How Does Property Pass to Heirs in Estate Planning?

Not everyone understands how different kinds of property pass to heirs. This becomes problematic when heirs learn they aren’t receiving assets they thought would automatically pass to them — or when taxes or court costs take a big bite out of their inheritance. A recent article from The News-Enterprise, “Understanding how property passes on is crucial to planning,” explains how assets are distributed.

There are four general categories for how property can pass to beneficiaries upon death: joint ownership, POD (Payable on Death) accounts, trusts and wills. Most estates include a combination of these methods. However, every estate plan is different and should be crafted to meet the individual’s unique needs.

A primary residence typically passes to a joint owner, usually a spouse or domestic partner. This is why homes are owned by “Joint Tenants with A Right of Survivorship.” Property owned with a JTWRS title passes to the surviving owner when one of the owners dies. This is often how married couples own homes and joint bank accounts. These rules vary by state, so check with your estate planning attorney to be sure you own your home correctly.

Jointly held assets can also be owned without a right of survivorship. Each person owns a separate interest in the property, and ownership continues after death. When one owner dies, several steps must take place to distribute the decedent’s share to their heirs. A case will need to be opened in probate court, and a will needs to be submitted if there is one. Without a will, the decedent’s shares pass to their nearest heirs by kinship.

If you don’t like your relatives, having a will is necessary to prevent your assets from going to the wrong people.

How assets are owned should be clarified during estate planning. Many cases involve surviving spouses going to court against their own children because the ownership of joint property wasn’t established with a right of survivorship.

When accounts are set up as Payable on Death (POD) or Transfer on Death (TOD), the assets go directly to the person named on the account. It sounds simple and speedy. However, there are some risks. The assets may return to the taxable estate if the intended beneficiary dies before the primary owner. If the beneficiary receives means-tested benefits because of a disability, they might become ineligible for benefits like SSI or Medicaid. Even a small distribution could disrupt years of careful planning, if it is directly into their own name.

Trusts are commonly used to pass assets privately and smoothly. The distribution directions follow the trust’s language and can be tailored as needed. Assets can be distributed based on meeting certain conditions, like getting married or attaining a college degree. A trust can also distribute specific percentages of the trust at certain ages.

Assets not distributed through the three methods described above pass through a will and the probate process. If there is no will, the laws of the state determine who inherits the property.

An experienced estate planning attorney uses well-formed strategies to help clients consider how assets are best passed to their heirs. Keep in mind that every situation is different, so what your neighbor or best friend may have done may not be suitable for you and your family. A consultation with an estate planning attorney is the best way to be sure that your wishes are followed.

Reference: The News-Enterprise (Oct. 12, 2024) “Understanding how property passes on is crucial to planning”

Should I Give My Kid Their Inheritance Before I Die?

Some wealthy people have publicly declared their intention to give away their wealth before they die to see their philanthropy’s impact. However, these people usually don’t have to worry about making ends meet, unexpected medical bills, or expensive home repairs. A recent article, “How to Give an Inheritance While You’re Alive,” from Kiplinger, agrees that more than half of Americans in their 60s will need long-term care services at some point. Don’t rush to give away your kid’s inheritance just yet.

For most people, the solution is transferring wealth through estate planning, using a last will and testament. You won’t need the assets after death; your loved ones will be grateful for the bequest.

However, there are some downsides to hanging on to all of your assets while you’re living. If you’re lucky enough to live into your nineties, your “kids” may be in their sixties or seventies when you die. Their need for help with a deposit to buy a home will be long past.

It’s heart-warming to be able to help your family when they can use the help. You get to see how your hard work has helped the next generation. If you’re involved in charitable causes, a donation while you are living allows you to see the impact of your own giving.

Giving with warm hands or while living isn’t possible for everyone. If you think it might be possible, start by crunching the numbers. How much can you really afford to give away? You’ll need to be very intentional about planning. Just deciding to cut back on spending won’t be enough.

Your estate planning attorney may talk with you about using trusts. Creating and funding a trust means lowering your taxable estate, creating more wealth to pass onto heirs and, if you wish, having the trust distribute assets while you’re living. If you use a living trust, you will be able to change the terms whenever you want. Therefore, if it becomes clear you will need the money, you have access to it.

