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Estate Planning Blog Articles

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Do Charitable Gift Annuities Work?

A Charitable Gift Annuity donated to a qualified 501(c)(3) charity creates an immediate tax deduction for a portion of the contribution and a fixed income stream from the charity for as long as the grantor lives. With the minimum contribution usually $5,000, a CGA is accessible for many people seeking to create a legacy and lower taxes, according to a recent article, “How about a gift that pays you back?” from Los Angeles Daily News.

Who could benefit from a CGA?

  • A person who wants to give generously but is concerned about having enough income for the future.
  • Someone who needs a last-minute tax deduction and has already reached contribution limits for an IRA or 401(k) plan.
  • A philanthropic-minded person who wants to leave a large amount or all of their estate to charity and wishes to have the business end of their giving done all at once.
  • A donor who wants to avoid or defer capital gains tax on an asset they want to donate to charity.

An estate planning attorney should be involved in creating and executing the CGA to ensure that all requirements are met so that the CGA achieves the desired results and works in tandem with the rest of the estate plan. The estate planning attorney will set up the CGA. You then donate the asset to the charity. The gift is set aside and invested by the charity. You receive fixed monthly or quarterly payments as long as you are living. After your death, the charity receives the funds remaining in the account.

The income tax deduction is the contribution minus the present value of the payments to the donor. The estate planning attorney can make the calculations. Current annuity rates range from 4.6 to 10.1% for 50 and older, based mainly on age. Let’s say someone made a $100,000 contribution. They would receive $4,600 to $10,000 a year from the charity.

The amount received never fluctuates and is fixed so it won’t adjust for inflation. However, it is secured by the charitable organization’s assets and continues at the stated rate, no matter how the annuity investments perform.

Another example: a couple in their 70s funds a Charitable Gift Annuity with $50,000 of appreciated stock originally purchased for $20,000. They will receive an income tax charitable deduction of $17,584 and a payment of 6% or $3,000 a year for the rest of their lives.

This kind of donation is advantageous to both the donor and the nonprofit. The charity needs to be a qualified 501(c)(3), and it’s best to pick a well-established charity with a Charitable Gift Annuity program in place. Your estate planning attorney will be able to review the program to be sure that it aligns with your overall estate plan.

Reference: Los Angeles Daily News (Dec. 29, 2024) “How about a gift that pays you back?”

How to Discuss Estate Planning with Aging Parents and Adult Children

Estate planning is critical to financial and personal preparedness, yet discussing it with family members is often uncomfortable. Aging parents may avoid the topic out of fear or denial, while adult children may feel hesitant to raise concerns about their inheritance or end-of-life care. Despite these challenges, starting the conversation early ensures that everyone understands the plan and can work together to honor their loved ones’ wishes.

Why Discussing Estate Planning Matters

Talking about estate planning with family members is more than dividing assets—it’s about ensuring clarity, preventing disputes and avoiding unnecessary legal complications. When plans are not communicated, misunderstandings can lead to emotional strain, legal battles, or financial difficulties after a loved one’s death.

Conversations about estate planning also provide an opportunity to address other critical topics, such as long-term care preferences, healthcare proxies and powers of attorney. This ensures that family members can make decisions if an unexpected event occurs.

Strategies for Starting the Conversation

Estate planning discussions require focus and sensitivity, so choose a time when everyone involved can be present and free from distractions. A private, comfortable setting encourages open dialogue and reduces the likelihood of interruptions.

For example, scheduling a family meeting during a holiday or family gathering can be convenient. However, ensure that the setting allows for meaningful discussion rather than quick exchanges.

Frame the Discussion Positively

Approach the topic as an opportunity to protect and honor your family’s values rather than focusing solely on legal or financial matters. Emphasize that the goal is to avoid future conflicts, reduce stress and ensure that everyone’s wishes are respected.

For instance, a parent might say, “I want to make sure we’re all on the same page about my plans, so there’s no confusion later on.” On the other hand, a child might say “I want to make sure that we know how to respect your wishes when you’re gone, and be prepared for an emergency.” This framing can make the discussion feel collaborative rather than confrontational.

Start with General Topics

If the idea of diving into financial details feels overwhelming, begin with broader questions about values and preferences. Discuss topics like healthcare priorities, funeral arrangements, or general goals for passing on a legacy. Once everyone is comfortable, you can move into specific details about wills, trusts and financial planning.

