Is It Possible You’ve Forgotten Assets in Your Estate Plan?

The number and type of assets that people own today is constantly evolving, which presents significant challenges for people who don’t look at their estate planning that often. Thankfully, an estate planning attorney can help to review your checklist of an inventory of items that go inside your estate. There are some assets that are left outside of your probated estate but should still be updated on a regular basis to reflect your individual needs.

These include retirement accounts, payable-on-death bank accounts, and life insurance policies that name a beneficiary who is eligible to take over if something were to happen to you. Everything that you own must be incorporated in your estate plan along with a provision for its distribution. In addition to this basic guideline for estate planning, you should think about what-if provisions too. Which means that you have thought about what happens if a named beneficiary cannot inherit as you intended for him or her to do so.

Although one option for minimizing the chances of missing something inside your will is to update it whenever you acquire something new. This can be a challenge to keep up with and oversights can still happen, which is why your estate planning attorney might recommend a residuary clause. This ensures that any assets that are not specifically named in the will are passed on to the beneficiaries of your choice.

If you have property that is not included in the will and skip out on the residuary clause, your loved ones could find themselves in the land of probate. Avoiding probate is a common goal of estate planning so talk to an attorney about how this might benefit you.

What Unique Assets Were Left Behind by Famous People in U.S. History?

Ancestry.com’s U.S. probate and wills collection provides vast details about what people in the past left behind to their loved ones.

Some of the most interesting items left behind by famous people in history include:

• A snuff box left by U.S. Secretary of State, Daniel Webster, to his grandson.
• An island given by railroad businessman, George Pullman, while awarding his twin sons only a few thousand dollars a year.
• A $1 gift made to a grandchild of Paul Revere whereas everyone else received $500.

If it makes you concerned that so many intimate details of other people’s estates are available online, then you might wonder how these came to be available for public consumption to begin with. This is because the information about assets being passed down to future generations was detailed in wills and wills become a matter of public record. Even if the initial intent of establishing such a will was for these details to remain private, you need to consider using a trust as opposed to a will.

An experienced and knowledgeable estate planning attorney can help you use a trust to enable additional privacy for your estate planning. Trusts are essentially written instructions that only you and the person selected as trustee need to know about. This document does not go through probate like a will does and is much more private. You can also help to manage assets passed on to your loved ones by using a trust, which is not as easy to accomplish in a will.

What Assets Need to Be Included in My Estate Inventory?

Each person’s estate inventory will look unique, but a careful consideration of the different types of assets that should be included can make it easier for your estate executor and your loved ones when you pass away.

One of the primary reasons that people sit down to establish an estate plan is to ensure that their assets are simply transferred to the new owners that you have chosen and with minimal tax consequences. In order to establish a plan of distribution, you have to know the assets inside the estate.

This makes sure that your family members know exactly what you own so nothing falls through the cracks and so there is no additional conflict or challenges that emerge if you suddenly pass away.

Some of the most important assets to include in your estate plan include:

  • Life insurance policies, even though these will pass outside of your will and are managed through beneficiary designations.
  • Personal property like art, jewelry, furniture and books.
  • Investment accounts.
  • Vehicles
  • Real estate.
  • Ownership interests in any business.
  • Intellectual property.
  • Investment accounts.

When you list out these assets, it is valuable to know how these assets are owned and whether or not you have already designated any beneficiaries on these accounts.

As mentioned above, beneficiary designations may be handled separately from what is outlined in your will, although you should still have an idea of the beneficiaries listed on this account because these will supersede anything listed in your will.

These will matter significantly if they need to be transferred upon your incapacitation or death. Talk to a Virginia estate planning lawyer if you need more advice or help with your planning.

High Net Worth Families More Comfortable Revealing Information About Their Money

A recent study conducted by Wilmington Trust identified that individuals with high net worth who are older today are more comfortable sharing the intentions of their estate with the beneficiaries. The study included nearly 60 families with at least $20 million in assets but nearly three quarters of the study participants had at least $50 million in assets.ThinkstockPhotos-462163435
According to the results of that project, 48% of the individuals who currently hold wealth shared financial details with their heirs while only 33% of those same individuals got such information from their own benefactors. Part of this sharing of information may have to do with the fact that there’s a legacy benefit of protecting a family’s wealth.
The survey confirmed that wealth holders had a desire to protect the family’s assets for multiple future generations. 30% of those individuals who did not share information with those who would inherit the funds were concerned about demotivating their inheritors. If you have questions about the estate planning process, a lawyer can help you.
Have you made the decision not to share information about your estate plans with your loved ones? If so, this might have been the right decision at the time, but there are benefits to revisiting this concept with the help of the right estate planning lawyer. You may wish to empower your attorney by sharing these details and by appointing a knowledgeable executor to help manage your estate after you pass away.
Talk to your Virginia estate planning attorney about all your concerns regarding your future plans and your legacy.
 

