Why Shouldn’t I Wait to Draft my Will?

There are countless reasons why people 50 and over fail to write a will, update a previous one, or make other estate planning decisions. Market Watch’s recent article entitled “We beat up 6 of your excuses for not writing a will (or updating an old one)” takes a closer look at those six reasons, and how to help overcome them.

Excuse No. 1: You have plenty of time. Sure, you know you need to do it. However, it’s an easy thing to move down on your priority list. We all believe we have time and that we’ll live to be 100. However, that’s not always the case. Set up an appointment with an experienced estate planning lawyer ASAP because what gets scheduled gets done.

Excuse No. 2: You don’t have a lot of money. Some think they have to have a certain amount of assets before estate planning matters. That isn’t true. Drafting these documents is much more than assigning your assets to your heirs: it also includes end-of-life decisions and deciding who would step in, if you were unable to make financial decisions yourself. It’s also wise to have up-to-date documents like a power of attorney and a living will in case you can’t make decisions for yourself.

Excuse No. 3: You don’t want to think about your death. This is a job that does require some time and energy. However, think about what could happen without an up-to-date estate plan. Older people have seen it personally, having had friends pass without a will and seeing the children fighting over their inheritance.

Excuse No. 4: It takes too much time. There’s a misconception about how time-consuming writing a will is. However, it really can be a fairly quick process. It can take as little as 2½ hours. First, plan on an hour to meet with the lawyer; an hour to review the draft; and a half-hour to sign and execute your documents. That is not a hard-and-fast time requirement. However, it is a fair estimate.

Excuse No. 5: You’d rather avoid making difficult decisions. People get concerned about how to divide their estate and aren’t sure to whom they should leave it. While making some decisions in your estate plan may seem final, you can always review your choices another time.

Excuse No. 6: You don’t want to pay an attorney. See this as investment in your loved ones’ futures. Working with an experienced estate planning attorney helps you uncover and address the issues you don’t even know you have. Maybe you don’t want your children to fight. However, there can be other issues. After all, you didn’t go to law school to learn the details of estate planning.

Reference: Market Watch (March 12, 2022) “We beat up 6 of your excuses for not writing a will (or updating an old one)”

Can I Split My Inheritance with My Sibling?

Let’s say that you are the beneficiary of your brother’s IRA.

All of his assets were supposed to be split between you and your sister according to a living trust. However, the IRA administrator says the IRA only has one beneficiary… you. How can you spilt this equally?

Can you sell half and give your other sibling her money?

What is the effect on taxes and the cost basis?

nj.com’s recent article entitled “Can I give my brother half of my inheritance?” says that it’s important to review beneficiary designations to make sure they reflect your wishes.

In this case, you would essentially be making a gift to your sister from the IRA account that you inherited.

To do this, you would have to liquidate some of the account and pay the taxes on the liquidated amount, if it is a traditional IRA.

You would also have to file a federal gift tax return for the amount gifted above the $16,000 annual exclusion amount. However, no gift tax should be due if you have less than $12.06 million in your estate and/or lifetime gifts made above the annual exclusion amounts.

The unified tax credit provides a set dollar amount that a person can gift during their lifetime before any estate or gift taxes apply. This tax credit unifies both the gift and estate taxes into one tax system that decreases the tax bill of the individual or estate, dollar to dollar.

As of 2021, the federal estate tax is 40% of the inheritance amount. However, the unified tax credit has a set amount that a person can gift during his or her lifetime before any estate or gift taxes are due. The 2021 federal tax law applies the estate tax to any amount above $11.7 million. This year’s amount is $12.06 million.

While you would receive a step-up in basis, the cost basis of your brother’s gifted share would be the value at the time the gift is made.

Another thought is that if there are other assets in the estate, perhaps your sister could have a greater share of those, so you could keep the IRA intact to avoid paying taxes at this time.

Reference: nj.com (Feb. 23, 2022) “Can I give my brother half of my inheritance?”

Why Is Estate Planning Review Important?

Maybe your estate plan was created when you were single, and there have been some significant changes in your life. Perhaps you got married or divorced.

You also may now be on better terms with children with whom you were once estranged.

