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Celebrity estate planning mistakes

10 Celebrity Estate Planning Mistakes

10 Celebrity Estate Planning Mistakes

10 Celebrity Estate Planning Mistakes. Just like regular folks, celebrities flub their estate planning, costing their intended heirs money and/or grief. What’s different? Bigger dollar amounts and notoriety, mostly. A new book, Trial & Heirs, by probate litigator Andrew W. Mayoras and his estate lawyer wife, Danielle B. Mayoras, uses celebrity cliffhanger cases to dish out real-life advice.The mistakes celebrities have made run the gamut, from never writing a will (music legend Jimi Hendrix) to relying on a “letter of wishes” to give away belongings (Princess Di). So read on, and learn from their mistakes.

Celebrity: Jimi Hendrix

Mistake: Never writing a will.

Story: Music legend Jimi Hendrix died at age 27 in 1970 without a will. Under state law, his dad, Al, got everything, leaving his close brother Leon with nothing. Al built Hendrix’s musical legacy into an $80 million venture, but in his own will cut out Leon and his family, in favor of his adopted daughter through a later marriage.

Lesson: Even young rock stars aren’t immortal. Sign a will or living trust document.

Celebrity: Warren Burger

Mistake: Relying on do-it-yourself documents.

Story: Chief Justice Warren Burger died in 1995 with a $1.8 million estate and a will of 176 words he typed up himself. There’s something to be said for brevity, but in this case, his family paid $450,000 in estate taxes, something that could have been easily avoided. And his executors had to pay to go to court to get approval to complete administrative acts, such as selling real estate, that typically a well-drafted will would have allowed without court approval.

Lesson: Even if you know a bit about the law, get an estate pro to write your will.

Celebrity: Princess Di

Mistake: Relying on a “letter of wishes” to give away belongings.

Story: At her death in 1997, Princess Diana left a detailed will, naming her sister and mother as executors. She also wrote a separate “letter of wishes” asking her executors, at their discretion, to divide her belongings among her sons and her 17 godchildren. But instead of getting stuff worth an estimated 100,000 pounds, each godchild got only a trinket.

Lesson: Don’t rely on executors’ sense of noblesse oblige; put bequests in your will or trust or in a signed, dated list.

Celebrity: Heath Ledger

Mistake: Not updating documents.

Story: When actor Heath Ledger died at age 28 in 2008, he had a will, but it was written three years before he died, prior to his relationship with Michelle Williams and the birth of their daughter, Matilda Rose. The will left everything to his parents and sister. When Ledger’s uncles raised fears that his father wouldn’t properly care for Matilda Rose, Ledger’s father said he would.

Lesson: When life changes, update your will, retirement accounts and insurance policies.

Celebrity: Doris Duke

Mistake: Bad choice of executor.

Story: Tobacco heiress Doris Duke, who died in 1993 with a fortune estimated at $1.3 billion, named her butler as executor and as trustee for a huge charitable foundation. After the butler’s lifestyle and spending habits were called into question, he was removed from his duties by a probate judge, then reinstated by New York’s highest court. A settlement agreement created a board of trustees to manage the foundation.

Lesson: Don’t let the butler do it. Pick someone competent and trustworthy as your executor.

Celebrity: Marlon Brando

Mistake: Making oral promises.

Story: Angela Borlaza, actor Brando’s “major domo,” claimed Brando gave her the house she lived in, saying he had kept it in his name for tax reasons. She settled with the executors of his estate for $125,000. She also claimed Brando promised her continued employment with a company he owned, and settled that claim out of court.

Lesson: Oral promises won’t do; if you’re serious, execute the right written documents.

Celebrity: Florence “FloJo” Griffith Joyner

Mistake: Not telling your executor where to find your original documents.

Story: When Olympic sprinter Florence Griffith Joyner died at 38, in 1998, her husband couldn’t find her original will, and failed to file it with the probate court within 30 days of her death, as required by California law. Joyner’s husband and mother took disputes, including whether Joyner promised her mother could live in their house the rest of her life, to court. Joyner never filed the original will, and the judge eventually appointed a third party to administer the estate.

Lesson: Tell at least two people you trust where to find your original will. To be safe, keep two copies, and leave the original in your bank safety deposit box, or in your lawyer’s fireproof safe.

Celebrity: Leona Helmsley

Mistake: Taking care of the dog, but not the grandkids, without getting her sanity certified.

Story: When she died in 2007, hotel tycoon Leona Helmsley’s will left most of her $5 billion estate to charity, created a $12 million trust for her Maltese dog, Trouble, and completely cut out two of her four grandchildren. The two stiffed grandkids sued her estate, claiming she wasn’t mentally fit to create her will and trust. The case settled, with Trouble getting $2 million, and the two grandkids sharing $6 million plus legal fees.

Lesson: If you’re older and cutting out relatives, have your lawyer conduct and sign a “mini mental evaluation” attesting to your competence.

Celebrity: Brooke Astor

Mistake: Naming wrong person as agent under power of attorney.

Story: In October 2009, socialite Brooke Astor’s son Anthony Marshall was convicted of fraud and grand larceny relating to his handling of his late mother’s estate. The 14 counts of which a New York jury found Marshall guilty included misusing his power of attorney over her financial affairs by giving himself a retroactive $1 million raise for managing her finances. Marshall denied wrongdoing and is appealing his conviction.

Lesson: Pick your agent with care, and require a backup agent to sign off, too, on major decisions.

