What are the Most Popular Estate Planning Scams?

The Wealth Advisor’s recent article entitled “Beware of These Common Estate Planning Scams” advises you to avoid these common estate planning scams.

Cold Calls Offering to Prepare Estate Plans. Scammers call and email purporting to be long lost relatives who’ve had their wallets stolen and are stranded in a foreign country. Seniors fall prey to this and will pay for estate planning documents. Any cold call from someone asking that money be wired to a bank account, in exchange for estate planning documents should be approached with great skepticism.
Paying for Estate Planning Templates. For a one-time fee, some scammers will offer estate planning documents that may be downloaded and modified by an individual. While this may look like a great deal, avoid using these pro forma templates to draft individual estate plans. Such templates are rarely tailored to meet state-specific requirements and often fail to incorporate contingencies that are necessary for a comprehensive and complete estate plan. Instead, work with an experienced estate planning attorney.
Not Requiring an Estate Plan. Although less of a scheme, somepeople think they do not need an estate plan. However, proper estate planning entails deciding who can make health care and financial decisions during life, in the event of incapacity. These documents help to minimize the need for family members to petition the Probate Court in certain situations.
Paying High Legal Fees. Like many things in life, with an estate plan, you may get what you pay for. Paying money upfront to have your intentions memorialized in writing can minimize the expense. Heirs should be on guard if an attorney hired to administer an estate is charging exorbitant fees for what looks to be a well-prepared estate plan. Don’t be afraid to get a second opinion in these situations.
Signing Estate Planning Documents You Don’t Understand. Estate planning documents are designed to prepare for potential incapacity and for death. It is critical that your estate planning documents represent your intentions. However, if you don’t read them or don’t understand what you’ve read, you will have no idea if your goals are accomplished. Make certain that you understand what you’re signing. An experienced estate planning attorney will be able to explain these documents to you clearly and will make sure that you understand each of them before you sign.

You can avoid these common scams, by establishing a relationship with an experienced attorney you trust.

Reference: The Wealth Advisor (June 7, 2021) “Beware of These Common Estate Planning Scams”

Tell Me again Why Estate Planning Is So Important

The Legal Reader’s recent article entitled “The Importance of Estate Planning” explains that estate planning is not just for the rich.

If you don’t have a comprehensive estate plan, it could mean headaches for your family left to manage things after you die, and it can be expensive and have long-lasting impact.

Here are four reasons why estate planning is critical, and you need the help of an experienced estate planning attorney.

Estate plan beneficiaries. Middle-class families must plan in the event something happens to the bread earner. You might be only leaving behind one second home, but if you don’t decide who is to receive it, things might become complicated. The main purpose of estate planning is to allocate heirs to the assets. If you have no estate plan when you die, the court decides who gets the assets.

Protection for minor children. If you have small children, you must prepare for the worst. To be certain that your children receive proper care if they are orphaned, you must name their guardians in your last will. If you don’t, the court will do it!

It can save on taxes. Estate planning can protect your loved ones from the IRS. A critical aspect of estate planning is the process of transferring assets to the heirs to generate the smallest tax burden for them. Estate planning can minimize estate taxes and state inheritance taxes.

Avoid fighting and headaches in the family. No one wants fighting when a loved one dies. There might be siblings who might think they deserve much more than the other children. The other siblings might also believe that they should be given the charge for financial matters, despite the fact that they aren’t good with debts and finances. These types of disagreements can get ugly and lead to court. Estate planning will help in creating individualized plans.

Work with an experienced estate planning attorney and see how estate planning can help your specific situation.

Reference: The Legal Reader (May 10, 2021) “The Importance of Estate Planning”

Is a Handwritten Will a Smart Idea?

Some states, recognize holographic wills under limited circumstances, such as Alaska, Arizona, Arkansas, California, Colorado, Idaho, Kentucky, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming.

