Tag: Estate Planning

Til Death Do Us Part? Why Unmarried Couples Must Have An Estate Plan That Works For the People They Love

Post author By Sara Thomas
Post date April 3, 2025
No Comments on Til Death Do Us Part? Why Unmarried Couples Must Have An Estate Plan That Works For the People They Love

Love in the 21st century takes many forms, and for many couples, “forever” doesn’t always include a marriage license. While a deeply personal choice, being unmarried adds layers of legal and financial complexity that can’t be ignored, especially when protecting your assets and loved ones.

Imagine this: you’ve built a life with your partner, maybe even bought a home and had children together. You share bills, dreams, and a future. But without the legal protections of marriage, what happens when one of you passes away? And what happens if one of you becomes incapacitated first?

Some of the questions you should be asking:

Who makes medical decisions for you or your partner? Without marriage or legal protections, you likely won’t be the person you want.

Who inherits what? Again, it will not likely go how you want without marriage or legal documents.

How would your children be provided for? It all depends on who the biological parents are and the line of “blood” relationship unless you’ve got an estate plan in place to ensure your children are cared for by the people you want, not who the law would choose.

How can you avoid a court process and potential conflict during an already emotional time?

The Legal Reality for Unmarried Couples

Unlike married couples, who automatically receive certain legal protections, unmarried couples must take deliberate steps to ensure their wishes are honored. In the eyes of the law, unmarried partners are essentially legal strangers, regardless of how long they’ve been together or how intertwined their lives may be.

This legal disconnect becomes starkly apparent in moments of crisis. If you’re hospitalized, your partner may be denied visitation rights or the ability to make medical decisions on your behalf. If you pass away without proper planning, your partner could be left with nothing – not even the home you’ve shared for decades.

According to a recent survey by Caring.com, only 24% of Americans have a will. This omission leaves millions of Americans vulnerable to painful legal and financial complications that can compound grief with unnecessary hardship. And it’s completely avoidable.

The Unmarried Couple’s Estate Planning Checklist

Here’s a closer look at some key areas where unmarried couples need to be especially proactive in their estate planning:

✔ Home Sweet Home, But Whose Name is on the Deed?

Many unmarried couples purchase a home together. However, the surviving partner might face significant challenges without a will or living trust that clearly outlines ownership and inheritance wishes. Here’s why:

Intestacy Laws: If you die without a will, your state’s intestacy laws dictate who inherits your property. These laws typically favor spouses and blood relatives, meaning your unmarried partner will be left with limited or no rights to the home you shared.

Tax Implications: Inheritance laws for married couples often come with tax benefits that unmarried couples don’t receive. The surviving partner could face a hefty estate tax bill, potentially forcing them to sell the home to cover the costs.

Title Matters: How you title your property significantly impacts what happens after death. Joint tenancy with rights of survivorship offers some protection, but this approach doesn’t address other estate planning concerns and may have unintended tax consequences.

✔ Providing for Your Children

Having children together adds another layer of complexity for unmarried couples. Here’s how a lack of proper estate planning can create significant hardship:

Guardianship Concerns: If one parent passes away, the surviving parent might not automatically have legal guardianship rights (especially if that person isn’t the biological parent, as is often the case with same-sex couples). In extreme cases, this could lead to legal battles with other family members or even state intervention.

Inheritance Complications: Without a will or trust, your children might not automatically inherit your assets as intended. Again, intestacy laws could mean your assets are divided in ways you wouldn’t have chosen, potentially leaving your children with inadequate financial support.

Blended Family Challenges: If either partner has children from previous relationships, the potential for conflict multiplies. Without clear documentation, children from previous relationships may find themselves at odds with the surviving partner, creating painful family rifts during an already difficult time.

✔ Beyond the Home: Protecting All Your Assets & Minimizing Taxes

Unmarried couples often accumulate significant assets—bank accounts, investments, retirement funds, etc. Without a plan:

Ownership Disputes Can Arise: If it’s unclear who owns what, it can lead to legal battles between surviving partners and family members of the deceased.

Unnecessary Tax Burdens: Unmarried couples often miss out on tax advantages available to married couples, potentially leading to a larger tax bill for the surviving partner.

Retirement Account Complications: Retirement accounts like 401(k)s and IRAs require specific beneficiary designations. Without these, your partner may have no claim to these assets, regardless of your intentions.

✔ Healthcare Decisions and End-of-Life Care

Perhaps the most immediate concern for unmarried couples is handling medical emergencies and end-of-life decisions:

Medical Decision-Making: Without healthcare directives, your partner may have no legal right to make medical decisions if you become incapacitated.

Hospital Visitation Rights: In some healthcare facilities, only family members can visit intensive care patients. Without proper documentation, your partner could be denied access during critical moments.

Funeral and Burial Decisions: Legal next of kin typically make funeral arrangements. Without documentation stating your wishes, your partner may have no say in how your remains are handled, even if you’ve discussed your preferences extensively.

✔ Digital Assets and Modern Considerations

In our increasingly digital world, estate planning must also address digital assets:

Access to Online Accounts: Your estate plan must specifically address digital assets, from social media to cryptocurrency, to ensure your partner can access them.

Business Interests: If you own a business, clear succession planning is essential to prevent disruption and protect your partner’s financial interests.

Pets: While many consider pets family members, the law views them as property. Specific provisions must be made to ensure your beloved pets receive proper care.

Don’t Leave Your Future to Chance

Estate planning isn’t just for the wealthy or the elderly – anyone who wants to protect the people and assets they cherish most. Creating a legally sound estate plan for unmarried couples is not just a good idea – it’s essential. But a traditional estate plan, DIY plan, or cheap legal plan isn’t sufficient. Instead, you need a Life & Legacy Plan.

I can help you create a tailored estate plan for your life and legacy. I’ll guide you to understand all the complexities and design a personalized plan that makes it all as simple as possible so that when one of you becomes incapacitated or dies, the survivor will have all the support they need without any of the mess. This includes:

Clearly Addressing Ownership of All Assets and Avoiding Probate: I’ll work with you to determine the best way to handle the transfer of all jointly and separately owned assets—including your home, bank accounts, investments, retirement accounts, and personal property—in a way that minimizes tax burdens, avoids probate court, and ensures a smooth and seamless transition for your surviving partner. This means your loved ones can focus on healing and honoring your memory, not battling legal complexities.

Establishing Guardianship and Financial Provisions for Children: If you have children together or separately, I will work with you to legally designate guardians, establish trusts if needed, and ensure your children’s financial well-being is protected. If you have children from previous relationships, I will take extra care to minimize or eliminate potential conflicts between your children and your surviving partner, ensuring a smoother transition and honoring your wishes.

Planning for the Incapacity of Either Partner: I’ll establish powers of attorney and healthcare directives so your partner can seamlessly manage your affairs and make medical decisions if you cannot do so yourself.