You’ll also need to determine if you have enough funds to pay for long-term care or if you need to begin planning for Medicaid eligibility. A living trust is countable as an asset for Medicaid. However, a Medicaid Asset Protection Trust is not. Your estate planning attorney will help you plan this out.

Home equity is something Boomers, in particular, should consider when considering paying for long-term care. The proceeds from the sale of your home could cover the cost of long-term care. Another option is taking out a reverse mortgage, which lets you enjoy the equity in your home without selling the property.

In 2024, taxpayers may gift up to $18,000 to as many people as they want without incurring gift taxes or filing a gift tax return. Married couples may give up to $36,000 to as many people as they wish. If this might work with your retirement finances, it’s a good way to reduce your estate tax burden.

There are many strategies for making gifts while you’re living. Take a clear, objective look at how much you’ll need to enjoy your retirement years before making any big decisions. Talk with your estate planning attorney about how to make this happen. Congratulations—you’ll get to see your legacy in action if it’s something you can realistically do.

Reference: Kiplinger (September 1, 2024) “How to Give an Inheritance While You’re Alive”

Inheriting the Family Business: Succession Planning Secures Your Legacy

Preserving a family business’s legacy is challenging. Studies show that only about one-third of family businesses make it to the second generation. The numbers have been declining over the years, and one major reason is the lack of proper business succession planning.

Without a clear plan, businesses are more likely to fall apart during leadership transitions. How can you prepare the next generation to successfully take over the family business?

Why Don’t Family Businesses Survive?

There are several reasons why family businesses struggle to stay within the family. One common issue is that the older generation often avoids discussing succession plans, hoping everything will fall into place naturally.

However, without a solid plan, when leadership needs to change, chaos can ensue. Younger family members might also not feel ready or willing to take on the responsibility of running the business.

What Could Happen without a Business Succession Plan

Many business owners believe that their children or relatives will smoothly step into leadership roles. However, this isn’t always the case. Sometimes, younger family members aren’t allowed to learn critical skills, like decision-making and management, because the older generation maintains strict control. This lack of preparation can leave younger members feeling overwhelmed when it’s their turn to lead.

Running a family business can also seem like a burden. For some, the idea of constant problem-solving and stress may deter them from stepping into leadership roles. Younger generations may opt out of continuing the family tradition without excitement or encouragement.

Passing on the Family Business Successfully

The Harvard Business Review shared a story that highlights the importance of preparation. In one case, a family business expected one sibling to take over the company. Unfortunately, a tragic accident left that sibling unable to fulfill this role. The other sibling had no experience in the business but had to step in regardless.

This is one of many situations that can compromise your legacy. The article also discussed parents not properly including their children in decision-making, leaving them without leadership skills.

Depending on their parents’ relationship with work, children may be turned off by the perception of too much work for too little reward. Frank, honest conversations about the future are one key step in establishing a firm business legacy.

How Can You Prepare the Next Generation?

Passing on a family business doesn’t have to be stressful or uncertain. There are many ways to ensure that younger generations are ready to take over when the time comes. Consider the questions below to help you decide how to prepare your family for a successful business succession.

1. Do Your Children Understand the Business?

Successful business succession planning requires that your successors know how the business operates. This can start at a young age by encouraging children to visit the workplace, meet employees and get a feel for the environment. They can begin with minor roles to gain deeper familiarity. However, you’ll eventually need to take their experience to the next level.

2. Are They Gaining Leadership Experience?

Future leaders can’t just show up at the business and have functional roles. If you want someone to inherit the business, you need to give them decision-making responsibilities in different areas of the company. Having your children gain work experience outside the business may also be valuable.

3. Do They Understand the Company’s Goals?

Regular conversations about the company’s mission, challenges and successes can help younger family members see the bigger picture. When they understand the company’s goals, they’ll be more prepared to make decisions that align with its future growth.

4. Are You Setting a Good Example as the Business Owner?

Family businesses often involve close relationships and, at times, family conflict. Parents and business owners need to set clear expectations about business behavior and manage personal needs.

5. Is There a Plan for the Future?

Most importantly, a clear business succession plan should be put in writing. This plan will outline who will take over leadership roles, their responsibilities and how the transition will occur. Without a formal plan, the business risks falling apart when it’s time to hand over the reins.

Act Today to Protect Your Family Business

Business succession planning is essential for the long-term success of a family-owned business. Whether your children are ready to step in or you’re just starting to think about the future, having a well-thought-out plan in place is key to keeping the business alive for generations to come.

