What Estate Planning Documents Should I Have when I Retire?

Research shows that most retirees (53%) have a last will and testament. However, they don’t have six other crucial legal documents.

Money Talks News’ recent article entitled “6 Legal Documents Retirees Need — but Don’t Have” says in fact, in this pandemic, 30% of retirees have none of these crucial documents — not even a will — according to the 20th annual Transamerica Retirement Survey of Retirees.

In addition, the Transamerica survey found the following among retirees:

32% have a power of attorney or medical proxy, which allows a designated agent to make medical decisions on their behalf
30% have an advance directive or living will, which states their end-of-life medical preferences to health care providers
28% have designated a power of attorney to make financial decisions in their stead
19% have written funeral and burial arrangements
18% have filled out a Health Insurance Portability and Accountability Act (HIPAA) waiver, which allows designated people to talk to their health care and insurance providers on their behalf; and
11% have created a trust.

The study shows there is a big gap that retirees need to fill, if they want to be properly prepared for the end of their lives.

The coronavirus pandemic has created an even more challenging situation. Retirees can and should be taking more actions to protect their health and financial well-being. However, they may find it hard while sheltering in place.

Now more than ever, seniors may need extra motivation and support from their families and friends.

The Transamerica results shouldn’t shock anyone. That is because we have a long history of disregarding death, and very important estate planning questions. No one really wants to ponder their ultimate demise, when they can be out enjoying themselves.

However, planning your estate now will give you peace of mind. More importantly, this planning can save your heirs and loved ones a lot of headaches and stress, when you pass away.

Talk to an experienced estate planning attorney today to get your plan going.

Reference: Money Talks News (Dec. 16, 2020) “6 Legal Documents Retirees Need — but Don’t Have”

Who Makes Money from Charlie and the Chocolate Factory?

The heartwarming drama is fictional, even though the two writers did once meet, says The Express in its recent article entitled “Roald Dahl inheritance: Who is raking in fortunes made from Dahl books & films?”

Roald was a mere lad and Beatrix was in her 60s, when the two authors briefly met one another. Dahl’s books and films are classics and are constantly being revamped and reimagined 30 years after his death.

But with Roald no longer around, who gets the money from his books and films? Roald died in 1990 at age 74 and was believed to have a net worth of $10 million.

The lion’s share of his income from films, books and merchandise is managed by his estate.

The latest data from Roald Dahl’s estate shows annual pre-tax profits of about $17 million in 2018.

This income is from television and film deals, royalties, fancy-dress costumes and a line of baby toiletries.

After Roald’s death, his widow Felicity inherited the majority of the $3.75 million he left in his will. This is worth nearly $6.75 million in today’s dollars.

Every year, fans commemorate Roald Dahl Day to celebrate his stories and their characters. Held on the anniversary of his birth—September 13—his books, films and characters are celebrated.

The author spent four hours every day writing stories from his garden shed. In all, Roald wrote at least 36 books, including James and the Giant Peach, Matilda, The Twits and Fantastic Mr Fox. His works continue to be popular for film and stage adaptations.

A new version of The Witches, starring Anne Hathaway, was released earlier this year, while Hollywood stars including Johnny Depp, Mark Rylance and Danny DeVito have all appeared in film versions of his stories.

Reference: The Express (UK) (Dec. 12, 2020) “Roald Dahl inheritance: Who is raking in fortunes made from Dahl books & films?”

Taking a look at Estate of Late Soccer Star Diego Maradona

Similar to soccer star Diego Maradona’s life, the inheritance process is likely to be a mess with his big family that includes eight children from six different partners as heirs to his assets, plus his intangible heritage.

Reuters’ recent article entitled “Image rights, fast cars and a ‘tank’: Maradona’s death triggers complex inheritance” explains that Maradona, who died recently at 60 from cardiac arrest, had four children in Argentina, one in Italy, and three in Cuba, when he went there for treatment to recover from his addictions, his lawyer Matías Morla said.

“In the specific case of Maradona, he is divorced and has eight children, so the estate is divided by eight in an inheritance trial,” Buenos Aires-based soccer lawyer Martín Apolo told Reuters. “It will be a complex process.”

The probate process can last 90 days in a normal case. However, Apolo said it could be much longer with the prospect of “internal disputes” and opportunists seeking a payout from Maradona’s estate. The estate of the World Cup champion, who at the time of his death was coach of the Argentine club Gimnasia y Esgrima, includes properties, cars, investments and jewels that he was given throughout his career. He played and coached in Argentina, Spain, Italy, the United Arab Emirates, Belarus and Mexico.

