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Frequently Asked Questions

Inheritance

Should I tell my estate planner I am expecting an inheritance?


Yes. While some people are hesitant to count their chickens before they hatch, looping your estate planner into your full financial picture is the best way to prepare for whatever the future may hold. By planning ahead, you can help ensure that whatever is left to you will be protected and able to be enjoyed for years to come. With all of the emotions that surround the passing of a loved one, you’ll be able to focus on grieving and the administration process, without having the additional worries of how you will handle your finances.




What will happen to my plan if I do not actually receive the inheritance?


If you expected to a receive an inheritance and ultimately do not, your financial and estate plans can be revised to take the change into account. We like to think of estate planning as a process rather than a one-time event. Your plan must evolve over time to ensure a continued management of the assets you have, not just the ones you had when the plan was originally prepared.




How do I ask my family if I am getting an inheritance?


Money can be a taboo subject in some families. Broaching this subject with your family may be difficult and uncomfortable, but it is necessary. Start the conversation during a relatively stress-free time rather than springing it on a family member during the chaotic holiday season or before a big family celebration. Instead of focusing solely on what you are to receive as your inheritance, you can discuss it as part of a larger conversation regarding your loved ones’ future plans for their health and overall well-being. You can begin by inquiring as to what type of planning they have already done. Have they designated agents under Financial or Medical Powers of Attorney to act on their behalf should they become incapacitated? Do they have a living will in place to assist with end-of-life decisions? While planning for an inheritance may be your main focus, this conversation can help ensure that your loved one is protected as well.




Should I tell my estate planner I am expecting an inheritance?


Yes. While some people are hesitant to count their chickens before they hatch, looping your estate planner into your full financial picture is the best way to prepare for whatever the future may hold. By planning ahead, you can help ensure that whatever is left to you will be protected and able to be enjoyed for years to come. With all of the emotions that surround the passing of a loved one, you will be able to focus on grieving and the administration process, without having the additional worries of how you will handle your finances.




What happens to my plan if I do not actually receive the inheritance?


If you expected to a receive an inheritance and ultimately do not, your financial and estate plans can be revised to take the change into account. We like to think of estate planning as a process rather than a one-time event. Your plan must evolve over time to ensure a continued management of the assets you have, not just the ones you had when the plan was originally prepared.





Newlyweds

We just got married with no children. Why would we need an estate plan?


Just because you marry someone does not automatically mean that they will inherit from you. Some assets, such as life insurance policies, have beneficiary designations that must be changed. Whoever is listed on those will receive the assets on your death. For those assets that do not have a beneficiary designation, they will be distributed according to the state law of intestacy. While each state may vary, in most cases, the assets will be distributed between the surviving spouse and other family members. An estate plan puts you in control of the inheritance you leave behind.




We may be moving soon. It is okay to wait until we are settled before having our estate planning done, right?


A move should not be a reason to put off your estate planning. While we understand that there are a lot of changes occurring, tragedy can occur at any time. Even if you are changing states, there are still some aspects such as updating your beneficiary designations that can be accomplished and will not be affected by the move. Additionally, it is a good idea to have a Medical Power of Attorney, even if you are not going to be in the state for too much longer. Life can be very unpredictable and you do not want to get caught needing court intervention should something happen to you or your spouse before the move.




Do we need an estate plan if we have a pre-nup?


While a prenuptial agreement may address the distribution of assets, it does not handle other important topics such as incapacity. Without a Financial Power of Attorney or Medical Power of Attorney, if you are to become incapacitated, your family will need to petition the court to have someone appointed to act on your behalf for your financial matters and medical decisions.




Can we avoid estate planning by owning assets jointly?


It is true that the survivor will automatically own 100% of jointly owned assets, this strategy does not protect the assets from creditors and provides no additional protection in case of incapacity. Also, owning assets jointly has no impact on the need for a Medical Power of Attorney or guardianship for minors.





Year-End Planning

With respect to estate planning, why does it matter the year is coming to an end?


Because the year is coming to an end, it is a great opportunity to ensure everything is in place for a successful and financially safe new year.

