Estate Planning and Tax Lawyer Blog

The prevalence of blended families has led to an increase in the number of wills that are contested each year in Florida probate courts, especially since Florida law does not recognize a no-contest clause in a will as anything more than a statement of intent.

A Florida will can be contested if:

The testator – the person making the will – lacked testamentary capacity at the time the will was made. A testator must understand what his or her assets are, and know the people who will be receiving them. A Florida will may be voided if it has been made by someone who is mentally incompetent or who has had his or her capacity impaired by dementia, illness or medication.

Undue influence was involved. This can occur when a testator is coerced through improper pressure or threat to execute or revise a will, usually to the benefit of the person or persons bringing the pressure to bear. This usually happens when an elderly testator is ill or suffers a decline in mental capacity, which causes them to be unduly influenced by the purpose of another.

It was executed improperly. A valid will must be signed by the testator and witnessed by two other people, and cannot be executed by fraud or under duress.

For more information on contesting a Florida will, contact our Jacksonville estate planning law firm.

For the first time in history, a comprehensive database of wills has been made available online at Ancestry.co.uk, the British version of the genealogical website Ancestry.com.

The National Probate Calendar is a summary of all the wills in England and Wales from 1861 to 1941 and provides information on over six million estates, including the name of the deceased, when and where they died, the name of their executor and, in many cases, details on specific bequests.

What has captured the most attention is, of course, the notable names who passed on during that time period, and the value of their estates. For example:

Karl Marx carried his anti-capitalism beliefs to the grave, leaving an estate worth only $390 ($36,000 today).

Charles Dickens died with an estate worth $125,000 ($11 million today).

Charles Darwin left his heirs in good shape, with an estate of $230,000 ($20 million today).

Arthur Conan Doyle, the creator of Sherlock Holmes, died in 1931 with almost $100,000 (about $4.7 million today).

Over 18,000 people in The National Probate Calendar died in the U.S., and the database contains the wills of several well-known American family members, including John Astor and Benjamin Guggenheim, who perished on the Titanic.

You can leave your own place in history – and make things a lot easier on your family – if you have a will. For more information about creating a will, contact our Jacksonville estate planning law firm.

If you die in Florida without a will (the terminology is “dying intestate”), all your assets will be divided among your immediate family (spouse and children).

If you are married without any children, your entire estate will go to your spouse.

If you are married with at least one child, the first $60,000 of your estate (above and beyond any homestead entitlements) plus 50 percent of the remainder of your estate will go to your spouse.   The rest will be divided among your children.

If you have no spouse or children, your assets will pass to your parents.  If your parents are no longer living, your estate will go to your siblings.

If you have no family whatsoever, your assets will go to the state.

Anyone who is over the age of 18 and of sound mind can execute a valid will, which must be in writing and signed in front of witnesses who are not named in the will as a beneficiary.

However, to ensure that your wishes are carried out as you intend them, you should consult with a Florida estate planning attorney, who can help you prepare a will as well as advise you about the many estate planning tools available to help you protect your assets and your heirs.

If you need more information on a Family Limited Partnership or other asset protection vehicles, contact our Jacksonville Florida estate planning law firm.

If your phone contact list includes both a pediatrician and a gerontologist, welcome to the sandwich generation, that growing demographic segment of the population who are taking care of their parents and their kids at the same time.

Besides healthcare, many of us are also taking on more responsibility for helping older parents manage their finances.  If you are currently tasked with that responsibility – or will be at some point – here are some things to put on your checklist:

Prescription drug coverage. Is the Medicare drug program your parents chose a year or two ago still the right one for them?  Most seniors find the plethora of choices confusing, so defer making any changes they might need.  Mark Nov. 15 on your calendar, which is the start date for Medicare’s open enrollment program (it ends on Dec. 31).  Visit www.medicare.gov and use the online prescription drug plan finder to find the best plan for them.

Retirement account distributions. If you have parents over the age of 70 ½, they must take the required minimum distributions from their qualified retirement accounts by the end of each year.  If they don’t, whatever is left over on Dec. 31 is subject to a 50 percent penalty.  You can set up automatic deductions to solve this problem as well.

