Estate Planning Blog Articles

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

The Benefits of a Good Estate Plan

If you don’t have a comprehensive estate plan, state law will control. That’s unlikely to coincide with what you would choose to do. MSN’s recent article entitled “What is estate planning?” discusses the benefits of estate planning.

Minimizes taxes. Clever structuring of flexible retirement accounts, such as a Roth IRA, can help funnel more tax-free money to your heirs, while other tax-planning strategies like strategic charitable giving can help you mitigate estate taxes.

Prevents family disputes. The possibility of a fight about who gets what of value or even a sentimental treasure can arise without proper planning.

Clarifies your directives. Although you may have always intended for your niece to get a certain heirloom, unless it’s written out in your estate plan, it may not get into her hands. If you clearly spell out your wishes with the help of an experienced estate planning attorney, you can help your loved ones remember you fondly or at least get what you intended.

Avoids the time and expense of probate court. Done correctly, a trust can help your family avoid the hassles of probate court. Because of the ease of using a trust, more people are doing an end-run around probate and setting up their assets this way. You don’t need as much wealth as you might think to make it worthwhile.

Keeps your family assets together. Trusts can be a good way to make sure your money stays in the family. With the help of an estate planning attorney, a trust can keep a beneficiary from blowing your lifetime of hard work in a few years.

Protects your heirs. If you have minor children, a will can instruct who will take care of them. A living will can help heirs avoid some difficult health decisions during a parent’s end of life.

Sound estate planning can help avoid several potentially troubling problems.

Reference: MSN (Oct. 13, 2022) “What is estate planning?”

How Can I Minimize My Probate Estate?

Having a properly prepared estate plan is especially important if you have minor children who would need a guardian, are part of a blended family, are unmarried in a committed relationship or have complicated family dynamics—especially those with drama. There are things you can do to protect yourself and your loved ones, as described in the article “Try these steps to minimize your probate estate” from the Indianapolis Business Journal.

Probate is the process through which debts are paid and assets are divided after a person passes away. There will be probate of an estate whether or not a will and estate plan was done, but with no careful planning, there will be added emotional strain, costs and challenges left to your family.

Dying with no will, known as “intestacy,” means the state’s laws will determine who inherits your possessions subject to probate. Depending on where you live, your spouse could inherit everything, or half of everything, with the rest equally divided among your children. If you have no children and no spouse, your parents may inherit everything. If you have no children, spouse or living parents, the next of kin might be your heir. An estate planning attorney can make sure your will directs the distribution of your property.

Probate is the process giving someone you designate in your will—the executor—the authority to inventory your assets, pay debts and taxes and eventually transfer assets to heirs. In an estate, there are two types of assets—probate and non-probate. Only assets subject to the probate process need go through probate. All other assets pass directly to new owners, without involvement of the court or becoming part of the public record.

Many people embark on estate planning to avoid having their assets pass through probate. This may be because they don’t want anyone to know what they own, they don’t want creditors or estranged family members to know what they own, or they simply want to enhance their privacy. An estate plan is used to take assets out of the estate and place them under ownership to retain privacy.

Some of the ways to remove assets from the probate process are:

Living trusts. Assets are moved into the trust, which means the title of ownership must change. There are pros and cons to using a living trust, which your estate planning attorney can review with you.

Beneficiary designations. Retirement accounts, investment accounts and insurance policies are among the assets with a named beneficiary. These assets can go directly to beneficiaries upon your death. Make sure your named beneficiaries are current.

Payable on Death (POD) or Transferable on Death (TOD) accounts. It sounds like a simple solution to own many accounts and assets jointly. However, it has its own challenges. If you wished any of the assets in a POD or TOD account to go to anyone else but the co-owner, there’s no way to enforce your wishes.

An experienced, local estate planning attorney will be the best resource to prepare your estate for probate. If there is no estate plan, an administrator may be appointed by the court and the entire distribution of your assets will be done under court supervision. This takes longer and will include higher court costs.

Reference: Indianapolis Business Journal (Aug. 26,2022) “Try these steps to minimize your probate estate”

Why Is a Will So Important?

A 2020 Gallup poll found that less than half of Americans have a will or have made plans regarding how they would like their money and estate handled in the case of their death. The poll also showed that Americans ages 65 and up are the most likely to have a will.

Yahoo News’ recent article entitled “How To Write A Will: The Importance Of A Will And Living Will” says that no matter your age, it’s important to have a will to be in control of what happens with your own assets. A will is a legal document that establishes a person’s wishes regarding the distribution of their assets — money, real estate, etc. — and the care of any minor children.