There is no established value of Diego Maradona’s fortune. Celebrity Net Worth estimates his net worth at the time of his death at $500,000 but said he had earned millions during his career from contracts with the different teams and sponsorship with brands, such as Coca-Cola.

Called “Dios” for his godlike skills on the soccer pitch and “Pelusa” for his prominent mane of hair. Maradona will be valuable for his image, even after death.

“The most important patrimony here could be the image rights, and also all his shirts,” said Apolo. “How much is the one he used in the World Cup final worth? How much could you pay at auction?”

The soccer star’s family has been through several legal battles in recent years, including a trial with his ex-partner Claudia Villafañe for tax evasion, procedural fraud and misappropriation of 458 objects from his past as a soccer player. However, Maradona’s family has asked for unity in the recent weeks before his death, after he underwent brain surgery to remove a blood clot, from which he was recovering when he died.

Reference: Reuters (Nov. 27, 2020) “Image rights, fast cars and a ‘tank’: Maradona’s death triggers complex inheritance”

Is the Pandemic Motivating People to Do Estate Planning?

A survey from Policygenius, an online insurance marketplace, found that most people (60.4%) didn’t have a will, but that may be about to change. Nearly 40% of survey respondents (39.7%) said they feel it’s more important to get a will because of the pandemic.

PR Newswire’s recent article entitled “Policygenius survey finds Americans with misconceptions about estate planning” reports that many respondents also held misconceptions about the estate planning process, which may a reason they avoid it.

The survey found that more than one in five respondents (22.8%) who think getting a will is too expensive overestimated the cost by hundreds or even thousands of dollars.

A total of 48.2% incorrectly thought that their possessions would automatically pass to their spouse, if they died without a will. That may suggest that people may not be creating wills because they think they don’t need them.

There were 24.1% respondents who said that they don’t have a will because they haven’t had time to put one together, and more than half of those respondents (62%) were parents.

The survey also found that respondents prioritized family, with more than a third of them (35.9%) saying that having a child is the most important life event for someone, if they want to create a will. About two-thirds (65.5%) said that making the process of inheritance as easy as possible is one of their top three important issues, when getting a will.

Just 39.3% knew that if someone passes away without a will, a court will determine who gets their assets.

The Policygenius survey is based on responses from a nationally representative sample of 2,689 Americans ages 25 and over. It was conducted by SurveyMonkey from July 16 through July 17, 2020.

Ask an experienced estate planning attorney about a will and a comprehensive estate plan.

Reference: PR Newswire (Dec. 2, 2020) “Policygenius survey finds Americans with misconceptions about estate planning”

What’s Going on with the Estate of Kenny Rogers?

TMZ reported that the estate of the late Kenny Rogers alleged that Kelly Junkermann convinced the country and pop singer to allow him to film his last tour.

Kenny supposedly agreed but did so under the strict condition that the footage be only for personal use.

Rogers’ estate now says that Junkermann disregarded that agreement and attempted to commercially release a DVD called “Kenny Rogers — The Gambler’s Last Deal.”

Wealth Advisor’s recent article entitled “Kenny Rogers estates sues longtime friend over unauthorized tour DVD” reports that the lawsuit states that Junkermann consistently asked for approval to use the content he’d collected but was always denied.

Regardless of this rejection, he moved forward and inked a deal to distribute the footage.

The lawsuit states that the tour footage is filled with “priceless and irreplaceable audio, video, photographic and audiovisual content that were compiled over the course of Kenny Rogers’ decades-long career.”

One of the reasons the estate wants Junkermann’s DVD blocked, is that it has its own DVD of the final tour and doesn’t want fans to be confused. The estate also says that Junkermann’s DVD isn’t up to Kenny’s high standards.

TMZ reported that the estate blocked the release of Junkermann’s DVD earlier in 2020, but it cost nearly $300,000 in legal fees to be accomplished.

The Rogers estate is formally suing for damages and for an injunction blocking the DVD from Junkermann from ever coming out.

The country music icon, who passed away in March at age 81, announced his Gambler’s Last Deal Tour in 2015 and completed it two years later. Officially, the star’s last show was in October 2017 at a star-studded farewell concert in Nashville. However, he played a few shows after that, until he canceled all remaining performances after April 2018.