Contact our firm today to schedule a consultation and learn more about how business succession planning can protect your company’s legacy for years to come.

Key Takeaways:

Understand the Business: Involve younger generations early to familiarize them with the company.
Build Leadership Experience: Offer opportunities for decision-making and managing key areas.
Align with Company Goals: Share the mission and values to ensure that decisions support the company’s future.
Set Clear Expectations: Address family dynamics to prevent conflicts from affecting business operations.
Formalize the Plan: Create a written succession plan to ensure a smooth leadership transition.

Reference: Harvard Business Review (Sep. 27, 2022) “How to Prepare the Next Generation to Run the Family Business”

Estate Planning for the Family Vacation Home

Many families enjoy owning a vacation home, where generations gather, and memories are made. The second home is part of the family’s legacy, and the hope is that it will continue over many years. Making this happen is the subject of a recent article, “Legal East: Legacy planning for your shore house,” from Daily Local News.

Let’s say the house is to be left to more than one heir. How will the expenses for maintenance be paid? How will the heirs devise a schedule for all owners to use the house? What would happen if the house needs major work and only one owner has the money to pay for it?

Discussing how to structure the ownership of the home with an experienced estate planning attorney is important, as there are many options. The home could be owned in a trust, as a business entity like an LLC, or owned outright by one or more family members. Determining which type of ownership to use becomes important as the owner’s age.

If one of the vacation homeowners is elderly and needs long-term care, the home’s ownership may become problematic if they need to apply for Medicaid. Most people don’t think about this until they are faced with the problem. The vacation property will be a countable resource unless ownership is structured correctly before applying for Medicaid. Transferring ownership to a Medicaid Asset Protection Trust may make sense.

Another question is raised when considering applying for Medicaid: is there a primary residence, and is it exempt from being considered a countable asset? Most primary homes are, but this should also be explored with an estate planning attorney.

A Medicaid Asset Protection Trust is an irrevocable trust, but in this case, it’s created with certain features to allow someone to qualify for long-term benefits from Medicaid. A grantor establishes the trust, so the trust itself owns the home (or other assets placed in the trust), and the trustee manages the assets in the trust. The person creating the trust determines the trustee and successor trustees. In most cases, the trust terminates at the grantor’s death, and the trust’s assets are distributed to beneficiaries.

The MAPT is still subject to Medicaid’s five-year look-back. If the vacation home is transferred into the trust and an application is made to Medicaid within five years, the person won’t be eligible.

An elder law attorney can help you plan to protect your assets from the cost of long-term care through Medicaid, insurance, and trusts. Many strategies exist, but they all take some time to create and execute and need to be crafted for your unique situation.

Reference: Daily Local News (Sep. 4, 2024) “Legal East: Legacy planning for your shore house”

Curated a Collection? You Need an Estate Plan for It

If you’re wondering if you need an estate plan, the simple answer is yes. The reasons are many, but among them is the answer to this question posed in an article from Morningstar, “A dilemma of the ultrawealthy: Who inherits the wine and art collections?”

The number of zeroes appearing after your estate value doesn’t matter to the courts who will decide what happens to your assets after you die if you don’t have a will. If you don’t have a last will and testament, your family will have to go through months or even years of sorting through your affairs. The entire estate will go through probate, which is costly and takes time. Without an estate plan, your heirs will see any inheritance shrink after state and federal estate taxes.

A better way is to have an estate plan created. You need a Power of Attorney and Healthcare Proxy to allow a trusted person to make legal and medical decisions on your behalf if you become incapacitated. You need a will to name an executor, a person of your choosing, to manage your estate after your death. If you have young children, you want to name the person who will take care of them and not hope the court doesn’t pick a family member whose lifestyle and values don’t match your own.

What about the collection you’ve spent a lifetime diligently assembling, thinking it will have greater value for heirs than a traditional financial investment plan? Whether you have a coin or stamp collection, own a small fleet of midcentury cars, or enjoyed curating a wine cellar, your collection has limited appeal for your heirs. Younger generations aren’t as interested as you think in these items, either as a means of amassing wealth or something to fight with their siblings over when you’ve passed.

When faced with shrugs over who wants what from the collection, most people put their heads in the sand and expect the children to figure it out after they’re gone. For one sports memorabilia collector, the eye-opening moment came when he sat down with his adult children to discuss their role in continuing his collection. No one was interested.