Tax and estate laws can also change over time, requiring further updates to your planning documents.

WMUR’s recent article entitled “The ‘final’ estate-planning step” reminds us that change is a constant thing. With that in mind, here are some key indicators that a review is in order.

The value of your estate has changed dramatically
You or your spouse changed jobs
Changes to your income level or income needs
You are retiring and no longer working
There is a divorce or marriage in your family
There is a new child or grandchild
There is a death in the family
You (or a close family member) have become ill or incapacitated
Your parents have become dependent on you
You have formed, purchased, or sold a business;
You make significant financial transactions, such as substantial gifts, borrowing or lending money, or purchasing, leasing, or selling assets or investments
You have moved
You have purchased a vacation home or other property in another state
A designated trustee, executor, or guardian dies or changes his or her mind about serving; and
You are making changes in your insurance coverage.

Reference: WMUR (Feb. 3, 2022) “The ‘final’ estate-planning step”

What Can’t I Forget in My Will Now that I’m 50?

Yahoo News’ recent article entitled “If You’re Over 50, Don’t Leave This Out of Your Will, Expert Says” fills us in on what we can’t forget in a will after the big 5-0.

Incapacity. A 2021 survey from Caring.com says that almost two-thirds of adults do not have a will. Even those thinking about estate planning do not consider a plan for addressing the possibility of incapacity.

Ask an experienced estate planning attorney to create a power of attorney, so in the event you are incapable of making decisions because of your mental state or disability, you have someone you trust doing it for you.

More than a will. A will should be one component of a comprehensive estate plan that addresses who gets what when you die, but also who can take care of business, if you are not able to care for yourself. Naming a person in advance lets you to avoid having court involvement and lets you take control of your future.

The law has many ways for you to select who will have authority and care for you, if you become incapacitated. This is something that you can and should discuss with an experienced estate planning attorney.

Will backups. Designating loved ones you trust should be the rule in all facets of estate planning. However, it is critical to be certain that you have backups (“successors” or “alternates”), in the event that a person you’ve selected can’t fulfill their role.

Many people around age 50 who see their thriving, productive children making their way in the world fail to consider the thought that their children may not be available or able to serve a role. Designating more than one backup might not seem like it is a big deal, but you should consider the possibility that a loved one might be incapacitated, predecease you, or be unavailable.

Keep your will current. As your life changes, so do your needs. Therefore, it is vital to be sure that your will is up-to-date. You should review your will regularly (at least every few years) to make sure that it still reflects your current thinking.

You should also be sure you know where an original copy of the will is located. It is important to keep track of it. You can leave it locked away with your attorney or some other secure place, but you need to know where it is.

Reference: Yahoo News (Feb. 6, 2022) “If You’re Over 50, Don’t Leave This Out of Your Will, Expert Says”

How Do I Conduct an Estate Sale?

At some point in your life, you may be called upon to hold an estate sale after a relative dies or goes into a nursing home.

Deciding how to sell or dispose of can be daunting. US News & World Report’s recent article entitled “Estate Sales for Beginners” gives you everything you need to know about how to hold a successful estate sale.

There’s no rule that says you have to do an estate sale. However, it can be a long process. Keep these things in mind.

Allow Time to Prepare. Estate sales are more complicated than a simple one-day yard sale, if you want to do it correctly and realize a profit. It can be emotionally stressful and challenging time, so ask for help and support from friends, family and professionals. Give family members a chance to “shop,” and decide how you want to do this. It can be done by lottery for certain items that several family members want, or you can sell some of the belongings cheaply to family members. After your family goes through everything, you might see that it’s not worth the time and effort to have a sale. Maybe you just keep some things, donate some and haul the rest away.

Decide if You Want to Hire a Professional. You can hire an estate sale service. They’ll take a commission, such as 30% to 45% of the sale’s gross profits, but you may find the cost is worth it. The service will handle most of the logistics.

Consider Selling Some Stuff Yourself. If there are a few big expensive items, you may want to sell it while the estate service provider or auction house handles everything else. This allows you to have the ability to negotiate, if the potential buyer wants to negotiate, instead of letting an estate sale company do it; and second, you don’t then have to pay the estate sale company’s commission on that item.