Without a will, state law may control who gets your “probate” assets and when. Having a will can save an enormous amount of time and money in estate administration and the process of having a guardian appointed for your minor children, if needed.

There’s a big difference between a will and a living will. A living will is a document that lets you state in advance how you want to be treated under certain medical situations, if you’re unable to make those decisions for yourself at a later time.

These differ by state law. However, they generally cover end-of-life decision-making and treatment options. General medical decisions unrelated to end of life care are typically covered in a health care power of attorney. Some states combine these two documents into one directive.

Unlike a living will, which specifically provides instructions for medical care during your lifetime, a will lets you to decide in advance who you want to receive your assets upon your death, and who you want to be in charge of handling the administration of your estate. If you have minor children, a will also allows you to nominate a guardian for them.

When creating a will, think about the “what,” the “who” and the “how.” To do so, ask yourself the following questions:

  • What assets do you have?
  • To whom do you want to leave them?
  • Who do you want to be in charge of making sure that happens?
  • Who do you want to be responsible for your minor children?
  • How do you want the assets transferred?

Reference: Yahoo News (Aug. 17, 2022) “How To Write A Will: The Importance Of A Will And Living Will”

Half of Americans Making More than $100K Don’t Have a Will

About 70% of participants in a new survey from Wealth, an estate planning platform, said that they want to pass wealth down to their loved ones. However, only about half (53%) have an estate plan. And only about a third (32%) say they have a will in place.

Think Advisor’s recent article entitled “Nearly Half of Families Earning $100K or More Lack an Estate Plan: Survey” reports that the survey found that people of color, in particular, face accessibility barriers. This group is 14% less likely to have an estate plan in place than their counterparts in the sample.

Wealth’s findings were based on a survey conducted in the U.S. by WALR in partnership with Manifest in the last two weeks of last year among 10,000 employed respondents ages 30 to 55 with a household income of more than $100,000.

The survey results showed that the main factor keeping people from securing their financial legacy is the notion that estate planning should be done in the future rather than now — possibly because 45% of respondents said they avoid thinking about death.

Another misperception is that estate planning is only for the very wealthy: 42% of survey participants said they don’t own anything valuable and as a reason they do not have a plan, and 30% said they don’t have enough money.

Wealth said it behooves employers to make employees aware of estate planning in their benefits packages.

Just 13% of the sample said they receive estate planning as an employee benefit.

About 72% of the respondents who don’t have a plan said they’d be more likely to create a will if the services were offered by their employer.

“Estate planning should not only be available to high-net-worth households,” Rafael Loureiro, Wealth’s co-founder and chief executive, said in a statement. “Employees of all income levels and walks of life can benefit from financial clarity and emotional peace of mind that comes with having an estate plan.”

The survey found that 40% haven’t gotten around to setting up an estate plan, although 70% say they eventually will do it and about 45% say that they actively avoid thinking about death (especially men and 51% of millennials). Almost half (45%) also think it’s inappropriate to talk about money with friends, missing out on valuable financial advice.

Reference: Think Advisor (March 29, 2022) “Nearly Half of Families Earning $100K or More Lack an Estate Plan: Survey”

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)”

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”

Do Young Adults Need Estate Planning?

Estate planning has an image problem, particularly with younger generations, says The Financial Post’s November 15th article entitled, “The case for estate planning in your 20s: At any age, some things are dear to you.”

If your 22 and don’t own a home, aren’t married and don’t have any dependent children, writing a will may seem like a waste of time and money. However, if you ask yourself “what do you want to see happen to your treasures if you pass away?

With no estate plan, a young adult will have no say over what happens to their treasures one day.

A recent survey shows very few young adults have an up-to-date will. It is less than 20%.

One reason for this poor result is that the term “estate planning” makes the process seem inaccessible or irrelevant for anyone not of a certain age or with significant assets.

However, considering your wishes earlier in life when your needs are simpler can make the process feel more natural and manageable when your life — and needs — become more complex as you get older.

The pandemic is a reminder that none of us knows for sure if we will have a later.

Drafting a will gives you the power to decide where everything from your savings and investments to your sentimental belongings and even your pets will go when you pass away.

Many people wait until they get married, buy a house, or have kids to draft a will. However, every adult needs one. Think about what would happen to your assets and property, if something happens to you.

People with spouses often mistakenly assume everything will go to that person, if they have no will in place.

However, state law will dictate exactly what assets will go to their spouse, and what might go to other relatives, such as their parents. If that’s not how you would have wanted it to go, you’re out of luck.

Leaving an up-to-date record of your wishes is the best thing you can do for your family.