Key Topics to Address

Discuss the importance of having a legally valid will and ensuring that beneficiary designations on accounts and policies are up to date. Explain how these documents ensure that assets are distributed according to the individual’s wishes and minimize potential disputes.

Healthcare Directives and Powers of Attorney

Clarify who will make decisions about healthcare and finances in the event of incapacity. Establishing advance directives and durable powers of attorney can provide peace of mind and prevent confusion during emergencies.

Long-Term Care Planning

Talk about preferences for long-term care, such as staying at home, moving to an assisted living facility, or seeking nursing home care. Discuss how these decisions will be financed and whether long-term care insurance exists.

Trusts and Tax Planning

If trusts or tax strategies are part of the estate plan, ensure that family members understand how these tools work and how they benefit the overall plan. While it is unnecessary to share every financial detail, explaining the purpose of these measures fosters understanding and transparency.

Overcoming Resistance

Resistance from aging parents or adult children is common. Parents may feel they are losing control, while children may worry about appearing greedy or intrusive. To address these concerns, emphasize that the discussion concerns their well-being and legacy rather than financial gain.

If resistance persists, consider involving a neutral third party, such as an estate planning attorney or financial advisor. These professionals can guide the conversation and provide objective insights that help ease tensions.

Maintaining Open Communication

Estate planning is not a one-time conversation. Circumstances, laws and family dynamics change over time, requiring periodic updates to the plan. Commit to revisiting the topic as needed and keeping lines of communication open.

Encourage family members to ask questions and express their concerns throughout the process. This ongoing dialogue builds trust and ensures that everyone remains informed and aligned.

Building Understanding and Trust

Effective communication about estate planning strengthens family bonds and reduces the risk of misunderstandings. By addressing these topics proactively and with empathy, you can ensure that your family is prepared for the future and that everyone’s wishes are respected. For help approaching hard subjects and building an estate plan that protects your family, reach out to our law firm today.

Key Takeaways

  • Start Early: Discussing estate planning early prevents future misunderstandings and legal complications.
  • Take a Positive Outlook: Approach the conversation positively, focusing on collaboration and protecting family values.
  • Estate Planning Fundamentals: Key topics include wills, healthcare directives, long-term care preferences and financial plans.
  • Seek Assistance: Neutral third parties, such as estate planning attorneys, can help overcome resistance and provide guidance.
  • Active Communication: Periodic updates and open communication ensure that the plan remains relevant and effective.

Reference: ACTEC (American College of Trust and Estate Counsel) (Jan. 27, 2022) “How to Talk with Your Parents About Estate Planning“

The Executor’s Checklist: Key Responsibilities and Timelines for Probate

When someone names you as the executor of their estate, they entrust you with the critical task of settling their affairs after their death. While this role is an honor, it comes with legal obligations and potential challenges. Understanding the probate process and responsibilities can help you navigate this critical role effectively, honoring the wishes of the deceased and following the law as needed.

The Role of an Executor in Probate

An executor is responsible for managing a deceased person’s estate, ensuring that assets are distributed to beneficiaries and debts are settled. The probate process legally validates the will and provides the executor with the authority to act on behalf of the estate.

While specific duties may vary depending on state laws and the complexity of the estate, the overall goal is to fulfill the deceased’s wishes as outlined in their will.

Step-by-Step Guide for Executors

1. Locate the Will and File for Probate

Your first responsibility is to locate the deceased’s original will and submit it to the probate court in the county where they lived. This step opens the probate process and establishes you as the estate’s legal representative.

Key documents to gather include:

  • Death certificate
  • Original will (if available)
  • List of known assets and liabilities

The court will issue “letters testamentary,” granting you legal authority to act on behalf of the estate.

2. Notify Interested Parties

You must notify all beneficiaries named in the will and legal heirs if no will exists.  You must  alsoinform creditors of the deceased’s passing, allowing them to make claims against the estate.

Depending on state requirements, notices may be sent by mail and published in local newspapers.

3. Inventory the Estate

You must then compile a detailed inventory of the estate’s assets and liabilities. This inventory should include:

  • Real estate holdings
  • Bank accounts and investment portfolios
  • Personal property such as vehicles, jewelry and collectibles
  • Outstanding debts, including mortgages and credit card balances

This inventory is crucial for understanding the estate’s value and ensuring that all assets are accounted for before distribution.