Also, for things such as 401(k) contributions and funding Health Savings Accounts, the federal government allows you to contribute a maximum amount per year. Towards the end of the year, if you have found you have not taken full advantage of these, it may be a great opportunity to save more for your retirement and your future medical needs.





Asset Protection Planning

Who is asset protection for?


Asset protection planning is for everyone. If you engage in any activity that could give rise to a lawsuit (drive a car, employ another person, allow people into your home, etc.), you are vulnerable to a lawsuit that could take everything you have.




Is asset protection legal?


YES! Asset protection planning is NOT about hiding assets, keeping secrets, or defrauding anyone. Asset protection planning is about positioning your assets in a way that discourages lawsuits or prompts a mutually beneficial settlement.




My spouse just filed for divorce. Can I do asset protection planning now?


Unfortunately it is too late. Asset protection planning can only be done before a lawsuit or threat of a lawsuit is known. Asset protection planning is about planning ahead, not transferring assets only when you are at risk.




What are some simple things I can do before transferring my assets into a trust?


Athough it is always better to seek the help of an estate planning attorney, there are some basic strategies you can use to do asset protection planning on your own. First, always make sure that you have proper insurance. Make sure that your homeowner’s insurance is up to date and accurately reflects the current value of your home. If you own a business, make sure you have business insurance to cover any liability or losses that might arise so that your personal assets are not at risk.

Second, if you are married (and your state law allows for it), you and your spouse should own your home as tenants by the entirety. This type of ownership means that the creditor of one spouse cannot take your home. Depending on your state law, you may be able to co-own other property the same way with your spouse.

Lastly, make the maximum contribution to your 401(k) or IRA accounts. These accounts are protected from bankruptcy proceedings for you and your spouse (with certain limitations). This same protection, however, does not extend to an inherited IRA.





Divorce and Estate Planning

My spouse just filed for divorce. Can I do asset protection planning now?


Unfortunately it is too late. Asset protection planning can only be done before a lawsuit or threat of a lawsuit is known. Asset protection planning is about planning ahead, not transferring assets only when you are at risk.




Does my ex-spouse receive anything if I die?


It is really up to chance and state law. Some beneficiary designations and asset titles are automatically revoked after a divorce if your spouse is named as the beneficiary, while others do not. For example, many retirement plans will pass to the named beneficiary, even if you are divorced from that person at your death. It is much better to be proactive and make conscious choices about your beneficiary designations, rather than leaving it to chance.




Can I update my will or trust if I am paying child support or alimony?


Unless you have a contractual will (which is as rare as snow in Hawaii), you are free to update your estate planning documents any time you want after a divorce is finalized. You may need to factor in ensuring that any alimony or child support claims that survive your death are paid, but it would be incredibly rare and unusual to required an inheritance be left to an ex-spouse in your will or trust. If you are paying child support or alimony, let us know so we can factor it into your plan.




Does my ex-spouse have any authority under a financial or medical power of attorney document


Not to sound like a lawyer, but it depends. It really depends on state law and the terms of your power of attorney documents. Additionally, there’s always a risk that an unscrupulous ex-spouse may conveniently omit that the divorce has nullified a power of attorney and attempt to use the document anyway. The better practice is to revoke your old power of attorney documents and create new ones to avoid any ambiguity. Then, let your hospital, physicians’ offices, banks, or anyone else who may have a copy of your old powers of attorney on file know that you revoked the old one naming your now ex-spouse. If necessary, provide them with a new copy naming your new agents.




All the legal work is done if the divorce decree divided all the assets, right?


Your divorce case may be final, but to be fully protected you must go through the estate planning process. Even if you created a plan while you were married, you are now a single person in the eyes of the law. Plus, the divorce decree may have divided the assets but it did not let you express who you want to leave them to now that you are no longer married. Estate planning lets you decide to whom you want to leave your assets.




What should I discuss with an estate planning attorney after my divorce?


Now that you are no longer married, your plans for your assets may be less clear than they once were. So, first explore who you would like to receive your estate. Second, be prepared to discuss who you want to handle your affairs when you are unable to do so. Third, make sure that you living up to the terms required in your divorce decree regarding child support and alimony.




Do I have to get my ex-spouse’s consent to make a new will or trust?