Reference: Financial Post (Nov. 15, 2021) “The case for estate planning in your 20s: At any age, some things are dear to you”

What Estate Planning Does My Child Need at 18?

This 18th birthday milestone legally notes the transition from minors to official adults, bringing with it major changes in legal status, says NJ Family’s recent article entitled “What You Need to Know (Legally and Medically) On Your Teen’s 18th Birthday.”

Adults—even your 18-year-old— is entitled to privacy rights. This means that anyone not given explicit rights via a power of attorney and HIPAA (the Health Insurance Portability and Accountability Act) release, among other important documents, can be denied info and access—even parents. Here’s what every family should have:

Power of Attorney. A power of attorney (POA) gives an agent (such as you as the parent) the authority to act on behalf of a principal (your adult child) in specific matters stated in the POA.

You can also have a POA for medical decisions and one for finances.

HIPAA Release. When kids become legal adults, they have a right to complete health privacy under HIPAA. That means no one can see their information without permission, even you!

Ask your child to sign a HIPAA release form (which is often included along with the medical power of attorney), to let their health providers share relevant information.

Wills. A simple Will is a good idea. It may also be a good time for you to review your estate plan to see how circumstances changed.

The wisest and safest way to get a credit card for your adult child is to add your child to your account. That way you can monitor transactions. Students also get an immediate bump in their credit score, which is important for renting apartments. However, the main point is to teach them skills and how to be responsible with money.

Talk with an experienced estate planning attorney about drafting all of the necessary legal documents for your newly-minted legally adult kid.

Reference: NJ Family (Oct. 6, 2021) “What You Need to Know (Legally and Medically) On Your Teen’s 18th Birthday”

Why Should I Update My Estate Plan?

The majority of Americans don’t have an updated estate plan in place. This can create a major headache for their families, in the event that anything happens to them.

Fox 43’s recent article entitled “Majority of Americans have outdated estate plans” explains that estate planning is making some decisions now for what you want to happen in the future, if you’re unable to make decisions then.

It’s important that every adult has an estate plan in place. Moreover, as you get older and you have a family, an estate plan becomes even more important.

These decisions can impact your family. It involves deciding who will care for your children. If you’re a parent with children under the age of 18, your estate plan can name the guardians of those children.

This is accomplished by having a clause in your will that states which person(s) will have the responsibility of caring for your minor children, in the event that you and your spouse pass away unexpectantly.

In your will, you’ll also name an executor who will carry out your wishes after your death.

You may ask an experienced estate planning attorney about whether you should have a trust to protect some of your assets.

You also should have your attorney draft a power of attorney, healthcare directive, living will and HIPAA waiver.

Many people don’t know where to get started. However, the good thing is ultimately it’s your decisions about what you want to happen, if you are unable to care for your loved ones.

Talk to an experienced estate planning attorney and do this sooner rather than later.

Reference: Fox 43 (Oct. 27, 2021) “Majority of Americans have outdated estate plans”

Should I Write My Own Will?

Only a third of Americans have estate planning documents, according to a 2021 study. However, the pandemic has caused many to start taking estate planning more seriously. The research saw a 63% increase from last year in adults between the ages of 18 and 34 who have a will or another estate planning document. A total of 24% of all adults surveyed also said that COVID made them see a greater need for estate planning and take action.

Yahoo Life’s recent article entitled “Planning to Write Your Own Will? Here’s What You Need to Know” explains that an online form may be cheaper. However, hiring a lawyer could save you money in the future. If you don’t understand or review the probate laws in your state, when you try to write your will on your own, it can cost you and your loved ones more in the long run. It can mean added court fees, legal fees and stress. If there are any mistakes in your will, it can take a long time for it to clear probate court.

Drafting a will through an attorney is a way to make certain that your assets will be transferred the way you want them to, giving you and your loved ones more peace of mind.

You should hire an experienced estate planning attorney because the state’s probate code and tax laws are constantly changing.

If you write your own will, it is possible that a minor mistake can cause the will to be invalid or contested.

Once you create your will, it is vital that you execute or sign it correctly according to state law. That means having the correct number of witnesses, the right formal language above the will-maker’s signature and the legal requirements of your state.

Even if you decide to write your own will, you should ask an attorney to review it for you.

When you use an experienced estate planning attorney, you can fix any mistakes and know that your will is legally sound.

Many attorneys offer estate plan audits for those who have documents and want to make sure they work the way they think they do.

Reference: Yahoo Life (Sep. 17, 2021) “Planning to Write Your Own Will? Here’s What You Need to Know”