Celebrity: Ted Williams

Mistake: Conflicting directions on burial wishes.

Story: In his will, baseball legend Ted Williams said he wished to be cremated. But his two children from a second marriage produced a grease-stained note saying he wished to be put in biostasis after his death, and they froze his body after his death in 2002. His eldest daughter fought to have his body unfrozen and cremated, but gave up the fight when she ran out of money.

Lesson: If you change your mind about your burial wishes, change your will by adding a codicil, or writing a new one.

Read more related articles here:

Celebrity Estate Planning Mistakes

6 Estate-Planning Mistakes Celebrities Made

Lessons To Be Learned From Failed Celebrity Estates

Also, read one of our previous Blogs at:

Which Stars Made the Biggest Estate Planning Blunders?

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

Florida Business Plan

FLORIDA BUSINESS PLANNING MADE EASY.

FLORIDA BUSINESS PLANNING MADE EASY.

UNDERSTANDING FLORIDA BUSINESS PLANNING WITH OUR JACKSONVILLE BUSINESS ATTORNEYS

Your business is your baby, your pride and joy. You’ve invested so much time into your Florida business it is an extension of who you are. From inception to the early stages to maturity, you have worked hard on your business. You may need legal help along the way, and getting things right is very important.

Our dedicated Jacksonville business lawyers and trusted legal counsel, Legacy Planning Law Group, know that the best way to help Jacksonville business owners understand their Florida business planning needs and ultimate goals.

If you’re interested in learning more about our Jacksonville business planning services, please book your free 15-minute phone call with us today! 904-880-5554

Business Plan

By ADAM HAYES

A business plan is a written document that describes in detail how a business—usually a startup—defines its objectives and how it is to go about achieving its goals. A business plan lays out a written roadmap for the firm from marketing, financial, and operational standpoints.

Business plans are important documents used for the external audience as well as the internal audience of the company. For instance, a business plan is used to attract investment before a company has established a proven track record or to secure lending. They are also a good way for companies’ executive teams to be on the same page about strategic action items and to keep themselves on target towards the set goals.

Although they’re especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to see if goals have been met or have changed and evolved. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.

KEY TAKEAWAYS

  • A business plan is a written document describing a company’s core business activities, objectives, and how it plans to achieve its goals.
  • Startup companies use business plans to get off the ground and attract outside investors.
  • Businesses may come up with a lengthier traditional business plan or a shorter lean startup business plan.
  • Good business plans should include an executive summary, products and services, marketing strategy and analysis, financial planning, and a budget.

A business plan is a fundamental document that any startup business needs to have in place prior to beginning operations. Banks and venture capital firms indeed often make writing a viable business plan a prerequisite before considering providing capital to new businesses.

Operating without a business plan is not usually a good idea. In fact, very few companies are able to last very long without one. There are definitely more benefits to creating and sticking to a good business plan—including being able to think through ideas without putting too much money into them and, ultimately, losing in the end.

A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. But they all tend to have the same basic elements, including an executive summary of the business and a detailed description of the business, its services, and its products. It also states how the business intends to achieve its goals.

The plan should include at least an overview of the industry of which the business will be a part, and how it will distinguish itself from its potential competitors.

While it’s a good idea to give as much detail as possible, it’s also important to be sure the plan is concise so the reader will want to get to the end.

 

Elements of a Business Plan

The length of the business plan varies greatly from business-to-business. All of the information should fit into a 15- to 20-page document. If there are crucial elements of the business plan that take up a lot of space—such as applications for patents—they should be referenced in the main plan and included as appendices.

As mentioned above, no two business plans are the same. But they all have the same elements. Below are some of the common and key parts of a business plan.

  • Executive summary: This section outlines the company and includes the mission statement along with any information about the company’s leadership, employees, operations, and location.
  • Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology. Any information about research and development (R&D) can also be included here.
  • Market analysis: firm needs a good handle on the industry as well as its target market. It will outline who the competition is and how it factors in the industry, along with its strengths and weaknesses. It will also describe the expected consumer demand for what the business is selling and how easy or difficult it may be to grab market share from incumbents.
  • Marketing strategy: This area describes how the company will attract and keep its customer base and how it intends to reach the consumer. This means a clear distribution channel must be outlined. It will also spell out advertising and marketing campaign plans and through what types of media those campaigns will exist on.
  • Financial planning: In order to attract the party reading the business plan, the company should include its financial planning and future projections. Financial statements, balance sheets, and other financial information may be included for already-established businesses. New businesses will instead include targets and estimates for the first few years of the business and any potential investors.
  • Budget: Any good company needs to have a budget in place. This includes costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.

Types of Business Plans

Business plans help companies identify their objectives and remain on track. They can help companies start and manage themselves, and to help grow after they’re up and running. They also act as a means to get people to work with and invest in the business.

Although there are no right or wrong business plans, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration, the traditional business plan is the most common. They are standard, with much more detail in each section. These tend to be much longer and require a lot more work.

Lean startup business plans, on the other hand, use an abbreviated structure, highlighting key elements. These business plans aren’t as common in the business world as they are short—as short as one page—and have very little detail. If a company uses this kind of plan, they should expect to provide more detail if an investor or lender requests it.1

Special Considerations

Financial Projections

A complete business plan must include a set of financial projections for the business. These forward-looking projected financial statements are often called pro-forma financial statements or simply the “pro-formas.” These statements include the overall budget, current and projected financing needs, a market analysis, and the company’s marketing strategy.