His response was proactive. He created a spreadsheet of the assets meticulously documenting their provenance, value and where they could best be sold. He also included information tracking the life-cycle of the collectibles, documenting the family’s lack of interest in the collection and insurance protection.

Another example of the importance of documentation came from the experience of a woman whose uncle had a massive coin collection. Twenty boxes of coins were set out in the family’s den, and she spent evenings creating an equally massive spreadsheet. The spreadsheet was submitted to a reputable antiques company, which sent a representative to review and purchase the collection only because the documentation was thorough and the coins had some value. It must be said—the coin collection was valued at far less than expected.

Depending on the collection, your estate planning attorney may also suggest making a charitable donation to a local, regional, or major cultural center. If you have a collection of movie posters, for instance, a local independent cinema might be able to auction them off at a fundraiser.

Addressing collections of any kind and planning for their eventual sale or distribution should be part of your estate plan. An experienced estate planning attorney can help create an estate plan to protect your assets, even those your heirs don’t value the way you do.

Reference: Morningstar (September 3, 2024) “A dilemma of the ultrawealthy: Who inherits the wine and art collections?”

Estate Planning can Include Pets as Well as ‘Regular’ People

Who could forget the headlines when billionaire Lenora Helmsley was found to have set aside $12 million for her dog, aptly named Trouble, after she passed? You don’t have to be a billionaire to want to protect your animal companion, says a recent article from The Wall Street Journal, “Putting Pets in Your Will Is No Longer Just for Eccentric Billionaires.”

One family created their will with instructions for caring for their two young children, naming a guardian and a plan for distributing their assets, a basic part of an estate plan. They’ve also planned for their two dogs, naming a sister as their caretaker.

No matter how much you love your dog, cat, horse, or mouse, they are legally considered personal property. If there are no directions in the will for who will take care of your pets when you die, they will go to whoever inherits your property, with no guarantee of what will happen to them. Worse, if you die without a will, the laws of your state will determine what happens to them.

Many pets whose owners die end up at shelters, and not every city has no-kill shelters. This situation is not great for older pets or those with medical conditions who aren’t as adaptable as puppies or kittens. Large birds, like parrots, can live as long as humans, making plans for their future especially important. Other animals end up abandoned, living on the streets.

In other words, don’t assume your family members love your pet as much as you do. You need to make a plan for their future.

Some shelters have programs helping people include pets in their wills, often tied to making a bequest to be made to the shelter to fund the pet’s care.

When parents pass, and a guardian has been named to care for children, there is usually a certain degree of court supervision. However, the same isn’t true for pets. If you choose to name a pet’s caretaker in the will and provide assets for the pet’s care, there’s no one watching to be sure your beloved animal companion is being cared for with the money you provided.

An enforceable alternative is the creation of a pet trust. The caretaker and the trustee should be different people. A trustee’s fiduciary duty is to ensure that the assets in the trust are being used for their intended purpose. The caretaker is responsible for the pet’s overall quality of life.

Your estate planning attorney will be able to create a trust to care for your beloved animal companions, so they will be safe and well cared for. You don’t have to be a billionaire to make this happen.

Reference: The Wall Street Journal (Aug. 10, 2024) “Putting Pets in Your Will Is No Longer Just for Eccentric Billionaires”

Is It Common for Siblings to Fight Over Inheritance?

Unfortunately, siblings refusing to speak with other siblings about their late parent’s estate matters is a fairly common occurrence. A recent article from Morningstar, “My brother won’t tell me anything about our mother’s $1.6 million estate. Can I remove him as trustee?” provides a good example of how things can go wrong.

According to a letter to the publication from one brother, a mother was the second to die and the brother who knows about her will has not yet filed the will with the court. To make matters more complicated, he explains that the father had created a trust before he died in 2000, which was never funded. Medicaid paid for $150,000 in nursing home costs, and at the time of her death, the mother owned a 1.6-million-dollar property.

While the best resolution is almost always simply to have a direct conversation, this doesn’t seem likely to occur in this situation. The controlling brother may be doing precisely what is necessary. However, since the brother won’t tell the other brother what is happening, the only way forward may be to go to court.