Your Next Steps for Peace of Mind

Don’t wait until it’s too late – take proactive steps today to protect the ones you love. Schedule a consultation with me to get started. Together, we can build a plan that provides clarity, security, and peace of mind for you and your family, no matter what the future holds.

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, Personal Family Lawyer, Unmarried Couples

Planning a Trip? Protect Your Children with a Kids Protection PlanⓇ

Post author By Sara Thomas
Post date March 26, 2025
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As summer approaches, you’re likely focused on planning the perfect getaway with your children—booking flights, reserving hotels, and mapping out exciting activities. However, one crucial aspect of travel planning often gets overlooked: ensuring your children’s safety and care if something unexpected happens to you during your trip. While no one wants to think about emergencies during vacation, having proper protection lets you truly relax and enjoy making memories together.

Let’s explore why having a Kids Protection Plan^Ⓡ (“KPP”) in place before traveling is essential and what steps you can take to protect your children. Please note: most lawyers, even at the top estate planning firms, often make at least one of 6 common mistakes the KPP is designed to address when naming legal guardians for children in an estate plan.

The Hidden Risks of Traveling Without Protection

When you’re caught up in vacation planning excitement, it’s easy to focus only on the fun ahead. However, traveling presents unique risks and scenarios you need to consider. If you become incapacitated in a car accident or experience any other emergency while away from home, what would happen to your children in those critical first hours or days? Without proper legal documentation, your children could be temporarily taken into the care of strangers or social services until the proper authorities can determine who has the legal authority to care for them.

This becomes even more complicated when traveling internationally. Different countries have varying laws about child custody and care in emergencies. Without clear legal documentation designating temporary guardians, your children could face significant trauma while authorities work through bureaucratic processes to determine their care. Even domestic travel can present challenges if you’re incapacitated in another state, as local authorities may not immediately recognize out-of-state guardianship arrangements without proper documentation.

Essential Components of Protection While Traveling

A comprehensive KPP, which we create for you as part of the Life & Legacy Planning^Ⓡ process, provides crucial legal documentation and instructions that activate immediately if something happens to you. This includes the designation of temporary guardians who can care for your children until your long-term guardians arrive, as well as detailed information about your children’s medical needs, allergies, medications, and daily routines.

When you work with us to create a KPP, we include several key components that many parents overlook. First, you’ll receive ID cards that list emergency contacts that can care for your children in your absence. Second, we’ll create a medical power of attorney forms that allow designated caregivers to authorize treatment for your kids if they need medical care if needed. Third, your KPP will include temporary guardianship documentation so your kids are never taken into the care of strangers while the authorities locate the long-term guardians for your children. Finally, if there is anyone you would never want raising your children, we document that (confidentially), too.

Beyond these basics, your KPP should include detailed information about your children’s daily lives—their favorite foods, bedtime routines, fears or anxieties, and comfort items. This helps caregivers maintain normalcy during a stressful situation. You can also include passwords for electronic devices, social media accounts, and educational platforms your children might need to access.

Take Action Before You Travel

Before heading off on your summer adventures, schedule time with me; we will help you consider all the potential issues that could arise so that you can make the best decisions for yourself and your kids. We’ll start by carefully selecting local and long-distance temporary guardians who can respond quickly in an emergency, considering factors like their proximity to your vacation destination, ability to travel on short notice, and familiarity with your children’s needs.

Then, we’ll help you create an emergency response plan that outlines what should happen in various scenarios. This plan should include who should be contacted first, in what order, and what immediate actions they should take.

Importantly, your plan should be easily accessible to designated guardians and include clear instructions for first responders or authorities who need to refer to it in an emergency. We will help you with this by ensuring you have access to the documents you need and that your chosen guardians know precisely how to access the information and documents they need. We will also support them in an emergency so they know exactly what to do.

Making these arrangements isn’t about dwelling on worst-case scenarios—it’s about creating peace of mind so you can fully enjoy your vacation. Proper protection allows you to create wonderful memories with your children instead of worrying about “what-if” scenarios. Think of it as travel insurance for your children’s well-being—something you hope you’ll never need but will be incredibly grateful to have if an emergency arises.

Your Next Steps for Peace of Mind

We support you in creating a comprehensive Life & Legacy Plan that includes a Kids Protection Plan so your children are always protected, no matter where your travels take you. Take the first step today by booking a Life & Legacy Planning Session, where you’ll get educated on what will happen if you become incapacitated and when you die so you can make the very best decisions for your loved ones. From that place of empowerment, we’ll work together to create your comprehensive Life & Legacy Plan that gives you peace of mind, knowing you’ve done all you can for the people you love most. Contact us today to get started.

Tags Estate Planning, Guardianship, Incapacity Planning, Kids Protection Plan, Travel

Estate Planning

A Step-by-Step Guide To Funding Your Trust

Post author By Sara Thomas
Post date March 17, 2025
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Creating a trust is a crucial step in estate planning, ensuring that your assets are managed and distributed according to your wishes. However, more than establishing a trust is required; you must also fund it. Funding a trust involves transferring assets into the trust, making them subject to the terms and management outlined in the trust document. Without funding, your trust remains an empty shell, unable to fulfill its intended purpose. This blog will walk you through the process of funding a trust, covering various asset types and providing practical tips to ensure that your trust is correctly set up to protect your legacy.

Why Funding a Trust is Essential

Before diving into the how-to, it’s essential to understand why funding a trust is so critical. When you fund a trust, you transfer ownership of your assets from your name into the name of the trust. This process has several key benefits:

Avoidance of Probate: One of the primary advantages of a trust is that assets placed in a trust typically avoid the probate process, which can be lengthy, costly, and public. By funding your trust, you ensure that your beneficiaries can receive their inheritance more quickly and with fewer legal hurdles.
Control Over Distribution: A trust empowers you to dictate exactly how and when your assets are distributed to your beneficiaries. Whether you want to provide for minor children, protect a loved one with special needs, or stagger distributions over time, funding your trust gives you the control to do so.
Protection from Creditors: In many cases, assets in a properly funded trust may be shielded from creditors, lawsuits, or divorce settlements, providing a robust layer of security for your estate.

Step 1: Identify the Assets to Transfer

The first step in funding a trust is to identify the assets you wish to transfer into the trust. These assets can include:

Real Estate is often one of the most valuable assets people transfer into a trust. It includes your primary residence, vacation homes, rental properties, and any other real property you own.
Bank Accounts: Checking, savings, and money market accounts can all be transferred into a trust. However, some funds should be kept in personal accounts for day-to-day expenses.
Investment Accounts: Stocks, bonds, mutual funds, and other investment accounts are commonly transferred into a trust. This ensures that these assets are managed according to your wishes after your death.
Retirement Accounts: While retirement accounts like IRAs and 401(k)s are not typically transferred into a trust due to tax implications, you can name the trust as a beneficiary, ensuring the assets are managed according to your trust’s terms upon your death.
Life Insurance Policies: You can transfer a life insurance policy ownership to your trust or name the trust as the beneficiary. This ensures that the proceeds are distributed according to your estate plan.
Personal Property: Valuable personal property, such as jewelry, artwork, and antiques, can also be transferred into a trust. This requires careful documentation to ensure the transfer is recognized.
Business Interests: If you own a business, you can transfer your ownership interest into the trust. This can be complex and require amending operating or shareholder agreements, so consult with a professional.

