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Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

Heirs’ Property and Potential Landowners Issues in Inheritance through Probate

Heirs’ property describes land or real estate that an heir inherits without a legally binding will. When a person dies without a will, their property goes through probate. This legal process determines the value of the deceased’s assets, pays off any debts and identifies the rightful heirs. Without a will, property is often divided among multiple heirs, fracturing the property among various landowners.

What Landowners Issues Arise from Heirs’ Property?

Heirs’ property creates several challenges for landowners:

  • Lack of Clear Title: Landowners cannot access the full benefits of homeownership without a clear title. They are often ineligible for loans or government assistance programs, making maintaining or improving the property difficult.
  • Vulnerability to Partition Sales: Any heir, regardless of their fractional interest, can initiate a partition sale. A forced sale can occur if the property cannot be physically divided, which is common in urban areas. This makes heirs’ properties susceptible to speculators who can buy out a single heir and force a sale.
  • Tax Issues: Heirs’ property owners may face higher property taxes because they cannot qualify for tax exemptions without a clear title. This increases the risk of tax foreclosure.

At first, fractional ownership under heirs’ property wouldn’t seem like a bad solution. However, the divided property ends up being worth much less to your descendants than the sum of its parts.

The Impact on Black Communities

Heirs’ property is particularly prevalent in Black communities, especially in the rural South. Historical factors, such as exclusion from the legal system during Reconstruction and Jim Crow eras, contributed to this issue.

Black families have lost significant wealth due to a historic lack of access to estate planning. According to HousingMatters, roughly one-third of all Black-owned land in the South is heirs’ property. This amounts to around 3.5 million acres with a value of $28 billion.

What Is the Uniform Partition of Heirs Property Act?

The Uniform Partition of Heirs Property Act (UPHPA) is legislation designed to protect the owners of heirs’ property from forced sales. According to ABCnews, the UPHPA helps families preserve their inherited property and maintain their wealth.

This bill aims to provide a fair process to partition inherited property. Co-owners can buy out the shares of other heirs before any forced sale. This law prioritizes keeping the property within the family, closing an avenue for real estate speculators to exploit heirs’ property owners.

Protecting and Preserving Heirs’ Property

Addressing the issue of heirs’ property requires a multi-faceted approach:

  • Legal Assistance: Providing legal services to help landowners create wills and clear titles is crucial. Legal clinics and pro bono work can connect lawyers with communities in need.
  • Community Engagement: Partnering with trusted community organizations can help build trust and encourage estate planning.
  • Policy Changes: Implementing state policies, like the Uniform Partition of Heirs’ Property Act, can protect landowners by allowing them to buy out other heirs and prevent forced sales.

Black Families, Estate Planning, and Truth in Fiction

In a poignant episode of HBO’s “Insecure,” Issa Rae’s character mentions that her great-aunt’s will was thought to be with God. However, it ended up with the county. This humorous line underlines the unfortunate reality that many Black families lack legally binding wills. As a result, many Black families have suffered even more obstacles to accruing generational wealth.

Without proper estate planning, properties end up in probate. This leads to avoidable taxes, fractional ownership and vulnerability to partition sales. This strips families of their heritage, while simultaneously perpetuating the racial wealth gap.

Plan for Generational Wealth

If you own property and lack a robust estate plan, taking action now is crucial. Contact our estate planning attorneys to learn more about protecting and transferring your assets to your descendants. Request a consultation today to secure your family’s legacy and reduce the racial wealth gap.

Key Takeaways

  • Clear Title Importance: Obtaining a clear title helps landowners access loans and government assistance.
  • Risk of Partition Sales: Any heir can force a sale, making properties vulnerable to speculators.
  • Tax Challenges: Heirs’ property owners may face higher taxes, risking foreclosure.
  • Impact on Black Communities: A significant portion of Black-owned land in the South is heirs’ property, affecting wealth transfer.
  • Solutions: Legal assistance, community engagement and policy changes are crucial for protecting heirs’ property.