Junkermann’s DVD was actually set for presale in late 2019, but links to online vendors and video trailers are no longer working.

Junkermann also had a forward written for the package.

Reference: Wealth Advisor (Dec. 1, 2020) “Kenny Rogers estates sues longtime friend over unauthorized tour DVD”

Federal Court Decides for ‘Blue Water’ Navy Veterans

In November, the U.S. District Court for Northern California ruled in favor of thousands of “blue water” Navy veterans and their survivors, who argued that they’re being wrongly denied benefits as part of a deal reached by Congress last year.

Military Times’ recent article entitled “New court ruling could give thousands of Vietnam vets and survivors overdue disability payouts” reports that under that plan, the Department of Veterans Affairs was required to grant presumptive benefit status for chemical defoliant exposure to veterans who served on ships off the coast of Vietnam during that war.

Advocates for years had said that VA’s requirement of direct proof of exposure was hard to obtain, when it has been decades after veterans were in the service. However, more than 22,500 blue water veterans or survivors have received VA benefits payouts since the beginning of 2020.

The new law didn’t require VA officials to go back and review cases denied before 2020. Vets who reapplied for benefits could have their cases considered again, but advocates argue that all of the cases should be resurfaced and reviewed by the VA.

In an interview with Military Times, Under Secretary for Benefits Paul Lawrence said no decision has been made by VA and Department of Justice officials on an appeal. However, he did remark that the lawsuit was discussed as part of VA’s preparations for the new benefits processing at the start of this year.

If the decision stands — either upon further appeal or if the government opts to simply accept the latest ruling — Lawrence said he’s confident the VA can start reviewing those cases without any significant disruption to operations.

President Trump signed legislation granting presumptive status for disability benefits to about 90,000 Navy veterans who served in the seas around Vietnam during the war. This concludes a long battle to get disability benefits more quickly for up to 90,000 Navy veterans who served in Vietnam.

VA has already paid out about $700 million in retroactive benefits related to the “blue water” veterans benefits in 2020.

Reference: Military Times (Nov. 16, 2020) “New court ruling could give thousands of Vietnam vets and survivors overdue disability payouts”

Is a Tax Change a Good Time to Check My Will?

A last will and testament can make certain that your goals for legacy and asset disposition are satisfied and carried out. However, what most people fail to grasp is that a will needs regular review—especially if the document was written or involved the creation of a trust prior to passage of tax reform, the Tax Cuts and Jobs Act (TCJA), in 2017, says Financial Advisor’s recent article entitled “Tax Changes Make This A Good Time To Revise A Will.”

Wills can pass on assets, but taxes have come to greatly impact how much money is passed on. People usually understand the primary components, including the tax implications, of their wills.

These include:

The unlimited marital deduction
Applying current rules to make non-taxable gifts of up to $15,000 per person
The current estate tax exemption of $11.58 million
Health care directives
Naming trustees and executors; and
Creating long-term trusts with non-taxable asset transfers.

Wills and trusts were created prior to the passage of the TCJA may not consider that reform changed the amount which can be exempted from estate taxes.

The law more than doubled the amount that can be exempted from estate taxes. The potential tax changes could cause many more Americans to have a taxable estate, and it’s important to have a full understanding of your assets and carefully decide who you want to receive them. You must also decide if you want them passed outright or through a trust.

Privacy is a good reason why some people often prefer trusts. They also like the quick processing and avoiding probate.

Estate plans should be reviewed every few years, and wills should be reviewed more frequently because life changes are the biggest reason for trouble in revising wills.

Divorce, separation or marriage; the birth or adoption of children, as well as a child reaching adulthood; and changes to finances, location and health all can play important roles.

Reference: Financial Advisor (Nov. 9, 2020) “Tax Changes Make This A Good Time To Revise A Will”

Does My Business Need a Power of Attorney?

Some business owners may need a power of attorney (POA). However, what type would be of benefit the most is the question. This article looks at the types of power of attorney and in what circumstances a business owner may need each of them.

