Think of your estate plan as a living entity that needs to evolve with the changes in your life. Various life events such as the birth of a child, children growing up, changes in the family dynamics, fluctuations in your investment portfolio, career shifts, health changes, or relocation can all impact your estate plan.

External factors like new tax legislation or innovative financial instruments can also affect your estate plan. They may necessitate adjustments or present fresh opportunities for optimizing your assets’ distribution.

Regular reviews don’t mean constantly obsessing over your plan. Instead, think of it as a periodic “health check” for your estate plan, helping ensure it continues to serve your interests and protect your legacy effectively.

Key Questions for Your Estate Plan Review

To help you assess if it’s time to revisit and update your estate plan, consider these critical questions:

• When did you last update your will or living trust? Life events such as the arrival of new children, divorce, relocation, or changes in your business could all warrant an update to these documents. Legal changes since your last review could also impact your estate plan’s effectiveness.
• Who have you appointed as your executor and trustee? If you were to start your estate planning today, would you still choose the same individuals for these roles? Your choices should reflect their suitability for the role rather than personal relationships. Ensure the individuals selected are still willing and able to fulfill these responsibilities.
• Is your insurance coverage sufficient? Many people underestimate the amount of insurance they or their businesses need. Also, remember to name contingent beneficiaries and ensure these designations align with your estate plan.
• Do you jointly own property with someone other than your spouse? Such properties could potentially be subject to double taxation. Seek professional advice on how to structure your assets optimally for tax efficiency.
• How organized are your records? Clear and orderly record-keeping can significantly ease the executor’s job and help prevent potential disputes or delays.
• When did a qualified attorney last review your estate plan? Even if there haven’t been significant changes in your life, if it’s been over five years since an expert last reviewed your estate plan, it’s time for another checkup.

After reflecting on these questions, if you find areas of concern or uncertainty, don’t hesitate to reach out to us. We’re here to assist you in ensuring your estate plan remains robust, relevant, and capable of withstanding the test of time.

Remember, estate planning is more than a document; it’s a dynamic process designed to provide peace of mind and secure your legacy.

1. It is Only for the Rich

Often, when we see headlines about estate planning, they’re typically focused on high-profile individuals – wealthy entrepreneurs or celebrities who’ve either neglected to create an estate plan, made a mistake in their plan, or have caused a family feud over their estate.

This generates the perception that estate planning is only for the rich, who can afford to hire professionals to manage their substantial assets. Many ordinary people might consequently dismiss the idea of creating an estate plan, assuming their assets are too insignificant to warrant one. However, this assumption couldn’t be more incorrect.

Estate planning isn’t merely about wealth distribution. It’s a comprehensive process that not only determines the allocation of your assets after your demise but also addresses potential scenarios where you might be incapable of making decisions for yourself. This latter situation is, in fact, more likely to occur than not.

Without an estate plan, if you become incapacitated, the court will have to designate someone to make crucial medical and financial decisions on your behalf. This procedure can be lengthy, costly, and public, potentially causing conflict within your family if there’s disagreement over who should be appointed and how decisions should be rendered.

Importantly, even if you consider your resources to be modest, it’s worth contemplating who would inherit your hard-earned savings upon your death. Without an estate plan, this decision falls to state law. Often, the state’s assumptions about your wishes may not align with your actual intentions. But without an estate plan formalizing your preferences, the state has no choice but to intervene.

Estate planning is for everyone, regardless of the size of your assets. It’s about ensuring your wishes are honored and your loved ones are protected, no matter what the future holds.

2. My Partner Will Inherit Everything

It’s a common practice for married couples to jointly own property and bank accounts. The principle of joint ownership or tenancy by the entirety stipulates that upon the death of one spouse, the surviving partner automatically becomes the sole owner. This arrangement often suits many couples.

However, it’s important to recognize the potential pitfalls of this approach. While it may seem straightforward for assets to automatically transition to the surviving spouse, this method lacks any form of safeguarding. Imagine a situation where you are sued following a car accident after your spouse has passed away. All the assets that have transitioned to your ownership are now exposed to creditors and can be used to settle any legal claims against you.

Moreover, consider what could happen if your spouse remarries after your death. The assets that were once jointly owned could now be spent without any regard for your original intentions or the interests of your children. This concern is especially relevant today, given the prevalence of blended families.

Estate planning isn’t about excluding your spouse from your assets. It’s an opportunity for both of you to discuss and decide how your shared assets should be handled upon either’s death. This process ensures the financial security of the surviving spouse and allows any remaining assets to be distributed according to both parties’ wishes. Therefore, estate planning provides control over your financial legacy and peace of mind for your family.

