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Estate Planning Blog Articles

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

Estate Planning Adds a Fresh Start to New Year

The first quarter of any year is always busy at estate planning attorney offices when people are catching up with the creation of an estate plan or revisions they meant to get done before the year ended but didn’t get around to finalizing. A recent article from the Press-Telegram, “New Year, new motivation for your estate plan,” shares some pointers for how to get this important to-do done.

The article is very clear: first, find an attorney. You aren’t expected to walk into an estate planning attorney with all the information you need or the answers. Their title, after all, is “counselors.” They help people work through all of the details. Most experienced estate planning attorneys also have organizers they provide to help guide you in listing assets, family members and ideas about what you’d like your plan to achieve. An estate planning attorney will keep you focused and organized.

Most people meet with two or three attorneys to see who they are most comfortable with. Is the office convenient for you, or can most discussions take place by phone or video chat? Did they explain how their own process works? Did they answer all of your questions? Were you treated with kindness? Or, if your estate is complicated, did they understand the complexity of your estate and the challenges about which you are concerned?

The article explains how searching for the least expensive attorney can create problems in the future. You want a professional with experience and understanding of estate planning techniques and the nuances of estate planning. For the same reason, don’t try doing your own estate planning with an online platform. These platforms have narrowed options down to the simplest and most common, and you won’t get the guidance you need regarding whether these are the best options for you.

The recent Los Angeles fires are a dramatic reminder of how quickly everything can change. If you don’t have a will, power of attorney, health care directives and trusts, and something unexpected occurs, what will happen to your family and your property? Who will know what you want regarding healthcare if an illness or accident occurs, and you can’t communicate your wishes?

Knowing where your estate planning documents are and sharing their location with people you trust is an oft-overlooked part of estate planning. If your documents are hidden deep within your home, will the person you named as a healthcare proxy be able to access these documents in a timely manner? Who knows the combination if they are locked up in a home safe?

Estate planning documents are often needed in an emergency. Make sure the people who will be using them can find them. Some estate planning attorneys provide clients with a binder and a thumb drive, so documents can be easily stored and shared. Where should the binder go? Don’t put this in a safe deposit box. If the safe deposit box is in your name and you are incapacitated or have died, no one will be able to retrieve the documents.

You hope you won’t need estate planning until your eventual demise. However, as we know, life happens, and the documents could make managing your affairs far more manageable for those you love. Start the new year off right by taking care of your estate plan and, by extension, your loved ones.

Reference: Press-Telegram (Jan. 19, 2025) “New year, new motivation for your estate plan”

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”

Do Not Neglect Digital Estate Planning

You may think having a will and perhaps a trust or two is all you need for your estate plan to be complete. However, if you do not also have a “digital estate plan,” your online life, from emails to financial accounts, may live forever and leave your estate and your heirs vulnerable to identity theft, says a recent article from Consumer Affairs, “Your digital legacy could be exposed after you die.”

Do not feel guilty, since most people age 65+ are completely unaware of their digital legacies, while 75% of millennials have a digital executor in their wills.

The problem is, if your executor cannot identify and access your digital assets, they may be left online in perpetuity and could be accessed by thieves who know more about navigating the web and selling stolen assets than you or your heirs.

You could leave your digital legacy to fate. However, it would be far better to be proactive by creating a digital estate plan. This also reduces the chances of your heirs quarrelling over your intentions with digital assets, just as your will and trust do for traditional assets.

Start with an inventory. List all your online accounts, websites where photos are stored online, social media profiles and all other files. You should then document all your login credentials, passwords and security questions for each asset. You may wish to use a password manager to organize and encrypt the information.

Make sure your executor and heirs know what you want by providing clear instructions in a document like a Letter of Intent. This is not legally enforceable. However, it can convey your wishes properly. Be sure that the right person or people know where your digital assets inventory is located.

Remember, you do not want the inventory of assets in your will, since it will become part of the public record when the estate goes through probate. However, you do want it documented.

Make it legal and secure. Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which gives trustees the right to access and manage digital assets after the owner’s death or incapacity.

Talk with your estate planning attorney about how your state’s laws address digital assets and what actions you will need to take.

Reference: Consumer Affairs (Dec. 18, 2023) “Your digital legacy could be exposed after you die”

Prevent Difficulties in Probate with Advance Planning

If you think gathering your papers, passwords, logins, account information and estate planning documents is a challenging task, consider your heirs trying to do it after you’ve passed and while they are grieving your loss. By preparing all the information they’ll need, you’ll make their inheritance process as easy as possible, says a recent article from Next Avenue, “6 Ways To Save Your Heirs from a Painful Probate.”