Step 2: Re-title Your Assets

Once you’ve identified the assets to transfer, the next step is to retitle them in the trust’s name. The specific process varies depending on the asset type.

1. Real Estate

To transfer real estate into a trust, you’ll need to execute a new deed that transfers ownership from your name to you as trustee of your trust. This deed must be recorded with the appropriate county recorder’s office. It’s often best to work with an attorney to ensure the deed is drafted correctly and recorded.

2. Bank and Investment Accounts

For bank and investment accounts, you’ll need to contact the financial institutions holding the accounts. They will require you to complete paperwork to change the account ownership to the name of the trust (you as trustee). Be prepared to provide a copy of the trust document or a Certification of Trust.

3. Personal Property

Personal property can be transferred into a trust through a bill of sale or an assignment of property, depending on the item. For items with titles, like vehicles, you’ll need to re-title the car in the name of the trust at your local Department of Motor Vehicles (DMV). Other personal property may be transferred via a Personal Property Memorandum.

4. Business Interests

Transferring business interests to a trust requires reviewing and possibly amending the business’s operating or shareholder agreement. You’ll then execute an assignment of ownership interest to the trust.

Step 3: Designate Beneficiaries

In cases where transferring the asset into the trust is not advisable or feasible—such as with retirement accounts or certain life insurance policies—you can name the trust as the beneficiary. This ensures that the asset will be transferred to the trust and managed according to the trust’s terms upon your death.

You may designate the trust as a primary or contingent beneficiary for retirement accounts. Be aware that naming a trust as the beneficiary of a retirement account can have significant tax implications, so it’s essential to consult with a tax advisor or estate planning attorney.

Step 4: Update Beneficiary Designations

If you have other assets with beneficiary designations—such as life insurance policies, annuities, or payable-on-death (POD) accounts—you may want to update these to name the trust as the beneficiary. This ensures that these assets are managed according to your trust’s terms and are not subject to the probate process.

Step 5: Review and Update Your Trust Regularly

Funding your trust is not a one-time event. As your financial situation changes, you acquire new assets, or your estate planning goals evolve, you must update your trust and ensure that all relevant assets are appropriately titled in the trust’s name. Regular reviews with your estate planning attorney can provide you with the reassurance that your trust is always up to date.

Step 6: Consult with Professionals

Funding a trust can be a complex process, and it’s crucial to get it right to ensure your estate plan functions as intended. Working with professionals—such as an estate planning attorney, financial advisor, and tax professional—can provide the expertise needed to navigate the process smoothly.

We’re Here To Ensure a Smooth Transition

Funding a trust is critical in ensuring that your estate plan is fully operational and capable of achieving your long-term goals. By carefully selecting assets, re-titling them into the trust, and regularly reviewing your estate plan, you can ensure that your legacy is protected and your loved ones are provided for according to your wishes. While the process can seem daunting, taking it step by step and seeking professional guidance can make it manageable and ultimately rewarding. Contact us today to get started.

Tags Asset Protection, Estate Plan, Estate Planning, Revocable Living Trust, Trust, Trust Funding

Estate Planning

The Unexpected Challenges of Being an Estate Executor

Post author By Sara Thomas
Post date March 6, 2025
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When someone asks you to be the executor of their estate, it might seem like a straightforward responsibility – distribute assets according to their will and handle some paperwork. However, as many executors discover, the role involves more complexity, time, and emotional labor than expected. Understanding these challenges can help you better prepare, whether creating your estate plan or considering serving as an estate executor.

But first, a note about terminology. If someone creates a will, the term used for the person who handles the estate is “executor.” If someone creates a trust, the person who handles the estate is called a “trustee.” When someone becomes incapacitated, the person who handles financial matters holds power of attorney. The jobs are similar but not identical. In this article, we’ll focus on the role of an executor, who carries out the wishes of someone who died under the terms of their will. However, if you’d like more information about what a trustee does, book a call with me using the link below.

Let’s get to it.

The Unexpected Financial Burden

One of the most unexpected aspects of being an executor is the immediate financial responsibility. When a person dies, their assets are temporarily frozen until a court grants legal authority to an executor to step into the shoes of the decedent (the person who died) and gather all the assets for distribution to the heirs of the decedent, which could take weeks, months or even years. Unless you plan and create a Life & Legacy Plan designed to keep your assets out of court, you’re leaving your executor with quite a burdensome responsibility.

Moreover, funeral homes and other service providers don’t wait for the court process. Most funeral homes require payment within days, ranging from $10,000 to $25,000 or more. While these costs can eventually be reimbursed from the estate (if funds are available), the executor must pay them personally and wait months for reimbursement. This situation can create significant stress, especially if the executor doesn’t have readily available funds.

Beyond funeral expenses, executors often need to pay ongoing bills for the deceased’s home, such as property taxes, utility bills, insurance premiums, and maintenance costs. These expenses must continue even though the estate’s assets are frozen. Again, these expenses must be paid out-of-pocket until the executor gains legal access to the deceased person’s accounts. Some executors report spending thousands of dollars of their own money during this interim period, creating financial strain at an already difficult time.

Finally, depending on who drafted your will (did you do it on your own, have a lawyer well-versed in estate planning, or perhaps a lawyer who just dabbles in wills and trusts?), your executor could be required to come up with the money to pay a bond, which is like an insurance policy that can be thousands of dollars out of pocket, before they can be appointed by the court to serve.

Drowning in Documentation

The paperwork involved in serving as an executor can be overwhelming. Executors must track down and organize all financial accounts, including bank accounts, investment accounts, retirement funds, and insurance policies. They must obtain multiple copies of death certificates, file court documents to initiate probate, submit final tax returns, close utility accounts, notify creditors, and process insurance claims. Sometimes, financial institutions ask for additional documentation, like a medallion signature – used to prove a person’s identity – which can take extra time and headache. The process often requires numerous phone calls, visits to financial institutions, and hours of organizing documents. Many executors report handling these tasks for hundreds of hours over months or even years.

Worse, some accounts may never be found. If you haven’t organized your finances so that your executor knows exactly what you have and where to find it, chances are the asset will be lost. When an asset is lost and never claimed, it must be turned over to the State’s Department of Unclaimed Property until (or if) someone finds it and can prove that the deceased was the rightful owner. Think about that for a minute. Would you want your hard-earned money turned over to the government or go to the people you want in the way you want? If it’s the latter, you need to create a Life & Legacy Plan. Keep reading to find out how.

