The Top Estate Planning Errors and How To Avoid Them

The Top Estate Planning Errors and How To Avoid Them

Probate & Estate, Wills

There are many myths and misconceptions about estate planning. In this article, we’ll discuss the top common mistakes and how to avoid them, which will help your family save thousands of dollars in unnecessary taxes and probate fees:

Not naming your beneficiary
Failure to name your beneficiary could subject your estate to probate, creditors and delays.

Outdated wills and trusts
Revisit your will or trust every few years. Many changes take place within a family or business structure. Ensure the assets you leave behind are given to the people you intend to have them.

Leaving assets directly to a minor without appointing guardianship
Who will handle a child’s inheritance? The phrase “for their benefit” welcomes a whole host of potentially abusive interpretations. Make sure to address this in your estate plans to avoid any misinterpretations.

Lack of proper records
You ought to keep thorough records. If you don’t, your Executor or Trustee may miss out on assets, be left with unpaid liabilities, and have more work to complete. Additionally, it might require extra time from your probate lawyer, which would cost more money for your family.

Ownership imbalances
If too many assets are in one spouse’s name, it could wreak havoc when it comes to tax planning. One spouse could have a much larger IRA and own a vacation house in his or her name only. By shifting the house or investment to the other spouse, the estate becomes more equalized, possibly reducing taxes.

Not having a residuary clause
A residuary clause covers items not named in a will or included in a trust, typically including items you don’t yet own but will before your death. Sometimes there are things you might not even know you own.

Not planning for the unexpected
Many things can happen, such as a sudden decline in your spouse’s health or a change in your assets. You can address this by having assets go to a trust. You can control how, to whom and when money gets distributed.

Improper planning for your death
Appropriate planning for the inevitable is vital. It’s important to have a financial Power of Attorney, an Appointment of Health Care Representative and a Living Will to avoid leaving your finances and assets in disarray.

Forgetting to remove an ex-spouse on an IRA
Many people aren’t aware that when you remarry, your new spouse becomes your beneficiary on the day you get married, but not in an IRA. This can have disastrous consequences for your new spouse and family.

Not planning for disability
An unexpected long-term disability can affect your personal and financial affairs in many different ways. Decisions like who will handle your finances, who will raise your children or make health care decisions on your behalf are essential. It may be necessary to appoint a power of attorney or create a living trust to work on your behalf if you cannot do it for yourself.

Chances are, you already know you can benefit from having an estate plan. Not only can it help maximize the actual value of the estate you pass on to your heirs and beneficiaries, but you’ll also have an opportunity to make informed decisions concerning how your assets should be handled while you are still alive.

We can help you put together a clean and concise estate plan. Contact Chuck Bendig today.

What happens to her if something happens to you?

What happens to her if something happens to you?

All, Child Custody, Probate & Estate, Wills

It sounds simple; You just want to give your assets to the people you love in a way that provides for those that can’t provide for themselves and avoids fighting so the family stays strong.

Should I download a Will template or should I meet with a lawyer?

Family structures have gotten pretty complex in the last few decades. With many couples electing to not marry and live together with or without having children, with divorce rates over 60%, and remarriages extending core families, there are lots of horror stories stemming from Wills that weren’t written properly. Loopholes and estate plan ambiguity can provoke your loved ones to contest your Will and file lawsuits to claim what is “rightfully theirs”. Ohio inheritance laws update frequently. Uncle Sam may (but not often) want a piece, how can you minimize the tax? An estate lawyer can be extremely helpful.

What is actually yours to give?

If you’re married, divorced with children, or have contracts (i.e. prenuptial agreements and/or certain trusts), you may have restrictions.

What should your Will include?

Here are a few basics:

Beneficiaries are people you choose to receive real property or personal property in the form of cash or assets. It’s common to name your spouse, children, friends, charities, or other family members.

Executor is the individual who will carry out what’s written in your Will. You can choose whomever you like, but most people choose a responsible friend or family member. If you don’t name an executor, often this job falls into the hands of an administrator who has to pay for a bond.

Parental guardian: If you are caring for young children, it’s important to name the person(s) you want to raise your children should you pass away. Since this is a major life endeavor for the person or people you name, list a few individuals in case one or two of them are not in a position to take on this role at the time of your death.

What should be left out of your Will?

Conditional gifts: You are not allowed to leave conditional gifts, such as bequeathing money to a beneficiary on the condition that they get married, get divorced or make some other life change. Although it may make for a good movie plot, in real life, it’s just not legal.

Final arrangements instructions: Your Will is typically not read until after the funeral, so your requests may not be carried out.