In some of these states, if a will was handwritten by its maker, the state will recognize the will provided it was executed with the state’s requirements for valid wills.

Many states, require, among other things, that at least two witnesses attest and sign the will in the presence of each other, as well as in the presence of the maker.

Think Advisor’s May 20 article entitled “Relying on Holographic Wills Is a Terrible Idea” says that, while a holographic will could be valid in your state, there are many instances where attempts to comply with the state probate laws failed.

If the maker of a holographic will lives in a state that doesn’t accept holographic wills, the will isn’t valid.

In those cases, if there aren’t any valid prior wills, the testator’s property will be distributed to his or her heirs according to state intestacy law, rather than the intent of the testator.

This makes it problematic for someone who makes a will — handwritten or not. That is because the maker of the will intended for the assets to pass in a certain way, and perhaps not how the state’s laws say.

Some people are not too concerned with making a will. However, that may be a result of a person not having many assets, or the individual relying on will alternatives, like intestacy laws, joint bank accounts, payable or transfer on death accounts, and certain deeds, such as real property owned tenancy by entirety (property owned by a married couple).

Some states also have what is known as a lady bird deed, or an enhanced life estate deed. This document permits the owner of the real property to have control of the property, until he or she dies. The property is then transferred automatically to the person(s) named in the deed. It’s essentially a lady bird deed as being a pay-on-death account for real estate.

For specifics and how they might apply to your particular circumstances, talk to an experienced estate planning attorney.

Reference: Think Advisor (May 20, 2021) “Relying on Holographic Wills Is a Terrible Idea”

Do Stepchildren Inherit?

When an individual passes away without a will, the state laws of intestacy instruct how the person’s probate estate will be distributed.

Only assets that would have passed through a person’s will are impacted by intestate succession laws. This typically includes only assets owned alone in his or her name.

For instance, in Nebraska, under intestate succession, who inherits depends on whether the deceased had living children, parents, or other close relatives, when he or she died.

In Nebraska, if the decedent was married and died without a will, what the decedent’s spouse will receive depends on whether the decedent had any living parents or descendants, such as children, grandchildren, or great-grandchildren. If the decedent did not, then his or her spouse inherits all of the intestate property.

Under New Jersey’s intestacy statute, when a decedent is survived by a spouse and children who are not children of the surviving spouse (stepchildren), the surviving spouse is entitled to the first 25% of the intestate estate, but not less than $50,000 nor more than $200,000– plus one-half of the remainder of the intestate estate.

However, nj.com’s recent article entitled “Who gets this house after spouse dies with no will?” explains that the laws of intestacy don’t control the distribution of assets that were jointly owned with a right of survivorship (like a house) or that have a beneficiary designation (like life insurance).

If the house was jointly owned as husband and wife in joint tenancy with the right of survivorship, the surviving spouse solely owns the entire house by operation of law, upon the death of the first spouse. The stepchildren do not have any right to the proceeds of the sale of the house.

However, if the decedent spouse owned the house only in his or her own name or the house was titled by the spouses as “tenants in common,” then the laws of intestacy would apply.

Tenancy in common is an arrangement where two or more people have ownership interests in a property.

The big difference between joint tenants and tenants in common is that joint tenants have the right of survivorship (which gives them ownership of the property when one owner dies), tenants in common do not.

With a tenancy in common, the tenants can own different percentages of the property.

Tenants in common can also gift their share of the property to anyone upon their death.

Reference: nj.com (May 5, 2021) “Who gets this house after spouse dies with no will?”

How to Simplify Estate Planning

For most people, estate planning and preparation doesn’t rank very high on their “to do” list. There are a number of reasons, but frequently it comes down these three: (i) cost; (ii) they believe it’s just for the rich; and (iii) it’s too complicated.

Fort Worth’s recent article entitled “3 Tips to Help Simplify Estate Planning,” explains that an estate plan really is not about you. It’s about taking care of your loved ones and charities.