Estate planning.  If they have not done so already, your parents need to visit with an estate planning attorney.  Estate planning laws change constantly, so even if they do have an estate plan in place but haven’t updated it in awhile, they need to do so.

For more information on retirement and estate planning, contact our Jacksonville Florida estate planning law firm.

Although the names are almost the same, there is quite a difference between a Will and a Living Will.

Basically, a Will is the written expression of your wishes for the disposition of your assets following your death. It ensures that the assets you have are distributed to the people you want to have them after you die. If you die without a Will, the court will make those decisions for you.

A Will usually contains the following elements:

• List of beneficiaries
• List of alternate beneficiaries, in case a primary beneficiary predeceases you
• Named executor of your estate as well as an alternate in case the primary executor is unable or unwilling to act
• Named guardian of any minor children, as well as an alternate
• Bequest assignments to beneficiaries
• Instructions on when and/or how minor children can inherit
• Requests for burial or cremation

A Living Will is separate from your Will and provides health care directives in case you have a terminal condition where your death is imminent or you are unable to make your wishes known. Your Living Will lets family and medical professionals know if you do not wish to have treatment that artificially prolongs your life (or if you do), and should be made a part of your medical record.

Both a Will and a Living Will should be part of your comprehensive estate plan; a Florida estate planning attorney can help you in drafting these important documents.

An auction is scheduled to sell some personal items of the late Lucille Ball and her second husband, Gary Morton. Morton and Ball were married until Ball's death in 1989, Morton later remarried. The items offered at the auction were consigned to Heritage Auction Galleries by Morton's widow, Susie Morton. Susie Morton is now battling the daughter, Lucie Arnaz Luckinbill, of Ball and her first husband and "I Love Lucy" co-star, Desi Arnaz.

Among the items up for sale are the couple's Rolls Royce, photos, sketches, love letters between Morton and Ball as well as some of the actress' awards.

Susie Morton sought a judge's ruling declaring the auction can proceed. Luckinbill stated she will go to court to try and stop the auction if the items she requested are not returned to her. Luckinbill is requesting the return of seven love letters, Ball's address book, some portraits and several lifetime achievement awards.

Cases like this happen all too often because people do not keep their will up to date. It is important after any major lifetime occurrence or event that you update your will to include in property that may be of value to your or your loved ones.

Continue reading "Heirs Argue over Lucille Ball Auction in Los Angeles, California " »

The battle continues over the former childhood star's estate. Gary Coleman's ex-wife Shannon Price and former business associate, Anna Gray continue to argue over who Coleman left as the beneficiary of his estate. In the meantime, Robert Jeffs, an attorney, has been appointed as the estate's temporary special administration.

Coleman and Price were divorced in 2008, but were living together at the time of Coleman's death. One one hand, Price argues that she was Coleman's common-law wife and has filed a hand-written document from 2007 that would give her Coleman's estate, if validated by the court. On the other hand, Coleman signed a will in 2005 that named Gray, from Portland, Oregon, as executor and awarded her all of his estate.

It is expected to take Utah District Judge, James Taylor, several months to conduct a trial that will determine which document is Coleman's last legal will and, thus, who will be awarded Coleman's estate. Until then, Coleman's remains are expected to be cremated and locked into a vault by Jeffs. There is no debate over whether or not Coleman wished to be cremated; the 2005 will called for his remain to be cremated as well as an earlier will made in 1999. Although both these wills are in agreement over Coleman's cremation, the wills contradict each other over whether or not Coleman wanted to have a funeral service. The 2005 wills states "there be no funeral serve, wake, or other ceremony memorializing my passing." However, the earlier 1999 will states gives instructions on who could and could not attend any funeral or memorial service. To read more about the battle of Coleman's estate see Gary Coleman's estate may take months to resolve.

Coleman's case happens all to frequently; where different and conflicting wills are created throughout one's lifetime. It is important to keep your legal will up to date. A legal will ensures your interests are protect and your estate is divested the way you intended. Contact a Florida Estate Planning Attorney to draft a legal will, update a previous legal will or discuss any questions or concerns you may have regarding the planning of your estate.

If your phone contact list includes both a pediatrician and a gerontologist, welcome to the sandwich generation, that growing demographic segment of the population who are taking care of their parents and their kids at the same time.