Allocate property to pets: Pets cannot legally inherit any assets. This kind of thing happens more often than you would think! Create a Pet Trust and leave assets in the care of a Trustee for the benefit of your pets.

Should I include a personal note?

You can attach a personal note to your Will as a way to say goodbye to loved ones. It’s a good way to personalize a somewhat sterile document. Some people leave a video.

Your Will may not be the only part of an estate plan. Various trusts can be of enormous help and may have advantages over a Will. You also can leave assets to transfer at death outside of Probate Court. The most important thing is to make sure your Will is as clear as possible so that your wishes are fulfilled correctly.

Contact Estate Planning Attorney Chuck Bendig to get started.

Setting the record straight: Myths of the Living Trust

Setting the record straight: Myths of the Living Trust

Probate & Estate, Wills

If you’re reading this, chances are you have already thought about setting up a living trust.

First, let’s define the benefits of a living trust.

A living trust allows you to retain control over the trust property until death. Then, the trust is turned over to the successor trustee, chosen by you, to distribute the trust property according to your wishes. This helps to avoid probate, resulting in a faster and easier distribution to your beneficiaries without the additional costs that are often associated with probate. It also maintains your privacy since its provisions stay confidential, compared to a last will and testament, which becomes a matter of public record.

You can update a revocable trust at any time during your lifetime. Revocable living trusts are used to protect your property until your beneficiary is mature enough to make wise decisions about their inheritance.

Next, let’s delve into some common myths about a living trust.

Myth #1: Living trusts are only for the wealthy.
While it is true that many wealthy people set up trusts, it doesn’t mean that this option is only for the rich. In fact, many people with average incomes find living trusts to be extremely beneficial; especially those with children or dependents.

Myth #2: Living trusts only benefit beneficiaries, not the people making the trusts and not you, the grantor.
In fact, a trust allows for easier handling of your affairs if you become incapacitated, and makes things much less stressful for your loved ones that are left to care for your affairs when you’re unable to do so.

Myth #3: You can’t access funds once they’re in a living trust.
This ignores the “living” part of the living trust. All funds and assets can be made as accessible as you wish, to you or to whomever you choose. You can structure the trust so that everything is accessible to you and you alone until your death.

Myth #4: Creating a living trust is expensive and complicated.
Setting up a trust may cost a bit more up front than a last will and testament, but the cost savings later can make up for these expenses in the long run.

Myth #5: A will can do the same things a trust can do.
A living trust adds flexibility. For one, it allows you to give your hard-earned money and property to those you care about while still protecting it for them. For example, if you have beneficiaries who you feel are not able to handle large sums of money on their own yet. Maybe your potential beneficiary is struggling with debt or an unstable marriage; a living trust may be the perfect instrument for you.

Have a discussion with estate planning attorney Chuck Bendig. Call 614.878.7777

This video contains my Last Will and Testament

This video contains my Last Will and Testament

Wills

Have you ever thought, ‘When I die, I’ll leave a video for my loved ones’? More and more people are preparing a video in which they read their will and explain why they’ve left certain belongings to some and not others. The recording can show the execution of the will and can be compelling proof that you were mentally competent, but is it a good idea?

Let’s explore some of the pros and cons of a video will.

Pros:

A video Will can head off claims that you weren’t of sound mind or were being unduly influenced in some way when you signed your will. A video will help in the event that someone is disappointed and decides to hire a lawyer to contest your Will. The video can also show you and your witnesses signing your Will. In this case, it clearly demonstrates that you were rational, knew the contents of your Will and were expressing your own wishes.

A video Will can supplement your formal estate plan: For example, if you want one child to serve as an executor, a video Will is your chance to say so. Your other children or family won’t be left to wonder about your actions. If you want to get into detail, a video Will can also express how you’d like your family to divvy up items of sentimental value.

Cons:

(This is a big one.) Although you may use your video Will to convey how your family should distribute sentimental items, you need to know that your wishes are not legally enforceable. Meaning your video won’t be accepted by a probate court, a bank, or any other institution that controls assets in your name. Only a formal paper Will is legally enforceable.

Videos don’t last forever and therefore, are subject to damage.

If you opt for a video Will, consider it as an add-on to a formal, legal, paper will, filed by an estate planning attorney, and remember these tips:

  • Use a quality camera that clearly identifies your face.
  • Speak clearly without distortion and eliminate as much background noise as possible.
  • Keep the video-captured area at medium close-up.
  • The video cannot be edited and must be submitted with any kind of technical data necessary to play it back.
  • Some states want you to be sworn in by a person authorized by law to take oaths.
  • Prior to administering the oath, any officers of the court have to identify themselves on camera.
  • Mention the date, time and place of the recording prior to recounting your last wishes and the recorded names of your beneficiaries, as well as the names and addresses of the will’s witnesses if they’re not present at the taping.
  • The video Will should run without interruption.