References: ABCnews (Oct. 27, 2023) “In North Carolina, a proposed law could help families protect land ownership” and HousingMatters (Dec. 13, 2023) “What Is Heirs’ Property, and Why Does It Matter for Equitable Homeownership?”

Your College Student Needs a Power of Attorney for Finance and Healthcare

Once a child reaches the age of legal majority, they are considered an adult with privacy rights.  This means that parents lose access to private information. This can have dire consequences if the student is involved in an accident or gets seriously ill, explains the article “Navigating The Transition To Adulthood: A Legal Guide For Parents” from mondaq. With proactive steps, parents can address these situations before they occur.

Whether or not your insurance covers your child’s healthcare doesn’t matter. Without a Healthcare POA, parents cannot make medical decisions, speak with healthcare providers, or talk with the health insurance company. Parents are strongly urged to have their college-bound student complete a Healthcare Power of Attorney.

If there is no POA and the child is incapacitated, parents will have to go to court to be able to make medical decisions for their child. Hospitals and healthcare providers are extremely strict about following these rules to avoid litigation and fines. No matter how bad the situation is, don’t expect any rules to be bent.

Your adult child should also have a Living Will. This is a document controlling decisions about end-of-life. It only becomes effective when a person is in a state of permanent unconsciousness, like a coma, or if they are terminally ill. The student uses this document to express their wishes concerning care: do they want to be artificially fed, hydrated, or kept alive by extraordinary means? Do they want to become an organ donor? This document conveys their wishes and can save the family an unimaginable amount of added stress during a trying time.

A Durable Power of Attorney is used to name a person, known as an “agent” or “attorney in fact,” to act on their behalf. The agent can take care of legal and financial matters. This is needed in case of incapacity so the parent or trusted person may deal with financial institutions, colleges, courts and any other company or organization on behalf of the student. Without it, parents cannot access account information or act on the student’s behalf.

Does your student need a will? The estate planning attorney who helps create the documents listed above can help you answer this question. Depending on their situation, if the student owns a car, has a bank account, an inheritance, or sizable cryptocurrency accounts, they may need a will.

The documents mentioned above should also be in place for parents. If parents don’t have a will, Power of Attorney, Healthcare Power of Attorney, Living Will and trusts, if appropriate, their newly minted adult will have a lot to deal with if they should both die unexpectedly. A visit to the estate planning attorney for all generations is a good idea.

Reference: mondaq (June 24, 2024) “Navigating The Transition To Adulthood: A Legal Guide For Parents”

Can You Use AI to Create a DIY Estate Plan?

Estate planning is crucial to carry out your wishes after you’re gone. However, with the rise of artificial intelligence (AI), some wonder if it can bypass traditional methods. Some people have used AI tools to create DIY estate plans that look good to the untrained eye but have serious shortcomings.

What Is AI, and Can I Use ChatGPT in Estate Planning?

Artificial intelligence refers to computer programs that use complex algorithms to perform tasks usually requiring human intelligence. AI tools like ChatGPT and Google Gemini have recently become widely available. Creative writers and many others use these tools for help with research, drafting documents and other purposes. You would think a DIY estate plan with AI could work. However, a close examination reveals its shortcomings.

Can AI Draft My Will?

If you’re comfortable writing a document, you can use AI to assist in drafting. This could help in documents, like wills and powers of attorney, by generating them from information you provide. For most people, though, this would do more harm than good. It’s necessary to understand the limitations and risks of AI in estate planning.

What are the Risks of Using AI for Estate Planning?

While ChatGPT and other chatbots are impressive tools, they lack true intelligence. This can often make DIY estate plans with AI no better than having no estate plan at all.

  • Lack of Critical Thinking: AI lacks the ability to think critically. It uses pre-fed data to generate responses, which can lead to inaccuracies. For example, AI might misinterpret your instructions or miss important details about your estate.
  • Hallucinations: AI can “hallucinate,” or produce entirely fictional information. There have been cases where AI-generated legal documents contained fabricated cases and statutes. This can render AI-based legal documents completely invalid, with severe consequences.
  • Incomplete Customization: Estate plans need to be highly personalized. AI might not consider all personal details, such as the specific needs of your family members or your unique financial situation. This could result in a plan that doesn’t reflect your wishes.