Entrepreneur’s recent article entitled “Does Your Business Need a Power Of Attorney?” reports that the Consumer Financial Protection Bureau (CFPB) defines power of attorney as a legal document that permits a trusted agent the authority to act on your behalf. Accordingly, signing a power of attorney allows the business owner to authorize another person to conduct business in his stead. The person designated in the document is called the “agent” or sometimes the “attorney-in-fact.” There are three main types of power of attorney:

Financial Power of Attorney. This document allows the agent to deal with the financial responsibilities and functions of the “principal” (the person who signs the document), if the principal is unable to do so themselves. Some functions for the agent of a financial power of attorney include the following:

Delegation of the operation of your business
Hiring an attorney and making decisions in lawsuits
Filing and paying taxes
Conducting transactions with banks and other financial institutions
Making decisions on your investments and retirement plan
Entering into a contract
Purchasing of selling real estate or different types of property; and
Using your assets to pay for your living expenses.

Special Power of Attorney (or Limited Power of Attorney). A business owner may need to accomplish a task for the company, but she’s unable to be there because of other responsibilities. This document permits a particular agent to conduct business on her behalf, concerning a specific and clearly outlined event, like opening a bank account, settling a lawsuit, or signing a contract.

Healthcare Power of Attorney. An individual who is incapacitated and can’t communicate, can use this to permit an agent to make medical decisions on his behalf. Note that a healthcare power of attorney isn’t the same as a living will. A living will focuses on a person’s preferences for healthcare treatment, such as do-not-resuscitate and other religious or philosophical beliefs that they want to be respected. A healthcare power of attorney is more flexible and leaves the decisions regarding healthcare to the agent. A living will concerns end-of-life decisions only, where healthcare power of attorney applies in all medical situations.

Durable Power of Attorney. A POA usually becomes effective when a person is incapacitated and stops once they’re able to make their own decisions. However, a durable power of attorney or enduring power of attorney may be applied to any of the types mentioned above. As a result, the agent can make decisions on behalf of a business owner when they aren’t incapacitated.

A POA provides considerable protections that will help a business deal with regular operations, while the owner is unable to lead the company. If the business is an LLC or corporation, a power of attorney for the company may not be needed. However, it’s wise to have one for your own estate planning. Ask an experienced estate planning attorney about the types of power of attorney and how they might help your business.

Reference: Entrepreneur (Nov. 3, 2020) “Does Your Business Need a Power Of Attorney?”

Does Pandemic have an Impact on Financial Powers Of Attorney?

If you’re concerned about the consequences of contracting COVID-19, you’d typically create an advanced directive, a medical power of attorney and a HIPAA release to give authority to those you want to have access to your medical information. These documents are intended to both state your medical care wishes and specify who can make medical decisions for you, if you’re unable.

Forbes’s recent article entitled “If You Lose It, Don’t Lose It: Financial Powers Of Attorney In A Covid-19 World” says that sometimes the issue of money is lost in the confusion. If you’re in the hospital or otherwise unavailable, who do you want to take care of any of your immediate financial issues?

People frequently associate this issue with just writing checks, like paying the mortgage. If it’s deducted automatically, it should be okay, and the other bills can wait until they recover. However, some financial issues are planning-related, and those can’t wait, like in late December when you want to make a Roth IRA conversion but you’re in a hospital. You might also want to make a contribution to your favorite charity, since the CARES Act provides a $300 non-itemized charitable deduction. If you are incapacitated, you need a trusted agent who can make important financial decisions for you and execute them on your behalf.

A financial power of attorney (POA) is often the answer. It is separate from a medical POA but equally as important. Without a binding financial POA, your incapacity will have a major financial impact. A financial POA gives you the power to name an agent to act on your behalf, if you lose the physical or mental capacity to handle your own finances.

If you are worried about the financial risk related to a sudden impairment from an event, such as the coronavirus, ask an experienced estate planning attorney about creating a springing and durable POA. “Springing” means the power doesn’t trigger until you’ve lost legal capacity to handle your own finances. “Durable” means that your agent continues to retain the power to act on your behalf, until you either recover or die. This is the preferred approach because they retain control until something bad happens (causing it to “spring” into action) and then their agent maintains control, even if some unscrupulous individual attempts to hijack the process (proving the power is “durable”).

Note that a POA may not be recognized when it is presented to an individual or company. Financial institutions have been hesitant to accept a financial POA submitted by the principal’s agent because they’re concerned about liability if the POA turns out to be fraudulent, or if the agent acts contrary to the accountholder’s desires. Without the institution’s agreement, the incapacitated person’s plans won’t happen. However, many states have addressed this.

Many people are creating “just in case” estate planning documents to deal with the possibility of contracting COVID-19. Ask an experienced estate planning attorney about creating a financial POA.