Tips for Choosing an Executor

When approaching the estate planning process, your executor is the individual who has the legal responsibility to ensure that all of your estate planning intentions and plans are carried out to pay out any debts, bills and taxes, and to ensure that your assets are transferred properly. When identifying the right person to choose as an executor, you want to look for someone who is competent and trustworthy to carry through your wishes.
ThinkstockPhotos-99780257This person should also be aware of your intentions to name them as an executor so that they can accept. People often default to choosing a person in their family as their executor. However, it is important for that individual to understand all of their responsibility associated with this role as well as what will happen if this person were to suddenly pass away before you.
Trust and bank companies may also allow you to use them as your executor and attorneys can also serve in this role. Selecting someone who is geographically close to where you live may be beneficial. It is very important to determine the right person to serve as your executor.
If you’re not sure where to start, schedule a meeting with a Virginia Beach estate planning lawyer to get your questions answered.
 

More Americans Are Passing Away with Debt Than Ever

A recent study of 220 million consumers in Experian’s File One database, indicated that up to 73% of consumers are passing away with debt in high numbers. For those individuals who do not have a home loan, the average debt was $12,875. However, consumers with a mortgage carried approximately $61,554 in debt.
You may assume that debts are no longer your issue if you pass away, but that’s not true if there are assets inside your estate that may cover a portion or all of these debts. If you have communicated to your loved ones that you intend to give them particular assets, but those are seized and sold as part of your estate plan, you may wish to discuss your options for changing your estate plan with an experienced lawyer.
thumb_alternateThe types of debts most common included credit card balances, mortgage debt, auto loans, personal loans and student loans. Debt belongs to the deceased individual when he or she passes away. That means that creditors can pursue asset sold in the estate as part of their payment.
If there aren’t enough assets to satisfy debts, then creditors may lose out on all or some of their payments. But in the event that there are assets in the estate to pay out creditors, then your beneficiaries may actually receive nothing. This is why it may be important to discuss other opportunities such as a life insurance policy or advanced planning strategies with your knowledgeable estate planning attorney.

Estate Planning Increasingly Involves Charity Decisions

How to distribute one’s estate, never an easy decision and one with which people wrestle a great deal, becomes all the more complicated for those who don’t have children, stepchildren, grandchildren or other family members who might otherwise normally be in the mix.

(Photo credit: Tax Credits)

(Photo credit: Tax Credits)

A recent item in The New York Times by Caitlin Kelly May, leaving all or part of an estate to nonprofit organizations is something more and more older Americans are not merely considering but are actually doing.
Even some who do have close relatives but don’t feel they are in need of an inheritance or that some cause or another is the better bet are falling into this category, the article indicated.
“Today, with smaller families and more women choosing not to have children, ‘the dynamic has changed pretty significantly for the generation of baby boomers,’” Bob Carter, chairman of the board of the Association of Fundraising Professionals told May.
“The option of doing something charitably significant with their estates is a change,” he was quoted as saying.
“This situation is more and more prevalent,” said Kevin Pickett, executive director of development at MD Anderson Cancer Center in Houston.“Many people come to us to make a donation as a life stage decision. They’ve had a cancer diagnosis, or a friend or family member has. A retirement, divorce or new job can also prompt people to reflect on their legacy. What are we going to do with all this stuff we’ve accumulated in our lifetime?”
Carter, who has 40 years of experience in philanthropy and fundraising, termed this increased focus on charitable giving as part of estate planning complete shift for today’s long-retired population.
“Our family didn’t think of anything but leaving everything to us,” he told the writer. “The concept of estate planning didn’t exist in my parents’ lives.”
“The decision-making process should begin with some philosophical questions, said Isabel Miranda, a partner in the Bloomfield, N.J., law firm Pearlman and Miranda,” May wrote. “Ms. Miranda, a former bank trust officer, now specializesin helping clients plan their wills, trusts and estates.”
“Who do I owe my success to?” Miranda said. “What values do I want to reflect? How do Iwant to pay back the organizations I believe in?”

The Heart, As Well As The Head, Plays Role In Estate Decisions

Good estate planning goes behind the numbers to take the individuals involved into account.
When it comes to giving gifts to family and loved ones through a will or while still alive, there are tax implications to be taken into consideration, but a host of other factors come into play, as well.
A recent article on the Motley Fool website dealt with the subject in some detail.