3. I Already Have a Will, I Don’t Need an Estate Plan

Even though many people believe that creating a will can help them avoid probate, this isn’t necessarily the case. The will must still go through probate court for the assets to be distributed.

In some jurisdictions, if the estate’s value is below a certain amount, it’s possible to file a petition to distribute the assets without going through the usual probate process. Similarly, in certain states, an affidavit can be used to gather and distribute assets if their total worth falls under a specified limit.

Probate processes can either be supervised or unsupervised. Supervised probate involves a probate judge who oversees every step of the process and approves the actions of the personal representative. On the other hand, unsupervised probate can be an option when there are no disputes, and all involved parties are cooperative. However, certain documents may still need to be filed.

Regardless of being supervised or unsupervised, both types of probate can be time-consuming and might expose personal and financial affairs as public record.

Your peace of mind is our priority

Our dedicated team is on standby to address all your inquiries regarding estate planning and the intricacies of the process. We believe in crafting unique, tailored plans that offer the right protection for you and your loved ones. Don’t hesitate to reach out to us today.

Throughout our lives, we accumulate various belongings, some of which hold sentimental value or monetary worth. It’s crucial to ensure these items are allocated according to your wishes after your death. Here’s how you can ensure a smooth distribution process.

How to Distribute Your Belongings

Use a Personal Property Memorandum: If you want a specific item to go to a certain individual, you can create a personal property memorandum. This document should be linked to your will or trust, and it allows you to specify who gets what. You might, for example, leave your gold pocket watch to your nephew, Bill Smith. Make sure the items are clearly described and the recipients are specifically named. Changes to this document must comply with your state’s laws.

Hold an Auction: If your aim is to divide your belongings equally among several beneficiaries, you could use play money to conduct an auction. Each beneficiary gets an equal amount of play money to bid on items. This method ensures everyone has an equal chance, regardless of their real-world wealth.

Take Turns Picking: Gather all your belongings in one place and allow each beneficiary to select an item in turns. To keep things fair, you could have beneficiaries draw numbers to decide the order of selection. This method works best when the items are of similar value, ensuring everyone receives an equal number of items.

Other Important Factors

Provide Clear Guidelines: If you’re leaving the distribution to a trustee or representative, make sure you provide clear guidelines to prevent disagreements among beneficiaries.

Involve Your Loved Ones: If you’re unsure how to distribute your belongings, involve your loved ones in the planning process. You could use stickers or sticky notes to mark desired items, resolving any conflicts while you’re still alive. Don’t forget about younger family members who might appreciate something of yours after you’ve passed.

Consider keeping collection together: When distributing a collection, consider whether you want the collection to be divided among multiple people or given entirely to one person. Some collections may be more valuable if all of the pieces are owned by the same person, especially if the collection is complete.

It’s important to make these decisions while you’re still alive. Without clear instructions, your loved ones might face disputes and possible legal battles. We’re here to help you establish a clear strategy and document it properly. We offer both in-person and virtual meetings for your convenience.

Inheriting wealth is a major event that, if not managed correctly, can lead to financial missteps and potential loss. Individuals who receive an inheritance often face challenges in managing their newfound wealth due to a lack of experience, existing debt issues, or tax complications.

However, proactive estate planning can help mitigate these problems, ensuring that the inherited wealth is used wisely and effectively.

The Impact of Inheritance on Estate Plans

An inheritance can significantly alter your financial landscape, necessitating a review and possible adjustment of your tax and financial strategies. It may also increase your risk of legal claims as people tend to target those with perceived wealth. If this is your first experience with substantial assets or investments, an estate plan can establish measures to manage and safeguard your wealth.

If you already have an estate plan, it’s crucial to revise it to include your recent inheritance. More assets may require a change to ensure your wishes are correctly implemented. This is especially true if your family structure is complex, if your assets now exceed $11 million, making your estate taxable, or if your initial estate plans involved a philanthropic approach. By carefully planning how to use your inheritance – whether for immediate or long-term financial goals – you can prevent the squandering of your newfound wealth.

Safeguarding Your Family’s Wealth

Receiving an inheritance also presents an opportunity to conserve your family’s wealth for future generations. Unfortunately, studies show that 70 percent of affluent families lose their wealth by the second generation, and 90 percent by the third generation.

A key reason behind these startling statistics is poor intergenerational communication about money matters. Hence, it is vital to take active steps to ensure long-term wealth preservation. Discussions about money are often avoided due to fears of creating a sense of entitlement among younger generations, concerns about privacy, or because talking about finances is considered taboo. But with open and honest dialogue, and careful planning, your family can avoid the common pitfall of wealth dissipation within a few generations.