Make the Event as Professional as Possible. If you do it yourself, you need to advertise the event and mention some of the items people will find at the sale, like antiques or sterling silver. You can have some music playing softly in the background to brighten the mood and make people want to linger longer, so they keep looking and buying. People like to negotiate, so you don’t get too set with your prices. Have a policy that the more someone buys, the larger the discount.

Most estate sales last one to two days.

Reference: US News & World Report (Dec. 22, 2021) “Estate Sales for Beginners”

Why are Siblings Battling over Mom’s Estate?

Sisters Jean Mamakos and Irene Savadian — both retired nurses in their 70s —have been locked in a bitter fight with their three other siblings over their mother’s $2.7 million estate.

The New York Post’s recent article entitled “Nasty family feud over mom’s will lands two retired sisters in jail — and one may lose her home” explains that Frances Perrenod, who died in 2006, named Mamakos and Savadian as the executors of her estate. All five of her children were named as beneficiaries. Perrenod was a homemaker and her husband, Charles, who died in 1988, manufactured specialized miniature light bulbs.

Since the siblings started their legal challenges in 2008, their objections have included the payment of legal fees to settle the estate with money from it; the cost to pursue mineral rights owned by their mother; and allegations that the executors delayed the sale of their mom’s Forest Hills home. They sold the Tudor home, which the family moved into in 1957, in 2014 for $1.8 million.

Anette Klingman, the oldest sibling who is an attorney, told The Post that her sisters were mismanaging the estate and taking money out of it to which they weren’t entitled. She was joined in her opposition to them with sister, Yvette Ravina, and her brother Charles Perrenod Jr., who died in 2020.

One of the disgruntled siblings also started a proceeding in South Carolina to take Irene Savadian’s house.

However, it really got ugly in April 2016, during a lunch break in a proceeding in Surrogate’s Court in Queens, Mamakos and Savadian said. Queens Surrogate Judge Peter Kelly said that the sisters were in contempt of court. At issue was a $100,000 distribution made to each beneficiary, a check the three disgruntled siblings refused to cash, Mamakos said. The judge ordered the two sisters to return their checks, but Savadian refused. Because Kelly said the sisters’ actions were “entwined,” both were sent to Rikers Island, where they were strip-searched and spent 21 days behind bars.

The two retained a lawyer for $50,000 to get them released from the lockup. However, when they were released, the discovered that Judge Kelly had replaced them as executors, naming their sister, Ravina.

In 2018, a final judgment in the estate was entered against Mamakos and Savadian for $1.8 million. It included the return of money they used for legal and other expenses to settle the estate. Judge Kelly ruled against a motion to vacate the judgment in October 2021, which the sisters are now trying to appeal.

Ravina started a lawsuit in South Carolina to take Savadian’s $400,000 house.

“We didn’t steal any money from my mother. We tried to get a good settlement for our siblings,” Savadian said. “It backfired against us.”

Reference: New York Post (Jan. 22, 2022) “Nasty family feud over mom’s will lands two retired sisters in jail — and one may lose her home”

How Do I Write My Will?

Remember that if you don’t write your will correctly, your wishes could end up going unfulfilled, says Claremont Portside’s article entitled “A Guide for Writing Your Will: Steps You Need to Take.”

While there are a lot of tools online, your best bet is working with an experienced estate planning attorney.

Schedule a meeting with an estate planning attorney to discuss your final wishes. The process of writing a will is relatively straightforward:

Decide who you want to inherit your assets
Remember to include your favorite charities, if you want
Note if any of your heirs has special needs or requires extra planning (e.g., if they’re not good with money)
Note if you have minor children who will need a guardian and can’t inherit outright at their age
List the specific items or assets you want each person to inherit
List any debts or liabilities
Designate an executor or personal representative
Determine how your estate should be managed, until it is distributed; and
Ask your attorney about tax implications.

Once prepared, retain a copy in a safe place and make copies for your executor, your spouse or partner, children older than 18 years old and any other heirs who live in another state.

When you begin this process, create a list of what you own and how much it’s worth. This can help ensure that your estate is distributed according to your wishes.