Generally no. Once you are divorced, you are treated as a single person for estate planning purposes. As a result, there’s no permission you need to change your will or revocable trust. Irrevocable trusts vary, depending on their purpose. If you have an irrevocable trust of any kind, bring a copy with to your meeting and we can examine what options you have. If you have a contractual will (which is as rare as the Washington Football team having good seasons), you may need to discuss with your spouse or look at your divorce decree. Go Giants!





New & Expanding Families

What is a guardian?


There are two kinds of guardians - (1) those appointed to care for a minor child when the child’s parent is unable to do so, and (2) guardians appointed for the care of an incapacitated adult who can no longer make his or her own decisions. Comprehensive estate planning addresses both types of guardians, so that you and your family are fully protected.

Although a guardianship for an incapacitated adult can be avoided by adding proper powers of attorney, and explicit directions for them, to your estate plan, you should always name guardians for minor children. A court will want to make sure the child’s best interests are cared for. The way that you, as a parent, can make your wishes known is to designate a guardian for your minor children in your estate plan.




If the person that would be a great guardian is not good with money, can I still select them?


Of course you can select them to the be guardian for your children. With a comprehensive estate plan, you can “split up” the roles: one person manages the money (the successor trustee) while another person raises the children (the guardian). Sometimes the same people are appropriate for both roles and other times, naming different people is the right thing to do. This is what we call a “counseling issue,” meaning that after we talk it through, you’ll know what decision to make. The people who care for your children day-to-day may or may not be the best fit to manage the finances as well. The responsibilities do require different skill sets. Luckily, your plan can be tailored to your unique circumstances and needs.




Why do I need a will or trust if I have life insurance?


If you do not have a will, the court will decide who settles your estate and raises your children and state law determines who gets your assets - and it may not be who you think. Most people want to make those decisions themselves; don't you?

Additionally, life insurance may provide the money to provide for your family if you are not able to, but it does not provide any structure, guidance, or protection against waste or financial abuse. When you use a “plain” beneficiary designation, you lose the ability to provide this protection for you family. But, a comprehensive estate plan gives you the opportunity to provide safeguards and protection against waste or abuse. Life insurance can be very helpful component of estate planning, but only when it’s used properly.




How do I name guardians for my children?


Guardians for minor children must usually be named in a will. If you fail to appoint guardians in your will, the court will decide who raises your children. For parents of minor children, this is the most important estate planning decision you will ever make.

Even though it is hard and no one can raise your children as well as you can, move forward and select the guardians you think will muddle through the best. Some people delay estate planning because they cannot make this decision. Do not do that; your inaction puts your children at risk. And, be sure to name back-up guardians as well in case your first choice is unable to serve if the time comes.




What if the guardians I name for my children cannot serve when the time comes?


This is an important question that many folks forget to ask. It is essential that you name contingent guardians in your will in case your primary guardians are unable or unwilling to serve if the time comes. Life does indeed change, so be sure to also indicate who get the kids if guardians divorce. Check in with the people you would like to name to be sure they are willing and able to serve.





Family Drama

How often do we have to update our estate plan?


Estate planning is not a one and done event. By not updating your estate plan to take into consideration your changes in circumstances over the past 20 years or those of your beneficiaries, you are inviting a contest because things have inevitably changed.




Are there other options to disinheritance to avoid my son's creditor issues?


Disinheritance is not the only option. Through the use of discretionary trusts, we can help you leave money to your son that will be for his benefit only.




I want to keep my estate planning private, but how do I prevent conflict?


Maintaining privacy is a very serious matter. However, too much secrecy can breed distrust and cause problems among the family. If you do not want to get into all of the details of your estate plan, such as what or how much each person is to receive, it is important to at least let your family know that you have had a plan prepared and that it reflects your wishes. With this little bit of information, your family will understand that the choices you made were yours and not someone else's, and that you have taken the time to have them memorialized. I always suggest my clients have the discussion either during Thanksgiving holidays, but not during football and definitely AFTER dinner!





Young Adults and Estate Planning

Who needs estate planning?


Everyone needs estate planning. Children under the age of 18 are protected by their parents’ estate plan but everyone age 18 or older needs his or her own estate plan. Of course, estate plans vary immensely depending on goals, finances, family situation, domicile (where you live). There is no one-size-fits all estate plan.