4. Pay Debts and Taxes

Before distributing assets to beneficiaries, you must settle the estate’s debts and taxes. This includes paying off outstanding bills and loans, filing the deceased’s final income tax return and paying estate taxes, if applicable. Use estate funds to cover these expenses and keep detailed records of all payments for court and beneficiary review.

5. Distribute Assets to Beneficiaries

Once debts and taxes are resolved, you can distribute the remaining assets according to the will. This may involve transferring titles, liquidating accounts, or physically delivering personal property. Ensure that beneficiaries receive an accurate accounting of their distributions and obtain receipts or acknowledgments to document the process.

6. Close the Estate

After completing all responsibilities, file a final report with the probate court to close the estate. This report should include a summary of:

  • Assets collected
  • Debts and taxes paid
  • Distributions made to beneficiaries

The court will review the report and officially close the probate case, releasing you from your duties as executor.

Challenges Executors May Face

The probate process can present challenges, including disputes among beneficiaries, hidden assets, or unexpected debts. To navigate these issues:

  • Stay organized: Maintain thorough records of all financial transactions and communications.
  • Communicate openly: Keep beneficiaries informed to reduce misunderstandings and potential disputes.
  • Seek the assistance of a lawyer: Consult a probate lawyer for guidance on complex legal or tax issues.

Overcome Executor’s Challenges with the Help of Our Estate Planning Firm

By approaching your role with diligence and care, you can honor the deceased’s wishes and ensure the process runs smoothly. At our probate law firm, we’re experienced in helping you through this challenging time with compassionate, informed guidance. Schedule a consultation with our probate attorneys today to find the help you need.

Key Takeaways

  • Responsibilities of Executors: Executors must locate the will, file for probate and manage the estate’s assets, debts and distributions.
  • Inventorying assets and notifying beneficiaries are critical early steps in the process.
  • Order of Priority: Debts and taxes must be settled before distributing assets to heirs.
  • Unexpected Challenges: Disputes or hidden debts are easier to manage with experienced legal assistance.
  • Completing Probate: Closing the estate requires filing a final report with the court, marking the conclusion of the executor’s duties.

Reference: Nolo (Sept. 12, 2022) “Checklist for Executors of a Will”

If You Want Your Trust to Work, Fund It

A revocable trust is a powerful estate planning tool that helps individuals manage their assets during their lifetime and distribute them efficiently after their death. However, a trust only works if it is properly funded. The American College of Trust and Estate Counsel explains that many individuals make the mistake of setting up a trust but fail to transfer assets into it. This leaves their estates vulnerable to probate, taxes and disputes. To fully benefit from your trust, you must ensure that it is appropriately funded with all intended assets.

What It Mean to Fund a Trust

Funding a trust involves transferring ownership of assets from your name into the trust’s name. This step gives the trust legal control over the assets, allowing them to be managed and distributed according to the terms of the trust. Without this transfer, your assets may remain subject to probate, and your trust could become an ineffective document.

Key asset types that can and should be transferred into a trust include:

  • Real estate properties
  • Bank and investment accounts
  • Tangible personal property, such as valuable jewelry, artwork, or collectibles
  • Business interests and intellectual property
  • Life insurance policies (with the trust named as the beneficiary)

By funding your trust, you ensure that these assets are managed seamlessly during your lifetime and distributed efficiently upon your death.

Why Trust Funding is Essential

Failing to fund a trust undermines its primary purpose. If assets remain outside of the trust, they may become subject to probate—the often lengthy and costly legal process of settling an estate. This can delay the distribution of assets to your heirs and increase the likelihood of disputes among family members.

A funded trust also provides benefits that unfunded trusts cannot, including:

  • Privacy: Unlike wills, which become public records through probate, trusts keep the details of your estate private.
  • Control: Funding the trust ensures assets are distributed according to your wishes without interference from courts or state laws.
  • Continuity: In the event of incapacity, the trust enables a successor trustee to manage your assets without court intervention.

How to Fund a Trust

Properly funding a trust requires transferring ownership of assets into the trust and ensuring that documentation is updated to reflect the change. Each asset type requires specific steps:

Real Estate

To transfer real estate, you must execute a deed transferring ownership to the trust. This often involves recording the new deed with the local land records office. Consult an estate lawyer to ensure that the transfer complies with state laws and doesn’t inadvertently trigger taxes or other issues.

Bank and Investment Accounts

Banks and financial institutions typically require documentation to retitle accounts in the name of the trust. This might involve filling out specific forms or providing a copy of the trust agreement. Failing to update account ownership could result in these assets being excluded from the trust’s control.