Without an estate plan or last will, state intestacy law determines who gets your assets. You lose control of how your wealth will be distributed.

Let’s look at three tips to make it easier and to help you prepare for the future:

Work with an experienced estate planning attorney. Estate planning is not something you ask your buddy to do. “Hey, Jimmy, help me write my will.” No way. Partner with an experienced estate planning attorney, so you are confident your documents comply with state law and that the plan’s language clearly details how your wealth should be managed.
Review your estate planning documents regularly. We all have planned and unexpected events in our lives, like new grandchildren, illnesses, or significant increases or decreases in your net worth that could impact wealth and how it should be distributed. Meet regularly with your estate planning attorney and review your plan to make sure it still meets your needs and intentions.
Organize important documents. Make certain important documents have been created and can be located quickly, if something happens to you. Here is a list of documents you should have on file that can be accessed by your spouse or family members in case of an emergency:

Wills, trusts, and other important estate planning documents
A list of tangible and intangible property
A list of financial accounts and insurance policies; and
Email accounts, logins, or other log-in information to your PC and phone.

Estate planning is not a DIY project. You need the expertise of an experienced estate planning attorney to make certain that your wishes are carried out and that your estate plan can withstand any legal challenge.

Reference: Fort Worth (May 6, 2021) “3 Tips To Help Simplify Estate Planning”

What Happens when Homeowner Dies without Will?

When parents die suddenly, in this case due to COVID-19, and there is no will and no discussions have taken place, siblings are placed in an awkward, expensive and emotionally fraught situation. The article titled “My parents died of COVID-19 and left no will. My brother lives rent-free in their home and borrowed $35,000. What now?” from MarketWatch sums up the situation, but the answer is complicated.

When there is no will, or “intestacy,” there aren’t a lot of choices.

These parents had a few bank accounts, owned their home outright and left no debts. They had six adult children, including one that died and is survived by two living sons. None of the siblings agrees upon anything, so nothing has been done.

One of the siblings lives in the house rent free. Another brother was loaned $35,000 for a down payment on a mobile home. He now claims that the loan was a gift and does not have to pay it back. There are receipts, but the money was paid directly to the escrow company from the mother’s bank account.

How do you determine if this brother received a loan or a gift? What do you do about the brother who lives rent-free in the family home? How does the family now move the estate into probate without losing the house and the bank accounts, while maintaining a sense of family?

For starters, an administrator needs to be appointed to begin the probate process and act as a mediator among the siblings. In some states, the administrator also requires a family tree, so they can know who the descendants are. Barring some huge change of heart among the siblings, this is the only option.

If the parents failed to name a personal representative and the siblings cannot agree on who should serve, an estate administration lawyer is the sensible choice. The court may name someone, if there is concern about possible conflicts of interests or the rights of creditors or other beneficiaries.

A warning to all concerned about how the appointment of an administrator works, or sometimes, does not work. Working with an estate planning attorney that the siblings can agree upon is better, as the attorney has a fiduciary and ethical obligation to the estate. While state laws usually hold the administrator responsible to the standard of care of a “reasonable, prudent” individual, not all will agree what is reasonable and prudent.

One note about the loan/gift: if the mother helped a brother to qualify for a mortgage, it is possible that a “Gift Letter” was created to satisfy the bank or the resident’s association. Assuming this was not a notarized loan agreement, the administrator may rule that the $35,000 was a gift. Personal loans should always be recorded in a notarized agreement.

This family’s disaster serves as a good lesson for anyone who does not have an estate plan. Siblings rarely agree, and a properly prepared estate plan protects more than your assets. It also protects your children from losing each other in a fight over your property.

Reference: MarketWatch (April 4, 2021) “My parents died of COVID-19 and left no will. My brother lives rent-free in their home and borrowed $35,000. What now?”

Is the Pandemic Making Young People Think About Estate Planning?

