Common mistakes that affect estate plans

While many people set out to craft air-tight estate plans to be followed in the event of their passing, the entire process is filled with pitfalls that can limit a plan’s effectiveness. A recent article regarding estate planning discusses some of these mistakes and the different ways that a person might avoid them.

One key mistake is choosing the wrong people when deciding who should carry out the plan. A person setting out their plans for their estate should make sure that the chosen executor is mentally and emotionally capable of making the more difficult decisions that are included in his or her duties. It is also important to keep beneficiary information in both the estate plan and in IRA, 401k, and insurance benefit documents up to date. Checking that information frequently and adding or removing beneficiaries when necessary might the administration of the estate go more smoothly.

It might also be a good idea to select alternate beneficiaries. When these contingent individuals are chosen, it might help ensure that the assets held in the estate are awarded to a person rather than given to the state if the primary recipients are incapable of or unwilling to take any inheritance left to them. In addition, it might be beneficial to confirm that those appointed to execute and benefit from the estate have the best interests of everyone involved at heart. This can help avoid conflict and legal intervention down the road.

While avoiding these mistakes might have a positive influence on the estate planning process, these are only some of the common mistakes that a person might make when drafting a will. An attorney who is familiar with estate planning strategies might be able to help a client build an effective plan.

Source: Investing Daily, “Key Estate Planning Mistakes You Need to Avoid“, Bob Carlson, July 24, 2014

Lou Reed relied on written will to disperse $30 million estate

California residents who were fans of late musician Lou Reed may be interested to learn how the ‘Walk on the Wild Side” singer handled his estate planning. According to a report filed by one of the two co-executors of Reed’s estate, a 34-page will Reed drew up in April 2012 was all the estate planning he had done before he passed.

Because Reed relied on a will rather than a revocable living trust, the details of how Reed’s estate was divided has become public knowledge. While his $30 million estate was dispersed, Reed’s family members were required to go through probate court. The media quickly discovered that Reed’s wife was left with 75 percent of his estate and Reed’s sister was left with 25 percent of his estate.

In addition to becoming public, wills that have to go through probate court can result in added expenses and headaches for a deceased person’s surviving family members. If one family member objects to an aspect of the will, it’s relatively easy to challenge the will in probate court. A revocable living trust, however, will ensure that the contents of an estate are dispersed privately without every beneficiary knowing exactly who got what.

A person who would like the added privacy and security of a revocable living trust may wish to consult an estate planning attorney. The attorney could help design a revocable living trust that will ensure that the person’s estate is dispersed quickly and privately after he or she passes. While writing a comprehensive trust document, the attorney may also be able to help individuals to add detailed conditions and limitations to the dispersal of their assets.

Source: Forbes, “Lou Reed Walked On The Wild Side With His Estate Planning“, July 10, 2014

Review estate plans regularly to keep them current

Estate planning is more than a one-time event in which a person writes a will and gives a power of attorney to a trusted relative or friend. To be most effective, California individuals should review their estate plan on an annual basis to ensure that the decisions they made when they signed the documents are still in line with their current wishes. There are a few times in a person’s life that it is important to review an estate plan and make necessary changes.

An estate plan should always be reviewed when a close family member who was listed as a beneficiary, trustee or representative dies or when someone becomes unable to perform the duties required of them. It’s important to have trusted family members or friends who are willing and able to serve as executor and under a power of attorney.

A person may want to consider revising their estate plan when they get divorced. Failing to revise a health care or financial power of attorney can leave someone’s former spouse or former in-laws in charge of important decisions. By reviewing the documents regularly and especially after important life events, a will and power of attorney designations can remain current.

Taking the time to review these legal forms can ensure that a person’s wishes are carried out as they would have done themselves if they were able. If it is ever necessary to change documents to appoint a new executor or trustee, an attorney who focuses on estate planning may be able to help a client make the adjustments and explain to the newly designated representatives what their role will be in the event the client dies or becomes incapacitated.

Source: Explorer News, “Six reasons to take a fresh look at your estate plan“, June 25, 2014

What are your duties as an executor of a will?

You have been named the executor of someone’s will: now what? You probably have a lot of questions about what you are expected to do and what steps you need to take to get the process started. 

Being the executor of a loved one’s will can be a difficult process, especially since you are still grieving the loss of your loved one. However, the executor is expected to take care of the person’s estate and your duties will start fairly soon after your loved one’s passing.

What exactly is the executor expected to do? The executor of a will has several duties to complete. The executor should become familiar with the person’s will so he or she knows who the listed beneficiaries are and what they will be receiving. 

Some of the main duties the executor will complete include: 

  • Gathering the deceased’s assets
  • Paying any bills
  • Filing any tax returns
  • Distributing assets to beneficiaries

The executor should become familiar with the will so the estate is settled according to the will’s terms. It is the executor’s responsibility to make sure the terms of the will are executed according to their loved one’s wishes. 