Can You Trust AI with Confidential Information?

When you input personal data into an AI tool, there’s a risk of confidentiality breaches. AI systems store this information, which others can potentially access. This raises significant privacy concerns, since a data breach could expose sensitive information about your family and assets.

Is It Cost-Effective to Use AI for Estate Planning?

AI might seem like a cost-effective solution compared to hiring an attorney. However, the likely risks and inaccuracies can be devastatingly costly in the long run. Errors in your estate plan can result in legal disputes, probate battles and avoidable tax burdens.

Why Should You Consult an Estate Planning Attorney?

Estate planning attorneys bring a level of expertise and personal touch that AI cannot match. They can:

  • Ensure that all legal documents are accurate and tailored to your needs.
  • Provide critical thinking and problem-solving skills.
  • Address complex family dynamics and financial situations.
  • Guarantee confidentiality and privacy of your personal information.
  • Offer ongoing support and updates to your estate plan as laws and personal circumstances change.

Real-Life Examples of AI Failures

The American College of Trust and Estate Counsel (ACTEC) reports that a New York lawyer used AI to find case law for his case. However, they discovered the cases were entirely fabricated, and he soon faced sanctions. A Florida attorney similarly faced suspension for submitting AI-generated pleadings with non-existent cases. Despite the progress in AI, these tools remain inadequate for legal purposes.

How Does AI Estate Planning Compare to Human Attorneys?

AI lacks the human element necessary for comprehensive estate planning. Human attorneys understand the nuances of the law with true understanding that AI simply cannot replicate. Furthermore, a human attorney brings interpersonal skills and business experience to your estate planning. They can foresee potential issues with your family and new developments in the law to create a comprehensive, enforceable estate plan.

Secure Your Future

While AI can help draft simple documents, it is not a substitute for an estate planning attorney’s expertise. The risks of inaccuracies, lack of customization and potential privacy breaches make it unreliable.

A skilled estate planning attorney is needed to create a comprehensive and accurate estate plan. Contact us today to schedule a consultation and take the first step towards securing your future.

Key Takeaways

  • Hallucination and Other Dangers: AI cannot understand complex personal and legal nuances.
  • Privacy Concerns: Personal information you share with AI may not remain confidential.
  • Professional Guidance: A qualified attorney can ensure a comprehensive and personalized estate plan.

Reference: American College of Trust and Estate Counsel (ACTEC) (Apr. 18, 2024) ”Use of Artificial Intelligence (AI) in Creating an Estate Plan”

How to Prepare for Cognitive Changes in Your Life

Planning for the cognitive decline that often accompanies aging can prevent expensive mistakes, says a recent article from U.S. News & World Report, “How to Minimize 4 Financial Management Disasters That Come With Aging.” Planning for cognitive decline can make our later years less stressful.

Age and Vulnerability to Financial Elder Abuse. Simple tasks like paying bills can become problematic as our cognitive abilities diminish. This also leaves people more susceptible to fraud and scammers—today’s thieves’ prey on the elderly through telephone, online, mail and in-person schemes. Add a layer of protection by having a trusted person or family member oversee accounts. A professional fiduciary or a bill-pay service could be used if no family member is available or trustworthy enough.

Freezing a senior’s credit with major credit bureaus can make it harder for thieves to steal their identity, take out loans, or open credit cards under their names.

Financial documents should be organized, and their location should be shared with loved ones. Your estate planning attorney, financial advisor and CPA should have the contact info of a trusted person who can step in to manage your affairs, if necessary. Your estate planning attorney can create a Financial Power of Attorney, so they can act on your behalf.

You can appoint a representative payee with the Social Security Administration, so another person can help you with Social Security matters.

The Death or Disability of the Family’s Financial Person. One person in the household very often runs the business side of life, paying bills, balancing checkbooks and keeping an eye on investments. If that person dies or becomes disabled, the spouse needs to be able to take over finances. To do this, they’ll need to know more than the usernames and passwords on accounts—although they’ll need to know this information as well. Regular check-ins on financial matters with a spouse and a trusted adult is a good practice.