Tangible Personal Property

A written assignment can transfer tangible personal property to the trust, such as art, heirlooms and jewelry. The assignment lists the items being transferred and formally declares their inclusion in the trust.

Life Insurance and Retirement Accounts

While retirement accounts, like IRAs and 401(k)s, are not typically retitled to a trust for tax reasons, you can name the trust as a beneficiary. For life insurance policies, updating the beneficiary designation to the trust ensures that proceeds are directed according to the trust’s terms.

Business Interests

If you own a business, transferring shares or interests into the trust allows the trustee to manage them as needed. This requires amending operating agreements, stock certificates, or partnership documents to reflect the transfer.

Common Pitfalls to Avoid

Even with good intentions, individuals often make mistakes when funding their trusts. Common errors include:

  • Leaving assets out of the trust: Forgetting to transfer all intended assets undermines the trust’s effectiveness.
  • Failing to update beneficiary designations: Beneficiary forms conflicting with trust terms can create legal disputes.
  • Not reviewing the trust regularly: As assets change over time, it’s essential to revisit and update the trust to include new acquisitions.

An estate lawyer can guide you through the process and help ensure that all assets are correctly transferred and documented.

Ensuring Your Trust Works

A revocable trust is a living document that requires ongoing attention. Regularly reviewing and updating the trust ensures it remains aligned with your goals and includes all current assets. Properly funding your trust provides security for your loved ones, avoids unnecessary legal complications and ensures that your legacy is preserved.

Key Takeaways

  • Trusts require funding: A trust without assets cannot function as intended.
  • Assets must be transferred: Ownership of real estate, accounts and personal property must be retitled in the trust’s name.
  • Life insurance and retirement accounts need updates: Name the trust as a beneficiary to align proceeds with your estate plan.
  • Regular reviews prevent errors: Ensure newly acquired assets are included in the trust to avoid gaps in coverage.
  • Legal guidance is crucial: Working with an estate lawyer helps ensure that all steps are completed properly and effectively.

References: American College of Trust and Estate Counsel (ACTEC) (Aug. 31, 2023) “Funding Your Revocable Trust and Other Critical Steps” and American College of Trust and Estate Counsel (ACTEC) (Sep 21, 2023) “Tangible Personal Property in Estate Planning”

What Is the Difference between Equal and Fair Inheritances

Deciding how to disperse a lifetime of assets among heirs is a common issue seen by estate planning attorneys. The idea of being “fair” to family members generally refers to a wish to divide the estate equitably, according to a recent article from The News-Enterprise, “Fair isn’t same as equal when dividing estate.”

Assets are commonly distributed by giving each person an equal share. If a beneficiary has died, their share passes to their descendants, or the living heirs divide the decedent’s share.

In some cases, gifts already made to heirs need to be taken into consideration. Let’s say one child has received a $18,000 gift to help purchase a house. The parents may deduct this amount from the beneficiary’s overall inheritance to keep asset distribution fair to the other children.

If one of the children has supported a parent, provided housing, or devoted time and effort towards their care, the estate plan may give the caregiving child more to recognize their dedication. Caregiving adults give up a great deal to care for aging parents, sometimes delaying their careers or losing out on career or social opportunities. This seems like a reasonable response. However, it may engender resentment by non-caregiving siblings. An estate plan should be very clear about this distribution method, and a letter of intent may be useful in case of any court challenges.

When the family includes disabled individuals, distribution may be based on their short- and long-term needs. For instance, an adult child who is unable to support themselves may be the recipient of assets through a Special Needs Trust. If they inherit assets directly, they may become ineligible for government benefits. A Special Needs Trust requires the help of an estate planning attorney to ensure that the SNT is created properly.

When adult children have achieved different levels of financial success, parents can also provide more for the children who need more help. A conversation with all the children should occur so they understand why one sibling is receiving more than another.

Blended families face challenges when distributing assets between stepparents and stepsiblings. Assets are usually divided between spouses, and then the spouses distribute their shares of the estate to their children. Marital trusts may be needed to ensure that no child is disinherited, and an experienced estate planning attorney will be able to structure the estate properly to achieve this goal.

Suppose spouses in a blended family have significantly different levels of assets. In that case, the couple may leave additional assets to the spouse’s heirs with a higher net worth. How assets are distributed will also depend on whether or not the couple has merged their finances and whether or not each has agreed to waive their spousal claim on each other’s estates.

