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I JUST GOT MARRIED: HOW DOES THIS CHANGE MY ESTATE PLAN?

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As you likely have experienced, getting married brings lots of changes to your estate plan, so updates are needed. As life changes, your estate plan must also change to reflect your current personal and financial situation as well as current law. As a benefit of updating, you also will benefit from newly established planning techniques as well.

If you’ve recently gotten married or are preparing to do so:

  • Consult with a Qualified Estate Planning Attorney

No doubt about it, you and your new spouse will need to totally revamp your estate plans when you get married, or, in preparation of marriage. This is not a path to go alone.

  • Health Care Documents

You likely want to name your new spouse as your agent under your health care proxy. Your agent can make health care decisions on your behalf if you cannot. In addition, discuss your wishes for a living will and organ donation with your spouse; then, get your wishes in writing.

  • Financial Documents

Consider naming your new spouse as your agent under your financial power of attorney and as a trustee of your revocable living trust. As in all estate planning documents, name contingent trusted helpers as well; don’t just name your spouse.

  • Passing Financial Assets

If your spouse is dependent upon your income and assets, be sure to make your spouse a beneficiary of your will or trust, retirement plans, life insurance, pensions, and annuities. However, if you have children from a previous relationship, consult with a qualified estate planning attorney to balance these interests; otherwise, you might unintentionally disinherit your children.

  • Final Arrangements

Chat with your spouse about what is important to you regarding final arrangements. Do you want the body to be buried, cremated, or both? Do you want certain people invited, a specific clergy person to speak, or a special song to be sung?

  • Love Letter

Write your spouse (and other loved ones) a love letter and keep it with your estate planning documents and other important papers. It will create a lasting legacy and, likely, become the most treasured inheritance.

If you’ve recently gotten married or are about to, consult with a qualified estate planning attorney to update your estate plan.

 

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Thank you to all the Veterans who have served and continue to serve our country, as well as to the families of Veterans! Through your sacrifices, you have given the rest of us peace and freedom.

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The heartbreak and financial crisis of divorce strikes 50% of all first marriages and 60% of all second marriages. It’s normal to be concerned about protecting your children’s inheritances from divorcing spouses. As a bonus, you can protect their inheritances from creditors and predators, as well as divorcing spouses.

The key to protecting your children’s inheritance is to pass the inheritance in a lifetime individual trust share. The trust is available for your child’s health, education, and maintenance but can’t be taken by divorcing spouse, creditors, and predators.

If you pass an inheritance outright and the assets go into your child’s individual name, he or she is likely to commingle them with the spouse so the inheritance becomes marital property; and, even if kept separate, they can be considered by the judge in property distribution during divorce.

In addition, creditors such as in a bankruptcy, malpractice claim, business failure, medical crisis, or car accident lawsuit have the opportunity to seize your child’s assets when the inheritance is in the child’s name.

Predators are unscrupulous friends, relatives, financial advisors, charities, conmen, and clergy who pounce on heirs. Your child can blow off the predator by explaining that his or her assets are all tied up in trust.

For the maximum asset protection, name an independent trustee of the trust or name your child beneficiary as a co-trustee with a professional trustee such as a CPA, trust company, or estate planning attorney. If the child serves as his or her own trustee alone, the judge may force assets out of the trust. It’s not worth the risk.

The best way to give and the best way to receive an inheritance is in a lifetime, asset-protected, individual trust share. To set this up for your children and avoid their inheritances being taken by divorcing spouses or predators, consult with a qualified estates planning attorney.

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If you have young children (i.e. children under the age of 18), you need to carefully plan your estate to protect and provide for your children. You’ll need the basic estate planning documents to protect yourself as well, with additional documents and consideration for your children.