Besides healthcare, many of us are also taking on more responsibility for helping older parents manage their finances. If you are currently tasked with that responsibility – or will be at some point – here are some things to put on your checklist:

Prescription drug coverage. Is the Medicare drug program your parents chose a year or two ago still the right one for them? Most seniors find the plethora of choices confusing, so defer making any changes they might need. Mark Nov. 15 on your calendar, which is the start date for Medicare’s open enrollment program (it ends on Dec. 31). Visit www.medicare.gov and use the online prescription drug plan finder to find the best plan for them.

Retirement account distributions. If you have parents over the age of 70 ½, they must take the required minimum distributions from their qualified retirement accounts by the end of each year. If they don’t, whatever is left over on Dec. 31 is subject to a 50 percent penalty. You can set up automatic deductions to solve this problem as well.

Estate planning. If they have not done so already, your parents need to visit with an estate planning attorney. Estate planning laws change constantly, so even if they do have an estate plan in place but haven’t updated it in awhile, they need to do so.

For more information on retirement and estate planning, contact our Jacksonville Florida estate planning law firm.

Many Americans have the mistaken belief that estate planning is just for the wealthy, but that is not the origin of the term “estate” planning.

Everyone who dies owning property or other assets leaves an “estate.”  If you do not have property that would normally go through probate, then having a will is probably good enough.  And drawing up a will is an important part of estate planning.

Another important part of estate planning is developing advance directives, which spell out your wishes in terms of healthcare and/or property management.

Some other reasons for having an estate plan include:

• You have children from one or more marriages or relationships
• You have minor children
• You have a disabled child
• You have no heirs but want your property dispersed to someone other than the state
• You have heirs you want to disinherit

Whatever the size of your “estate”, it is a good idea to formulate an estate plan that reflects your wishes after you’re gone.

For more information on Florida estate planning, contact our Jacksonville Florida estate planning law firm.

What are the basic estate planning tools that you can use to protect your family – and your assets – no matter what age you are right now?

Will – if you die without a will or a living trust in place, your assets will be divided up according to state law.  And you might not like it.  Are you on a second marriage?  Just been through a divorce?  Without a will designating how your assets will be distributed, you will be leaving a mess for your heirs to clean up.

Financial Power of Attorney – this allows you to designate a responsible party to handle your financial affairs in case you become incapacitated.

Living Will – a living will or a healthcare power of attorney designates someone to make major healthcare and/or end-of-life decisions for you when you cannot, according to your wishes.

Beneficiary Forms – even if you name the beneficiaries of retirement accounts or life insurance policies in your will, if those names are not on the account or policy’s beneficiary form, they will not receive them.

Title Your Assets – if you have set up living trusts for your spouse or children, you must be sure to retitle the assets in the name of the trust or the living trusts are invalid.

Need to learn more about protecting your family through careful estate planning?  Contact our Jacksonville Florida estate planning law firm.

A University of Michigan study on the effectiveness of advance directives (living wills and durable powers of attorney) shows that medical professionals almost always respect the wishes of people who have advance directives in place.

The study, published recently in the New England Journal of Medicine, is one of the largest ever done on the effectiveness of advance directives.

From an article on the study in the Los Angeles Times:

In a study of 3,746 deaths, researchers found that 42.5% of patients had faced treatment decisions near the end of their lives but that more than 70% of those people had lacked the ability to make choices because of their mental or physical health. Among that group, however, the majority -- 67.6% -- had advance directives.

Moreover, the instructions left in the advance directives were almost always carried out by surrogate decision-makers. The will of the patient, said the lead author of the study, prevailed.

"This is a big change from the early '90s, when studies reported that only about 20% of people had advance directives," said Dr. Maria J. Silveira, a clinical scientist at the Veterans Affairs Ann Arbor Healthcare System and an assistant professor at the University of Michigan. "I think it shows the public has bought into this and thinks it's important."

Silveira used data from the long-running Health and Retirement Study, which surveys adults ages 51 and older nationwide. In analyzing data from people ages 60 and older who died between 2000 and 2006, researchers found that of the 398 incapacitated people who had used a living will to request limited care at the end of life, almost 83% received it. Limited care was described as care in only certain situations.