How old do you need to be to have an estate plan?


Everyone needs estate planning, no matter their age. Children under the age of 18 are protected by their parents’ estate plan; everyone age 18 or older needs his or her own estate plan. Of course, estate plans vary immensely depending on goals, finances, family situation, domicile (where you live). There is no one-size-fits all estate plan. If you’re wondering whether you need an estate plan, you’re asking the right question and, yes, you do.




When do my children need to get their own estate plan?


Everyone is surprised when we answer this question. Even an 18-year-old high school senior needs her own estate plan. Once a child attains the age of 18, she is legally an adult and must make her own health care, financial, and legal decisions. Without legal documentation, parents are powerless to act on behalf of their adult children.

Of course an 18-year-old’s estate plan is very different from a 48-year-old’s estate plan because life, assets, goals, and family situation evolve over 30 years, but some basics are the same.




How much money do I need before an estate plan is necessary?


You do not need to be a Rockefeller, Gates, Bezos, or Soros to need an estate plan. In fact, you don’t need any assets to need an estate plan. What you do need is one of the following: 1. someone you love, 2. the desire to control your life and finances, 3. the desire to maintain privacy, or 4. the wish to avoid court interference.

To help you think this through, here are non-monetary reasons to have an estate plan in place: 1. an estate plan empowers your trusted helpers to make healthcare decisions and manage your day-to-day business if you’re not able to; 2. appoints guardians for minor children and pets; and 3. avoids medical heroics through a living will.




My child is legally an adult, should she have her own estate plan?


YES! A million times yes. Even an 18-year-old high school senior needs an estate plan. Once a child attains the age of 18, she is legally an adult and must make her own health care, financial, and legal decisions. Parents are powerless to act on behalf of their adult children without legal documentation. Plus it makes them feel important while at the same requires them to beginning thinking and planning as an adult.





More than Money

Isn’t estate planning only about taxes?


This is a common misconception. Comprehensive estate planning takes the whole person into account. It involves selecting trusted individuals to carry out one’s wishes and drafting documents that carefully guide and protect future generations. Estate planning also goes beyond taxes, wealth, and medical decision making: Many people choose to include things like recorded oral histories and precious heirlooms in their plans. This makes estate planning not just about property, but about the legacy, values, and vision you want to pass along to future generations.




How can a trust be used to pass along my values?


There is actually a huge diversity of types of trusts, and part of estate planning is picking the ones that work best for you, your family, and your goals. In terms of passing your values to the next generation, educational and incentive trusts can promote or discourage certain life choices. For example, someone who prizes their family vacation memories might create a fund for that purpose. Additionally, charitable trusts or foundations can pass along your personal mission of philanthropy.




What should I tell my children about my estate planning?


There is no cut-and-dry rule for what you should and should not tell your children about your estate planning, but it is usually a good idea to err on the side of more information rather than less. It is a good idea to tell your children the reasons behind your decisions, so they understand how your values translate into your plan. Sharing your perspective far in advance using important documents like your health care directives can also reduce stress on your family in a difficult moment down the road. It is also an excellent way to reduce (or even eliminate) family infighting that sometimes occurs after death if your children have heard directly from you about the reasons for your decisions.

BTW, when we finally disclosed to my girls the value of my life insurance policy, they looked at me like hungry hyenas staring a raw meat. Then they looked at their mother as though they were denied the winning PowerBall ticket ;-)





Pet Trusts

If I forgot to include my pet in my existing estate plan, is it too late?


We can easily amend your current estate plan to include a pet trust; in fact, most pet trusts exist as part of a larger revocable living trust-based plan. If you want or need a separate pet trust, we can certainly structure it that way, but most of our clients prefer us to include the pet component within their existing plan.




How can I be sure my chosen caretaker will be able to keep my "particular" dog on her routine?


Your pet trust includes instructions for care, and these instructions can be specific. If your dog needs to be fed a certain type of food at precise times of day, prefers a special toy, has a specific bedtime or needs to be walked three times a day in a specific park near your home, you can include all this information in the instructions. You should also talk with the person you plan to appoint as a caretaker and explain the situation, so he or she knows what to expect. You can even have your appointed caretaker tag along for a couple of days to get familiar with your dog’s routine.