The executor of your will is responsible for ensuring that everything goes according to plan, so choose someone you trust.

Reference: Claremont Portside “A Guide for Writing Your Will: Steps You Need to Take”

Will Moving to a New State Impact My Estate Planning?

Since the coronavirus pandemic hit the U.S., baby boomers have been speeding up their retirement plans. Many Americans have also been moving to new states. For retirees, the non-financial considerations often revolve around weather, proximity to grandchildren and access to quality healthcare and other services.

Forbes’ recent article entitled “Thinking of Retiring and Moving? Consider the Financial Implications First” provides some considerations for retirees who may set off on a move.

Income tax rates. Before moving to a new state, you should know how much income you’re likely to be generating in retirement. It’s equally essential to understand what type of income you’re going to generate. Your income as well as the type of income you receive could significantly influence your economic health as a retiree, after you make your move. Before moving to a new state, look into the tax code of your prospective new state. Many states have flat income tax rates, such as Massachusetts at 5%. The states that have no income tax include Alaska, Florida, Nevada, Texas, Washington, South Dakota and Wyoming. Other states that don’t have flat income tax rates may be attractive or unattractive, based on your level of income. Another important consideration is the tax treatment of Social Security income, pension income and retirement plan income. Some states treat this income just like any other source of income, while others offer preferential treatment to the income that retirees typically enjoy.
Housing costs. The cost of housing varies dramatically from state to state and from city to city, so understand how your housing costs are likely to change. You should also consider the cost of buying a home, maintenance costs, insurance and property taxes. Property taxes may vary by state and also by county. Insurance costs can also vary.
Sales taxes. Some states (New Hampshire, Oregon, Montana, Delaware and Alaska) have no sales taxes. However, most states have a sales tax of some kind, which generally adds to the cost of living. California has the highest sales tax, currently at 7.5%, then comes Tennessee, Rhode Island, New Jersey, Mississippi and Indiana, each with a sales tax of 7%. Many other places also have a county sales tax and a city sales tax. You should also research those taxes.
The state’s financial health. Examine the health of the state pension systems where you are thinking about moving. The states with the highest level of unfunded pension debts include Connecticut, Illinois, Alaska, New Jersey and Hawaii. They each have unfunded state pensions at a level of more than 20% of their state GDP. If you’re thinking about moving to one of those states, you’re more apt to see tax increases in the future because of the huge financial obligations of these states.
The overall cost of living. Examine your budget to see the extent to which your annual living expenses might increase or decrease in your new location because food, healthcare and transportation costs can vary by location. If your costs are going to go up, that should be all right, provided you have the financial resources to fund a larger expense budget. Be sure that you’ve accounted for the differences before you move.
Estate planning considerations. If this is going to be your last move, it’s likely that the laws of your new state will apply to your estate after you die. Many states don’t have an estate or gift tax, which means your estate and gifts will only be subject to federal tax laws. However, a number of states, such as Maryland and Iowa, have a state estate tax.

You should talk to an experienced estate planning attorney about the estate and gift tax implications of your move.

Reference: Forbes (Nov. 30, 2021) “Thinking of Retiring and Moving? Consider the Financial Implications First”

When Do I Need to Review Will?

You should take a look at your will and other estate planning documents at least every few years, unless there are reasons to do it more frequently. Some reasons to do it sooner include things like marriage, divorce, birth or adoption of a child, coming into a lot of money (i.e., inheritance, lottery win, etc.) or even moving to another state where estate laws are different from where your will was drawn up.

CNBC’s recent article entitled “When it comes to a will or estate plan, don’t just set it and forget it. You need to keep them updated” says that one of the primary considerations for a review is a life event — when there’s a major change in your life.

The pandemic has created an interest in estate planning, which includes a will and other legal documents that address end-of-life considerations. Research now shows that 18- to 34-year-olds are now more likely (by 16%) to have a will than those who are in the 35-to-54 age group. In the 25-to-40 age group, just 32% do, according to a survey. Even so, fewer than 46% of U.S. adults have a will.