If a trust was created, it’s entirely possible it was a Medicaid Asset Protection Trust (MAPT). This trust is created to remove assets from being countable for Medicaid purposes. If the trust wasn’t funded, the $1.6 million property may never have been retitled and placed in the trust. This is the second most common estate planning mistake seen by estate planning attorneys; the first is not having an estate plan.

If the trust was never funded, the family home is considered an asset by Medicaid and could be “clawed back” by Medicaid to cover the medical expenses. If the $150,000 were the father’s nursing home costs, the father’s estate would have owned this amount, which should have taken place after the father’s estate was settled. There is a statute of limitations, however, and depending on the rules of the father’s state, this may be a moot point.

Since the house was the primary residence of a well-spouse, it may not have been countable for Medicaid. If the father had no other assets, there may be no debt to Medicaid. It’s entirely possible all this was dealt with. However, the brother wasn’t told the details.

This leaves the question of what the brother is doing with the mother’s estate. If no will has been filed, it might be because the estate plan was designed to avoid probate. Assets held in trusts and passed through beneficiary designations don’t go through probate. If the house was placed in a trust, it would not go through probate either.

However, since the sibling is an heir, he has the right to an accounting report or a report from the brother as the trustee and executor. The report should contain information on how assets were owned, and distributions were made.

This is a lesson for parents who know their children don’t get along. If they don’t get along while you are living, don’t expect this to change after your death. If one is given power of attorney, serves as a trustee and executor, and the others are left out of any decision-making, your estate may shrink because of litigation, and the family may fracture. Talk with your estate planning attorney about naming a neutral person for all or some of these roles to avoid adding the stress of an estate battle to your family’s grief.

Reference: Morningstar (Aug. 3, 2024) “My brother won’t tell me anything about our mother’s $1.6 million estate. Can I remove him as trustee?”

Well-Played: Country Legend Toby Keith’s Legacy Protected for His Family

Toby Keith, the famous country singer, passed away at the age of 62 after battling stomach cancer. Despite his illness, he ensured that his estate was in order before his death. In a story shared by InTouchWeekly and Survivornet, his widow, Tricia Covel, filed to be named the administrator of his estate shortly after his passing. Keith’s estate planning included a revocable living trust meant to ensure his family’s privacy and financial security.

Why Should You Plan Your Estate Early?

Planning your estate early helps reduce stress on your family during an already emotional time. When someone passes away, emotions run high, and conflicts can arise. Having a clear plan makes it easier for your family to follow your wishes without added stress or uncertainty.

What are the Key Documents in Estate Planning?

There are several critical documents to consider when planning your estate, especially if you are dealing with a serious illness like Toby Keith did:

Power of Attorney: This allows someone you trust to make legal, tax and financial decisions for you if you cannot do so.
Health Care Proxy: This person will make health-related decisions on your behalf.
HIPAA Release: This lets someone access your medical information and speak to your doctors.
Physician Order for Life-Sustaining Treatment (POLST): This outlines your wishes for life support.
Beneficiary Designation: This document names the beneficiaries of your life insurance and retirement assets.
Living Will: This states your health care wishes.
Will: This specifies how you want your assets distributed.

How Did Toby Keith Use a Revocable Living Trust?

Toby Keith’s estate planning included a revocable living trust. A revocable living trust is a legal document that places your assets into a trust while you’re alive and allows you to make changes as needed. After your death, the trust becomes irrevocable, meaning it can’t be altered. This type of trust helps avoid probate court, making the process smoother and quicker for your family.

Should You Consider a Trust?

A revocable living trust might be a good option if you have significant assets, such as property or investments. Trusts offer more control over how your assets are distributed and can help avoid lengthy probate processes. Toby Keith’s trust ensured that his family could manage his estate privately and securely without the public scrutiny of a probate court.

What can You Learn from Toby Keith’s Trust?

Toby Keith’s careful planning illustrates the importance of addressing your estate needs early, especially when facing a serious illness. He documented his wishes and ensured they were legally binding, providing his family with clear instructions and avoiding potential disputes. Keith protected his legacy and provided for his family’s future by taking these steps.

How can You Start Planning Your Estate?

Starting your estate planning might seem overwhelming. However, protecting your loved ones and your legacy is essential. Here are a few steps to get started:

Make a List of Your Assets: Include everything from bank accounts to property.
Decide on Your Beneficiaries: Think about who you want to inherit your assets.
Choose Your Representatives: Select people you trust to act on your behalf, such as a power of attorney, health care proxy and executor.
Consult with an Estate Planning Attorney: An attorney can help you navigate the legal requirements and ensure that your documents are in order.