Other Considerations for a Business Plan

The idea behind putting together a business plan is to enable owners to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify their structures accordingly before implementing these ideas. It also allows owners to project what type of financing is required to get their businesses up and running.

If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing. For example, Tesla Motors’ electric car business essentially began only as a business plan.

A business plan is not meant to be a static document. As the business grows and evolves, so too should the business plan. An annual review of the plan allows an entrepreneur to update it when taking markets into consideration. It also provides an opportunity to look back and see what has been achieved and what has not. Think of it as a living document that grows and evolves with your business.

Read more related articles at:

WHAT MAKES A GOOD BUSINESS PLAN?

Without Sound Financial Projections Your Business Plan Is Merely Conceptual

Also, read one of our previous Blogs at:

How To Create a Strong Succession Plan for Your Business

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

spring clean documents

It’s Spring! Time For a Little Spring Cleaning. 12 Instances Where You Should Update Your Documents.

It’s Spring! Time For a Little Spring Cleaning. 12 Instances Where You Should Update Your Documents.

1. You are having your first child.

This one should be a no-brainer, and the birth of a first child is usually when people create their first will. The focus on this will should be naming your choice of guardian for your child, and who will serve as trustee for any trust created for that child by the will. The will should be flexible enough to accommodate the possible birth of future children.

Execute this will before the child is born: While you can still execute a will after your child is born, you likely have a hundred other things to do, and doing them with two hours less sleep. Get the will done before you give birth.

2. You are thinking about divorce.

This one, too, should be obvious — but the timing might be surprising: Do it ASAP … before you file for divorce. Remember that your spouse has marital rights to a portion of your estate if you die without completing the divorce proceeding. And once you file for divorce you often can’t change your will until the divorce is finalized.

Executing the will before you commence the divorce ensures that your spouse will not receive all of your money if you die before the divorce is complete.

3. You have gotten divorced.

4. Your child gets married.

An older parent is a wiser parent, and you may know more about your future ex-son-in-law and future ex-daughter-in-law than your child knows. But your current will likely addresses issues that applied when your child was an infant, meaning it does not address your child’s possible divorce. You may be able to mitigate the lack of a prenuptial agreement by creating trusts in your will and including post-nuptial requirements before you child can receive any estate distributions.

Create this will immediately after your child gets married, since (a) the marriage may never happen, and (b) if you do happen to die before the marriage, anything you leave your child is not considered marital assets in most states.

5. Your beneficiary develops creditor or substance abuse problems.

6. Your named executors or beneficiaries die.

If your estate plan named individual people to manage your estate or receive any remaining funds and those people are no longer alive you may have to update your will. Your old will may name contingency plans or leave undistributed funds to the deceased person’s children, but you may want to re-evaluate this decision.

7. Your young family member becomes a responsible adult.

Your old will likely named your spouse or parent as your first executor, then perhaps your sibling or a friend. Now everyone is three or more decades older (or deceased), and your younger family member may be up to the task of handling your estate affairs more expediently than your past choices.

Don’t rush to this decision: While some older individuals don’t have too many good choices over younger trusted friends or family members, making a rushed choice may affect several people.

8. New legislation is passed.

Make sure to ask your attorney every few years if there have been any new laws that are relevant to your estate planning.

9. You come into a windfall of money.

If you finally get that huge payday from the scratch-off ticket you bought, or inherit money, consider updating your will so you can ensure proper tax planning. For example, you may want to start gifting money to younger family members’ 529 college savings plans, or create a donor advised fund to both shield some money from taxes and leave a nice legacy to a cause you believe in. Also, you may want to reconsider when and how much money you are leaving to certain people or charities.

10. You can’t find your original will.

Wills are the product of hundreds of years of Anglo-American jurisprudence. Think parchment and barristers wearing powder and wigs. A formal, original will matters, and photocopies are very difficult to validate. If you can’t find your will, or if you agreed to have your attorney hold onto your original will and now don’t want to deal with him or her, make sure you replace that will with a new, original one that explicitly states it invalidated all prior wills. Do this as soon as possible.

11. You buy property in another country or move to another country.

Plenty of countries have treaties with the United States allowing for reciprocity of wills: Your will drafted in French when you were stationed in France is likely valid in the United States. But transferring property in one country may be delayed if the will must be probated in the other country first. Consider having a different will for each country you own property in.

12. Your family and friends become enemies.

Few things can derail your planning more than parties who don’t get along. The problems with animosity between parties in your will are compounded when one party is your family and the other is your friend. Only your nearest family members can easily fight your will, since your “next-of-kin” are required parties to your probate (even if you fully disinherit them), while your friends have no default rights.

If you think your family will try to take a legal right hook to your best friend’s bequest in your will, consider adding a No Contest Clause that will serve to disinherit the aggressive family member if he tries to attack your friend.

 

Read more related articles at:

When Should You Redo Your Will?

8 Reasons You May Need to Update Your Will

Also, Read one of our previous Blogs at:

When it comes to a will or estate plan, don’t just set it and forget it. You need to keep them updated.

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

power of attorney

What Are the Duties for Financial Powers of Attorney?

What Are the Duties for Financial Powers of Attorney?

I just got appointed agent under a financial power of attorney. What do I need to do next?

A financial power of attorney is a document allowing someone (the “attorney-in-fact” or “agent”) to act on the principal’s behalf. It normally allows the attorney-in-fact to pay the principal’s bills, access his accounts, pay his taxes, buy and sell investments or even real estate. Essentially, the attorney-in-fact steps into the shoes of the principal and is able to act for the principal in all matters as described in the document.

