Does Your Executor Know What to Do?

Don't leave a mess for your executor clean up. There are ways to make your executor's job easier.
Don’t leave a mess for your executor clean up. There are ways to make your executor’s job easier.

Next Avenue’s recent article entitled “Is Your Estate as Planned As You Think?” explains that when you pass away your executor will have many tasks to perform when settling your estate.

It’s helpful to add clarity and lessen the burden of your executor’s work in advance. Look at this list of things to make sure your estate is as planned as you think it is:

Is your will current? If you’ve written your will, how long has it been since you drafted it? Have there been any major changes in your life since that time? If so, it’s likely time to update it. Review your will to make certain that it’s an accurate representation of your assets and your wishes now.

Is your will detailed? Yes, you’ve addressed the big stuff, but what about smaller items with sentimental value? You should list who gets what, to avoid fighting, especially if the executor is one of your beneficiaries.

Do you have a way to distribute your other personal items? You should determine how your family will divide up the possessions not explicitly listed in your will, such as the lawnmower, dishes and photographs. All of it will need to be either distributed by the executor to one of your beneficiaries, donated, or sold.

Are your financial affairs organized? Your executor will need to know if you have any recurring payments, as well as your account number, and online passwords. Create a list of regular monthly bills, along with your account numbers and access codes to simplify your executor’s job.

You will also need to let the executor know about any automatic deductions or charges on your credit card, internet-based subscriptions, club memberships, recurring charitable donations and automatic utility payments.

Making your wishes clear for your executor can help ensure that there’s less stress and an easy distribution of your assets.

Your estate planning attorney can help you address these issues to make things easier for your executor and your family. And while speaking with your estate planning attorney, ask about advance medical directives such as a medical power of attorney, a living will, a HIPAA waiver and whether you should have a trust.

For more information on wills see https://www.galliganmanning.com/understanding-why-a-will-is-important/.

Reference: Next Avenue (Feb. 25, 2020) “Is Your Estate as Planned As You Think?”

 

Continue Reading

Coronavirus Causes Increase in Estate Plan Updates

Many estate plan updates are being done by video conference.
Many estate plan updates are being done by video conference.

With the ever-increasing number of deaths from the coronavirus in Europe and the U.S., many people are now focusing on getting their estate plans in order. Phone meetings or videoconferences with estate planning attorneys have become the new way of updating estate plans, says Barron’s in the article “The Coronavirus Has Americans Scrambling to Set Their Estate Plans. Here Are Some Key Things to Know.” This is the case at Galligan & Manning where we have been meeting with our clients by phone or video conference and arranging for documents to be executed in the safety of our clients’ homes.

People are worried, and they are in a hurry too.

Here are a few tips:

Everyone should have three basic documents: a last will or revocable living trust, a financial durable power of attorney, and a medical power of attorney. These documents will allow assets to be distributed, give another person the ability to make financial decisions, if you are too sick to do so, and  allow another person to talk to medical professionals and make medical desisions on your behalf . These same documents are also a good idea for any young adults in the family, anyone older than 18 in Texas.

However, there’s more. In addition to these basic documents, everyone needs to review their beneficiary designations on assets that include bank accounts, IRAs, annuities, insurance policies and any other assets. If family situations have changed, these may be out of date.

Also, parents of minor children need to execute documents appointing guardians to care for their minor children in the event the parent is unable to do so.

While young adults may be more worried about the financial impact of the pandemic, seniors and the elderly are concerned about having documents in order. Wealthy people are concerned about the impact that the pandemic may have on estate planning law, and some are engaged in planning to make substantial gifts, in case the current estate and give tax exemptions are lowered.

Specific issues to be discussed with an estate planning attorney:

  • The advantages of certain trusts, which provide an opportunity to direct how assets will be held, invested and distributed before and after death.
  • Financial durable powers of attorney, which appoint an agent to make financial decisions.
  • Medical powers of attorney which let people designate an agent to make health decisions on their behalf
  • HIPAA Releases which allow family members receive health care and medical information from your health care providers.
  • Living wills, which allow people to designate whether to provide life-prolonging treatment, if in a terminal state

To learn more about what you need to consider when updating your estate plan see https://www.galliganmanning.com/estate-planning-life-stages/.