Take Inspiration From Toby Keith’s Trust and Secure Your Legacy

Contact our law firm today to schedule a consultation and learn more about how a revocable living trust and other estate planning tools can protect your family’s future. By taking action now, you can ensure that your wishes are honored and provide peace of mind for yourself and your loved ones.

Key Takeaways

Early Planning Reduces Stress: Addressing estate planning early can ease emotional and financial burdens on your family.
Essential Documents: Key documents include a power of attorney, health care proxy, living will and revocable living trust.
Privacy and Control: A revocable living trust helps maintain privacy and avoids the public process of probate court.
Toby Keith’s Example: Toby Keith’s thorough planning ensured his family’s security and upheld his wishes.
Professional Guidance: Consulting with an estate planning attorney is crucial for navigating legal complexities and securing your legacy.

References: InTouchWeekly (July 9, 2024) “Toby Keith Drafted Will for $400 Million Fortune Amid Cancer Battle | In Touch Weekly” and Survivornet (July 15, 2024) “Distributing Fortune & Legacy: Late Country Star Toby Keith’s Estate and the Sensitive Issue of Planning Your Will as a Patient”

Single and Over 50? Estate Planning Is a Must

Estate planning might seem like something only families need to worry about. However, it’s just as crucial for single people, especially those over 50. Without a plan, your assets and healthcare decisions could end up in the hands of the state or distant relatives you barely know. Kiplinger makes the case that estate planning is essential for single people’s well-being and control over their assets.

What Happens without an Estate Plan?

If you pass away without an estate plan, the courts will distribute your property according to state laws. The state will look for your next of kin, which could mean your assets end up with distant relatives. If the state can’t find any relatives, it may claim your assets itself.

What’s more worrying is what happens if you’re indisposed. A spouse, parent, or child will normally make your financial and healthcare decisions if you cannot do so. Absent such a person, the state will appoint someone you probably don’t know to be responsible for you.

Choose Someone to Make Your Healthcare Decisions

A healthcare power of attorney is essential for single people. This document allows you to designate someone to make medical decisions on your behalf if you can’t. You can choose a trusted friend or relative who understands your wishes. Combine a healthcare power of attorney with an advanced healthcare directive to lay out your values, wishes and end-of-life care preferences.

Maintain Control of Your Finances

A financial power of attorney designates someone to handle your finances if you cannot do so. This person will pay your bills, manage your accounts and make financial decisions on your behalf. When you recover from an event that leaves you indisposed, you’ll be much better off having had a trustworthy financial power of attorney.

How Do You Plan Your Inheritance?

Creating a will is the foundation of an estate plan. It lets you decide who inherits your property, whether friends, charities, or other organizations. You can even make provisions for your pets and specify who should care for them. By naming an executor you trust, you can rest assured of your wishes going into effect.

The Importance of Trusts

While a will is the basis of an estate plan, trusts are vital to achieve specific goals. A revocable trust can avoid probate, the court process of validating a will and directly fund goals that are important to you.

State Inheritance Taxes

While federal estate taxes may not concern many, state inheritance taxes can be significant. Many states have lower exemption limits and impose taxes on property left to non-family members. Planning for these taxes is crucial to ensure that your beneficiaries receive the intended amount of your estate.

Can You Pre-Arrange Your Funeral?

You have broad leeway to prearrange your funeral in your will. You can specify whether you want to be cremated or buried and even arrange the details with funeral homes or cemeteries. Documenting your wishes ensures they are followed, preventing confusion or conflict among loved ones.

Who Will Take Care Of You?

Decide whether you want to stay at home with the help of in-home care services or move to a nursing home, if necessary. If you choose to stay at home, making accessibility modifications to your home can go a long way toward making single living practical in later life. Good estate planning can also help you reserve funds for these eventualities.

We Provide Estate Planning for Single People

Estate planning for single people over 50 isn’t just about distributing assets but also about securing the quality of life in your later years and protecting your wishes. Don’t leave your future to chance; contact us today to schedule a consultation and start crafting an estate plan tailored to your unique needs.