These responsibilities may sound daunting, and it’s only natural to feel a little overwhelmed at first — much like when we had our first child and the hospital staff left us alone with the baby for the first time: What do we do now?!

Things You Can and Can’t Do With Power of Attorney

Does Power of Attorney Make You Responsible for Someone Else’s Debts?

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

johnny Depp

Don’t Be Like Johnny Depp, Get a Prenup

Don’t Be Like Johnny Depp, Get a Prenup

Not having a prenuptial agreement can be a costly mistake — not just for Johnny Depp, but for you as well.

Depp, 52, and his wife of just 15 months, Amber Heard, 30, are heading for splitsville. Heard filed a divorce petition earlier this week, citing irreconcilable differences, and requested spousal support. Depp’s response, according to The Associated Press, asked the judge to deny Heard’s support request — and asked that Heard pay her own attorney’s fees.

The couple reportedly did not have a prenuptial agreement, which could leave Captain Jack Sparrow’s treasure rife for plundering.
“Depp would be a poster boy for a prenup,” said Arlene Dubin, chair of the matrimonial and family law practice at Moses & Singer in New York. “If you were checking off the boxes [of who should consider one], he pretty much has them all.”

Generally speaking, she said, prenups are an important consideration for:

  • older couples;
  • those who come into the marriage with assets (as he did with a reported $400 million);
  • people who have children from prior relationships (as he does);
  • people who expect future celebrity and significant income (as he could, despite dismal reviews of “Alice Through the Looking Glass”).

Without one, the process of getting unhitched can lead to protracted and expensive legal battles, or result in a less-fair division of assets.

A multimillion-dollar net worth isn’t required to benefit. Hammering out a prenuptial agreement — or for unmarried couples, a cohabitation agreement — can make sense for many regular folks, too, said Joslin Davis, president of the American Academy of Matrimonial Lawyers. “It requires people to think ahead,” she said.
Take the case of older couples and those who are remarrying. A prenup can protect your assets not just in divorce, but in death, said Davis, who is also a principal of Allman Spry Davis Leggett & Crumpler, P.A., in Winston-Salem, North Carolina.

Many jurisdictions prevent spouses from being disinherited, she said, so a court could easily void provisions in a will that leaves everything to your kids from a prior marriage. But a prenup could be worded to require your new spouse to waive their right to dissent or take an elective share in your estate.

For young couples, a prenup offers the chance to hash out divorce handling of issues like joint efforts to pay off one partner’s student-loan debt, or how a partner might be compensated for leaving the workforce to care for their children.

“This way, the two people can write their own deal at the beginning of the relationship, at a time when they are in love and looking out for each other,” said Dubin, who is also the author of “Prenups for Lovers: A Romantic Guide to Prenuptial Agreements.”

Already married? Postnups are generally harder to come by. “Sometimes, one party may be advised that they are better off without one,” said Davis. “The law already favors them.”

Read more related articles at:

A Tale of Two Celebrity Marriages and One Prenuptial Agreement

We Don’t Need No Stinkin’ Prenup: Lessons for Johnny Depp

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

end of life planning

End-Of-Life Planning Is A ‘Lifetime Gift’ To Your Loved Ones

End-Of-Life Planning Is A ‘Lifetime Gift’ To Your Loved Ones

Talking about death makes most of us uncomfortable, so we don’t plan for it.

That’s a big mistake, because if you don’t have an end-of-life plan, your state’s laws decide who gets everything you own. A doctor you’ve never met could decide how you spend your last moments, and your loved ones could be saddled with untangling an expensive legal mess after you die.

Betsy Simmons Hannibal, a senior legal editor , puts it this way: Planning for the end of life isn’t about you. “You’re never going to really get the benefit of it. So you might as well think about how it’s going to be a lifetime gift that you’re giving now to your parents or your partner or your children. It really is for the people you love.”

Here are some simple, practical steps to planning for the end of life. These tips aren’t meant to be legal or medical advice, but rather a guide to ease you into getting started.

1. Name an executor.

If you’re an adult, you should have a will, says Hannibal. Estate planning is not just for the rich. “It’s not just about the value of what you own. It’s also the feelings that you and your loved ones have about what you own.” If you own lots of valuable stuff — real estate, trust funds, yachts — you probably need a lawyer.

She says the first thing you do is name (in writing) a person whom you trust to take care of everything when you die. In most states that person is called an executor; in some they’re called a personal representative.

Hannibal says it’s a good idea to choose someone from your family. “The most important thing is that you have a good relationship with them — and also that they have a good attention to detail, because it’s a lot of work to be someone’s executor.”

An executor would have to, for example, find all your financial assets and communicate with everyone you’ve named in your will. It’s a big ask, so Hannibal says just be upfront. She suggests asking the person directly, “Would you be comfortable wrapping up my estate when I die?”

2. Take an inventory.

List everything you own, not just things that are financially valuable — such as your bank accounts, retirement savings or car — but also those things that have sentimental value: a music or book collection, jewelry, furniture. Then list whom you want to leave what to.

If you have young children, name a guardian for them. Choose carefully, because that person will be responsible for your child’s schooling, health care decisions and value system.

Hannibal says pets are considered property under the law, so she suggests naming a new owner so that the state doesn’t do it for you.