Planning for Long-Term Care Expenses. Failing to prepare for the cost of long-term care or to protect a couple’s assets with Medicaid planning can be financially catastrophic. Medicaid can help with the cost of nursing home care. However, if the family has assets, they must be used up before the person is eligible for care. Medicaid also has a five-year lookback period, meaning any transfers or sales of assets taking place five years from the date of application will delay eligibility. An estate planning attorney can help with the use of irrevocable trusts, often referred to as Medicaid Asset Protection Trusts. There are also trusts designed to protect assets for the healthy spouse. A consultation with an estate planning attorney long before long-term care is needed is critical to avoiding this mistake.

Outliving Your Money. Experts believe nearly two-thirds of Americans nearing retirement age are unprepared for two, three, or even four decades of retirement. The past year’s skyrocketing costs of living have prevented many from adding to their savings during the end of their working lives, and many don’t even have emergency savings. Having a financial plan and an estate plan is important at every age and stage of life.

Cognitive changes don’t happen to everyone as they age. However, it is still wise to have your estate planning done long before any changes occur. Having a will and any necessary trusts created and executed while you are at full capacity allows you to be the one making these decisions.

Reference: U.S. News & World Report (June 26, 2024) “How to Minimize 4 Financial Management Disasters That Come With Aging”

How to Protect Wealth over Generations

The Gilded Age was a time of rapid economic growth, creating extraordinary new wealth, materialistic excess, political corruption and terrible poverty and struggle for the lower economic classes. Famous families from this era, including the Rockefellers, Carnegies, Vanderbilts and Astors, had huge wealth. Nevertheless, not all benefited from multi-generational estate planning, says the article “Estate Planning to Protect Generational Wealth Transfers: Lessons From The Gilded Age” from mondaq.

The Vanderbilt family’s wealth came from shipping and railroad empires. In 1877, the family’s wealth was estimated at $200 million—$105 billion in today’s value. The family name continues, but with every generation, the size of the wealth dwindles. While the exact terms of the Vanderbilt estate plan are unknown, it’s understood that the family had no strategic long-term plan.

The Pulitzer family is best known for the Pulitzer Prize and the founding of the Columbia Journalism School. Two generations after Joseph Pulitzer’s death, a grandson lost most of the massive fortune in a single bad investment. Without a multi-generational plan for wealth transfer, the fortune evaporated.

The Rockefellers are known as one of the Gilded Age families that got estate planning right. They used irrevocable trusts to protect assets from wasteful spending by heirs over multiple generations. The Rockefellers created business succession plans and incorporated philanthropic goals that are still used today.

Your family can benefit from trust and estate plans, even if you’re not worth $100 billion. Creating a strategic plan to protect and transfer wealth over many generations can happen with the skilled experience of an estate planning attorney. Teaching financial literacy and shared family values, including understanding the importance of stewarding wealth and philanthropy, is as important as the money itself.

Generation-skipping trusts (GSTs) are just one means of preserving wealth transfer. With a GTS, a grandparent can leave assets in the trust to grandchildren and other beneficiaries at least 37.5 years younger. By skipping a generation, federal estate taxes aren’t paid twice on inherited assets. Trusts have also been used to offer creditor protection for generations. Divorcing parties can’t access funds in a trust.

If appropriate, there are some states where perpetual trusts are permitted. An estate planning attorney will be able to make recommendations as to whether these are appropriate for your family.

Selecting trustees and successor trustees is extremely important for wealth to last over many generations. Your estate planning attorney will also guide you in choosing either individuals or institutions to ensure trustee power is in the right hands.

Reference: mondaq (June 18, 2024) “Estate Planning to Protect Generational Wealth Transfers: Lessons From The Gilded Age”

How Elder Caregivers Take a Much-Needed Vacation

How Elder Caregivers Can Take a Vacation

Caring for an elderly parent can be a full-time job. Elder caregivers might dream about taking a vacation but feel unable to fulfill those dreams. The good news is that with a bit of planning and the right strategies, you can take a much-needed break without guilt or worry.