Of the 417 incapacitated people who had requested comfort care in a living will, 97% received it. Comfort care was described as being kept comfortable and pain-free while forgoing extensive measures to prolong life.

If you need more information about living wills or durable powers of attorney, contact our Jacksonville Florida estate planning law firm.

According to a recent Harris Interactive national survey, half of American adults do not have even the most basic estate plan in place to protect them and their assets.

The survey, detailed in a recent article in Forbes, showed:

Of those surveyed, only 35% have a will directing who gets their assets and only 29% have a living will that states their views on end of life medical procedures. Not surprisingly, older Americans were more likely to have made some preparations: 77% of adults over 55 had signed at least one of the needed documents, compared with 24% of those under 35. There was no noticeable difference in planning between men and women, but Americans with more education were far more likely to have planned.

Even the oldest respondents were hardly well prepared. For example, only 48% of those 65 and older said they a financial power in place authorizing someone to make financial decisions for them if they were incapacitated and only 51% said they had a health care power in place. Perhaps spurred by hospital admissions personnel, who usually ask if admitted patients have a living will, 58% of those 65 and older reporting having this crucial document.

The survey delved into why so many Americans lack estate planning documents. In a sign that the recession is taking its toll on planning, 44% of those without any documents said the reason was because they were more focused on "essentials" like paying bills and buying groceries. Feeding the neglect, however, were misconceptions about the primary purpose of estate documents or what might happen if someone hasn't planned.

If you need more information about retirement plans, contact our Jacksonville Florida estate planning law firm.

Do you have a beneficiary that you want to leave something to but it may not be exactly what they are expecting?  If so, you may worry that they may fight their inheritance in court.  To eliminate this worry, many estate planners insert what is a called a "no contest" clause into your will or trust.   A no contest clause is a statement in your will or trust that states that a beneficiary contesting or objecting to their inheritance will received nothing under the will or trust.  Essentially what you are telling the beneficiary is that if they throw a fit over their inheritance and attempt to fight it in court, they get NOTHING.

No contest clauses are completely dependant upon state law.  In Florida, they are not valid.  Florida law specifically states that a no contest clause is unenforceable.

To determine whether or not your state allows no contest clauses, please consult with an estate planning attorney to review your state's law.

If you’re like most people, you may believe that your estate planning duties are done once you make a will.  Wrong.  There are several important things a will can do for you, like distribute family heirlooms, but there are just as many – if not more – important things it cannot do:

Avoid probate – if you leave property to someone through your will, it will not be passed on to them except through probate court proceedings, which can take a year or more.

Reduce estate taxes – a will won’t help you reduce estate taxes; you will need to set up some kind of a trust to do that.

Provide care – if you wish to provide for someone with long-term care needs, a will cannot do this for you.

Distribute some types of property – a will cannot allow you to distribute property that you co-own with someone else or have transferred to a living trust, the proceeds of a life insurance policy, stocks or bonds held in transfer-on-death form, money in a payable-on-death account, or money in a pension plan, IRA, 401(k) or other investment account.

Provide for pets – pets cannot own property, so to provide for them properly after your death, you will need to designate a caretaker for your pet and leave appropriate pet care funds for them.

To learn more about the proper uses of wills and trusts, consult a Florida estate and tax planning attorney.

Florida, like many other states, has a slayer statute.  The statute states that a murderer is not able to receive property or any other benefits by reason of killing someone.  So if you kill your parents and you are a beneficiary of their will, you are not able to take your share of their estate under the will.  Florida treats you as if you had died before your parents.

The IRS recently released a private letter ruling (PLR 201008049) which came to a different result.  While Florida law may prohibit an individual who kills an IRA owner from benefitting under the IRA, the letter ruling states that a murder conviction in and of itself does not have the effect of retroactively removing the individual as the designated beneficiary of the decedent's IRA as of the measuring date.  Therefore, an individual convicted of and imprisoned for the murder of the decedent will still be treated as the designated beneficiary of the decedent's IRAs despite the state law slayer statute treating him as predeceased for purposes of inheriting property from the decedent.  The decedent's life expectancy will be used to calculate required minimum distributions.

To speak further about the private letter ruling, please consult an estate planning or tax attorney.