Digital accounts are also part of your property. This includes social media accounts, online photos, everything in, say, your Google Drive or iCloud, online subscriptions, dating site profiles, credit card rewards, a business on Etsy or Amazon. Hannibal suggests keeping a secure list of all those accounts and the login and password details. Let your executor know where the list is.

Just as you write out specific instructions about your physical belongings, be clear about what you’d like to happen with your online information.

She says it’s better not to have a handwritten will, because proving you wrote it will require a handwriting expert. So keep it simple. Just type out your wishes and have two witnesses watch you sign and date it. Then have them do the same. Hannibal says by signing it, “they believe that the person who made the will is of sound mind, and that’s a pretty low bar.”

You don’t need to file your will anywhere; neither do you need to get it notarized for it to be legally binding. And don’t hide it. Hannibal says just tell your executor where you’ve kept a copy.

Remember that your decisions will change over time. So if you have a child, buy a house or fall out with a family member, update your will.

3. Think about health care decisions.

Your will takes care of what happens after you die. An advance directive is a legal document that covers health care and protects your wishes at the end of your life.

There are two parts to an advance directive. The first is giving someone your medical power of attorney so the person can make decisions for you if you can’t. The other part is called a living will. That’s a document where you can put in writing how you should be cared for by health professionals.

She has seen thousands of situations of loved ones making difficult and emotional decisions around a hospital bed. It’s worse when family members disagree about a course of action.

You know the saying “The best time to plant a tree was 20 years ago. The second best time is now”? Zitter says with the coronavirus in the news every day, more people are realizing that these end-of-life conversations are important. “That tree was always important to plant. But now we really have a reason to really, really plant it. … That time is now.”

4. Name a medical proxy.

Pallavi Kumar is a medical oncologist and palliative care physician at the University of Pennsylvania. Kumar says the most important medical decision you can make is to choose a person who can legally make health care decisions for you if you can’t. This person is sometimes called a medical proxy or a health care agent. Naming the person is the first part of the advance directive.

“Think about the person in your life who understands you, your goals, your values, your priorities and then is able to set aside their own wishes and be a voice for you,” she says. You want someone you trust who can handle stress, in case your loved ones disagree on what to do.

5. Fill out a living will.

After you’ve chosen your medical proxy (and named a backup), you need to think about what kind of care you want to receive. There’s no right or wrong; it’s very personal. The document that helps you do that is called a living will. It’s part two of the advance directive.

A living will addresses questions such as “Would you want pain medication?”; “Do you want to be resuscitated?”; and “Would you be OK being hooked up to a ventilator?”

Kumar says she asks her patients what’s important to them and what their goals are. For some with young children, it means trying every treatment possible for as long as possible, no matter how grueling.

Other patients might want the exact opposite. “They would say, ‘I’ve gone through a lot of treatments and I … feel I’m not having as many good days with my kids. So if the disease gets worse, I want to spend that time at home.’ ”

Kumar says even among patients who are very sick with cancer, fewer than half have had conversations about how they want to die. So talk about your wishes. Once you’ve filled out the advance directive forms, share your decisions with your medical proxy, your loved ones and your doctor.

6. Don’t forget the emotional and spiritual aspects of death.

How you want to die is personal and about much more than just the medical aspect. For some, it’s about being at peace with God; for others, it’s being kept clean. Still others don’t want to be left alone, or they want their pets close by.

Angel Grant and Michael Hebb founded the project Death Over Dinner to make it easier for people to talk about different aspects of death as they eat. “The dinner table is a very forgiving place for conversation. You’re breaking bread together. And there’s this warmth and connection,” says Grant.

Grant says reflecting on death automatically forces you to think about your life. “That’s the magic of it,” she says.

“We think it’s going to be morbid and heavy. But what these conversations do is they narrow down our understanding of what matters most to us in this life, which then gives us actionable steps to go forward living.”

Grant doesn’t believe a “good death” is an oxymoron. “A good death is subjective, but there are some things that I have heard over and over again for many years at death dinners. … A good death is being surrounded by love, knowing you have no emotional or spiritual unfinished business.”

Read more related articles at:

Hard Conversations About End Of Life Wishes: Should Young Adults Be Included?

Getting Your Affairs in Order

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

estate plan documents

Estate Documents You’ll Need Beyond A Last Will And Testament

Estate Documents You’ll Need Beyond A Last Will And Testament

Justin Goodbread

Nobody likes to talk about it, but death is inevitable for all of us. Therefore, you should count every moment as a blessing. Beyond this, you should remember there’s no time to waste when it comes to preparing for your eventual passing.

When you think of estate planning, a couple of things come to mind. Chances are you know the benefits of having a last will and testament. Similarly, you likely understand the importance of having some form of life insurance to help your loved ones cover the costs of your funeral, burial and any other debts or expenses that may arise.

While both of those are necessary aspects of your estate planning, they’re not the only documents you’ll want to include. Your estate plan is intended to make the process of finalizing your estate simpler. To ensure your family and friends have the most complete plan, consider including these additional documents with your last will and testament and your insurance policies.

A Living Trust

Your last will and testament typically controls the distribution of your assets, and your family will likely need to go through probate. However, a living trust can limit the number of assets going through probate. When my father passed away, we managed to take the estate below $25,000. As a result, my mom was able to go through a shortened probate process known as “simple probate.” This isn’t always possible, but a living trust could help.

Because the living trust is a revocable document, you can change it. They are designed to avoid or limit probate for the deceased’s assets by creating a legally separate entity to hold property. But what does that mean?