Navigating the Family Dynamics

While the technical aspects of being an executor are challenging, the emotional and interpersonal dynamics can be even more difficult to navigate. Executors often find themselves in the uncomfortable position of enforcing the deceased’s wishes even when family members disagree. They must maintain impartiality while managing their own and others’ grief. This combination of emotional strain and family expectations can make the role particularly challenging and lead to family conflict. Sadly, that conflict can result in a protracted, expensive court battle and irretrievably broken relationships.

What You Can Do Now to Support Your Executor’s Success

When you create a Life & Legacy Plan with me, we will make your executor’s job much more manageable. For instance, I’ll help you create a comprehensive inventory of your assets, including account numbers and passwords, which can save countless hours of detective work. I’ll also help you update the inventory over time so it’s current when your executor needs it. I’ll also help you set aside funds to cover expenses so your executor doesn’t have to pay out of pocket. And we will consider whether to use a trust and name your executor as trustee of the trust so they don’t have to engage with the court at all.

We’ll also conduct a Life & Legacy Interview so family members know your wishes. This can go a long way towards preventing future conflicts. Most importantly, I will counsel you to choose the very best person for the job. Many people default to their oldest child or closest relative but haven’t considered whether they have the time, organizational skills, and emotional capacity to handle this complex role. Understanding exactly what’s involved means you can decide with full knowledge.

How I Help Make the Process Easier

I help you create a comprehensive Life & Legacy Plan that makes your executor’s job as straightforward as possible. After you’re gone, I will guide your executor through the probate process, handle complex legal paperwork, mediate family disputes, ensure compliance with all legal requirements, and provide objective advice during emotional decisions. That’s the value of a Life & Legacy Plan – and why it’s the best gift you can give your loved ones.

Take the first step toward protecting your family and supporting your future executor. Schedule a complimentary 15-minute consultation. Contact us today to get started.

Tags Estate Administration, Estate Executor, Estate Plan, Estate Planning, Executor, Personal Family Lawyer

Estate Planning

What You Need to Know About Trusts & Homeowner’s Insurance

Post author By Sara Thomas
Post date February 26, 2025
No Comments on What You Need to Know About Trusts & Homeowner’s Insurance

When you create an estate plan with a living trust, you’ve taken an essential step toward protecting your home and family from the cost of court. However, many people don’t realize that placing their home in a trust requires updating their homeowner’s insurance policy. Without this crucial step, you could face a devastating scenario: paying out of pocket for significant damage because your insurance claim was denied. Let’s explore how to ensure your trust and insurance work together to protect your most valuable asset.

The Hidden Risk of Trust Ownership

When you transfer your home into a trust, you change its legal ownership structure. While you might still live in the house and act as the trustee, depending on how your trust is structured, the trust becomes the legal owner of the property. If your trust is revocable, this title change won’t impact your taxes because you are still the owner for all tax purposes, but this title change could give your homeowner’s insurance company a reason to deny your claim. And, whether that denial is valid or could be contested in a court proceeding against the insurance carrier, you don’t want to have to deal with any of that.

Insurance companies base their coverage decisions on legal ownership. If there’s a mismatch between the property’s legal owner and the named insured on your policy, the insurer might deny your claim. Imagine discovering after a significant fire that your insurance company denies your claim because your policy doesn’t reflect your trust ownership. This nightmare scenario happens more often than you might think, but it’s easily avoidable with proper planning.

Aligning Your Insurance with Your Trust

The solution starts with notifying your insurance company when you transfer your home into a trust. Most insurance companies know trust ownership and can easily update your policy to reflect this change. They typically handle this by adding the trust as an additional insured party or including a trust endorsement on the policy.

When updating your policy, consider these key elements:

Property Coverage: Ensure the policy’s replacement cost accurately reflects current building costs in your area. Construction prices have soared recently, and many policies haven’t kept pace.

Liability Protection: Your policy should protect you personally and the trust from liability claims if someone is injured on your property.

Additional Structures: Remember to include coverage for detached garages, workshops, or other structures on your property owned by the trust.

Most insurers make these updates with minimal or no additional premium costs, but the protection they provide is invaluable. If disaster strikes, this small administrative task could save you hundreds of thousands of dollars.

Common Mistakes That Put Your Property at Risk

When disaster strikes, homeowners find out too late that they weren’t fully protected. But you can protect yourself if you’re aware of the most common pitfalls:

Delayed Notification: Many people wait months or even years to inform their insurance company about the trust transfer. During this gap, they’re paying for insurance that might not protect them. Instead, notify your insurance company when you create or update your trust.

Incorrect Trust Names: Insurance policies must list the trust’s exact legal name. Even minor discrepancies could cause problems during a claim. If your trust is “The Johnson Family Living Trust, dated January 15, 2025,” that’s exactly how it should appear on your insurance policy.

Overlooking Policy Reviews: Your insurance needs will change over time. Regular reviews ensure your coverage keeps pace with your home’s value and your family’s needs.

Multiple Property Confusion: If you own numerous properties in trust, each property’s insurance policy must reflect the trust ownership correctly. Don’t assume that updating one policy covers all your properties.

Creating a Comprehensive Protection Plan

Avoiding all these pitfalls is an inherent part of my comprehensive estate planning process called Life & Legacy Planning. Suppose you have a DIY estate plan, a plan you downloaded from a cheap legal site, or even a plan drafted by a traditional estate planning attorney. In that case, you’ll get a set of documents, but you won’t get a comprehensive plan that addresses all the potential consequences that arise. That’s why my Life & Legacy Planning^Ⓡ process includes:

A current inventory of your assets so we can look at how your property is owned and what properties could be at risk;
Regular, ongoing reviews of both your plan and insurance documents to ensure they remain synchronized. Major life events like marriages, divorces, or deaths in the family might require updates to both your trust and insurance policies;
Guidance on how to accurately and fully transfer your assets to your trust and
Much, much more.

We Help You Protect What Matters Most

I ensure your Life & Legacy Plan works as intended, including properly aligning with your insurance coverage. I’ll help you avoid costly mistakes and protect your home and family comprehensively. Our process includes regular reviews to keep your plan current and effective.

Don’t wait for a crisis to discover gaps in your protection. Contact me today to schedule a Life & Legacy Planning® Session, during which we’ll review your current trust and insurance arrangements and ensure they work seamlessly together. Contact us today to get started.

Tags Asset Protection, Estate Planning, Estate Planning Attorney, Home in Trust, Homeowner’s Insurance, Trust

Estate Planning

4 Estate Planning Myths That Put Your Loved Ones at Risk

Post author By Sara Thomas
Post date February 12, 2025
No Comments on 4 Estate Planning Myths That Put Your Loved Ones at Risk

Surveys conducted in 2024 by Caring.com and Ameriprise Financial revealed a troubling trend: Americans are falling behind on estate planning. The Caring.com survey revealed that only 32% of Americans have a will – a 6% decline from 2023. The Ameriprise survey found that 52% of couples lack estate plans. These statistics highlight a dangerous disconnect between understanding the importance of estate planning and taking action. Let’s examine these misconceptions and their potentially devastating consequences.