A 2021 study from caring.com shows the coronavirus pandemic’s impact on estate planning and the change in viewpoints among specific groups. The survey generated responses from 2,500 Americans and is a continuing effort to create greater awareness and understanding about the estate planning process.

Insurance News Net’s recent article entitled “Study: Young Adults More Likely To Do Estate Planning Due To COVID-19” reports that, based on results from last year, the number of young adults with a will increased by 63%.

For the first time, adults under 35 are more likely to have a will than those ages 35-54. About 50% of all younger adults surveyed also said that COVID-19 prompted their interest in estate planning. Despite the growing interest among younger adults, most Americans still do not have a will. They fail to take any action, except for speaking to loved ones about estate planning. About ⅔ or 67% overall still don’t have a will.

Most of those who responded to the survey said that procrastination was the main reason for not having a will. However, the number of Americans who expressed a lack of understanding increased by 90% since 2017.

The survey also shows a significant increase among Hispanic and Black Americans with a will. The number of Hispanics with a will increased by 12% and by 6.2% among Blacks, since the 2020 report.

“In comparison to previous years, the 2021 study indicates that Americans see a greater need for estate planning due to the pandemic,” says caring.com CEO, Jim Rosenthal. “Unfortunately, many people haven’t begun the estate planning process – even with the increased availability of remote and online services.”

Income level is also a significant factor among people who do in estate planning. The survey’s respondents making under $40,000 a year were less likely to have a will.

The percentage of Americans with a will and annual income of $40,000 to $80,000 increased 6% to 39% in one year.

Caring.com has conducted its Wills and Estate Planning Study since 2015 to raise awareness of the importance of estate planning, especially among people who may not feel they have the money or know-how needed to create a will or living trust.

Reference: Insurance News Net (Feb. 23, 2021) “Study: Young Adults More Likely To Do Estate Planning Due To COVID-19”

Remind Me Why I Need a Will

There are a number of reasons to draft a will as soon as possible. If you die without a will (intestate), you leave decisions up to your state of residence according to its probate and intestacy laws. Without a will, you have no say as to who receives your assets or properties. Not having a will could also make it difficult for your family.

Legal Reader’s recent article entitled “Top 7 Reasons to Fill Out a Will” reminds us that, before it is too late, consider these reasons why a will is essential.

Avoid Family Disputes. This process occasionally will lead to disagreements among family members, if there’s no will or your wishes aren’t clear. A contested will can be damaging to relationships within your family and can be costly.

Avoid Costly and Lengthy Probate. A will expedites the probate process and tells the court the way in which you want your estate to be divided. Without a will, the court will decide how your estate will be divided, which can lead to unnecessary delays.

Deciding What Happens to Your Assets. A will is the only way you can state exactly to whom you want your assets to be given. Without a will, the court will decide.

Designating a Guardian for Your Children. Without a will, the court will determine who will take care of your minor children.

Eliminate Stress for Your Family. Most estates must go to probate court to start the process. However, if you have no will, the process can be complicated. The court must name personal representatives to administer your estate.

Protect Your Business. A will allows you to pass your business to your co-owners or heirs.

Provide A Home For Your Pets. If you have a will, you can make certain that someone will care for your pets if you die. The law considers pets as properties, so you are prohibited from leaving assets to your pets in your will. However, you can name beneficiaries for your pets, leaving them to a trusted person, and you can name people to serve as guardians of your pets and leave them funds to meet their needs.

Drafting a will with the help of an experienced estate planning attorney can give you and your family peace of mind and convenience in the future.

Reference: Legal Reader (Jan. 28, 2021) “Top 7 Reasons to Fill Out a Will”

Sound Like a Broken Record in Estate Planning?

After a year like the last, estate planning attorneys may sound like a broken record, repeating their message over and over again: No matter your age, wealth, or familial structure, you should have a last will and testament, powers of attorney and a health care proxy.

Everyone needs these documents, to protect wealth, children, spouses, family and yourself.