If you’re among those who have a will or comprehensive estate plan, here are some things to review and why. In addition to reviewing your will in terms of who gets what, see if the person you named as executor is still a suitable choice. An executor must do things such as liquidating accounts, ensuring that your assets go to the proper beneficiaries, paying any debts not discharged (i.e., taxes owed) and selling your home.

Likewise, look at the people to whom you’ve assigned powers of attorney. If you become incapacitated at some point, the people with that authority will handle your medical and financial affairs, if you are unable. The original people you named to handle certain duties may no longer be in a position to do so.

Some assets pass outside of the will, such as retirement accounts, like a Roth IRA or 401(k)plans and life insurance proceeds. As a result, the person named as a beneficiary on those accounts will generally receive the money, regardless of what your will says. Note that 401(k) plans usually require your current spouse to be the beneficiary, unless they legally agree otherwise.

Regular bank accounts can also have beneficiaries listed on a payable-on-death form, obtained at your bank.

If you own a home, make sure to see how it should be titled, so it is given to the person (or people) you intend.

Reference: CNBC (Dec. 7, 2021) “When it comes to a will or estate plan, don’t just set it and forget it. You need to keep them updated”

How Do I Write a Will?

A poorly written or out-of-date will can be costly and ruin an otherwise well-planned estate. Yahoo Entertainment’s recent article entitled “11 Steps to Writing a Will” tells you how to get started and complete your will in 10 simple steps:

Hire an Estate Planning Attorney. Individuals or families with relatively simple financial situations may be able to use an online, reputable software program to complete their wills. However, many situations require an estate planning attorney, such as blended families.
Choose your Beneficiaries. A big mistake people make when planning their estate is failing to name or update beneficiaries on key accounts that work with the plans outlined in their wills. The beneficiary designation on an account supersedes the will, but it’s good to be consistent.
Name an Executor. The executor is responsible for carrying out the wishes expressed in your will.
Select a Guardian for Your Minor Children. It’s common to name multiple guardians, in case one of them named isn’t able to accept the responsibility of guardianship.
Be Specific About Your Bequests. One of the most time-consuming aspects of creating a will can be deciding which assets to include and determining who will get what.
Be Realistic About your Bequests. Practically consider how assets will be distributed. A big reason children stop speaking after a parent’s death is because of boilerplate language directing tangible assets, such as artwork or jewelry, to be divided equally among children.
Attach a Letter of Last Instruction. You can attach an explanatory letter to your will that can serve as a personal way to say goodbye and also provide additional details about certain wishes.
Sign the Will Properly. If you don’t, a will may be declared invalid. Witnesses must sign your will, and in many states, the witnesses can’t be under 18 and those who stand to inherit (“interested parties”).
Keep Your Will in a Safe and Accessible Spot. Make certain that someone you trust knows where to find your will and other important papers and passwords to financial institutions.
Review and Keep Your Up-to-date. Wills should be updated every five years or so, or sooner if you have a major life event, such as the birth or adoption of a new child or grandchild, a divorce, or the death of a spouse or parent.
Add Other Important Estate Planning Documents. A will by itself may not meet all of your estate planning needs. A trust is another estate planning tool that lets you transfer assets when and how you want. A living will communicates your desires for medical treatment or a power of attorney that allows a third party to make financial and legal decisions, along with the will and should be your next step after writing your will.

Reference: Yahoo Entertainment (Jan. 4, 2022) “11 Steps to Writing a Will”

Estate Planning Blog Articles

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

Why Shouldn’t I Wait to Draft my Will?

Can I Split My Inheritance with My Sibling?

Why Is Estate Planning Review Important?

What Can’t I Forget in My Will Now that I’m 50?

How Do I Conduct an Estate Sale?

Why are Siblings Battling over Mom’s Estate?

How Do I Write My Will?

When Do I Need to Review Will?

How Do I Write a Will?

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Why Shouldn’t I Wait to Draft my Will?

Can I Split My Inheritance with My Sibling?

Why Is Estate Planning Review Important?

What Can’t I Forget in My Will Now that I’m 50?

How Do I Conduct an Estate Sale?

Why are Siblings Battling over Mom’s Estate?

How Do I Write My Will?

When Do I Need to Review Will?

How Do I Write a Will?

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