Let’s assume you have set up a living trust. You then hold title to all assets you wish to be denoted in that trust. If you own a vacation property in Florida, you could title it under the “Joe Someone Living Trust.” This expedites the process because the trust details who the trustee is, what happens to the trust once you’ve passed and how to manage property held within the trust.

Oftentimes, the living trust provides faster access to certain assets than going through probate to sort out a last will and testament. However, your will is still a necessary part of your estate planning.

Living Will Or Advance Directive

The living will or advance medical directive is often required by healthcare providers for certain procedures. However, this document should also be included within your estate plans. Basically, your living will or advance medical directive informs your loved ones and medical staff of your wishes regarding life-saving or life-prolonging medical procedures in the event you become unable to communicate them. You don’t want to put your loved ones in a position to have to choose whether you live or die.

Although you will need to choose who carries out your wishes, a living will takes the burden off their shoulders, providing certain criteria in which you wish to be kept alive or allowed to pass. I suggest speaking with your primary physician before signing an advance directive.

Power Of Attorney

Another important piece, power of attorney often consists of two documents. First is the healthcare power of attorney. This allows you to select someone to make healthcare decisions on your behalf. Oftentimes, this is your spouse or significant other, but you could designate anyone you’d like. Power of attorney differs from the living will in that your living will is only valid if you’re unable to communicate your wishes.

So, what happens if there’s an accident that involves you and your designated power of attorney? The person who is supposed to make decisions if you become ill or seriously injured is also injured. This is why I suggest creating a “three-deep roster.” This means you’ve chosen three people for each role (I also advise doing this for your last will and testament) that needs to be filled. Be sure to choose someone who’s capable of separating emotion from reality.

The other power of attorney is a financial power of attorney or durable power of attorney. Similar to the healthcare variety, you’re choosing someone to make financial decisions for you if you’re unable to. This doesn’t necessarily mean that you must be incapacitated. For example, my wife is my immediate financial power of attorney, allowing her to make financial decisions for me even when I can make decisions. She can sign my name with POA, and it’s just as legally binding as if I had signed it myself.

Statement Of Desires

Finally, consider including a statement of desires with the rest of your estate planning documents. Although this isn’t a legally binding document, it provides the executor a bit of last-minute guidance. This could include where to find various financial accounts, passwords, outstanding debts, insurance coverages, etc.

Leaving a short summary of where to locate everything they will need to address and how to access it can really unburden them during an otherwise difficult time. Take some time to write down everything about your financial life.

You only have so many opportunities to really show the people you love how you feel about them. One of those opportunities is to handle all of the heavy lifting that will come from your passing before you’ve gone. When my uncle found out he had terminal cancer, he told me that he trusted me and wanted me to take care of his wife. We took care of everything we could while he was still living. When he passed, his wife was able to navigate his passing much more easily because of his statement of desires.

Estate planning documents aren’t really for you. They’re for the loved ones you’ll leave behind, and there is no greater “I love you” than to say, “I took care of everything,” from the grave. Take some time to speak with your advisors. Put these documents in place, and make a difficult inevitability a little easier on those you hold most dear.

Read more related articles at:

8 Documents That Are Essential to Planning Your Estate

5 Essential Estate Planning Documents

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

 

assets in trust

What Assets Should Be Included in Your Trust?

What Assets Should Be Included in Your Trust?

A revocable living trust is a great tool to help your assets pass smoothly to your beneficiaries, and it can significantly reduce the headaches of probate. However, while some assets belong in a trust, others cannot (or should not) go into one.

Probate can be a rather lengthy and costly process for your heirs. The procedure can extend from a couple of months for a simple estate, to a couple of years for a more complex estate. For most people, ensuring their property is preserved and passed on at the lowest possible cost is essential to a comprehensive estate plan.

Advantages of Revocable Living Trusts

A revocable living trust is an instrument created for the purpose of protecting your assets during your lifetime. It also creates an avenue to pass your assets with ease after your death. There are several benefits of creating a trust. The chief advantage is to avoid probate. Placing your important assets in a trust can offer you the peace of mind of knowing assets will be passed onto the beneficiary you designate, under the conditions you choose, and without first undergoing a drawn-out legal process. A trust can also provide you with some level of privacy as to the information shared about your estate. Another feature is that placing your assets in a trust will help protect them should you become incapacitated.

Can I Avoid Probate with a Trust?

It is important to note that there is no way to completely bypass probate. While your most important assets may be transferred as part of your trust, there are some assets that will not fund your trust for a variety of reasons. These other assets will still go through the probate process. Though setting up a trust can be costly and complex, it can make the inheritance process easier on your beneficiaries. To ensure your trust performs as it was intended, timely and proper funding is vital.

What Type of Assets Go into a Trust?

Many people assume that once they sign the trust documents at their attorney’s office, they are ready to roll. Setting up a trust, however, is only half of the solution. For a revocable living trust to take effect, it should be funded by transferring certain assets into the trust. Often people fund a living trust with real estate, financial accounts, life insurance, annuity certificates, personal property, business interests and other assets. The most notable types are outlined below:

Real Estate: Many people wonder whether it is a good idea to place their house in a trust. Considering that your home is potentially one of your largest assets, living trusts can be especially beneficial as they can transfer real estate quickly. Additionally, they help avoid the hassle of separate probate proceedings for land, commercial properties and homes that are owned out of state or held in different counties. Any property with a mortgage, however, would require retitling into the name of the trust, and some lenders may be reluctant to do this.