Wealth Advisor’s recent article entitled “2020 Concludes With Intestate Celebrity Estates” says that the execution of legal documents does have a financial cost. This can keep some people from talking to an experienced estate planning attorney. Others say they are simply too busy to take care of the matter, so they delay. There are other people don’t want to talk about issues of sickness and mortality because they just can’t bring themselves to think about these important estate planning documents.

It doesn’t matter who you are, these types of issues are seen with all kinds of people. Recently, we’ve learned that several celebrities died intestate or without a last will and testament. For example, Argentinian soccer great Diego Armando Maradona died in November at the age of 60. He had a fortune including real estate, financial assets and jewelry, but his life was filled with drama. Diego fathered eight children from six different partners but signed no last will and testament. Fighting among his many heirs is expected, especially with his large estate. Diego said publicly that he wanted to donate his entire estate and not leave his children anything. However, he died of a heart attack before putting this plan in place. Therefore his next-of-kin, not the charities, received his assets.

Another notable person who died intestate recently is former Zappos CEO Tony Hsieh, who died at age 46. His estate is valued at $840 million. Hsieh was survived by his two brothers and his parents. He recently purchased eight houses in Park City, Utah, so this purchase of real estate across state lines will make the administration of his estate even more complicated without a last will and testament or a trust.

Finally, actor Chadwick Boseman died intestate at age 43, after a long battle with colon cancer. His wife, Simone Ledward, petitioned the California courts to be named the administrator of his estate. The couple married in early 2020. As a result, she was qualified to administer and receive from his estate. He had no children, so under California probate law, she gets the entire estate.

These recent deaths of three celebrities, none of whom were elderly, show the need for individuals of all ages, backgrounds and wealth to address their estate plans and not put it off.

Reference: Wealth Advisor (Jan. 19, 2020) “2020 Concludes With Intestate Celebrity Estates”

Am I Named in a Will? How Would I Know?

Imagine a scenario where three brothers’ biological father passed away a decade ago. The father wasn’t married to the brothers’ mother, plus, he had another family with three children, grandchildren, and great grandchildren. The father never publicly acknowledged that the three boys were his children. They’ve now heard rumors that he left them something in his will—which may or may not exist. The father’s wife has also passed away.

Nj.com’s recent article entitled “How can we find out if our father left us something in his will?” explains that a parent isn’t required to leave his or her adult children an inheritance.

If a person doesn’t leave a will when they die, the intestacy laws of the state in which he or she dies will dictate how the decedent’s property is divided.

For example, if you die without a will in Kansas, your assets will go to your closest relatives. If there were children but no spouse, the children inherit everything. If there is a spouse and descendants, the spouse inherits one-half of your intestate property, and your descendants inherit the other one-half of your intestate property.

In Illinois, if you’re married and you pass away without a will, the portion given to your spouse is based upon whether you have living descendants, such as children and grandchildren.

In New Jersey, if the decedent is survived by a spouse and children—this includes any children who are not children of the surviving spouse—the surviving spouse gets the first 25% of the intestate estate, but not less than $50,000 nor more than $200,000, plus one-half of the balance of the intestate estate. In that state, the descendants of the decedent would receive the remainder.

Note that an intestate estate doesn’t include property that’s in the joint name of the decedent and another person with rights of survivorship or payable upon death to another beneficiary. In our problem above, the issue would be whether the three boys would’ve been entitled to a percentage of the property permitted under the state intestacy statute, or under a will if you could prove there was one.

However, the time for the three boys to make a claim against their father’s estate would have been at his death. A 10-year delay is a problem. It may prevent a recovery because there are time limitations for bringing legal actions. However, they may have other claims, and there may be reasons you are not too late.

Litigation is very fact-specific, and the rules are state-specific. The boys should talk to an estate litigation attorney, if they think there are enough assets to make at it worth their while.

Reference: nj.com (Dec. 29, 2020) “How can we find out if our father left us something in his will?”

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