An estate planning attorney works with families to decide how they wish to distribute their wealth and guides the process to make it as conflict-free as possible. Fair is not always equal. However, planning and full transparency can build bonds between family members.

Reference: The News-Enterprise (Dec. 7, 2024) “Fair isn’t same as equal when dividing estate”

Strategies for Thriving as a Senior Living Alone

A growing number of older Americans are living independently, ushering in a “gray revolution” fueled by longer life spans, rising divorce rates and smaller or geographically dispersed families. According to The Washington Post, more than 16 million Americans aged 65 and older now live alone — the largest number ever. While this trend underscores the importance of independence and self-reliance, it also presents unique health, safety and social well-being challenges.

Consider the story of Gerri Norington, a 78-year-old woman from Chicago who has lived alone for decades following her divorce and widowhood. Though she maintains a strong relationship with her daughter, Gerri fears being a burden and relies on her resourcefulness to remain engaged in her community. Like many seniors living solo, she confronts questions about her long-term safety and how to maintain her independence.

Elder law attorneys can help support seniors living alone by addressing legal concerns, while equipping seniors and their families with proactive strategies for thriving as they age.

Challenges Faced by Seniors Living Alone

Living independently can bring a sense of empowerment. However, it also introduces risks that may compromise a senior’s ability to thrive:

  1. Health and Mobility Issues: Seniors living alone are at increased risk of falls, chronic illnesses and difficulty accessing healthcare, particularly in rural areas. Nearly 40% of solo seniors experience disabilities that impact daily living, according to Census data analyzed by KFF.
  2. Social Isolation and Mental Health: Prolonged isolation can lead to depression, anxiety and cognitive decline. Even socially active individuals, like Gerri, can feel lonely without daily companionship.
  3. Financial Vulnerability: Managing finances independently can be daunting, particularly for those on fixed incomes or with limited savings. Scams and financial exploitation remain pressing concerns for solo seniors.
  4. Emergency Preparedness: Without a nearby support system, responding to accidents or medical crises can be more challenging, exacerbating risks to well-being.

Proactive Strategies for Thriving While Living Alone

A combination of practical tools, community connections and legal planning is essential for seniors to age successfully and safely while living alone.

  1. Create a Safe Living Environment
  • Install handrails, adequate lighting and non-slip surfaces to prevent falls.
  • Consider investing in a medical alert system for emergencies.
  • Evaluate whether current housing is suitable for aging in place or if modifications are necessary.
  1. Build a Reliable Support Network
  • Stay connected with family, friends and neighbors. Regular check-ins and visits can provide emotional support and a safety net.
  • Join local senior centers, community groups, or faith-based organizations to cultivate meaningful relationships.
  1. Leverage Technology
  • Use smartphones and tablets for video calls, social media and telehealth services to bridge physical distances.
  • Set up reminders for medication schedules and appointments.
  • Enroll in online classes or virtual events to stay mentally engaged.
  1. Prioritize Physical and Mental Health
  • Schedule routine check-ups and screenings.
  • Engage in regular physical activity, such as walking, yoga, or swimming, to maintain mobility.
  • Pursue hobbies like gardening, reading, or crafts to promote mental stimulation and emotional well-being.
  1. Plan for Nutrition and Home Maintenance
  • Simplify meal preparation with meal delivery services or batch cooking.
  • Maintain a clean and organized home with assistance from local services or volunteers when needed.
  1. Stay Informed About Transportation Options
  • Explore senior-friendly transportation services, rideshare apps, or shuttle programs.
  • If driving becomes challenging, identify reliable transportation alternatives for medical appointments and grocery shopping.
  1. Legal and Financial Preparedness
  • Update essential documents, including wills, advance directives and powers of attorney.
  • Monitor finances with budgeting tools or enlist the help of a financial advisor.
  • Establish safeguards to prevent fraud, such as freezing credit and using monitoring alerts for bank accounts.

Partnering with Elder Law Attorney for Peace of Mind

An elder law attorney can be an invaluable resource for seniors living alone. By crafting a comprehensive plan, attorneys help seniors address their unique concerns and establish protections for the future.

Attorneys assist with critical legal documents, such as healthcare proxies and financial powers of attorney, ensuring that trusted individuals can act on their behalf during emergencies. They also offer guidance on long-term care planning, estate management and asset protection to safeguard independence and financial security.  Take the first step toward creating a secure and fulfilling future by scheduling a consultation with our elder law team today.