How can I know how much to leave in my pet trust without overdoing it?


We can certainly help! The specifics about how much money to leave for your pet will vary greatly depending on your specific circumstances, but we can will help you create an itemized list to ensure there’s enough to cover everything. Factors to consider will include how long your pet is expected to live, the current costs for caring for your pet, costs for the caretaker/trustee, etc. As for any surplus, you can easily designate where any extra money goes after your pet passes on (for example, the extra could be donated to your favorite animal charity), so you can rest assured that any extra will go where you think best. Depending on the amount being set aside and your other assets, we can also work with your financial advisor to ensure that your pet trust is completely coordinated with your other financial objectives.





Probate

What is probate?


Probate is the process by which the court validates the authenticity of a will; appoints an executor (aka personal representative); and supervises the settlement of an estate, including the payment of bills, filing of tax returns, and transfer of assets to beneficiaries. If no will is presented, the court will appoint an estate representative, called an "administrator." The administrator carries out the same duties as an executor; but when a person dies without a will the court must determine the heirs of the deceased. The complexity and duration of this heirship determination process varies from state to state, but typically the remainder of the probate process, such as the payment of taxes and bills, remains the same whether there was a will or not. Of course, estate assets are distributed to heirs at law as determined by the state's intestacy laws, not beneficiaries chosen by the testator (aka the deceased who created the will).




How do I avoid probate?


Only assets in your individual name or payable to your estate will go through probate. Many folks use a (fully funded) revocable living trust to avoid probate. In addition, contract assets such as life insurance, retirement accounts, and annuities as well as assets owned by joint tenants with rights of survivorship avoid probate as well.




Is probate bad?


Sounding like a lawyer again, but it depends. Many people, but not all, think so. The difficulty and expense of probate varies from state to state (and in some jurisdictions, county to county) and from family to family because of differences in state laws, family goals and personalities, and assets. Many clients wish to avoid probate because it’s a public process, time consuming, and costly. We’ll take a look at your entire situation together and let you know whether a probate avoidance plan should be part of your estate plan.




Why should I avoid probate?


First reason, because you can! Next because most people want to avoid probate because it can include high fees and costs, significant time delays and stress, and public dissemination of private information. What do I mean by public? In most cases, court records are public records, meaning that anyone could get a copy of your will, the estate’s inventory, and other information you might wish to keep private. The ease of accessing this information does vary from state to state, and sometimes even from county to county. Some places even have online dockets, allowing anyone with an internet connection to see a listing of your assets, debts, beneficiaries, and who got what. If you are like most people, you want to keep your family affairs and finances private, so probate should be avoided.





Incapacity Planning

What does "disabled" mean?


In the estate planning world, the term “disabled” refers to an individual’s incapacity or the inability to manage day-to-day business affairs such as managing and protecting assets, signing papers, paying bills, and filing taxes. “Disability” or “incapacity” does not mean you are laid up on the couch with a bad back; instead, it means that you don’t have the physical and mental capacity necessary to manage your personal business.




How can I be sure to stay in control of my property if I become disabled?


There are two options for maintaining control during a period of disability; and, often, we recommend the use of both: power of attorney and revocable living trust.




How do I avoid being kept alive by machines if I am brain dead?


A living will is used to avoid medical heroics such as life support at the end of life.




Who will make healthcare decisions for me if I cannot make those decisions myself?


Assuming you have an estate plan, your agent under your health care power of attorney has the power to make healthcare decisions for you if you are unable to make those decisions yourself. Otherwise, the court could end up appointing someone.




Who will take care of my finances if I become disabled?


Disability is the perfect example of why you need to appoint trusted helpers. If you have an up-to-date power of attorney, the named agent may be able to manage your finances, including paying your bills. Unfortunately, if you do not have a legally documented disability/incapacity plan, your loved ones will battle it out in court and a judge will decide who’s in charge. Because power of attorney documents are often turned down, we use the belt and suspenders approach for many clients, including a trust with disability provisions.

TIP: Be sure to name a contingent agent in case your primary agent is unable or unwilling to serve. The same with disability trustees. Be sure to name successor disability trustees in case your named trustees are unable or unwilling to serve when the time comes.