Reference: Forbes (Oct. 27, 2020) “If You Lose It, Don’t Lose It: Financial Powers Of Attorney In A Covid-19 World”

Cornelius Vanderbilt Created an Estate Plan, but Should I?

AJC’s recent article entitled “Why Vanderbilts should inspire you to create an estate plan” explains that when Cornelius Vanderbilt died, his son, William, inherited most of the fortune and nearly doubled it within a decade. However, after that came a drop in the cash, and after just a few decades, the fortune had been spent. Therefore, none of Vanderbilt’s descendants stayed among the wealthiest people in the country.

When 120 Vanderbilt family members recently gathered for a reunion at Vanderbilt University, not one was a millionaire. In a century, the largest estate America has ever known had dwindled to next to nothing.

Let’s look at why this happens and how you can prevent this from happening to your estate.

America is currently in the midst of the greatest transfer of wealth ever. An estimated $59 trillion will be transferred to heirs, charities and taxes between 2007 and 2061. However, roughly 70% of wealth transfers aren’t successful. This means that sometimes heirs get practically nothing. There are three reasons for this failure:

No trust and communication among heirs because they’re all concerned about their share.
Heirs are unprepared to inherit an estate, which may include managing investments or a business. In many cases, other family members don’t know how it works.
Heirs have no clue where the money should go and what purpose it should serve because no one is thinking long term about what is best for the family assets.

It’s common for business owners to believe that an estate plan is enough to keep everything in order, but they don’t consider their business. This is the reason why succession planning is vital. This planning determines what happens to the business itself and lays out the strategy, so it continues to operate smoothly after it’s passed to the heirs.

Let’s look at some tips for dealing with estate planning that should make for a smooth transition:

Create a plan. If you die without a will, state probate law will determine who gets your assets. This may not be what you want. Talk to an experienced estate planning attorney to be certain that everything is drawn up correctly.

Discuss the issues with your heirs. Talk to your family about the financial details. Make sure that your heirs know the details of your estate, so they can start to manage and oversee it once you die.

Get heirs involved in the process. Likewise, heirs can help plan based on their knowledge, future availability and expectations. By planning now, no one will be caught unaware about what to do with the estate.

Ready your heirs. Educate your heirs on how to manage and oversee your assets, especially if you have a succession plan for a business. Discuss the company’s mission and vision, and what you want the company to achieve.

Organize your financial documents. Get all financial documents in a single location and label everything clearly to help out your heirs. Keep this in a safe location, and let your heirs know where it’s located. Your attorney should also have a copy of your will, estate plan and succession plan (if applicable).

Get help from experts. Help forge a relationship between your heirs and your financial team, which may include a financial adviser, an estate planning attorney and an accountant. This will allow your heirs to know who to call, if things get complicated. It’ll also help to prepare them for what they’re supposed to be doing, once they get their inheritance.

Communication is the key. Talking with your experts and your heirs will make certain that everyone understands each other’s roles, regardless of whether it’s a small business or a multimillion-dollar empire.

Reference: AJC (Sep. 25, 2020) “Why Vanderbilts should inspire you to create an estate plan”

Estate Planning Blog Articles

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

What Estate Planning Documents Should I Have when I Retire?

Who Makes Money from Charlie and the Chocolate Factory?

Taking a look at Estate of Late Soccer Star Diego Maradona

Is the Pandemic Motivating People to Do Estate Planning?

What’s Going on with the Estate of Kenny Rogers?

Federal Court Decides for ‘Blue Water’ Navy Veterans

Is a Tax Change a Good Time to Check My Will?

Does My Business Need a Power of Attorney?

Does Pandemic have an Impact on Financial Powers Of Attorney?

Cornelius Vanderbilt Created an Estate Plan, but Should I?

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Recent Posts

What Estate Planning Documents Should I Have when I Retire?

Who Makes Money from Charlie and the Chocolate Factory?

Taking a look at Estate of Late Soccer Star Diego Maradona

Is the Pandemic Motivating People to Do Estate Planning?

What’s Going on with the Estate of Kenny Rogers?

Federal Court Decides for ‘Blue Water’ Navy Veterans

Is a Tax Change a Good Time to Check My Will?

Does My Business Need a Power of Attorney?

Does Pandemic have an Impact on Financial Powers Of Attorney?

Cornelius Vanderbilt Created an Estate Plan, but Should I?

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