  • In your will, you name guardians to raise your children if you die. Name back-up guardians as well in case your primary guardians are unable or unwilling to serve when needed. Be sure to ask permission before naming them; it’s a huge responsibility and you want your children to be wanted.
  • Don’t distribute assets to your minor children in a simple will. Children are unable to inherit and if you try, the court will intervene and take over. In addition, the children will get their full inheritance when they turn 18, which may not be a good thing.
  • Instead, provide individual lifetime trust shares for your children in a revocable living trust. These assets will be available for their health, education, and maintenance but can’t be taken by future creditors or divorcing spouses. Your children can serve as co-trustees as they get older and learn about managing money, earning a living, and living within their means, with progressive levels of trustee responsibility.
  • Execute a first responder authorization which appoints trusted friends and neighbors to stay with your children in an emergency, until your named guardians arrive.
  • Because your will is only effective if you’re dead, you also need to appoint stand-by guardians in a separate document. This guardianship authorization is effective if you are incapacitated, but alive, and unable to care for your children.

If you have young children, consult with a qualified estate planning attorney to best ensure that their needs are met and they are protected.

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As long as you have testamentary capacity (i.e. you’re mentally competent), you can make changes to your will. You can change it a little, change it a lot, or completely revoke it, any time you want.

However, it is imperative that you work with a qualified estate planning attorney so that your changes are legally valid and well understood by your executor, the courts, and your beneficiaries.

In the “olden days” (i.e. pre-computers), small changes would be made via a “codicil.” A codicil is a small change, an amendment. Wills used to be a zillion pages long and hand written or type written. To avoid re-writing or re-typing the entire will, a codicil was drafted.

Multiple codicils could be confusing or even misplaced and, thus, were ineffective.

Now, in the computer age, codicils are rarely used. The entire will is redrafted on the computer, easily reprinted, and re-executed.

Both a codicil and a new will must be legally executed in order to be legally valid. If your will is not executed legally, it has no value and is as if you have not made any change.

Typically, your will must be signed by you at the end of the document, witnessed by two adult witnesses, and notarized.

To best ensure that your will works, meaning that it does what you want it to do:

  • Never make any handwritten comments on the documents.
  • Make updates every three to five years or sooner if your spouse dies, you get married or divorced, your executor becomes disabled or dies, you move to a new state, or you have a new child in your life.
  • Always work with a qualified estate planning attorney; there is a class action lawsuit in California now pending wherein a will downloaded from LegalZoom wasn’t properly executed; and, therefore, it wasn’t legally valid.

If you’d like to make changes to your will, you have the power to do so. Consult with a qualified estate planning attorney to best ensure that your changes are effective.

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You should own your property in accordance with your needs, goals, and up-to-date estate plan, designed by a qualified estate planning attorney. Proper asset ownership is a key to a successful estate plan; and, most people don’t own their assets properly. If you have a revocable living trust, fund your assets into the trust.

If you do trust-based planning, your estate planning attorney will tell you to fund all of your assets into the name of your trust. This is the only way your trust will work and won’t be just a pretty pile of papers in your desk drawer.

How to Fund Your Trust

For example, you change the name on your bank accounts and investment accounts, to the name of your trust.

You transfer the title of your house to the name of the trust, and change the beneficiary of your life insurance policies, annuities, and retirement plans to the name of your trust.

Assets Your Trust WON’T Control

Your trust can only control assets in its own name; therefore, your trust does NOT control:

Assets in your individual name
Assets you own jointly with someone else
Tenancy by the entireties assets
Assets with a beneficiary designation, unless the title and beneficiary have been changed to the trust
Assets with a “pay on death” or “transfer on death” designation
Assets with a “in trust for” designation
Assets in your spouse or children’s names
If you’ve done estate planning, specifically trust planning, make sure that your plan actually works by making sure you own your assets properly. For guidance on your individual situation, consult with a qualified estate planning attorney.

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A benefit of estate planning is that you get your questions answered about all kinds of estate planning issues. For example, you find out how to prevent problems and how to create positive solutions, regarding medical planning. Here, we’re answering the 6 important medical estate planning questions we receive the most frequently. We’re including two parts to this article because there are so many questions and the answers are important to everyone.