Life Insurance: Many people ask if it is a good idea to put life insurance in a trust. The benefits include protecting it from creditors and making it easier for your loved ones to access the money by avoiding probate. Naming the living trust as a beneficiary of your life insurance may come with some risks. If you are the trustee of your revocable living trust, all assets in the trust are considered your property. In this instance, life insurance proceeds are counted as part of your estate’s worth and could create a taxable situation should you reach the IRS threshold for taxable estates. In 2022, that amount is $12.06 million for an individual and $24.12 million for couples. Funding a trust with life insurance and annuity contracts generally requires a change of ownership form submitted to the contract issuer.

Valuable Personal Property: Personal items, such as jewelry, art, collectibles and furniture, including pianos or other important pieces, may be placed in a trust. Personal property without any legal certificate or title is commonly listed on an accompanying schedule that is kept with your trust documents. Those assets with certificates or legal title often require the owner to quitclaim their ownership interest to the trust.

Collectible Vehicles: Some cars retain their cash value for long periods of time and therefore may be worth transferring to your revocable living trust. It is worth considering the title transfers and taxes that may be imposed, so it is important to speak to a trusted financial adviser or lawyer before transferring such assets.

Can You Put a Business in a Living Trust?

There are a number of advantages of transferring your business interest into a revocable living trust. Benefits generally include providing relief to your family from carrying the burden of your business debts, as well as the potential to reduce the tax burden on your estate. Below are the effects of several types of business ownerships:

Partnerships: With partnerships, you may transfer your share in the partnership to a living trust. If you hold an ownership certificate, you will, however, need to have it modified to show the trust as the shareowner rather than yourself. It is important to note that some partnership agreements may prohibit transferring assets to living trusts, so you will want to consult a financial adviser or attorney.

Limited Liability Companies (LLC): Depending upon your operating agreement, LLC business owners often need approval from the majority of owners before they can transfer the interests in the company to their living trust. Once transferred, the voting ability remains with you, but your ownership share will fall to the trust.

What Assets Cannot Be Placed in a Trust?

There are a variety of assets that you cannot or should not place in a living trust. These include:

Retirement Accounts: Accounts such as a 401(k), IRA, 403(b) and certain qualified annuities should not be transferred into your living trust. Doing so would require a withdrawal and likely trigger income tax. In this instance, it is possible to name the trust as the primary or secondary beneficiary of the account, which would ensure the funds transfer to the trust upon your death.

Active Financial Accounts: It is not advisable to transfer accounts you use to actively pay your monthly bills unless you are the trustee and granted full control of the trust assets. For many people, it is simply easier to keep these accounts out of the trust.

Vehicles: Generally, everyday vehicles like cars, boats, trucks, motorcycles, airplanes or even mules or snowmobiles are not placed in a trust because they often do not go through probate, and unlike collectible vehicles, they are not appreciable assets. Additionally, many states impose a tax when the vehicles are retitled, and some do not allow vehicle owners to name a beneficiary after death.

A Word About Irrevocable Trusts

While the assets placed in an irrevocable trust are no longer vulnerable to creditors or subject to an estate tax, you forfeit ownership of the assets. Careful consideration should be made when using an irrevocable trust, and it is highly advised that you first consult your financial adviser or attorney.

While creating a living trust may be costly and require a lot of legwork to fund, there are many benefits to using it as an instrument to protect your assets. The flexibility these trusts offer helps to ensure that your assets are protected during your lifetime and pass easily to heirs after your death.

Read more related articles at:

What Assets Can Go Into a Revocable Living Trust?

Which Assets Belong in a Trust?

Also, read one of our previous Blogs at:

Planning for Retirement Assets in Your Estate Plan

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

pet trusts

How To Make Plans To Provide Care For Your Pet If You Can’t

How To Make Plans To Provide Care For Your Pet If You Can’t

The best way to take precautions and ensure your pet will be well cared for is by doing some estate planning.

Consider what would happen if you became incapacitated without estate plan provisions for your pet: A legal process could be initiated to establish a court-supervised guardianship or conservatorship on your behalf and a judge would choose a guardian for you. This person would be authorized to make decisions about your finances and your property, including your pet, because the law treats pets as property.

Although the guardian may understand the importance of your pet in your life and do what’s necessary to keep the two of you together, it’s also possible that he or she may decide your pet is a drain on your estate. Then, the guardian might send the pet to a shelter or give him or her to someone.

 

A Durable Power of Attorney

One option is to designate someone to act as your financial agent upon your incapacitation, by preparing a durable power of attorney document. This person would be legally entitled to make decisions about your finances and your personal property, including your pet, without the court’s involvement.

There is a drawback to such an arrangement, however.

Although your financial agent would have permission to manage your financial life, your power of attorney document won’t include instructions for how you want things managed. Those details will be up to the discretion of your financial agent. So, you won’t have any control over what happens to your pet.

A Revocable Living Trust for Your Pet

A far better alternative is to set up a revocable living trust.

In your trust document, you can spell out what you want to happen to your pet (and to all of your property), should you become incapacitated, and after you die, too. Here, the person you designate as your trustee will be legally bound to carry out your wishes.

The wishes can be as specific as you want. For example, you can require that if you become incapacitated, your pet should remain with you and how much you want the trustee to spend from the trust’s assets on things like food, veterinarian care, grooming and toys.

Alternatively, your trust document can designate a caretaker for your pet or state that your pet should go to a no-kill shelter. If you choose the first option, you can also use your trust document to ensure that the caretaker is compensated for assuming the responsibility of caring for your pet and reimbursed for any pet-related expenses.