Key Takeaways:

  • Growing Trend: More than 16 million seniors in the U.S. now live alone, driven by longer life spans, divorce and smaller families.
  • Unique Challenges: Seniors living solo face heightened risks of isolation, health complications, financial vulnerability and difficulty managing emergencies.
  • Proactive Strategies Matter: Solutions like creating a safe home, building a support network, embracing technology and prioritizing health can empower seniors to age confidently.
  • Legal Preparedness is Essential: Working with an elder law attorney ensures that seniors have key documents—like powers of attorney and healthcare proxies—while addressing long-term care planning and financial security.

References: The Washington Post (Sept. 24, 2024) “Historic numbers of older Americans are now living by themselves” and Senior Healthcare Team (2023) “Thriving Alone: Essential Tips for Seniors Embracing Independent Living”

How Transparency in Estate Planning Prevents Family Conflict

Estate planning is more than just drafting legal documents—it’s about preparing your loved ones for the future. As Warren Buffett explained in a letter to Berkshire Hathaway shareholders, as The Wall Street Journal shared, having open discussions with your family about your will is one of the most effective ways to avoid confusion and conflict after your passing. Despite its difficulty, transparency in estate planning fosters understanding, accountability and alignment with your values and intentions.

Why Transparency Matters in Estate Planning

Family conflict often arises from misunderstandings about estate plans. Buffett’s advice to share the terms of your will with your adult children before signing it underscores the importance of clear communication. Estate planning attorneys echo this sentiment, highlighting several benefits:

  1. Prevent Misunderstandings: Explaining your decisions reduces the likelihood of disputes among heirs.
  2. Clarify Responsibilities: Discussing roles, such as trustees or healthcare proxies, ensures that everyone understands their duties.
  3. Align Expectations: Transparency helps beneficiaries prepare for their roles and responsibilities, minimizing surprises during an already emotional time.

The alternative—keeping plans under wraps—can leave loved ones unprepared, as seen in the story of Ebonee Moore, who didn’t learn about her inheritance until after her father’s passing. This delay hindered her ability to plan wisely, underscoring the value of proactive conversations.

Strategies for Discussing Estate Planning with Family Members

While the conversation may feel uncomfortable, families must address estate planning openly. Drawing insights from The Wall Street Journal and estate planning experts, here are actionable tips for meaningful discussions:

1. Choose the Right Time

Avoid initiating these conversations during stressful periods or family gatherings where emotions run high.  You should instead opt for a calm setting, like a private meeting or a dedicated family event.

2. Start Small

As Warren Buffett did with his children, break the conversation into manageable pieces. Discuss overarching goals first, then dive into specifics over time.

3. Involve Professionals

Consider including your estate planning attorney in family meetings to explain complex terms, answer questions and provide reassurance about legal safeguards.

4. Address Common Concerns

Reassure your loved ones that estate planning isn’t just about financial matters—ensuring that your values, legacy and healthcare preferences are honored.

Key Elements of an Effective Estate Plan

An estate planning attorney can guide you in crafting a plan that secures your legacy, while fostering family unity. Critical components include:

  • Wills and Trusts: These documents outline how assets will be distributed, reducing ambiguity and potential disputes.
  • Powers of Attorney: Appoint someone to manage your financial and medical decisions if you become incapacitated.
  • Healthcare Directives: Specify your preferences for medical care to ease decision-making during emergencies.
  • Beneficiary Designations: Regularly update these to reflect current relationships and intentions.

Overcoming Emotional Barriers

Many families avoid estate planning discussions due to the emotional weight of topics like death and finances. However, avoiding these conversations can lead to greater challenges later. Reframing the discussion as a way to strengthen family bonds and create peace of mind can help overcome hesitations.

Estate planning is an opportunity to share stories, express values and build a legacy of unity and understanding. Writing a letter to beneficiaries, as some estate planners suggest, lets you articulate your values and the reasoning behind your decisions in a heartfelt, personal way.

How an Estate Planning Attorney Can Help

Navigating the complexities of estate planning requires expertise and compassion. An experienced estate planning attorney can provide the legal framework to secure your assets, while helping you facilitate meaningful family conversations.

By working with an estate planning attorney, you can:

  • Ensure that your wishes are legally documented and enforceable.
  • Identify the best strategies for minimizing taxes and maximizing your legacy.
  • Create a comprehensive plan that protects your loved ones in unforeseen circumstances.

