay the grandchild directly.

4 | Timing Matters

When withdrawing funds from the 529 plan, it’s crucial to do so within the same tax year as the educational expenses. This strategic move ensures smooth financial transactions and adherence to tax regulations.

5 | Watch Your Withdrawal Limits

The amount withdrawn from all 529 plans should be no more than the total cost of the qualified educational expenses billed by the school. Excess withdrawals may incur a 10 percent penalty, but there’s a 60-day window to rectify the situation without penalties.

Helping You Plan For Your Family’s Future In The Most Loving Way Possible

It’s a heartwarming prospect to be able to help shape a brighter future for the younger generation. By understanding the new FAFSA rule and strategically utilizing 529 plans, you can contribute meaningfully to your grandchild’s education without compromising financial aid opportunities. This makes a 529 account an even better investment tool that not only helps your grandchild afford their education but leaves behind a legacy of love and wisdom.

At our firm, we believe this is what estate planning is all about – your Life & Legacy. That’s why we refer to estate planning as Life & Legacy Planning. It isn’t just about making a plan for what happens to your assets when you die – it’s about making meaningful, heart-centered decisions that provide peace, love, and guidance to the ones you love today and for years to come in the future.

If you’re ready to create a plan that takes care of everything you own and everyone you love in the most loving way possible, schedule a complimentary 15-minute call to find out what our heart-centered approach can do for you.

Tags Estate Plan, FAFSA, FAFSA Simplification Act, Grandkids, Kids, Personal Family Lawyer®, Student Ai

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