Blended Families

I am married to my second spouse, but my spouse and children from my first marriage get along really well. Why would I need to consider estate planning?


They may be getting along well now, but there is no telling what will happen after your death. The court records are full of cases that could be said to have begun with these exact facts. Estate planning puts you in charge and allows you to make sure everyone that is important to you - your new spouse and your children from a prior marriage - understands your wishes. This greatly reduces the risk of conflict and, in some cases, can completely eliminate conflict.




I have my home, bank accounts, and cars in joint tenancy with my new spouse, so why would I need a will or trust?


Joint tenancy does avoid probate and is often better than no planning. However, if you and your spouse were to die at the same time then the joint tenancy is “broken” and your respective halves would have to go through probate. Additionally, if your new spouse survives you, then he or she owns all of the property that was jointly owned. Even if the two of you agreed that your children from a prior marriage should be supported or left an inheritance, your new spouse owns the property and can do whatever he or she wants with the property. This could completely disinherit your children from a prior marriage.




If my children are happily married and I amm in a stable, long-term marriage, why should I worry about divorce or the estate planning issues “blended” families experience?


Even if none of your children are divorced now, the statistics show that many couples will experience a divorce. Estate planning reduces the risk that your death could be a financial windfall for a soon-to-be-ex-spouse, which can happen if you die at the “wrong” time. It’s wise to hope for the best but plan for the worst, so that your family can be fully protected.




How do I balance the interests of my children and my spouse from a second marriage?


We can do that together. We will help you set up an estate plan that protects and provides for whomever you’d like - often that’s children and, sometimes, a second or third spouse. Your estate plan, likely including trusts, will be carefully crafted to balance the interests of your children as well as your spouse. Without proper planning, too many parents accidentally disinherit their beloved children and cause havoc (and expensive lawsuits) in blended families. But with proper planning, you can take care of everyone’s needs in an equitable way that reduces the risk of expensive conflict.




Without a prenup with my new spouse I cannot do any estate planning that might impact him or her?


The intersection of prenups and estate planning is complex, so every case will vary. But, in many cases there are strategies that can be used to help you provide for your new spouse while also ensuring protection for your children. The worst thing you can do is assume that there is nothing that can be done.





Military

I am currently enlisted in the military. Should I just go through the Judge Advocate General ("JAG") office for all of my estate planning since it is provided to me for little or no charge?


While you do have some legal services at your disposal because of your military service, sometimes the basic estate planning offered by your JAG office is not enough to carry out your specific wishes and truly protect your family. By working with an experi enced estate planning attorney, we can help ensure that your individual situation is evaluated and a custom plan is crafted and implemented to meet your needs.




I am able to purchase up to $400,000 in life insurance through the Servicemembers’ Group Life Insurance. Why should I consider more?


Although $400,000 seems like a lot of money, it can be depleted quickly. Depending on your unique situation, your family may need more than that. Are you married? Do you have children? The cost of raising a child to age 18 is approximately $250,000 (at least), so that life insurance could be eaten up quickly. Will your family need to move if you pass away? Does your spouse currently work, and will he or she need to return to work and then find child care? The passing of a loved one can throw a family into financial turmoil. With the proper planning, it is better to leave your family with more resources, appropriately protected, than too few.




If I already had a Will prepared when I was deployed, do I need to be concerned?


YES. Estate planning is not a one and done task. Depending upon how long it has been since you had the documents prepared, it is always a good idea to have them reviewed by an experienced estate planning attorney to make sure that your wishes are adequately contained in the old documents. Life is full of changes, and it is important that your estate planning documents reflect your life and needs as they are right now.




Why is estate planning important if I am single and do not own a home or any other large assets?


Regardless of your financial status, estate planning is important for everyone. It not only covers what to do with your assets when you have passed away, it also includes documents such as financial and medical powers of attorney that will authorize individuals to act on your behalf if you are not able to due to incapacity or being out of the country.





Elder Law

Can my executor sign my name if I am sick?


No. A personal representative/executor only has authority after you die. This is because in a Will, a testator/testatrix (i.e., you) provides instruction as to who shall serve as personal representative/executor to settle the estate and how assets will be distributed. A power of attorney, not a will, is used to provide assistance, such as signing documents for you, while you are alive, but sick.




