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JOINT WILLS AND CHANGING CIRCUMSTANCES

Estate Planning

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People are often similar and predictable. It is no different when it comes to their estate plans. Most people want the same thing. Almost universally, when a husband and wife in a first marriage devise an estate plan they want the same thing: when the first spouse passes away, everything goes to the surviving spouse. When the second spouse passes away, everything goes to the children. Executing this plan with joint Wills is not always the best option.

Most people do not want to think about it, but there is always a possibility that a surviving spouse will get remarried. It happens all the time. The new spouse is entitled to a share of the surviving spouse’s estate by law. This may or may not leave enough of the property available for the original couple’s children to receive the originally contemplated inheritance.

The initial goal of most couples is laudable. It is an excellent idea to leave your assets to your surviving spouse with the plan that everything will eventually pass on to your children. It is not the idea that is wrong. It is often the execution. Circumstances change and what we expect to happen often doesn’t. Talk to an estate planning attorney about ways that you and your spouse can accomplish the same goals in ways that take changing circumstances into consideration.

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College is extremely expensive and the cost keeps rising. Parents and grandparents routinely struggle with how they will pay for their children or grandchildren’s college education. If you plan ahead, you can make paying for the college education a part of your larger estate plan. You have many different options.

The traditional way to pay for a college education is by setting up a Trust. This allows you to set up the account long before it will be needed and let the Trust assets earn interest. However, there are other ways to pay for college if you have not planned far in advance. Parents and grandparents can directly pay tuition to the education institution. Money paid directly to an accredited school is not subject to the gift tax. You can then give living expenses to the student directly up to the gift tax limit. Another option is to set up a 529 college savings plan. However, like a Trust, that should be done long before it is needed.

Paying for college is important and most people want to see their children and grandchildren go to college without having to worry about how it will be paid for. Talk to an estate planning attorney about making your loved ones’ college expenses part of your estate plan.

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Many people share a common belief that probate should be avoided at all costs, so instead of hiring an attorney to come up with an estate plan they devise their own schemes. For example, most people know that if two people are on a real estate deed as joint tenants, when one person passes away the entire property automatically passes to the surviving joint tenant. As a result of this knowledge, some people will make the mistake of adding their children as joint tenants in their home.

Adding children to to your property as joint tenants might work out in some cases. However, what might happen if your children have debts they cannot pay? You might find yourself involved in costly litigation to keep your children’s creditors from making a claim against your home. This litigation could be a lot more time-consuming and costly than probate. If your children owe money to a government agency, it’s almost guaranteed to be more expensive than probate.

Experienced estate planning attorneys have many methods of ensuring that your property passes to the people you want it to. Sometimes, those methods will include probate as a necessity. However, an attorney can and will plan your estate and draft the appropriate documents in a way that makes the probate process as painless for your heirs as possible. Probate only needs to be scary if you don’t have an experienced estate attorney working for you.

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If you have a blended family, it’s important that you have an estate planning attorney craft your estate plan rather than using a simple form Will to divide your assets based on percentages. Blended families are those that have children from multiple marriages and they have unique dynamics for which you should account in your estate plan. This will help avoid conflicts after you pass away.

When you leave a simple Will that bestows an inheritance on your natural children based on percentages, you leave open the possibility that the children will fight about who gets what specific assets. That’s bad enough. When you add step-children into the mix, it can get even worse. This could especially be a problem if your natural children and step-children did not grow up together. You may want to provide for your entire blended family and it is your right to do so. However, you should be careful to provide for them in a way that minimizes conflict.

The best way you can provide for your family, whether it’s blended or not, is to speak to an estate planning attorney. Every family is different and needs different things. An estate planning attorney can help you in making sure that you do what is right for your family.

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If you have young children, it is important that you name someone to be the guardian of the children in the event that you pass away. To do this, you need to make a Will. An estate planning attorney can help you make a Will. However, you need to choose an appropriate guardian. Here are a few tips.

The most important thing is to pick someone who is responsible and willing to serve as guardian. You want someone you know who will raise your children appropriately. That might be a family member or it might be someone else. You should also speak to that person ahead of time and make sure that he or she is willing to raise your children if anything should happen to you.