A List of Passwords for Hardware, Online Accounts and More Our cellphones, tablets, computers, online accounts and other technology all hold important information. If your executor tries to access information and accounts, they’ll need more than your passwords. If you have accounts with two-factor authentication, for instance, they’ll need to be able to access your email and/or cellphone to access other digital assets. The list should include things like social media usernames and passwords. The information must be kept somewhere safe where a spouse or executor can find it. Some tech platforms allow you to name a legacy contact with the right to access accounts after you pass. A password manager system might be helpful. However, this may add another layer of frustration for non-technical people.

List All Assets and Accounts with Contact Information. Whether you use a spreadsheet or a notebook, this is crucial information. Make sure to include investment accounts, checking and savings accounts, 401(k)s, IRAs, pension accounts, brokerage accounts, etc. Provide contact information for your estate planning attorney, accountant and financial advisor.

The information must be well organized because it will be a lot of data. Your executor will also need the accounts for running your household, paying utilities, mortgage, cable, etc. The same goes for health insurance, Medicare or Medicaid information, life insurance policies, car insurance and deeds to your home and car.

Tell the Executor and/or Heirs Where Your Information is Located. One estate planning attorney reports receiving a few monthly calls from grieving heirs who have no idea where the estate planning documents are, who takes care of the financial accounts, or how to access these accounts. Sometimes, the calls come from people who aren’t even clients but are hoping there might be some special resource known to estate planning attorneys to provide this information. There is no such thing.

Plan for the Unexpected A significant part of estate planning is planning for financial and healthcare decisions while you are still living. A living will details whether or not you want to be kept alive by heroic or artificial means, and a power of attorney authorizes someone to make decisions on your behalf. Without a POA, the person may recover from their medical emergency to find a financial mess of late bills, missed insurance premiums, or a host of issues that could have been dealt with on their behalf. Without healthcare surrogate documents and discussions of your wishes in difficult health situations, the family will need to make difficult healthcare decisions in highly stressful situations.

If the proper documents are not in place, the family must go to court to have someone named a guardian, who can then make health care decisions for you. The same process will be needed to have someone manage your financial affairs, called conservatorship. These are expensive and invasive court processes that can easily be avoided.

Talk with your estate planning attorney and family members to plan for the future. You’ll all feel better knowing that you’ll all be prepared when difficulties arise.

Reference: Next Avenue (Jan. 9, 2024) “6 Ways To Save Your Heirs from a Painful Probate”

Estate Planning and Tax Planning for Business Owners

Business owners who want long-term financial success must navigate an intricate web of taxes, estate planning and asset protection. Pre- and post-transactional tax strategies, combined with estate planning, can safeguard assets, optimize tax positions and help strategically pass wealth along to future generations or charitable organizations, as reported in a recent article from Forbes, “Strategic Tax and Estate Planning For Business Owners.”

Pre-transactional tax planning includes reviewing the business entity structure to align it with tax objectives. For example, converting to a Limited Liability Company (LLC) may be a better structure if it is currently a solo proprietorship.

Implementing qualified retirement plans, like 401(k)s and defined benefit plans, gives tax advantages for owners and is attractive to employees. Contributions are typically tax-deductible, offering immediate tax savings.

There are federal, state, and local tax credits and incentives to reduce tax liability, all requiring careful research to be sure they are legitimate tax planning strategies. Overly aggressive practices can lead to audits, penalties, and reputational damage.

After a transaction, shielding assets becomes even more critical. Establishing a limited liability entity, like a Family Limited Partnership (FLP), may be helpful to protect assets.

Remember to keep personal and business assets separate to avoid putting asset protection efforts at risk. Review and update asset protection strategies when there are changes in your personal or business life or new laws that may provide new opportunities.

Developing a succession plan is critical to ensure that the transition of a family business from one to the next. Be honest about family dynamics and individual capabilities. Start early and work with an experienced estate planning attorney to align the succession and tax plan with your overall estate plan.

Philanthropy positively impacts, establishes, or builds on an existing legacy and creates tax advantages. Donating appreciated assets, using charitable trusts, or creating a private foundation can all achieve personal goals while attaining tax benefits.

Estate taxes can erode the value of wealth when transferring it to the next generation. Gifting, trusts, or life insurance are all means of minimizing estate taxes and preserving wealth. Your estate planning attorney will know about estate tax exemption limits and changes coming soon. They will advise you about gifting assets during your lifetime, using annual gift exclusions, and determine if lifetime gifts should be used to generate estate tax benefits.

Reference: Forbes (Sep. 28, 2023) “Strategic Tax and Estate Planning For Business Owners”

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