How can I avoid going to court?


To stay in control of your assets and avoid court interference as much as possible, you should have a strong, up-to-date estate plan in place. This includes having an executed will, health care power of attorney, and a financial power of attorney. Unsigned or incomplete documents do not help – be sure you finalize things. Let your family know that you have done estate planning, where you have stored your documents, and who to contact (i.e. the attorney that helped prepare your documents) should you become incapacitated or die. Regarding storage, if you are a Maryland resident, your will can be stored for safekeeping with the Register of Wills for your county.




Will my revocable living trust protect my assets from the nursing home?


No. While your trust can be used to provide asset protection for your beneficiaries after you die, it cannot be used to protect your own assets during your lifetime. You need Medicaid planning to protect assets from the nursing home.





Estate Planning Basics

Key Players in Your Estate Plan


An important part of the estate planning process is deciding who will help you manage your responsibilities if you are no longer able to and when you are gone. Here are the key roles that you need to assign.

Healthcare Power of Attorney

What this person does

  • Steps in to make health care decisions for you when you cannot make such decisions for yourself
  • Makes decisions ranging from ongoing care or basic medical decisions to emergency decisions in a life or death situation

Questions to consider

  • Does this person understand what I would want done, and will he or she stand by my wishes?
  • Does this person live nearby, or would he or she be able to live nearby if my situation required it?
  • Is this person logical in high-stress times and able to make medical decisions?
  • What experience has this person had making other health care decisions? Will he or she know what questions to ask and how to be my advocate? Can this person be a strong advocate for me?
  • Is this person close to me and comfortable making a health care decision for me? Do we have compatible opinions about health care treatment?
  • Do I trust this person to carry out my wishes if I am unable to make decisions for myself?

Durable Power of Attorney

What this person does

  • Steps in to make financial decisions for you when you cannot make them for yourself
  • Needs to be someone you trust to carry out all types of financial decisions such as paying bills or making deposits

Questions to consider

  • Do I trust this person to manage my finances if I am unable?
  • Will this person be available to make these decisions? (Consider where this person lives, what he or she does for a living and how many other commitments he or she may already have.)

Personal Administrator (i.e., Executor)

What this person does

  • Works with your attorney and other financial advisors to settle your financial affairs after your death. Includes filing taxes, paying bills and making sure all of your property goes where you want it to go.
  • Either does the work or hires professionals to help with taxes and distribute assets and other notices required to be given by the estate. The Personal Administrator often works closely with the attorney. Unlike other positions, the Personal Administrator is entitled to payment for his or her time.

Questions to consider

  • Is this person trustworthy, detail-oriented and able to handle paperwork?
  • Does this person have the time to take on the role?
  • Does this person live close to where the estate will be settled and, if not, will that slow the process or create complications?
  • Does this person have good financial sense? Can he or she work with professionals such as tax advisors and attorneys?

Trustee

What this person does

  • Takes charge of the assets placed in a trust

Questions to consider

  • Do I trust this person to make sound decisions about the money I am leaving to a minor or other party?
  • Does this person have compatible financial sense?
  • Will this person deal with my beneficiaries fairly and competently?
  • Does this person have values similar and consistent with mine?

Guardian of a minor

What this person does

  • Raises your children if they are still minors when you pass away
  • Carries out your decisions about where your children live, where they go to school and all other matters regarding everyday living

Questions to consider

  • If I were unable to raise my children, would I feel good about this person raising them in my place?
  • Does this person have the living environment I would want for my children?
  • Is this person willing and financially capable to raise my children?

Beneficiary

What this person does

  • Receives the benefits or assets you leave behind
  • Receives distribution of assets from the personal representative of the estate, as long as a beneficiary is an adult and there are no restrictions on the distribution
  • Receives distribution of assets from the trustee, if beneficiary is a minor or the distribution has restrictions

Questions to consider

  • Will this person use what I am leaving him or her in a way I feel good about?
  • Do I have any reservations about this person receiving my gift? If the person is underage, has/had a drug or alcohol problem or a history of bad spending, consider options such as different trusts or investments that would pay a smaller specific amount over time.