An Animal Life-Care Center

Still another option is to specify that your pet be moved to a place like the Stevenson Companion Animal Life-Care Center at Texas A & M University. Pets who live in such a facility are cared for by veterinary students and live luxurious lives. The cost is pricey however, so this option is out of reach for many pet owners. Enrollment fees at the Stevenson Center, for instance, range from $25,000 to $100,000 per pet.

Your trust document could also stipulate that if you must move to an assisted living facility or a nursing home, you’ll want regular visits with your pet, “pet therapy” or to be placed in a facility with a house pet that provides companionship to residents.

Pet therapy typically involves a cat or dog and a handler who interacts with the residents or patients. The goal is to help individuals recover from, or cope with, a physical or mental health problem.

A Standalone Pet Trust

And here is one last option: Create a standalone pet trust. This specialized living trust would focus only on your pet; all the trust’s funds would be earmarked to pay your pet’s care and well-being and for services of a caretaker. The trustee could either be the caretaker or someone else who you’ve designated. This kind of trust would give you complete control over what happens to your pet.

Hiring an estate planning attorney to draw up a standalone pet trust would likely cost $1,500 to $5,000. If you already have a revocable living trust, your pet trust could be built into it.

One final piece of advice: work with an estate attorney with pet planning experience. And do it sooner rather than later. A debilitating illness or injury can occur quickly and without warning, Once it does, you’ll have no control over the future of your pet unless you’ve done the right planning.

Read more related articles at:

Providing for Your Pet’s Future Without You

Also, read one of our previous blogs at:

Pet Trusts Can Protect Your Pets after You’re Gone

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

 

 

Bills

What if your inheritance turns out to be just a pile of bills?

What if your inheritance turns out to be just a pile of bills?

What if your inheritance turns out to be just a pile of bills? Debt collectors are on your tail. Blogger John Schmoll’s father left a financial mess when he died: a house that was worth far less than the mortgage, credit card bills in excess of $20,000—and debt collectors who insisted the son was legally obligated to pay what his father owed.

Fortunately, Schmoll knew better.

“I’ve been working in financial services for two decades,” says Schmoll, an Omaha, Nebraska, resident who was a stockbroker before starting his site, Frugal Rules. “I knew that I wasn’t responsible.”

Baby boomers are expected to transfer trillions to their heirs in coming years. But many people will inherit little more than a pile of bills.

Nearly half of seniors die owning less than $10,000 in financial assets, according to a 2012 study for the National Bureau of Economic Research. Meanwhile, debt among older Americans is soaring. It used to be relatively unusual to have a mortgage or credit card debt in retirement. Now, 23% of those older than 75 have mortgages, a fourfold increase since 1989, and 26% have credit card debt, a 159% increase, according to the Federal Reserve’s latest data from the 2016 Survey of Consumer Finances.

If your parents are among those likely to die in debt, here’s what you need to know.

You (probably) aren’t responsible for their debts. When people die, their debts don’t disappear. Those debts are now owed by their estates. Some estates don’t have enough assets (property, investments and cash) to pay all of the bills, so some of those bills just don’t get paid. Spouses may have the responsibility for certain debts, depending on state law, but survivors who aren’t spouses usually don’t have to pay what’s owed unless they cosigned for the debt or applied for credit together with the person who died.

What’s more, assets that pass directly to heirs often don’t have to be used to pay the estate’s debts. These assets can include “pay on death” bank accounts, life insurance policies, retirement plans and other accounts that name beneficiaries, as long as the beneficiary isn’t the estate.

You need a lawyer. Some parents hope to avoid creditors or the costs of probate, which is the court process that typically follows a death, by adding a child’s name to a house deed or transferring the property entirely. Either of those moves can cause legal and tax consequences and should be discussed with a lawyer first. After a parent dies, the executor must follow state law in determining how limited funds are distributed and can be held personally responsible for mistakes. That makes consulting a lawyer a smart idea — and the estate typically would pay the costs. (The costs of administering an estate are considered high-priority debts that are paid before other bills, such as credit cards.)

At his attorney’s advice, Schmoll sent letters to his dad’s creditors explaining the estate was insolvent, then formally closed the estate according to the probate laws of Montana, where his dad had lived.

A lawyer also can advise you how to proceed if a parent isn’t just insolvent, but also doesn’t have any assets at all. In that situation, there may not be a reason to open up a probate case and deal with collectors, Sawday says.

“Sometimes, I advise clients just to lay the person to rest and do nothing,” Sawday says. “Let a creditor handle it.”

You need to take meticulous notes. The financial lives of people in debt are often chaotic — and sorting it all out can take time. As executor of his dad’s estate, Schmoll dealt with over a dozen collection agencies, utilities and lenders, often talking to multiple people about a single account. He kept a document where he tracked details such as the names of people he talked to, dates and times of the conversations, what was said and required follow-up actions as well as reference numbers for various accounts.

You shouldn’t believe what debt collectors tell you. Some collectors told Schmoll he had a moral obligation to pay his father’s debts, since the borrowed money might have been spent on the family. Schmoll knew they were trying to exploit his desire to do the right thing, and advises others in similar situations not to let debt collectors play on their emotions.

Read more related articles here:

Can you inherit your dead parent’s debts?

Can You Inherit Debt?

Also, read one of our previous blogs at:

Will I Get A Bill as My Inheritance?

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.

 

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