4. Who should I name as my health care agent?

Use a health care proxy to appoint health care agents to make health care decisions, if you are ever unable to make those decisions yourself. Name agents who care about you, know you, can deal with stressful medically oriented situations, and can communicate effectively, even assertively, with medical personnel. Everyone needs an advocate when he or she is in the hospital.

Be sure to ask your agent before naming him or her and name back-up agents, in case your primary agent is unable or unwilling to serve at the time.

5. Does my health care agent have to honor my living will?

Yes, your health care agent can only make health care decisions on your behalf if you cannot provide informed consent and haven’t already done so. Your health care agent must honor your living will and should make sure that your doctors have a copy of it.

6. Should I be an organ donor?

Being an organ donor is a personal decision, but consider that you can save up to 8 lives and help numerous others improve their lives by being an organ and tissue donor. Would you want someone to donate organs and tissues so that you or a loved one may live, see, or recover from tragic burns or trauma?

If you haven’t yet done so, read Answers to 6 Important Medical Estate Planning Questions (Part One of Two), to learn more and get your medical estate planning questions answered. If you have questions about your individual situation, consult with a qualified estate planning attorney.

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A benefit of estate planning is that you get your questions answered about all kinds of estate planning issues. For example, you find out how to prevent problems and how to create positive solutions, regarding medical planning. Here, we’re answering the 6 important medical estate planning questions we receive the most frequently. We’re including two parts to this article because there are so many questions and the answers are important to everyone.

1. What is an advanced medical directive?

An advanced medical directive is a legal document wherein you make a medical decision before you need it. You’re making a medical decision now for a potential situation sometime in the future. Examples of an advanced medical directive are a living will, health care proxy, and organ donation authorization.

2. I already signed a HIPAA release at my doctor’s office; do I need another one?

You likely signed a HIPAA release authorizing the medical office to release information about your medical record to your health insurance company so they can get paid. You need a HIPAA release that honors federal medical privacy laws and authorizes your medical staff to communicate with your health care agents, named in your health care power of attorney.

3. Who Needs a Living Will?

A living will is effective if you are in an end-stage medical condition such as an irreversible coma or persistent vegetative state. Each and every person, age 18 or older, needs a living will if that person wants to avoid end-of-life medical heroics, including life support machines. The United States Supreme Court has rules that a living will is clear and convincing evidence of the desire to not be kept alive with medical heroics.

Continue reading Answers to 6 Important Medical Estate Planning Questions (Part Two of Two)tomorrow to learn more and get your medical estate planning questions answered. If you have questions about your individual situation, consult with a qualified estate planning attorney.

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Most estate planning clients want to avoid court interference through guardianship proceedings once they learn what it entails. A guardianship is a court proceeding during which your competency is questioned. It is expensive, time consuming, public, and stressful.

If the court determines that you are incapacitated, it will appoint a guardian to take over your finances. You have no control over who the court appoints and it may not be a family member. It might be a local attorney. Your assets will be eaten away by ongoing guardianship fees and court costs.

You can totally avoid guardianship proceedings, court interference, and losing control with a fully funded revocable living trust.

A trust is an agreement that you create; it’s really a set of instructions, explaining how you want your finances handled should you become incapacitated and when you die.

It’s imperative that you fund all of your assets into the trust and designate your trust as the beneficiary of your life insurance policies, retirement accounts, and annuities.

When you have a trust and have granted disability trustees authority to step into your shoes if you become incapacitated, court interference and the guardianship proceeding is avoided.

All assets that can be funded into the trust must be funded; the trust and your disability trustee only controls assets funded into the trust. Be sure to execute an up-to-date power of attorney in addition to your trust to handle any assets that can’t be funded such as retirement investments and qualified annuities.

RED FLAG: Never try to fund retirement accounts and qualified annuities because doing so will accelerate all the income tax due.

RED FLAG: Your power of attorney must specifically say that your agent has the power to deal with life insurance policies, retirement accounts, and annuities.

If you would like to avoid court interference and guardianship, execute and fund a revocable living trust and a power of attorney with the assistance of a qualified estate planning attorney.