Important Additional Considerations

Here are additional considerations to ponder as you decide who to name for each role:

  • Consider each role separately and anticipate needing more than one person to fill each role. The qualities required to fill one role may not be the same qualities you need to fill another role.
  • Consider naming a backup for each role in case the primary person is unable or unwilling to serve.

While it is important to carefully consider who you want in each role, do not wait for a "perfect decision." You are nearly always better to name someone now, knowing you can change your mind later. In other words, do not let waiting for "the best there is" keep you from naming "the best you have got."

Once you have decided who will fill each role, be sure to talk to each person so everyone knows you have chosen them and what is expected of them.




How To Have Conversations with People Involved in your Estate Planning


Perhaps one of the biggest reasons you are working on an estate plan is to minimize the stress and possible family drama after you pass. While your actual plan will go a long way toward doing that, one way to be more successful is to talk about your plans with those who will play a part in them. Let them know exactly what their roles mean and what they will be expected to do.

Here is a conversation guide to help you think through what you want to say. Keep in mind that these are just examples and you should make this as personal as possible and include additional examples if necessary to make the role clear.

I have asked you to be my Healthcare Power of Attorney.

What this means is that you will be the person who will: Step in to make health care decisions for me if I cannot make such decisions for myself.

I would like you to do this because: I know you will carry out my wishes. You are logical in high-stress situations. You have experience making health care decisions.

Circumstances when you would be needed are: If I were unconscious or incompetent to make health care decisions, you would act on my behalf. Decisions could range from ongoing care or basic medical decisions to emergency decisions in a life or death situation.

Additional information you might need to know includes: Why I have made the health care decisions I have and where any supporting documents are located.

I have asked you to be my Durable Power of Attorney.

What this means is that you will be the person who will: Step in to make financial decisions for me if I cannot make them for myself.

I would like you to do this because: I trust you to manage my finances. I know you will be available and willing to devote the time it takes to make these decisions.

Circumstances when you would be needed are: If I were unconscious or incompetent to make financial decisions, you would act ethically and responsibly on my behalf. You might need to pay bills, make deposits to or withdrawals from my investments.

Additional information you might need to know includes: Why I have made the financial decisions I have and where any supporting documents are located.

I have asked you to be my Personal Representative (i.e., Executor)

What this means is that you will be the person who will: Work with my attorney and other financial advisors to settle my affairs after my death.

I would like you to do this because: I trust you and know that you are detail-oriented. You have experience working with professionals.

Circumstances when you would be needed are: Settling my affairs after I die. This can include filing taxes, paying bills and making sure all of my property goes where I have decided it should go.

Additional information you might need to know includes: The process I have created with my attorney and when you should contact the attorney. Optional: How and when people are receiving items.

I have ask you to be my Trustee.

What this is that you will be the person who will: Take charge of the assets place in my trust. I would like you to do this because: I believe we share similar values. Therefore, I trust you to make sound financial decisions and deal fairly with beneficiaries. I believe we share similar values.

Circumstances when you would be needed are: If I have a trust, you will manage those funds for the person who receives the funds.

Additional information you might need to know includes: The plans I have made and decisions I would want made in different situations.

I have asked you to be my children's Guardian.

What this means is that you will be the person who will: Raise my children who are younger than 18.

I would like you to do this because: My children know you and love you, and I trust you. If I cannot raise them, I feel good about you doing it in my place. I know we share the same beliefs and values.

Circumstances when you would be needed are: Raising my children, deciding where they go to school and all other matters regarding everyday living.

Additional information you might need to know includes: Details about how I want my children to be raised.

I have asked you to be my Beneficiary.

What this means is that you will be the person who will: Receive benefits or assets I am leaving behind.

I would like you to do this because: I know you value what I am giving you and will use what I leave you in a positive way.

IMPORTANT: Depending on your family situation, you may or may not want to notify people you will be naming beneficiaries.

You may want to ask your attorney for additional tips on telling family members about these roles, and if there are any general procedures the law office follows. People will want to know the specifics of who to contact and how to reach them, especially if they need help outside of normal business hours.

Anticipate that there will be questions. If you do not know the answer, write the question down and follow up with your attorney and then discuss again with the person you have named.





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