Estate planning can lay the groundwork to ensure assets are managed effectively and preserved, rather than wasted. It can also help transform wealth into a positive legacy rather than a source of problems or societal issues.

Consulting Experts

Inheritances can deplete more rapidly than expected without proper planning. If you’ve recently inherited wealth or anticipate doing so soon, it’s essential to seek financial and legal advice.

Don’t hesitate to reach out to us for an appointment to discuss how we can assist in preserving your family’s legacy.

Establishing a trust is akin to nominating a financial guardian who takes charge of your financial affairs. The role of a trustee is multifaceted, encompassing tasks like collecting income, paying bills and taxes, saving and investing for the future, buying and selling property, providing for your loved ones, maintaining accurate records, and ensuring everything is organized and in good order.

Who Can Be Your Trustee

Interestingly, if you have a revocable living trust, you can don the mantle of a trustee. For married individuals, their spouse can serve as a co-trustee, providing continuity in handling financial affairs if one becomes incapacitated or passes away. This arrangement is common among couples who jointly own accounts and property. However, being your own trustee isn’t obligatory. Some people opt for an adult child, a trusted friend, or even a professional or corporate trustee such as a bank trust department or trust company.

The decision to appoint someone else as a trustee doesn’t mean relinquishing control. The chosen trustee is legally bound to adhere to the instructions in your trust and keep you informed. Moreover, you retain the right to replace your trustee if you change your mind. This flexibility ensures that your trust is managed according to your wishes and best interests.

Professional or Corporate Trustee – A Worthy Consideration

There are circumstances where a professional or corporate trustee’s expertise proves invaluable. These include scenarios where you may be elderly, widowed, or in declining health with no children or other trusted relatives living nearby. Perhaps your other candidates lack the time or ability to manage your trust, or maybe you don’t have the time, desire, or experience to manage investments by yourself. Certain irrevocable trusts might also prohibit you from serving as a trustee due to tax law restrictions. In such cases, a professional or corporate trustee, with their experience, time, and resources, can effectively manage your trust and help meet your investment goals.

However, it’s important to note that professional or corporate trustees do charge a fee for their services. But when you consider their experience, the range of services provided, and the potential investment returns they can deliver, the fee is generally quite reasonable.

What’s next?

In conclusion, before making a decision, it’s crucial to evaluate whether you are the best choice to be your own trustee, consider appointing a co-trustee, assess your trustee candidates carefully and realistically, and if considering a professional or corporate trustee, speak to several to compare their services, investment returns, and fees.

Remember, we’re here to assist you in selecting, educating, and advising your successor trustees, ensuring they have the necessary support and knowledge to carry out your wishes. Don’t hesitate to reach out to us today.

Research conducted in 2012 revealed that approximately a third of Americans who inherit money end up with negative savings within two years. Among those who inherit $100,000 or more, almost one in five lose it all through spending, donations, or mismanagement.

If you’re about to inherit, there are several measures you can take to ensure your newfound wealth lasts longer than a few years.

1. Don’t Rush Decisions

Put your inheritance in a safe place temporarily, like a savings account, money market, or CD. This will give you enough time to plan on how you should manage the inheritance. Invest in a long-term money plan or create an emergency fund that is enough to cover your cost of living for 6 months.

If you’re married, you also need to decide if the inheritance should stay in your name or become joint property with your spouse. Be extra careful if you’re thinking of giving some of it to your kids. There might be tax consequences you should know about.

2. Boost Your Retirement Savings

If you’re working and not saving the most you can in your 401(k), think about adding more, especially if your employer matches your contributions. If you don’t have a 401(k), start an IRA. Keep this in mind: if you’ve inherited a traditional IRA, the money you take out will be taxed. To pay less tax, only take out what you have to, and let the rest grow inside the inherited IRA.

3. Assemble a Team of Experts

To create a long-term strategy for your inheritance, it is highly recommended that you seek professional assistance. Here are the people that can help:

• Financial Advisor: They’ll look at your money situation now and help you plan for the future. This includes investing, choosing the right insurance, handling debt, saving for college, and getting ready for retirement. They can also help you reach big goals like buying a home or starting a charity.
• Accountant: They’ll help you keep track of your money and pay as little tax as possible.
• Estate Planning Attorney: They’ll work with you to create a plan for your inheritance. This includes making sure your will is up-to-date, finding ways to lower estate taxes, setting up a plan for giving, making sure your money goes where you want it to, and protecting your inheritance from debts, bad actors, and legal issues.

A sizable inheritance has the potential to sustain you for life. But you don’t have to navigate this journey alone. We’re here to provide answers to any queries you may have about receiving, growing, donating, protecting, and eventually passing on your inheritance to your loved ones. Reach out to us today.