Why Is It Important for Caregivers to Take a Vacation?

Taking care of an elderly parent is physically and emotionally demanding. Without regular breaks, caregivers can experience burnout, stress and even health problems. This burden takes a toll on the elder caregiver and can result in care mistakes that also affect the elderly parents. A vacation offers a chance to recharge, relax and return with renewed energy to provide the best care possible.

Can You Find Coverage for Your Caregiving Duties while You’re Away?

According to Care, the first step in planning your vacation is finding someone to care for your parent temporarily. There are several options to consider:

Ask a Family Member or Friend

Family members or close friends can often step in to help. Care discusses how Carolyn Miller Parr, a family caregiver, asked her siblings to cover for her so she could take a trip. They enjoyed spending time with their parents and saw it as a mini vacation.

Similarly, Laurie from Boston asked her brother to extend his visit with their mother so she could enjoy a brief getaway. Although she only stayed at a local hotel, it was still a peaceful, rejuvenating experience.

Hire a Temporary Caregiver

If family and friends are not an option, consider hiring a temporary caregiver. Introduce them to your parent ahead of time to ensure that they are comfortable with each other. If you don’t have personal recommendations, try looking through an agency.

Look into Respite Care

Respite care is another excellent option. Many assisted living facilities offer short-term stays with professional care for elderly parents. While this is usually for the parent’s respite following an injury or hospital visit, it can also be for your respite. Research local facilities to find one that suits your needs.

How to Prepare a Temporary Caregiver?

Preparing the temporary caregiver is crucial for a smooth transition. Provide detailed instructions about your parent’s needs, from medications and meal preferences to daily routines and quirks. Laurie, who arranged for her brother to care for their mother, provided him with a comprehensive guide, including everything from medication schedules to household tips.

How Should You Handle Communication while Away?

Decide how you want to communicate with the temporary caregiver while on vacation. Some caregivers prefer daily updates, while others only want to be contacted in emergencies. Ensure that the caregiver has all the necessary information, including insurance details, medical records and emergency contacts.

How to Deal with Caregiver Guilt?

Feeling guilty about taking a vacation is common among caregivers. However, it is essential to remember that caring for yourself is crucial to being an effective caregiver. Overcoming guilt involves recognizing that you deserve a break and accepting that you can’t control everything.

Janet, from Homewood, Alabama, felt guilty about going on a pre-booked trip after her mother was diagnosed with cancer. However, she realized that worrying about worst-case scenarios was unproductive. By accepting her limitations, she was able to improve her well-being and better support her mother through hard times.

Start Planning Your Break

If you’re an elder caregiver who needs greater peace of mind, we can help. While our estate planning attorneys can’t plan your vacation, we can help you create a comprehensive plan for your elderly parents’ care and estate. Schedule a consultation with us and secure your peace of mind today.

Key Takeaways

  • Preventing caregiver burnout is a must: Taking a vacation helps prevent burnout and reduces stress, enabling caregivers to continue providing quality care.
  • Find a temporary care solution: Family, friends, temporary caregivers and respite care facilities can provide temporary coverage.
  • Make detailed preparations: Thorough preparation and clear communication ensure a smooth transition and peace of mind.
  • Care for yourself and your parents: A break allows caregivers to recharge. This is just better for them and those they care for.

Reference: Care.com (Mar. 2, 2024) “Yes, you can take a vacation — even if you’re caring for aging parents. Here’s how”

Trustee of Late Singer Tony Bennett’s Estate Sued

What Happened to Tony Bennett’s Estate?

For many, estate planning is a distant concern. However, life events can bring it suddenly into focus. A DailyMail headline involving the late singer Tony Bennett exemplifies this. He passed without a robust estate plan, leaving his children and widow embroiled in a legal battle over his estate. We must ask ourselves an important question: how can we avoid these estate disputes?

Why Do Families Fight Over Inheritances?