Estate planning is more than preparing for the inevitable; it’s about taking control of your future and ensuring that your family is cared for in alignment with your values. Don’t leave your legacy to chance—schedule a consultation with our estate planning attorney today to create a plan that protects your loved ones and fosters peace of mind.

Key Takeaways:

  • Transparency Prevents Conflict: Openly discussing your estate plan with family members minimizes misunderstandings and strengthens bonds.
  • Key Documents Are Essential: A comprehensive plan includes wills, trusts, powers of attorney and healthcare directives, ensuring that your wishes are honored.
  • Professionals Provide Guidance: Involving an estate planning attorney facilitates clear communication, resolves questions and ensures that your legal documents are up-to-date and enforceable.
  • Legacy Conversations Matter: Sharing your intentions fosters understanding and prepares heirs for their roles, reducing emotional and financial stress during difficult times.

References: The Wall Street Journal (Nov. 29, 2024) “Warren Buffett Talks to His Kids About His Will. You Should Too.” and J.P. Morgan Wealth Management (April 22, 2024) “How to talk to loved ones about estate planning”

Estate Planning Steps to Contemplate in 2025

One of the tasks for families and business owners to consider at the start of a new year is estate planning. Did any special events occur in 2024, making it necessary for your estate plan to be updated? Or has another year passed since you didn’t get to update an existing plan or even have an estate plan created? What about a succession plan? A recent article from Cincinnati Business Courier, “5 key considerations for personal estate planning in 2025: An attorney’s perspective,” examines steps to take in the new year.

What’s going to happen with the federal gift, estate and generation-skipping transfer tax exemptions? The exemption is currently $13.61 million and will increase to $13.99 million in January (indexed for inflation). The legislation creating these levels expires on January 1, 2026, but the future of the exemption remains uncertain. Many high-net-worth individuals and families are going forward with estate planning strategies to ensure that their estates are not hit with taxes in case the exemption is reduced.

Annual gift tax exclusion rises to $19,000 in 2025. The IRS recently announced an increase in the annual gift tax exclusion, which took place in January 2025, from $18,000 to $19,000. This is the amount any individual can gift to as many people as they wish without using up any of their lifetime exemptions. A married couple can make gifts of $38,000 to as many individuals as they want.

Grandparents who gift $38,000 to grandchildren and adult children can transfer a tidy sum to their descendants in a single year without using any of their own exemption amounts. Speak with your estate planning attorney about whether or not it makes sense to file a gift tax form with the IRS. There are instances where this is not required. However, it is helpful for future planning.

Deadline for the Corporate Transparency Act is approaching. Business owners should speak with their estate planning attorney about the Corporate Transparency Act to see if they need to file a beneficial owner information report. Any reporting company established before January 1, 2024, is required to file the initial beneficial owner information report before January 1, 2025. A reporting company created in 2024 has to file within 90 days of formation. Even single-member limited liability corporation (LLC) owners should check with their attorneys to ensure that they meet reporting obligations.

Family-owned and other closely held business organizations should consider the new year a time to start creating or updating a succession plan. The succession plan needs to align with the estate plan and serve two goals: avoiding probate and ensuring a seamless transition for employees and clients.

Will the recent Connelly decision impact your business succession plan? This high court decision centered on whether or not proceeds from a business owner’s life insurance should be included in the value of the business for estate tax purposes. The court ruled a company’s obligation to redeem a deceased shareholder under a stock redemption plan cannot be used to offset the insurance proceeds when calculating the value of the company as part of the owner’s estate. Business owners need to consider how their succession plan is structured, including life insurance, and discuss whether changes need to be made.

Reference: Cincinnati Business Courier (Dec. 3, 2024) “5 key considerations for personal estate planning in 2025: An attorney’s perspective”

Discussing Estate Planning in the Holiday Season

With so many families living in distant states, the holiday season is often the only time everyone is together. A family gathering can provide a chance to talk about major life changes and plans for the future, including estate planning issues. It can be tricky to navigate. However, some conversations are simply better in person. A recent article from Independent Record, “How to tackle estate planning with loved ones this holiday season” outlines topics to cover.

Beneficiary Designations. Upon opening savings, investment and retirement accounts, an option is usually provided to name a beneficiary. This tells the financial institution who is to receive the asset upon the owner’s death, similar to how a beneficiary is named on a life insurance policy. There are often contingent beneficiaries if the primary has died or does not want to receive the assets.