My last blog began a series of questions you should ask yourself to see if your estate plan needs to be updated.  Again, if you answer “No” or “I don’t know” to any of the questions, please set up a consultation with us so that we may review your estate plan with you to either tell you what it says or update it so that you have an estate plan that works for you and your families needs:

1. I am satisfied with the persons I named as guardians of my minor children in my current plan.
2. I am satisfied with the persons I named as executor or trustee in my current plan.
3. The persons I named as executor are either a Florida resident or a family member.
4. I am satisfied that my current plan sets up a contingent trust for my minor children.
5. I am aware of all future estate planning fees and expenses; including an understanding of those involved at the time of my death.
6. My children have met with my attorney and fully understand their roles and responsibilities upon my incapacity or death.
7. My Revocable Trust, if any, and Power of Attorneys specify an understandable test to determine my disability.
8. My Revocable Trust, if any, gives instructions for my care and the care of my loved ones if I become mentally disabled.
9. My Revocable Trust, if any, is fully funded so that my family can avoid the delays, publicity  and expenses of probate.
10. I and my spouse, if applicable, own everything jointly.
11. I have put my personal property into my Revocable Trust, if applicable.
12. I own property in another state which has already been dealt with in my estate plan.

If your estate plan needs updated, please conult with an estate planning attorney to set up a review of your current estate plan.

Does your estate plan need a tune up?  Although most Americans do not have an estate plan, those who do have an estate plan set up their estate plan, shove it in a file drawer in their homes and completely forget about it afterwards.  Below are a series of questions to quickly ask yourself to make sure that your estate plan still does what you originally wanted it to do.  If you answer “No” or “I don’t know” to any of the questions, please set up a consultation with us so that we may review your estate plan with you to either tell you what it says or update it so that you have an estate plan that works for you and your families needs.

1. I have a current Health Care Power of Attorney that has the required HIPAA authorizations to permit my spouse, children and/or family to make emergency health care decisions for me in the event I am unable to do so.
2. I have a current Durable Power of Attorney that is less than four years old to permit my spouse or children to handle my financial affairs in the event I become disabled.
3. I am certain that my current estate plan will minimize possible federal estate taxes at my death, including taxes on my house, life insurance and IRAs.
4. I have taken steps to avoid possible will contests and disputes at my death.
5. I have taken steps to protect my children’s inheritance in the event my surviving spouse chooses to remarry.
6. I have recently checked the beneficiary designations of my retirement plans and life insurance policies, and I am confident that I have not listed my estate or any minor children as either primary or secondary beneficiaries.
7. I have a plan to provide creditor and lawsuit protection for assets passed to my surviving spouse.
8. My current plan provides creditor and lawsuit protection for my children’s’ inheritance.
9. My current plan addresses income tax planning.
10. I have a plant to protect my children’s inheritance from a divorcing spouse.

Again, if you answered "No" or "I don't know", please consult with an estate planning attorney to review your estate plan and ensure it still works for you and your family.

If you’ve experienced – or are about to experience – a big change in your life, chances are that change should also be reflected in your will.

There are two ways to change your will – by modifying it with a codicil, or by drawing up a new will.  It is usually easiest – and helps reduce any potential for confusion – to create a new will when something major happens in your life:

Marriage – both spouses should create new wills after they get married.  If the marriage brings stepchildren into the picture – and you want to include them in your will – you must specifically name them, unless you have legally adopted them.

Divorce – suffice it to say, if you’ve divorced someone, you probably don’t want them getting any (more) of your assets.  While a divorce judgment revokes a gift made to your spouse in your will in most states, you should make a new will after your divorce.  Not to mention to completely redo the beneficiary designations on life insurance and retirement plans.

Birth – you should establish guardianship for a minor child in your will.

Death – if someone you have provided for in your will dies before you do, a new will should be made to redistribute the asset.

In addition, you will need to create a new will if you have disposed of any property that you gifted in your will or if you change your mind about a beneficiary.

For help in creating a will, consult a Florida estate and tax planning attorney.

Confused when your estate planner asks if you want the distribution to be per stirpes or per capita?  You are not alone.  Most people, including some attorneys, do not know the difference between a per stirpes distribution pattern and a per capita distribution pattern.  The very best way to explain it is with an example.