Myth 1: “I don’t have enough assets to need an estate plan.”

This dangerously narrow thinking ignores that estate planning isn’t just about financial wealth. It’s about doing the right thing for the people you love so you don’t leave a mess and ensuring your wishes for your care are considered if you cannot decide for yourself due to an accident or illness.

If you haven’t created a Life & Legacy plan (the type of comprehensive planning I offer), your loved ones could face lengthy court proceedings, unnecessary taxes, and difficulty accessing financial accounts, which could have devastating consequences if bills need to be paid.

It’s also about:

Ensuring what you DO have goes to the people you want in the way you wish to (and stays out of the court process);
Your children being raised by people you choose;
Your wishes for your medical care are honored if you become incapacitated or if your mind deteriorates;
Only people you trust can manage your finances if you can’t manage your finances yourself and
Leaving your loved ones with your most valuable assets – your values, insights, stories, experiences, and love.

Moreover, a Life & Legacy plan can minimize conflict among your loved ones. By clearly outlining your intentions and ideally getting my support to share them with them, you significantly reduce the chances of misunderstandings or disputes and increase the chances that your resources will be used to create a better future for the people you love.

Finally, a well-designed estate plan will save your loved ones time and money by ensuring the people who matter know what you have, where it is, how to find it, and what to do with it when they do find it. It will keep them out of court and conflict.

In short, an estate plan is not a luxury reserved for the wealthy; it’s necessary for anyone who has things that matter and people who matter. If that’s you, and you don’t have an estate plan (or your plan could be outdated), let’s talk soon.

Myth 2: “My spouse and I trust each other completely.”

Ameriprise’s survey reveals that 95% of couples trust each other with finances, and 91% share financial values. When couples don’t plan because they trust each other to fulfill their wishes, they overlook several essential matters.

For instance, trust between spouses doesn’t prevent legal complications or avoid court. Without a Life & Legacy plan, a surviving spouse may face lengthy probate proceedings, increased tax burdens, and difficulty accessing accounts. This strain can damage relationships and deplete assets meant for heirs. Even worse, if both spouses die simultaneously, the complications can be significant, especially if the spouses have children from prior marriages or minor children.

Another potential issue arises if the surviving spouse remarries. Without an estate plan, assets could unintentionally be passed to the new spouse instead of the people the deceased spouse loved. In some cases, children may even be accidentally disinherited, leaving them without the financial support their parents had planned to provide.

Myth 3: “Estate planning is too expensive.”

Another common misconception is that estate planning is a luxury reserved for the wealthy because of its perceived high cost. The reality? Avoiding estate planning due to cost concerns can lead to far more significant time and money costs for the people you love down the road. Without a plan, your loved ones may face costly probate proceedings, unnecessary taxes, and legal disputes that can drain your estate and create additional stress for your loved ones during an already difficult time. These costs often far exceed the upfront investment of creating an estate plan.

Beyond the financial aspect, the peace of mind that comes with knowing your loved ones are protected is invaluable. A Life & Legacy plan ensures that your wishes are carried out, your loved ones are cared for, and potential conflicts are minimized. By addressing these matters proactively, you save the people you love from emotional and financial burdens, making Life & Legacy planning one of the wisest and most compassionate investments and the best gifts you can give those you love.

Myth 4: “I don’t need to worry about who would raise my kids.”

Many parents of minor children assume that in the event of their death, loved ones will naturally step forward to care for their children. Unfortunately, these assumptions are often misplaced. Without a Kids Protection Plan^Ⓡ, which I support you to create, the decision about who raises your children will be left to a judge – a complete stranger to you and your children. And when a stranger decides who will raise your kids, it might not be the person you would have wanted. In some cases, the individual granted guardianship could have values, parenting styles, or circumstances entirely incompatible with how you envisioned raising your children. Even if you have named legal guardians for your children in a prior created will, it’s likely not taken into consideration the six common mistakes I see consistently when people (and even their well-meaning lawyers) name legal guardians without the training around planning for the needs of families with minor kids at home. Call my office if you have a minor child and have named legal guardians but want me to review your plan to see if you’ve made any of the six common mistakes.

Another important consideration is the financial burden on your children’s chosen guardian. If you haven’t created a Life & Legacy plan and allocated sufficient funds for your children’s care, even willing loved ones might decline guardianship, leaving the court to make an even more challenging choice.

A Life & Legacy plan alleviates the potential financial burden on your chosen guardians. It ensures your children receive the care and stability they need during an emotionally challenging time.

Take Action Now to Protect the People You Love

I’ve seen too many people suffer negative, yet unnecessary, consequences after a loved one dies. And if you haven’t experienced it yourself, you probably will. But with the proper education, beginning with correcting these dangerous myths about estate planning, I believe we can break the cycle of strife.

I start with education so you are clear on what would happen to your loved ones and your assets if you become incapacitated and when you die. Then, we will work together to create a plan that aligns with your values, goals, loved ones, and most importantly, that works when you need it to.

We call it the Life & Legacy Planning® process. Once you’ve created your Life & Legacy plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your property protected.

Tags Estate Plan, Estate Planning, Estate Planning Attorney, Estate Planning Myths

Estate Planning

Five Essential Steps to Protect Your Loved Ones

Post author By Sara Thomas
Post date February 6, 2025
No Comments on Five Essential Steps to Protect Your Loved Ones

Do you know that uneasy feeling when you think about what everyone you love would do if (and when) something happens to you? That nagging voice reminding you that you still haven’t created a will or trust or updated the estate plan you do have?

As we enter 2025, it’s time to stop pushing those thoughts aside and take action to protect the people you love most. Many people avoid estate planning because they think it will be complicated, expensive, too time-consuming, or emotionally challenging. But the truth is, not having a plan, or having an out-of-date plan, is far more costly – financially, emotionally, and time-wise – for the people you love.

Let’s take a look at five things you can do right now to create lasting peace of mind.

Step 1: Get Financially Organized

One of the biggest challenges people face after losing a loved one is trying to piece together their financial life. Where are all the accounts? What insurance policies exist? What bills need to be paid? Without proper organization, your family could spend months or even years trying to track everything down. Worse yet, anything they don’t find will be turned over to the State Department of Unclaimed Property, where there are approximately $60 billion in lost assets nationwide.

As important as it is, financial organization isn’t just about making lists – it’s about creating a clear roadmap for the people who will handle your affairs when you cannot. This includes documenting all your accounts, insurance policies, important passwords, and key contacts. When your loved ones need access to this information, it should be readily available, updated, and easy to handle. This is why our Life & Legacy Planning process begins with a financial organization, and then our ongoing Life & Legacy Planning service supports you to maintain your financial organization throughout your life, so it’s handled with as much ease as possible for the people you love when something happens to you.