Key Takeaways:

Ensure That Your Wishes Are Respected: Without a plan, the state decides what happens to your assets and healthcare.
Designate Decision Makers: A healthcare power of attorney and financial power of attorney ensure that trusted individuals make decisions if you’re incapacitated.
Direct Your Inheritance: A will allows you to specify who inherits your property, including friends and charities.
Pre-Arrange Your Funeral: Planning your funeral in advance ensures that your wishes are followed and relieves your loved ones of this burden.
Prepare for Long-Term Care: Planning for long-term care, including funding and home modifications, is essential for maintaining independence.
Protect Yourself in Relationships: Keep finances separate and avoid giving control to new partners too quickly.

Reference: Kiplinger (May 21, 2024) “10 Things You Should Know About Estate Planning for Singles”

Celebrity Estate Planning Mistakes to Avoid

It’s hard to miss the major mistakes celebrities make—their lives and deaths are public and not always pretty. Expensive mistakes on a grand scale aren’t what most of us deal with, but there are good lessons to learn from their mistakes, says a recent article from Market Watch, “Sharon Stone’s missing $18 million, Prince’s estate back in court: what to learn from celebrity estate mistakes.”

Eight years after Prince’s death, his estate is back in court, while Sharon Stone was in the news when she revealed $18 million in savings disappeared while she suffered a life-threatening illness more than two decades ago. For conservatorship stories, while we aren’t hearing much about Britney Spears anymore, Jay Leno has filed for conservatorship for his wife Mavis, who has dementia, and musical legend Brian Wilson of the Beach Boys faced conservatorship issues when his caretaker wife died, and another caretaker had to be named.

We expect people with great professional success to be surrounded by a small army of trusted caretakers, estate planning attorneys, accountants, managers, and others. And we’d also expect them to want to keep as much of their lives private as possible. But as headlines show, people who are incredibly talented performers aren’t necessarily skilled in the legal and business aspects of their lives.

In 2001, Sharon Stone suffered a stroke. It took seven years for her to overcome the effects of the stroke, and she counted on others to manage her affairs. When she was finally able to start taking control of her life, she found everything had been put into someone else’s name, and $18 million was missing from her bank account.

While she’s not forthcoming with details, this was likely a trusted person abusing their role as Power of Attorney, where a fiduciary was appointed without enough oversight. For regular people, an estate planning attorney could create a plan where, in addition to a Power of Attorney for certain accounts, like running the household, more considerable assets are placed in a trust, and the trustee is not the same person as the POA. Checks and balances need to be built into an estate plan to protect individuals in case of incapacity.

In cases where the fiduciary has performed poorly, and a family member challenges the results, the results are common. When the court reviews the matter, changes can be made to appoint another person to the POA. Courts can also step in to take over another person’s finances, but it usually doesn’t happen until after significant damage has been done.

A meeting with an estate planning attorney should include discussions about who is qualified to serve as a Power of Attorney and how their actions may be reviewed. In many instances, trust is not the issue, but competence is. Are they capable of managing the affairs of an incapacitated person? If not, another person should be selected, regardless of whose feelings might be hurt by the decision.

Reference: Market Watch (July 13, 2024) “Sharon Stone’s missing $18 million, Prince’s estate back in court: what to learn from celebrity estate mistakes”

Estate Planning Blog Articles

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

Why Don’t Family Businesses Survive?

What Could Happen without a Business Succession Plan

Passing on the Family Business Successfully

How Can You Prepare the Next Generation?

1. Do Your Children Understand the Business?

2. Are They Gaining Leadership Experience?

3. Do They Understand the Company’s Goals?

4. Are You Setting a Good Example as the Business Owner?

5. Is There a Plan for the Future?

Act Today to Protect Your Family Business

Key Takeaways:

Why Should You Plan Your Estate Early?

What are the Key Documents in Estate Planning?

How Did Toby Keith Use a Revocable Living Trust?

Should You Consider a Trust?

What can You Learn from Toby Keith’s Trust?

How can You Start Planning Your Estate?

Take Inspiration From Toby Keith’s Trust and Secure Your Legacy

Key Takeaways

What Happens without an Estate Plan?

Choose Someone to Make Your Healthcare Decisions

Maintain Control of Your Finances

How Do You Plan Your Inheritance?

The Importance of Trusts

State Inheritance Taxes

Can You Pre-Arrange Your Funeral?

Who Will Take Care Of You?

We Provide Estate Planning for Single People

Key Takeaways:

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