Assume Parent 1 has Child A and Child Z.  Child A has two children b and c and Child Z has one child y.  Under either a per capita or per stirpes distrubtion, when Parent 1 dies, Child A and Child Z each get ½ of the property.  Also under each system, if Child A predeceases Parent 1, upon Parent 1’s death, Child Z will still get ½ and children b and c will each get ¼ (sharing in Child A’s ½ share).

The difference between the two distribution patterns is shown if Child A and Child Z both predecease Parent 1.  In a per stirpes distribution pattern, children b and c will each get ¼ (sharing in Child A’s ½ share) and child y would get ½ (Child Z’s share).  In a per capita distribution pattern, children b, c and y each would get a 1/3 share.

If you would like to discuss the differences further, please contact an estate planning attorney to answer your questions.

In Florida, there are requirements that must be met in order for a last will and testament will to be valid. The person writing the will, also known as the testator,  must be at least 18 years old and competent when he or she signs the will; the will must be written and witnessed by two individuals, both of whom must sign the will in the presence of the testator and each other; and the testator must sign the will at the very end of the will itself and in the presence of the two witnesses.

If a will is not executed according to Florida law, a probate court will not approve the will and the estate will be distributed under the state's intestacy laws, which means that the state has set up a will for you but usually will not distribute the assets according to your wishes. While Florida requires that a will be written, it does not have to be typed and can be handwritten. A handwritten will, sometimes referred to as a holographic will, is valid as long as it is properly executed under Florida law (two witnesses, signed at the end, etc.).

If you live in the Jacksonville, Florida area and would like to speak to an estate planning attorney to review your estate plan, please contact Wood, Atter & Wolf, P.A.to set up an appointment.

Estate planning is such a broad term.   Estate planning includes wills, trusts, taxes, business succession, asset protection and many other documents and practice areas.  Estate planning also includes long-term care insurance and elder care.   It is all about planning for the future.   The time to plan for a nursing home placement or admission is not the first day of the admission.  Ideally, the best time to plan is when there is no pressure to find a facility, when the person is healthy and able to make an informed decision about long-term care, and when there are funds and insurance plans available to purchase to complete or put in place the planning process.   Douglas K. Gitter, J.D. of Northwestern Mutual will be making a presentation this Sunday, March 14, 2010 on the importance of Long Term Care insurance in estate and succession planning.  According to Gitter, in discussions with clients many of them were unfamiliar with the overall effect long term care can have on their assets.  Take Charge of Your Future is a detailed educational seminar, which illustrates the importance of long term care planning to ensure financial security.   Martin Goetz, CEO of River Garden will also be speaking about his top-rated, five star, long term care facility.

Please join us to learn more at the Brotherhood Sponsored Community Breakfast this Sunday from 10:00 am to noon.  There is a $5.00 per person charge with RSVP to TempleBrothersJax@yahoo.com or $6.00 at the door.    

This is a community event open to all interested in attending.  While Wood, Atter & Wolf are not sponsors or speakers at this event, Wood, Atter & Wolf supports and commends people and organizations promoting good estate planning as well as the proper and dedicated care of the elderly and those in need of long-term nursing home care.

To learn more about Doug and his practice, please visit his website at http://douggitter.nmfn.com/.

A recent study conducted by Harris Interactive for Lawyers.com shows that around half of Americans have no estate planning documents in place.  (If you would like to see more of the statistics related to the study, please click here.)  The biggest reason for that was that many were deterred by the legal cost and erroneously believed that without a large amount of assets, they had no need to plan at all.

First, the legal cost of setting up an estate plan is, in most cases, going to be less than your heirs have to spend in legal costs.  Your heirs will have to hire an attorney to probate their estate.  The legal fees usually end up being much higher to probate the estate than they would have been to have a proper estate plan in place which completely avoids probate.

Second, most mistakenly believe also that your surviving spouse automatically gets all your assets upon your death, even without a will.  Actually, only 16 states allow a surviving spouse to inherit everything.  Most states have some sort of split between the surviving spouse and the decedent’s children.  This can get messy with blended families.

Finally and possibly most importantly, estate planning also involves disability planning.  What happens if you are not able to make health care decisions for yourself?  What happens if you have no living will?  What happens to your assets if you cannot take care of them yourself?  These are very simple but VERY important questions, all of which are taken care of as part of your estate plan.  Unfortunately, not having  an answer to any one of them will cause your family and pocketbook to have problems.