Step 2: Create a Lasting Message for Your Loved Ones

When someone dies, their loved ones often wish they had one more conversation, one more chance to hear their loved one’s voice or read their words. That’s why recording a Life & Legacy Interview is part of our planning process. It’s truly one of the most meaningful gifts you can give the people you love, and who love you.

This message isn’t just about saying goodbye—it’s about sharing your values, hopes, and life lessons. Consider what you want future generations to know about your life journey.

What wisdom do you want to pass down?

What family stories, or even recipes, should be preserved?

While you may think “generational wealth” is just about money, the truth is that people who can learn from the recorded history of past generations have true generational wealth that’s far more irreplaceable than any dollar ever could be.

Your words will become a treasured part of that legacy, offering comfort and guidance long after you’re gone.

Step 3: Learn About Tax Planning

Many people don’t realize that proper estate planning can help minimize or eliminate taxes their loved ones might otherwise have to pay. Without planning, they could lose a significant portion of their inheritance to estate taxes, income taxes, or capital gains taxes.

Strategic tax planning isn’t about avoiding your obligations – it’s about ensuring more of your hard-earned assets go to the people you love rather than the government. Working with a trusted advisor who understands both estate and tax law can help you identify opportunities to protect your loved ones’ financial future.

Step 4: Plan Your Final Farewell (and Your Last Days)

While it might feel uncomfortable to think about your funeral, planning and paying for it in advance is one of the most loving things you can do for the people you love. When you’re gone, they will be grieving. The last thing they need is to make difficult decisions about your funeral while trying to guess what you would have wanted.

By planning ahead, you ensure your wishes are honored and protect the people you love from emotional overspending during a vulnerable time. You can choose and pay for exactly what you want, locking in today’s prices and relieving your loved ones of this financial burden.

Even more importantly, consider how you want to spend your last years, months, or even days and discuss that with the people who will be responsible for your care now. This could be a conversation we can help facilitate if bringing it up or even thinking about it alone feels too challenging or if you keep putting it off. This courageous conversation is one of the best gifts you can give to the people you love.

Step 5: Create a Comprehensive Life & Legacy Plan

All these elements come together in our comprehensive Life & Legacy Planning® process, which guides you to understand the law and how it will apply to your unique situation, considering your family dynamics and assets, so you can make educated and informed choices to ensure your loved ones stay out of court and out of conflict when something happens to you. This isn’t just about creating legal documents – it’s about creating a plan, maintaining it, and ensuring your loved ones know who to turn to when something happens to you.

Creating a Life & Legacy Plan with me includes clear instructions about who gets what, who’s in charge of what, and most importantly, how to find and access everything when needed. It also includes specific directives about what happens if you become incapacitated. In addition, you’ll have the opportunity to outline your memorial service, and we’ll support you to record a Life & Legacy Interview that your loved ones will cherish for the rest of their lives.

The start of a new year is the perfect time to take these essential steps to protect the people you love. Don’t wait until it’s too late – the greatest gift you can give your loved ones is the gift of preparation and peace of mind.

How We Help You Get Started

We help you put these essential protections in place. Through our Life & Legacy Planning® process, we’ll guide you in creating a lasting message for your loved ones, implementing smart tax strategies, planning your final arrangements, getting your finances organized, and creating a comprehensive plan that ensures the people you love stay out of court and conflict. Most importantly, we’ll help you make informed decisions that align with your values and wishes. So don’t delay! Let us help you do the right thing for your loved ones.

Tags Estate Plan, Estate Planning, Financial Planning, Legacy, Tax Planning

Estate Planning

Utilizing Estate Planning For FAFSA Eligibility

Post author By Kylie Casper
Post date January 29, 2025
No Comments on Utilizing Estate Planning For FAFSA Eligibility

Understanding how financial aid and estate planning intersect can make a significant difference when preparing for college expenses. This article will explain how asset ownership influences aid eligibility, offer actionable strategies to increase the chances of receiving aid and highlight estate planning tools that can protect your wealth while optimizing support for your child’s education.

FAFSA and Asset Ownership: The Basics

The FAFSA, or Free Application for Federal Student Aid, evaluates a student’s financial need based on several factors, including family income and assets. However, not all assets are created equal in the eyes of FAFSA. How those assets are owned—by the parent, the student, or even a third party—can significantly impact financial aid eligibility.

Here’s the key: FAFSA assesses up to 5.64% of parent-owned assets when calculating the Expected Family Contribution (EFC). For student-owned assets, though, that number jumps to a whopping 20%. So, keeping assets out of your student’s name increases their chances of receiving financial aid.

In other words, parent-owned assets are less punitive than student-owned ones. Consider assets like your savings account, investments, or a 529 college savings plan. If you, the parent, own the asset, only 5.64% of its value is considered in the EFC calculation.

But if your child owns assets outright—like in a UGMA or UTMA custodial account— those accounts will be subject to a 20% assessment. For example, if your child has $10,000 in one of these accounts, FAFSA will expect $2,000 to go toward college costs. Ouch.

What can you do? You can’t legally change UGMA/UTMA account ownership because they belong to the child. However, consider using a 529 plan or a parent’s investment account instead for future savings.

Estate Planning Meets FAFSA

Here’s where estate planning comes into play. By structuring your assets wisely, you can minimize their impact on financial aid. Let’s explore a few strategies:

1. Irrevocable Trusts

An irrevocable trust can be a powerful tool in estate planning and remove assets from a person’s estate for tax purposes. However, irrevocable trusts are counted for FAFSA purposes if the student or parent is a beneficiary of an irrevocable trust. Note that the entire value of the trust should not be reported, but the beneficiary’s proportional share must be reported. In addition, if the trust distributes income to the student, that income will be assessed at up to 50%. So, use irrevocable trusts with caution.

2. Retirement Accounts: Hidden Gems

Good news: FAFSA does not count assets in qualified retirement accounts like 401(k)s, IRAs, and Roth IRAs. This makes retirement savings a double win—you’re preparing for your future in a tax-advantaged manner and protecting your child’s financial aid eligibility.

Pro tip: If you have extra savings that would otherwise count on FAFSA, consider contributing to your retirement account. It’s a FAFSA-friendly way to reduce your countable assets.

3. Pay Down Debt

Another savvy move is using liquid assets to pay down debt, such as mortgages or student loans. Since FAFSA doesn’t count your home’s equity or the balance of your debts, this strategy can reduce your reportable assets without hurting your financial position.

4. Timing Is Everything

FAFSA looks at your financial situation as of the day you file the form. That means you can time certain financial moves to optimize your aid eligibility. For instance, if you plan to sell an investment or receive a large bonus, try to do so after filing FAFSA to avoid inflating your assets or income for that year.