Being named the executor of another person’s will can be difficult. There are many decisions and procedures to follow to make sure the will is managed properly. In California, there are specific laws regarding the probate process and how the terms of the will should be managed. 

Executing the will or other estate planning documents can be a complicated process. It may be beneficial to work with an attorney to discuss any legal issues you should be aware of and to make sure the will is being executed according to the estate’s terms. 

Source: The American Bar Association, “Guidelines for Individual Executors & Trustees,” Accessed June 18, 2014

What is an advance health care directive and do you need one?

Estate planning can include many different documents that will make your wishes known. While many of us have wills in our estate plans, many of us overlook the importance of having an advance health care directive. What exactly is this document and why should you have one?

An advance health care directive, also known as a living will, lets your loved ones and doctor know your wishes for medical treatments. This document can include information on what type of medical care you would like to receive at the end of your life as well as if there are any medical treatments you do not wish to have. This document is vital because you may not be able to let others know your wishes when you become ill.

Even if you have discussed your wishes for medical treatments with your doctor or family, having an advance health care directive is a legal document that will make sure your wishes are honored. This document can address what care you want to receive if you are diagnosed with a terminal illness or whenever you receive medical care and something happens where you cannot voice your wishes. 

Many advance health care directives include whether or not you want your organs donated, if you will receive cardiopulmonary resuscitation, what surgical procedures you do or do not want as well as what diagnostic tests to perform and what type of life-sustaining medical care you want and for how long. This can include the use of a ventilator to help you breathe along with other life saving medical procedures.

Your advance health care directive should address if there are any medical treatments you absolutely don’t want along with any other important information your family, loved ones and medical professionals should know. The document can also state if you wish to stay in a hospital, nursing home or at home during this time. 

After creating your advance health care directive, you should be sure to discuss your wishes with your loved ones. You should also give your doctor and other health care providers a copy of the document. This will make sure everyone knows your wishes and there are no surprises. 

End-of-life planning can be very emotional and difficult. However, making these decisions now will make life much easier in the future. 

Source: State of California Department of Justice Office of the Attorney General, “Advance Health Care Directive: What’s Important to You,” Accessed June 2, 2014

Estate planning tips for women

Planning for the future can be difficult, especially when you’re busy being a wife or mother. Women face unique challenges when it comes to estate planning so it is important for them to be aware of the different types of issues they should address in their individual estate plans.

Women are usually known for taking care of everyone else and their estate plans usually reflect this too. However, an estate plan should also provide protection for women and help everyone else know their wishes.

What should women think about when creating their estate plan? For women who have children, it is important to have a will that names a guardian for any minor children. A guardian will be the person who will care for your kids in the event you are incapacitated or pass away. Women with kids should also consider having an advance health care directive and power of attorney to make sure their wishes are known, especially regarding life-sustaining medical treatments.

Women who don’t have children should also have a will, power of attorney and advance health care directive. These documents will help your loved ones and those taking care of you as you get older know your wishes. 

In addition to having these documents, women should make sure they review and update their beneficiary designations on their life insurance, retirement plans and other financial accounts. Women should review their beneficiary designations after they get married, divorced, have children or after their spouse passes away. It is important to review and update these documents because failing to do so could result in money going to someone who is no longer alive or someone you no longer have a relationship with.

Women in California should be aware of the different types of issues to address in their estate plans and take action now before it’s too late. 

Source: Market Watch, “How women can make estate planning easier,” Andrea Coombes, May 8, 2014

Why everyone needs an estate plan in California

Estate plans are just for older, wealthier people, right? Wrong. Everyone should have an estate plan, including young adults who don’t have a significant amount of wealth. An estate plan will make sure your wishes are known and pass on your possessions to the people you care about. 

Some readers may not know what an estate is or what it includes. An estate includes any real estate property you own as well as personal property like a vehicle or furniture. Your estate also includes financial accounts like bank accounts, retirement accounts, investments and even your Social Security benefits. Since your possessions and finances are part of your estate, it couldn’t be more important to create an estate plan to address what you want done with your estate.

An estate plan can include several different documents. At the very least, you should have a will. A will can document what will happen to your possessions and financial accounts. A will can also document who will take care of your children in the event you and their other parent pass away. 

In addition to having a will, you may want to consider having a few additional documents in your estate plan. You may want to have a durable power of attorney, which allows you to appoint someone else to make personal and financial decisions on your behalf if you are incapacitated.

Another document to consider is an advance health care directive. This allows you to appoint someone to make medical decisions on your behalf if you are no longer able to. It also lets your loved ones and doctors know what life-sustaining medical treatments you want and don’t want. 