Money (Photo credit: 401(K) 2013)

Money (Photo credit: 401(K) 2013)

“You’re in your golden years, and you’re thinking hard about estate planning,” Paula Pant, a contributor to WiseAdvisor, wrote in the article. “You want to leave gifts for your heirs, but should you wait until you pass away? Or should you give some money to them now?
“Gift tax versus estate tax – gift tax is the tax imposed by the federal government on any transfer of property to an individual without any compensation in return. ‘Property’ in this sense includes both tangible property, like art or furniture, and intangible gifts like stocks and cash.”
Pant goes on to point out that currently the law allows a lifetime gift limit of $5.34 million, after which taxes of 40 percent are imposed. But there’s also the added complication of an annual exemption $14,000 to consider.
A good estate planner will help people make up their minds from a purely financial perspective which options are the best for taking care of heirs.
Exceptional estate planning will help clients come to grips with the pros and cons to either approach Pant points out in her Motley Fool contribution.
For giving heirs money now, these include:

  • You get to see them enjoy it. If you’d prefer to see your gifts in action, giving your heirs the money now gives you a chance to see the difference it makes in their lives.
  • You can advise how they spend it. If you’d prefer to see your gifts in action in a specific way, giving the money while you’re still alive gives you a chance to let your heirs know how you’d prefer they spend it.
  • You can give the gift in the form of paying for something. If you really want to ensure the money is spent on the thing you want it to be spent on, you can pay for something rather than giving your heirs the money for it.
  • You can stop giving them money if you see them falling off the rails.

The factors that weigh in favor of waiting until you pass away include:

  • You may need the money later. What if you find that you need the money to pay for your own expenses during your lifetime?
  • Your heirs might appreciate it more and spend it more wisely. By waiting until you’ve passed away, you give your heirs a chance to ‘make their own way in the world’ at a younger age. Rather than relying on an annual cash infusion from you, your heirs will be older and more responsible when they receive the inheritance. This might cause them to appreciate the gift more, as they will have experienced the task of earning money.

“Which should you choose?” Pant asks. “Should you give your heirs gifts now? Or wait? Ultimately, there’s no ‘right’ answer. This is a personal choice.”

Lessons Are There For The Learning In Actor’s Death

The tragic death of talented actor Philip Seymour Hoffman from an apparent drug overdose offers some important lessons for people least likely to learn them.

English: Philip Seymour Hoffman at the Paris p...

Philip Seymour Hoffman (Photo credit: Wikipedia)

“One key lesson is the need to make an estate plan when one is going through a personal crisis or a downward spiral,” according to a posting to a legal news website.
The posting points out that Hoffman, after more than two decades of sobriety following drug and alcohol problems when he was in his early 20s, relapsed and underwent rehab again in May 2013.
“It is easy to put off getting one’s affairs in order as it is not pleasant to think about one’s own demise or to find time to do it with a fast-paced lifestyle, but when one has a life-altering wakeup call such as being checked into a drug rehab facility it is important to take that chance to get important things like estate planning done,” the site states. “Other such wakeup call type events to inspire action could be a major medical incident or death of someone close. There are only so many second chances or pauses in the action of life to get one’s business in order.
“Another important lesson from Hoffman is the need to do estate planning any time there are minor children involved. Hoffman is survived by three minor children at his death. Making sure that there is a guardian and a backup guardian and that any inheritance that a child receives is properly managed are key components of any estate plan.”

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Selling off a late parent’s possession can be stressful

As if losing a parent wasn’t trying and troublesome enough, many adult children face the grim task of subsequently have to dispose of some of their late mother’s or father’s prized possessions.
Often the sad reality is that what these older people held dear doesn’t have much value to others.
“A few months after my mother died in 2011 at the age of 93, I put her Manhattan apartment on the market and was lucky enough to have a deal within days” Terry Pristin wrote in a recent item for The New York Times. “The buyers were paying cash and seemed certain to be approved by the co-op board.
“But then I faced the real challenge: disposing of six rooms’ worth of furniture and hundreds of decorative plates, crystal bowls and other knickknacks my parents had accumulated during a 61-year marriage. In the end, I spent a lot more time unloading the contents of the apartment than I did selling the apartment itself, although the financial payoff was, of course, in no way comparable. And there were moments when the job seemed overwhelming.”
“You’re lucky if the contents are worth one-tenth of the value of the apartment,” Nick Thorn, vice president of Litchfield County Auctions in Litchfield, Conn., was quoted as saying. “But people get so stressed about this stuff.”
“Anxiety, it seems, is an inevitable part of the process,” according to Pristin. “Even if there are no conflicts with siblings about what to do with family belongings, disposing of those things can feel like discarding your history, especially if you are still grieving. That table where you used to have family dinners can feel nearly impossible to part with. Those of us who have been through the process have learned, sometimes the hard way, that there are several ways to alleviate the stress.
“Consider asking your estate lawyer or real estate broker to recommend an intermediary to act as an adviser, someone who knows what sells, where the market is and which auction houses are reputable. This adviser, who may also be able to negotiate with auction houses for a break on commissions and fees, does not have to be an appraiser.”