Family conflicts over inheritance are tragically common. According to The Conversation, there are several reasons why these disputes arise:

  • Lack of Clear Instructions: A vague will or estate plan leaves room for interpretation and disagreement.
  • Unresolved Family Issues: Long-standing family tensions can resurface during the emotionally charged period after a loved one’s death.
  • Perceived Fairness: Different family members might have varying opinions on what constitutes a fair distribution of assets.

In Tony Bennett’s case, the daughters are suing their brothers and his widow. The brother is the sole executor of the state, and he’s allegedly failed to be transparent with his sisters.

Trustee of Late Singer Tony Bennett’s Estate Sued

Tony Bennett’s daughters, Antonia and Johanna Bennett are the plaintiffs in the suit. The defendant, their brother D’Andrea “Danny” Bennett, has allegedly mishandled the estate. According to his sisters, he has failed to disclose their father’s assets and answer their questions.

The sisters estimate the value of their father’s estate to be much greater than what their brother has reported. They specifically claim that their brother did not account for proceeds from the sale of Tony Bennett’s music catalog and image rights when he worked as their father’s manager. They’ve also named their brother Daegal “Dae” Bennett and Tony’s widow, Susan Benedetto, as defendants.

What to Learn from the Battle over Tony Bennett’s Estate

Tony Bennett’s story is a cautionary tale. Whoever is right, a lack of clarity and ambiguity in their fathers’ finances has torn a family apart. While few of us have an estate the size of Tony Bennett’s, even a more modest estate can spark strife. Avoiding litigation and protecting your wishes requires a thorough, detailed estate plan and an impartial executor.

Can You Avoid Estate Litigation?

Creating a detailed will and trusts are the foundation of good estate planning. A few key principles include:

  • Plan Ahead: Don’t wait until it’s too late. Start planning your estate now.
  • Appoint a Trusted Executor: The battle over Tony Bennett’s estate began with the executor’s alleged mismanagement. Avoiding conflicts requires choosing a capable, impartial executor.
  • Seek Professional Help: An experienced estate planning attorney can help you navigate the complexities and ensure that your wishes are honored.
  • Review and Update Your Plan: Life changes, and so should your estate plan. Regularly update your documents to reflect your changing circumstances and wishes.

How can an Estate Planning Attorney Help?

An estate planning attorney can provide invaluable assistance in several ways. They can draft a detailed will that’s legally binding and reflects your wishes. They can also set up different trusts to manage your assets, protect your wealth, and provide for your loved ones in a structured manner. Intelligent estate structuring can minimize your tax liabilities to preserve wealth for your beneficiaries. At the bottom line, a good estate planning attorney can help you protect your legacy for when you’re gone.

Reliable Estate Planning Attorneys

Don’t leave your family’s future to chance. By taking proactive steps, you can avoid the kind of disputes that Tony Bennett’s family is facing.

Contact us today to protect your estate. Our team is here to help you create a comprehensive estate plan that honors your wishes and protects your loved ones.

Key Takeaways

  • Avoid Family Disputes: Proper estate planning can help prevent conflicts among heirs.
  • Clarity and Communication: Clear instructions and open communication reduce misunderstandings.
  • Select a Reliable Trustee: Choosing a trustworthy executor is crucial for smooth estate administration.
  • Regular Updates: Keep your estate plan current to reflect life changes.
  • Professional Guidance: An estate planning attorney can ensure that your wishes are legally sound and honored.

References: DailyMail (June 15, 2024) “Tony Bennett’s daughters break their silence after suing brothers and late singer’s widow amid bitter inheritance battle over their father’s estate” and TheConversation (May 17, 2022) “Why families fight over inheritances – and how to avoid it”

Should You Consider Planned Giving?

Estate planning presents many opportunities for philanthropically minded people, and you don’t have to be a millionaire to be a philanthropist. One way to ensure that your assets are given to causes you care about is addressed in the article “What Is Planned Giving?” in Financial Advisor.

Planned giving means donating assets to a nonprofit in a structured way during your lifetime or as part of an estate plan. The assets can be cash, securities, real estate, life insurance proceeds, funds from retirement accounts, or assets held in trusts.