In most cases, the court will appoint the person you designate to be the guardian. However, sometimes the court might have a good reason not to. Because of something you do not know about, the person you chose might not be an appropriate person to raise your children. For this reason, you might want to also consider appointing a backup guardian. That is someone the court can appoint if the first person cannot be the guardian.

An estate planning attorney can create a Will that designates your choice for a guardian of your minor children and your backup choice.

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If you have paid life insurance premiums for years, the last thing you want to happen is for the insurance company to receive a windfall after your death instead of paying out to your beneficiaries. However, if your beneficiaries do not know about the policy, they will not know to make a claim. For this reason, part of your estate plan should include some way of letting your beneficiaries know about your life insurance policy.

New York’s Department of Financial Services strongly encourages insurers to check their unpaid premiums databases against the Social Security Administration’s records in an attempt to find unclaimed life insurance benefits that should be paid out. However, it might take months or even years for the insurance company to notice that you have passed away and that it needs to locate your beneficiaries. In the meantime, your spouse and children will not have the benefit of the life insurance policy you paid for.

You should reference all of your life insurance policies somewhere in your overall estate plan documents so that the people who need to know can tell your beneficiaries where to make a claim. It is also a good idea to store the policy information in the same place that you keep your other estate plan documents. At a minimum, make sure that your will’s executor will know about the life insurance policies as quickly as possible.

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As part of your estate plan, your New York City estate planning attorney will draw up a wide range of documents for you. As part of the process, you will need to designate people to act on your behalf. You might need to appoint an executor, a trustee, a general power of attorney, a healthcare prox and more. You do not need to designate the same person to act in every role.

Speak with your attorney about what the people designated for each role actually do so that you can designate the most appropriate person. For example, the executor of your will has a short-term assignment. Once directives in the will are carried out, the executor’s role is over. However, a trustee may need continue administering the trust for years. Thus, you might want to consider a potential trustee’s ability to continue to act well into the future, which might not be as big of a concern for an executor.

Different considerations go into deciding who to appoint to different roles, such as appointing a power of attorney or a healthcare proxy. An estate planning attorney will go over every role with you and has the experience to know what the most important factors are that you should consider. Make sure you ask your attorney about every role.

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A durable power of attorney allows an attorney-in-fact or an agent to make specific financial decisions on the principal’s behalf. A power of attorney document must be in writing and must comply with specific statutory formalities. Additionally, some banks may require parties to use their specific forms before they honor their power of attorney instruments. In most cases, you will have to sign your power of attorney document in the presence of a notary public and obtain the notary’s signature or seal. You may also need to sign your document in front of witnesses. You can limit your agent’s financial decision-making powers by specifying the types of actions your agent can take on your behalf. You can also further specify what types of financial decisions your agent cannot make.

Every power of attorney ends at the principal’s death. This means that if you die, your power of attorney is no longer effective, regardless of whether or not you revoked it or validly destroyed it. The termination is automatic. However, your power of attorney may also become automatically invalid if you become mentally incompetent. Unless you created a “durable” power of attorney, your power of attorney most likely ends at your mental incapacity. Although state laws may differ, most states require you to include certain words to express your intent in creating a durable power of attorney. You may need to include specific words, such as “to remain effective upon my mental incapacity” or “a durable power of attorney.”

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Many people fear that a spouse from a second marriage will not leave assets to the children of a previous marriage. If you leave all of your assets to your spouse in a simple will, this is a real concern. The second spouse is under no obligation to leave assets to your children from a previous marriage in his or her own will. Even if you and your spouse create joint wills that leave assets to all of your children, nothing prevents your spouse from changing his or her mind after you pass away.

With proper estate planning, however, you can avoid this problem and leave assets to your children from a previous marriage. In New York, an attorney can assess your situation and find the best option for you. For example, if your spouse lives in a home that you individually own and would eventually like to see pass to the children of your first marriage, you might want to give your spouse a life estate in the property and have it automatically pass to your children when your spouse passes away. In other situations, setting up a trust or leaving your children assets in your will might be better options. A qualified estate planning attorney can determine the best options for your family situation.