Beneficiary designations should be checked every few years and when certain triggering life events occur, like death, divorce, or marriage. Some financial institutions have default beneficiary designations, so the owner should also have this information. The beneficiary receives these assets outside of the will, avoiding probate in most cases. Tax treatments of these instruments may differ, so they should be reviewed with an estate planning attorney to see how they work with the estate plan.

Power of Attorney. The POA is a document allowing an individual to name someone to make decisions on their behalf if they are incapacitated. This document should be discussed with the chosen person, usually a spouse, adult child, trusted friend, or an estate planning attorney, with their consent. If there are issues with family members, a non-family member may be a better choice.

There are different types of POA. A durable POA takes effect immediately and doesn’t expire. A non-durable POA is valid for only a specific period of time. The healthcare POA, also known as a healthcare proxy, is also needed for another person to be involved in medical care: spouses are not automatically given these rights. A HIPAA release form should also be in place, so the POA can talk with doctors and others involved in medical care.

Wills and Trusts. If there is no will, the person’s assets are distributed according to the laws of the state, which, in most cases, is decided based on kinship. Most people opt to have a will to decide how their assets are distributed.

Trusts establish a separate legal entity managed by a trustee, who also oversees distribution at the time indicated in the language of the trust. Unlike a will, assets in a trust are distributed privately and outside the court system, meaning they don’t pass through probate. An experienced estate planning attorney creates a trust to meet the specific needs of the grantor.

It’s a good idea to talk about these issues while the family members are well and able to discuss them with a clear head. An estate planning attorney will help with guidance and could also help figure out how to navigate issues when potential conflict exists. During and after the holiday season, estate planning protects loved ones and ensures that wishes are followed.

Reference: Independent Record (Nov. 25, 2024) “How to tackle estate planning with loved ones this holiday season”

How to Avoid Estate Planning Mistakes in 2025

Even if you could remove all of the emotions about estate planning, like considering your eventual demise and the possibility of incapacity, it can still feel a bit overwhelming. Having an experienced estate planning attorney on your team makes the process far easier, with the knowledge you’re in good hands. A recent article from GO Banking Rates, “4 Expert Insights on Avoiding Estate Planning Pitfalls for 2025,” explains how estate planning helps to avoid family fights, lost assets and legacies.

Estate Planning encompasses your entire life. Wills express how you want assets to be distributed, and trusts minimize taxes by taking assets out of the probate estate. However, an estate plan is more than these two pieces. Estate plans include incapacity plans, caring for children and transferring wealth in a number of ways.

If someone becomes incapacitated and hasn’t created a Durable Power of Attorney, no one can manage non-healthcare matters, from paying utility bills to maintaining their home. A family member must go to court to obtain guardianship to do anything.

Every estate plan should include a Healthcare Power of Attorney and HIPAA release authorization so a designated person can be involved with their loved one’s healthcare, talk with their doctors and be involved in any medical decision-making.

Keeping beneficiary designations up to date. Beneficiaries aren’t just the people you name in a will. Designated beneficiaries are those listed on retirement accounts, investment accounts, life insurance policies and other documents to receive assets when you die. Make sure these names are up to date, especially if you haven’t reviewed them in years. Any account with a beneficiary designation does not go through probate, and your will has no control over these assets.

Things will get messy if beneficiaries on your accounts are no longer in your life. Assets could go to an ex-spouse, an estranged family member, etc.

Choosing your executor with care. Many people get stuck when there is no obvious person to manage this task. An experienced estate planning attorney can help you work through this issue, since a poor choice could put your entire estate plan at risk. Whoever you choose to serve as executor—the person who manages your estate—will need to deal with financial institutions, family members, government agencies and every facet of your life. Many automatically name their eldest child or best friend, which might lead to disaster if they are not available, good with details, fiscally knowledgeable, or able to manage your family’s personalities. Ensure that they are up for the task and also have a backup executor named.

Introduce your family to your estate planning attorney, financial advisor, CPA and other professionals in advance. The people who help you manage the business side of your life will be able to help you better if family members know who they are, how to contact them and have already met them. They don’t have to be friends. However, making introductions in advance can make their work together easier.

Reference: GO Banking Rates (Nov. 17, 2024) “4 Expert Insights on Avoiding Estate Planning Pitfalls for 2025”

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