Why make a planned gift? Planned giving is a means to create a legacy, ensuring something you value continues after you are gone. This can be a large donation to fund building construction, a student scholarship, or an endowed program. It can also take the form of an annual gift to the organization.

The benefit of a planned gift is it allows you to structure assets to accomplish other things, like providing for beneficiaries. Certain charitable trusts can provide income to spouses, children, or grandchildren over decades or in a lump-sum payment.

Creating a planned giving program should align with your overall estate plan to achieve optimal results in growing wealth and minimizing tax liabilities. Doing so requires discussing your charitable intent with your estate planning attorney, determining the best way to do this and then drafting wills, trusts and any other instruments to work together.

The development office of any nonprofit organization will be familiar with planned giving and may even have someone on their team who focuses on planned gifts. They are usually happy to receive donations this way and will also know about different types of gifts and tax-efficient strategies.

Planned giving can also be used with a tax-advantaged vehicle like a donor-advised fund, which owns assets specifically for use by a charity.

Consider why you want to make a charitable gift and what you hope to accomplish. You and your estate planning attorney can then map out a strategy to benefit you, your loved ones and the nonprofits of your choice, demonstrating your priorities and creating a legacy.

Reference: Financial Advisor (June 1, 2024) “What Is Planned Giving?”

What’s the Best Way to Simplify an Estate?

Yes, you need to create your estate plan and decide how you want your money and real estate property to be distributed upon your death. However, there’s more. A recent article from Morningstar, “Your family will love you even more if you simplify your estate,” says you should also simplify your assets to simplify your estate.

How you have your financial life arranged now may seem simple enough to you as you navigate it regularly. You know where your accounts are, how much is in each account and who the beneficiaries are of any account, having the option of naming a beneficiary. If you don’t know who the beneficiaries are, take care of this right away.

However, for your executor and your heirs, those same accounts are a series of unknowns. If a single financial advisor doesn’t handle your investments, can you bring them under one person’s management? If you have accounts in more than one bank, can you consolidate them into one bank?

A record number of boomers will turn 65 in 2024. The “great wealth transfer” of a generation owning $72.6 trillion and passing this along to younger generations has led many to prepare accounts and heirs for what will come in the next twenty years. This includes creating a comprehensive estate plan with a will and trusts. Most experienced estate planning attorneys advise their clients to create a revocable living trust to avoid probate, which can be costly, stressful and time-consuming.

Probate is considered one of the most complex parts of inheritance. Distribution will be far simpler if you can remove most of your assets from being part of your probate estate. Trusts can also protect assets in a way wills cannot. It’s far more challenging to contest a trust than it is a will. If your family is prone to infighting, you want to place assets into trusts!

Talk with your estate planning attorney about a “pour-over will.” This is a will directing any assets not already in your trust to be “poured over” into the trust upon your death. You’ll also want to have a financial power of attorney, healthcare power of attorney, living will and HIPAA release. These documents allow the people you designate to take care of your financial, legal and health if you should become incapacitated.

Once your estate plan is in place, start consolidating accounts. If you have multiple IRAs or 401(k)s from various employers, combine them. You’ve set your heirs up for trouble if you have individual stock certificates in your bank’s safe deposit box. First, the safe deposit box will be sealed upon your death, unless someone else owns the box. Second, stock certificates must be settled through a stock-transfer company, which requires proof of the owner’s passing and proof of their being legitimate heirs. New accounts need to be opened up for the stocks to be transferred to, and only then can they be retrieved the money from the sale of the stocks.

It can also be difficult for heirs if they have annuities, government-issued bonds, or bank CDs. They all must be found, and distribution rules must be uncovered and processed.

After having your estate plan created and consolidating accounts, create an inventory of all accounts, including digital assets (usernames and passwords will be needed), and place them in a file with keys to your safe deposit box, life insurance policies and estate planning documents in one place. Make copies of your credit cards, front and back as well.

Having this information in one place will make managing your estate far easier. Your loved ones can focus on their memories and not be overwhelmed by the details.

Reference: Morningstar (June 18, 2024) “Your family will love you even more if you simplify your estate”

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