Practical Steps to Take Now

So, what can you do right now to prepare? Here are some actionable steps:

Review Your Assets: List all your family’s assets, including who owns them. Pay special attention to student-owned accounts and assets held in trusts.

Shift Savings to FAFSA-Friendly Accounts: If you’re saving for college, prioritize 529 plans owned by you, the parent. Avoid putting large sums into custodial accounts.

Create a Life & Legacy Plan: Work with me to create a comprehensive Life & Legacy Plan that may include irrevocable trusts or other strategies to protect your assets and your financial aid eligibility.

Max Out Retirement Contributions: If possible, contribute to your 401(k) or IRA to reduce your countable assets while securing your financial future.

Plan Ahead for Income Events: Be mindful of how bonuses, stock sales, or other income events could affect your FAFSA profile. If possible, defer these until after filing.

The Big Picture

Balancing estate planning and FAFSA eligibility can feel like walking a tightrope. On one hand, you want to preserve your family’s wealth and secure your child’s future. Conversely, you don’t want to leave money on the table regarding financial aid.

Understanding how asset ownership works and taking strategic steps can position your family for success. Whether it’s shifting assets, leveraging trusts, or timing your financial moves, a little planning can go a long way. And when that acceptance letter arrives—along with a generous financial aid package—you’ll be glad you took the time to get it right.

How We Help

We can help you create a comprehensive strategy that optimizes education funding and wealth preservation goals. We’ll work with you to structure your assets effectively and ensure your plan adapts as the law, your assets, or your family dynamics change. Our approach focuses on creating clarity and consistency across all aspects of your financial planning, from education funding to legacy preservation.

Book a call to learn how we can help you create the right plan for your family. Contact us today to get started.

Tags Custodial Accounts, Estate Planning, FAFSA, Financial Planning, Personal Family Lawyer, Strategy

Estate Planning

Our Top 10 Most Common Estate Planning Questions: Part 2

Post author By Sara Thomas
Post date January 23, 2025
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When planning for your family’s future, the options can feel overwhelming. Should you get a will? Create a trust? And what happens if you do nothing at all? These aren’t just academic questions – your choices today will impact your loved ones tomorrow. In this second installment of a two-part Q & A series, I’ll break down the key differences between your primary estate planning options and explore practical ways to ensure your family is protected, no matter what the future holds. So, let’s dive in, beginning with a question about the basic estate planning documents.

Q: What is the difference between a will, living trust, and dying intestate? And what does that mean, practically speaking?

A: If you die without an estate plan, you do have a plan – it’s just the plan chosen for you by the state, and you may not like it. Your loved ones probably won’t like it because it means they’ll likely need to deal with a court process called “probate.” When you die without a will, it’s called dying “ intestate,” and it means that your assets are distributed according to state law after a process in which a judge decides who gets what. This could mean your assets would not go to the people you choose in the way you choose, and your family could face a lengthy, expensive, and public court process during an already difficult time.

A will is your basic instruction manual for what happens to your assets after you die, but it still requires your family to go through the probate process. While a will allows you to name guardians for your minor children and specify who gets what, your “executor” or “personal representative” must file the will with the court and potentially wait months or even years before receiving your assets. Plus, everything becomes public record – so anyone can look up what you owned and who got what, leaving the inheritors open to predators.

If you create a trust, your assets can be passed to the people you choose without a court process and completely privately. Think of a trust as a container that holds your assets during your lifetime. Then, upon your incapacity or death, a successor trustee you’ve named can step in to handle your assets, manage your affairs, and pass your assets to your chosen beneficiaries. With a properly funded trust, your beneficiaries could receive their inheritance within weeks or months instead of months or years.

Q: Is probate always required when someone dies?

A: The necessity of probate depends largely on how your assets are titled when you die and the total value of assets in your personal name at the time of your death. Assets solely in your name with no beneficiary designation must go through probate, and a Judge must order the distribution. Some exceptions: jointly owned property automatically passes to the surviving owner, assets with named beneficiaries (like life insurance policies and retirement accounts) go directly to those beneficiaries, and assets held in a properly funded living trust transfer according to the trust’s instructions, without court involvement.

These issues can be complicated and have a huge impact on your loved ones, so it’s important to work with a trusted advisor who can help you understand your goals, and then properly structure your assets to accomplish your goals, especially if you want to keep your family out of court and out of conflict. Keep reading to find out how I can help.

Q: What if I’m uncomfortable talking about death and money?

A: While it’s completely natural to want to avoid thinking about death and avoid talking about money, not planning for the reality of death or a possible incapacity before death can leave your loved ones with an expensive, time-consuming mess to clean up during what will already be an emotionally difficult time. Here’s what you absolutely must know: First, if you become incapacitated or die without a plan, the court will make all the decisions about your care and your assets according to state law, not according to what you would have chosen.

Second, if you have minor children and no estate plan, the court will decide who raises your children and who takes care of the assets you leave behind without your input. Think about that for a moment. A judge is a stranger to you and your kids, yet that’s who will decide your children’s future – who makes decisions about their education, health matters, and financial affairs. And, then, whatever you leave behind and whatever is left after the court process goes to your children when they turn 18 without protection (i.e., they’ll be free to spend it all as quickly as they want). If that concerns you, you need a plan of your own.

Third, your family will likely have to spend significantly more time and money dealing with your affairs if you don’t have a plan than if you had taken the time to create one. The good news is that making a plan doesn’t have to be overwhelming or uncomfortable—working with a trusted advisor who can guide you through the process step by step can bring you peace of mind, knowing you’ve taken care of the people you love.

Q: How can you minimize your family’s stress by handling these matters the simplest way possible?

A: The best way to minimize stress for your family is to create a clear, comprehensive Life & Legacy Plan before anything happens to you. Many people think creating an estate plan will be stressful, but lack of planning causes the most stress for families.

I make the process simple:

First, I help you understand what you own and what would happen to everything you own and everyone you love (including yourself) when something happens to you. Then, I support you to make informed, empowered choices about who should receive your assets, who should carry out your wishes, and how you want it all handled. Finally, I help ensure your plan will work when your family needs it by supporting you to review your plan regularly as your life changes and ensuring we maintain an updated inventory of your assets to ensure none of your assets are lost to the state due to oversight after your death.

Beyond creating the right legal documents, I’ll support you in other ways to make things easier for your loved ones. I’ll help you document specific wishes for personal items with sentimental value and have conversations with your loved ones about your choices so there are no surprises later. We’ll conduct a Life & Legacy Interview so you can pass on your values, insights, and stories – the intangible (and most important) assets that are often lost when someone dies. Most importantly, I will be there for your family when you can’t be there, to guide them through the process and ensure your wishes are carried out properly. This is the power of our Life & Legacy Planning® process.