Reference: Barron’s (March 22, 2020) “The Coronavirus Has Americans Scrambling to Set Their Estate Plans. Here Are Some Key Things to Know”

Continue Reading

Estate Planning Mistakes by Famous People

Many estate planning mistakes by famous people illustrate on a grand scale what applies to all of us; the need for an up-to-date, quality estate plan.

The instructions for the disposition and management of one’s estate at death through the use of wills, trusts, and other devices can cover almost about any topic you can think of. While the majority of instructions in estate planning concern finances, wills and trusts frequently guide decisions regarding health care, guardianships, business, education and even which heir gets the entire Barry Manilow record collection.

Born2Invest’s recent article entitled “The biggest estate planning blunders of all time” looks at a few colossal estate planning mistakes by the rich and famous.  Estate planning mistakes by famous people show you what can go wrong in the worst of ways.

Estate planning usually conjures up thoughts of drafting a will by an attorney. Although the cost of drafting an estate plan varies significantly based on location and complexity, it can range from a few hundred dollars to several thousand. Regardless of the cost, hiring an experienced estate planning attorney will save your family time, money and anguish after your death.

With that said, let’s take a look at some estate planning mistakes by famous people who simply didn’t get around to this very important task.

Ted Williams (Baseball Legend). When Ted died in 2002, he had one will that said his body should be cremated, and another that instructed he should be cryogenically frozen. As you can imagine, there was a fight among his children. This resulted in Ted’s decapitation (postmortem). Therefore, the Splendid Splinter, the greatest baseball hitter of all time, had his body and head frozen in Arizona at Alcor Life Extension Foundation.

Sonny Bono (Singer and Congressman). Sonny didn’t create a will. As a result, he passed away intestate. A lawsuit was initiated by ex-wife and singing star, Cher, to collect $1.6 million in unpaid alimony, along with a fraudulent claim by an illegitimate child (disproven by DNA testing), and Sonny’s widow, Mary.

Heath Ledger (Actor). Heath failed to revise his will after the birth of his daughter. At his death in 2003, his entire estate was split between his parents and sisters, but they agreed to give all the money to his daughter.

Philip Seymour Hoffman (Actor). The Oscar-winning actor also never updated his will after the birth of his two daughters. Since he wasn’t married to his then girlfriend, there was an approximate $12 million estate tax that was owed.

Joe Robbie (the owner of the NFL Miami Dolphins). Robbie had a substandard estate plan that contained a pour-over will and revocable inter vivos trust. This was designed to defer estate taxes until after the death of his wife. However, it didn’t work as planned. She demanded her “elective share” as spouse, 30% of the husband’s illiquid estate, which created a $47 million tax bill that could only be settled by selling off his football team. His 11 children also went to court to fight over his estate.

James Brown (Singer). The “Godfather of Soul” wasn’t around to witness the 12-year epic legal battle among several blended families over his estate.

Barry White (Singer). White died in 2003 in the middle of divorce proceedings. Legally speaking, he was still only separated from his wife. As a result, she got it all, instead of his current girlfriend and mother of nine kids.

There are many more famous people who posthumously became members of this dubious club. Their eligibility for membership was poor estate planning that resulted in unintended—and in some cases, tragic—consequences. Although many Americans can’t really identify with these mega-wealthy or public icons, they do have assets and families and friends, and everyone should expect to need an estate plan.  See here for ideas on how to do it properly https://www.galliganmanning.com/a-will-is-the-way-to-have-your-wishes-followed/

The club of estate planning mistakes by famous people shows the rest of us the need for proactive professional planning. Be certain that you work with a qualified estate planning attorney, so that your estate plan doesn’t end up like the ones above.

Reference: Born2Invest (January 27, 2020) “The biggest estate planning blunders of all time”

Continue Reading