Creating an estate plan and thinking about your own death can be very depressing and difficult to do. However, individuals in California need to think about the benefits of having a will and other estate planning documents before it’s too late and create an estate plan now.

Source: Dallas News, “Everyone needs an estate plan, regardless of wealth,” Pamela Yip, May 2, 2014

Does your estate plan address digital assets?

We live in a world where technology continues to advance and our population evolves with the new technology. Years ago, you probably never imagined that you would be so reliant on your cellphone or tablet for staying connected to your family, friends and even co-workers. However, times have changed and the online world has become a part of our daily lives whether we like it or not. 

Due to the role technology plays in our lives, it is important to address digital assets in your estate plan. Most people have some digital assets that should be included in their estate plan to help their loved ones know what to do with their possessions after you pass away. Unfortunately, many people fail to include digital assets in their estate plan, which can make life very difficult for their loved ones.

When your heirs don’t have knowledge or access to your digital assets, it can be difficult for your loved ones to retrieve online financial accounts, photos and documents. Even if your family knows about your accounts and has the passwords, they may not legally be able to access the accounts depending on the privacy agreements with each company. 

This is why you need to address digital assets in your estate plan now before it’s too late. Digital assets can include online financial accounts, social media accounts, photos, website domains, music accounts like iTunes, stock accounts and a variety of other accounts. 

If you want to include digital assets in your estate plan, you should put instructions on how to access them and what to do with your digital assets in your will or other estate planning document. You may want to store your passwords in a different location and not in your estate plan. You can also designate an executor for managing your digital assets, which can include specific instructions on what to do with each account. 

Every estate plan is different and every person has a unique set of circumstances to consider when creating an estate plan. Individuals should contact an estate planning attorney to discuss their specific issues. 

Source: USA Today, “Estate plan should pass down digital heirlooms,” Sue Doerfler, April 17, 2014

More than 50 percent of Americans don’t have a will

As you get older, many Americans accumulate more wealth, property and heirlooms they may want to pass onto their loved ones. The best way to address your wealth and possessions and what you want to happen to them is by having a will. Despite the many benefits, many Americans still don’t have a will.

A new survey by Rocket Lawyer found that 51 percent of people between the ages of 55 to 64 haven’t drafted a will. Among individuals 45 to 54, only 62 percent have a will. Why do so many Americans not have a will? The reason varies from person to person, but the most common reasons people said they don’t have a will include not having the time to create one, not feeling the urgency to create a will, not thinking they need a will and some don’t want to think about dying. 

Even though these reasons seem to be very common in the United States, they are not valid reasons for not having a will. Everyone should have a will, regardless of how much wealth they have or how old they are. Young adults to the elderly can benefit from having a will. 

What is the consequence of dying without a will? If you don’t have a will at the time of your death in California, your loved ones may not know your wishes and it can make it more difficult or impossible for them to inherit your assets. 

Having a will is very helpful for you and your family. A will can make sure your loved ones are cared for as well as make sure your assets are distributed according to your wishes. Having a will can also help your family avoid heated debates because they will know what you want and hopefully honor those wishes. 

Even if you think you have plenty of time to draft a will, do it sooner rather than later for the benefit of everyone you love. 

Source: Forbes, “Americans’ Ostrich Approach To Estate Planning,” Richard Eisenberg, April 9, 2014

L’Wren Scott leaves entire estate to Mick Jagger

The death of famous designer L’Wren Scott has led to some debate over her estate plan. The well-known fashion designer passed away earlier this month after committing suicide. In a surprising twist, she left her entire estate to her boyfriend, Rolling Stones frontman Mick Jagger. 

Her will lists Mick Jagger as the sole beneficiary of her $9 million estate. Her will did not include her siblings and they are set to receive nothing from her estate. In addition to her fortune, Mick Jagger is also listed as the beneficiary to her automobiles, furniture, clothing, jewelry and other personal items. 

Leaving her entire estate to her boyfriend could lead to some tension with her siblings. However, reports show that she wasn’t very close with her two siblings, which is likely why she didn’t name them in her will. Her siblings could possibly contest her will, but they would have to prove that she was not in the right mental capacity when the will was created or that the will is missing legal requirements. There are no reports of her siblings stating they want to contest her will, but it is a possibility. 

The fact that she left her entire estate to one person may seem shocking, but it is more common than you think. If you are drafting your will and are leaving your estate to only one person, you should definitely discuss it with that individual. It can also be helpful to discuss your will and other estate planning documents with other family members or loved ones who may think they will be named as a beneficiary in your will. Discussing the specifics of your will now can reduce stress and hurt feelings in the future as well as prevent potential legal battles over your estate. 

Source: Hollywood Life, “L’Wren Scott: Real Reason She Left Estate To Mick Jagger, Not Siblings,” March 27, 2014