Remember, it’s still the law that to be valid, a Last Will and Testament must be on paper and signed. If you have nothing but a recording of the deceased person’s last wishes, you’re unlikely to have a Will that will hold up in court.

It is important to consult with a legal professional about the laws and regulations in your jurisdiction to determine the validity and suitability of a video Will.

Finally, keep in mind that a Will, in either written or video form, is not the only estate planning tool you have. Various trusts can also help make sure your estate is left according to your wishes.

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When should I begin my estate planning?

When should I begin my estate planning?

Probate & Estate, Wills

There’s an easy answer to this. It’s never too early. You’ve heard tomorrow isn’t promised. It’s true. At worst, you could die before getting around to executing a plan, and that could leave your heirs with a costly, divisive mess.

What happens if you suffer a debilitating health crisis that prevents you from seeing that your wishes are carried out, or even prevents you from signing essential documents?

Did you know that applicable laws that are favorable to you now may be changed to be less so later? The more years that slip by, the more vulnerable you become to being taken advantage of because of your advanced age.

If your needs change in the future, you can modify your plan; although prospective change isn’t a valid excuse for delay. Do your best to look out for yourself and for your family now, and be sure to keep your plan current. Make sure that you have the right documents and that they are in keeping with estate laws now and in the future. An estate & probate attorney can help you with this.

Here is a quick summary of the estate-planning process

Getting started on estate planning can be a lot simpler than you think. To start with, you will want to go through these basic steps:

Take inventory of your assets, including investments, retirement accounts, insurance policies, real estate holdings and valuable items including your digital assets.
Determine your goals and your inheritors. If you have minor children or elderly loved one, who will care for them when you are gone?
Designate a person that you trust to manage your business affairs; Power of Attorney.
Designate a person to direct your medical care should you become incapacitated; Power of Attorney Healthcare
Designate an Executor to implement the directives outlined in your Will.

After deciding what kinds of bequests you wish to make, it’s important to discuss your plans with your heirs. You don’t want to leave any unpleasant surprises. Think about how best to leave your assets. A simple Will may not be the best option. An attorney can help you with a variety of trusts, which have many advantages in creating an estate plan.

I can’t stress enough that the earlier and the greater the degree of clarity you use when you outline your plans to family and friends, the less chance there will be for disagreements when you are gone.

Who Should Be Your Inheritors?

Who Should Be Your Inheritors?

Probate & Estate, Wills

If you’ve thought about estate planning and have contemplated when and how to distribute your assets to your heirs, read on. You probably imagine that this process will entail a series of trade-offs to prevent emotion-laden family problems. However, when you focus on numbers, you’re dealing with objective and straightforward facts.

But, you are in murkier waters when considering who should inherit your wealth, and you understand that emotions will most likely factor into those decisions. The truth is, there is no correct answer to how to distribute your estate. But here are some questions that will help frame your thinking:

  • How much would you like to leave to charity and how much to your family?
  • Will you divide your assets equally among your heirs, or on some other basis, like need or good behavior?
  • What form does your estate take? Is it cash, securities or some other assets? Do you want to give these outright or leave them in a trust?
  • Can the heirs you chose to handle the responsibility of managing their own finances, or will they need help?
  • If you use a trust, will there be provisions, what will they be and whom will you designate as the trustee?

Maybe we should take a step back and clarify what exactly an heir is. An heir is a relation who potentially is entitled to money or property after you die, such as a spouse or child. Laws in each state outline the exact order in which heirs inherit property, but the list stops at a certain point. Not every heir automatically inherits.

The term “heir” is often used when someone dies without a will. When that happens, the estate administrator tries to find who rightfully inherits the property.

A “beneficiary” is a person or an organization who receives money or property by being specifically named in your will or trust. Beneficiaries can include charities, descendants or close friends, and even places of worship.

If you leave a will, beneficiaries often have more rights to whatever assets remain after probate. If you don’t leave a will, the assets go to the first heir in line, and the process continues until a living blood relative is found. Keep in mind that rules may vary depending on the jurisdiction.

Trusts can help ensure the people you want to get your assets, in the form you want. Ensuring the transfer of your hard-earned assets to your heirs is a crucial part of a well-thought-out estate plan. Although it may be uncomfortable to have a conversation like this with your spouse, your children, and other possible heirs, it will enable them to ask questions and clarify what your exact wishes are. While the estate planning talk deals with sensitive issues, it will mean a smoother transition for your heirs after your death.

Get started with your estate plan.