How We Help You Create Peace of Mind

We understand that thinking about death and money can feel overwhelming. We’ve created a simple, step-by-step process to help you get your affairs in order and protect your family. Our Life & Legacy Planning process goes beyond just creating legal documents – we help you make informed decisions about your family’s future, keep your plan updated as your life changes, and ensure your wishes will be carried out properly when the time comes. Most importantly, we’ll be there for your family when you can’t be, providing the guidance and support they’ll need during a difficult time. You’ll gain peace of mind knowing you’ve done everything possible to make things easier for the people you love.

Tags Dying Intestate, Estate Planning, Estate Planning FAQs, Living Trust, Personal Family Lawyer, Probate, Will

Estate Planning

Our Top 10 Most Common Estate Planning Questions: Part 1

Post author By Sara Thomas
Post date January 16, 2025
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Regarding estate planning, I get many questions about many topics. One of the most common questions I hear concerns account ownership and asset management. Understanding how accounts are titled and who has access to them isn’t just about convenience—it’s about ensuring your assets transfer smoothly to your loved ones while protecting them from potential risks.

In this first installment of a two-part series, I’ll answer the most common questions about asset ownership and management. I’ll also outline ways in which you can make things as easy for your family after your death. So, let’s dive in, beginning with a question about joint assets.

Q: What’s the difference between joint ownership and transfer-on-death designation?

A: Joint ownership means both parties have full access to and ownership of a specific account or piece of real estate while they are alive. When one owner dies, the surviving owner automatically receives full ownership. This can be convenient but comes with risks—a joint owner can withdraw all the money at any time, and the account could be vulnerable to either the joint owner’s creditors or legal judgments.

On the other hand, transfer-on-death (TOD) or payable-on-death (POD) beneficiary designations give you sole control during your lifetime. Your designated beneficiary has no access or rights to the account while you’re alive but receives the assets automatically upon death. This arrangement prevents another person from accessing your assets while you’re alive and avoids the court process (called probate) after you die.

One important note: When you have a joint owner on your account or a designated beneficiary, that person will receive all the funds after you die, no matter how old they are or what your family dynamics are. This can create conflict in your family or cause someone fiscally irresponsible to inherit a windfall with no safeguards potentially. Lawsuits are filed all the time by disgruntled siblings who find out that the caretaker sibling receives all the money in a parent’s account (or sole title to real estate) rather than being distributed equally among all siblings. If this concerns you, read on to find out how you can book a call with me to learn about your options.

Q: If I hold my property jointly or use a TOD or POD, do I need to have a Trust?

If you use joint ownership or TOD/POD instead of a Trust, you need to consider some traps for the unwary. First, as indicated above, jointly owned property could be at risk from creditors of either party. I think of my client, the granddaughter, who was titled on grandma’s bank account. When the granddaughter’s husband didn’t pay the bill on the copier contract for his business, the copier company sued and got a judgment against him. Next thing you know, grandma’s account gets garnished because it was held jointly with the granddaughter, and so the granddaughter was liable on the copier judgment.

Suppose you use a TOD or POD to avoid a scenario like that. In that case, the problem is that the TOD/POD only operates in the event of death, not incapacity, and TOD/POD could result in the wrong person ending up getting the assets or the assets ending up in probate if there is an unexpected “order of death” issue. Imagine grandma leaving the house to grandson using TOD, but grandma and grandson are in the car together when there’s an accident, and grandson dies first, with grandma dying shortly thereafter, and before she could change the TOD/POD. Who gets the property, and how? In this case, the property would have to go through probate and pass to grandma’s “next of kin” according to the state intestacy statutes. Given that grandma was leaving her property to her grandson, she likely didn’t want the “state’s plan” for her assets. But that’s what she’ll end up with.

The solution is not to use joint ownership or a TOD/POD to pass title to assets at your death. Instead, set up a trust and retitle the property. Then, everything can be handled easily, privately, and in our office for the people you love.

Q: What happens to retirement accounts and life insurance policies after death?

A: These accounts pass directly to your named beneficiaries, bypassing probate and any instructions in your will, as long as you have named beneficiaries and if you haven’t named a minor as a beneficiary. This is why keeping your beneficiary designations up to date is crucial. If your beneficiary designations are outdated – listing an ex-spouse or deceased person, for example – your assets might not go where you want them to. Even worse, if no beneficiary is listed, these accounts would go through probate, costing your loved ones unnecessary time and money. Suppose you’ve named a minor as a beneficiary. In that case, assets will be subject to a court process to hold the assets under court order until your minor beneficiary is “of age” – usually 18 or 21, depending on state law.

Q: Do I need an inventory of my assets?

A: Yes, and it’s critically important that you create an inventory and keep it current. We include this in all of our planning options because it’s one of the most critical parts of the planning process, even though, surprisingly, it’s not part of most estate planning with traditional lawyers or legal insurance plans. Our unique Life & Legacy Planning^Ⓡprocess includes an asset inventory because if you don’t inventory your assets, your family will not know what you have, how to find it, and how to access it as easily and affordably as possible. Lost assets end up in your state’s treasury as unclaimed property. According to the National Association of Unclaimed Property Administrators, approximately 1 in 7 people in the U.S. – or about 33 million people – have unclaimed property, totaling roughly 77 billion dollars. You need an asset inventory if you want to ensure that your assets go to the people or charities you want rather than to your state government’s unclaimed property fund. And it must stay up to date.

Q: How often should I review my asset inventory and account designations?

A: Your inventory and beneficiary designations need to be kept updated over time to reflect your current circumstances when you die. Your Life & Legacy Plan includes regular, ongoing reviews of your asset inventory so no asset gets lost.

It’s also important to update your asset inventory and account designations whenever you experience a significant life event such as:

Marriage or divorce
Birth or adoption of a child
Death of a beneficiary
Purchase or sale of significant assets
Moving to a new state
Starting a business
Retirement

When you work with me, you won’t have to remember this alone. I’ll proactively remind you to update your inventory and beneficiary designations and help make it as easy as possible for you to take action.

Q: What’s the best way to organize and store my asset information?

A: Create a clear, organized system that your loved ones can easily access if something happens to you. However, be careful about including sensitive information like passwords in your will, as it becomes public record after death. Instead, consider keeping this information in a secure location and telling your trusted family members, executor, or trust administrator how to access it. I will help you explore the best way to do this when we work together.

How We Help You Get Organized and Protected

We help you create a comprehensive Life & Legacy Plan that includes a complete asset inventory, proper account titling, and coordinated beneficiary designations. We’ll help you understand the implications of different ownership structures and guide you in making the best choices for your family’s unique situation. Plus, we’ll help you keep everything updated through regular reviews, ensuring your plan continues to work as intended. You’ll gain peace of mind knowing that your assets will go to the people you want in the way you want.

Tags Asset Inventory, Estate Planning, Estate Planning FAQs, Joint Ownership, POD, TOD

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