If you are one of the majority of Americans who do not have any estate plan in place, please consult with an estate planning attorney to learn more about why you really do need an estate plan.

Although there is currently no estate tax (which could change any day), there are eight basic estate planning steps that everyone should take, no matter what your net worth is. 

The first step is to have a financial power of attorney.  The financial power of attorney appoints someone to handle your financial affairs if you are unable to do so yourself.  This document ensures that all of your assets are taken care of and your bills are being paid.  The person appointed can be appointed immediately or only upon your disability.  Without a financial power of attorney, your family will have to go to court to have permission to deal with your assets.  State laws change frequently, make sure your financial power of attorney is valid under your state’s law.

Step two is to make sure you have a valid health care power of attorney and living will.  The health care power of attorney allows someone to make health care decisions for you if you are unable to make them for yourself.  A living will states what your intent is if you are in a persistent, vegetative state.  More commonly stated as “whether or not to pull the plug”.  Your health care power of attorney needs to have the HIPAA authorizations within it, otherwise it is not a valid document.

Step three is to calculate your net worth.  You may be surprised where you stand financially.  This is important from a tax standpoint but you will also get a hold of everything you own.  Sometimes assets fall through the cracks and are not properly planned for because they were not brought up during the estate planning discussion.

Step four is to review your beneficiary designations.  Upon your death, your beneficiary designations control how that specific asset will pass.  A will or trust has no say.  If your ex-spouse is named accidently, the ex-spouse will receive that asset.  Beware, it happens everyday!

Step five is to create or update your will.  A will allows you to determine how your assets pass to your loved ones.  If you do not have a will, the state where you live has graciously set one up for you but it probably does not pass your assets according to your wishes.  This is especially true when you are remarried and have children from your current and/or previous marriage. 

Step six is to plan for your state’s estate tax.  The District of Columbia and23 other states have their own estate or inheritance taxes.   If you don’t plan for them, you could inadvertently cause a state estate tax upon your death.

Step seven is to check how your assets are currently titled.  Do you have everything titled jointly?  If you have a trust, does your trust own your assets?  If you are unsure how your assets are titled, please review the title of your assets as it makes a big difference upon your death.

Finally, the last step is to gift while you are alive.  Currently, you can give $13,000 per year to anyone you wish.  You can stand outside of your church and write a $13,000 check to everyone who passes by.  Additionally, you can pay anyone’s college or private school tuition or medical bills so long as they money goes directly to the educational facility or medical provider.

If you need help with any of the above estate planning steps, please consult an estate planning attorney for estate planning legal counsel.

Ever wonder what happens to your pets after you pass away?  Most pet owners consider their pets as a member of their family.  It, however, is not uncommon for pets to be left behind as their owners pass away.  What can you do to ensure that your pet is taken care of upon your passing?  Estate planning for pets became more popular in the 90s and pet trusts are now legal in most states.

Legally, your pet is deemed to be tangible personal property that would pass to your heirs or beneficiaries by law.  With a will or a trust, you can control who will get your pets and how they should be taken care of.

Typically a pet trust sets aside a certain amount of money that is dedicated to caring for the pets you owned upon your death.  Once the last of the pets pass, any remaining funds pass to your beneficiaries.  There are decisions to be made though in setting up the pet trust.

The most important decision is who will serve as the trustee of the trust and caretaker of the pets.  Friends and family are usually thought of first.  Although they may enjoy playing with your pets, the enjoyment may diminish quickly.  A good way to test whether or not they will be a good caretaker is to have them pet-sit for several days. 

Another decision to be made is how much, if any, to compensate the caretaker for their services.  If you compensate them too little, they may not adequately care for your pets.  If you compensate them too much, they may keep a suffering pet alive too long.  There is a story about a caretaker who found a new black dog whenever the old black dog passed away to ensure they continued to receive compensation.  You want to avoid this situation.  There are always non-profit organizations who will gladly care for your pet under a pet trust.

If you would like to discuss the possibilities of a pet trust further, please contact an estate planning attorney to draft the legal documents necessary to ensure your pets are taken care of upon your passing.