Study Shows Americans Look at Trusts, Wills and Life Insurance In 2020

There are always good reasons to update an estate plan, such as big changes in laws impacting estate and gift taxes or changes in your personal life that warrant new beneficiaries. But world events or family events might also prompt you to rethink your strategies.

As the coronavirus pandemic has made the topic of death unavoidable, more people than ever stepped back to look at their existing estate plans or to craft strategies to close those gaps.

According to the MIB Group, the number of life insurance applications for people younger than age 44 increased by over 7% in 2020 despite the fact that applications for life insurance had been down in the previous years. The creation of key estate planning documents, such as a will were also up due to covid-19. One study recently completed by LegalZoom.com found that over 30% of people between the ages of 18 and 34 created wills directly as a result of the pandemic and its unexpected impacts.

Preparing for death can be difficult and an uncomfortable topic to discuss with your loved ones but it can also be especially important to have these conversations well in advance of a crisis.

If you need support crafting your estate planning documents or discussing whether or not your existing strategies help to accomplish your individual goals, it’s a good idea to have an existing relationship with an estate planning law firm in Virginia Beach that can help serve as an important resource for you during these times.

Update Your Emergency Fund and Your Estate Plan in 2021

End of year provides unique planning opportunities to close up loopholes or to evaluate whether your life circumstances should prompt you to change strategies altogether. A couple of key tips can help you reorganize before 2021 and ensure that you enter the new year with a comprehensive plan and strategy to accomplish your individual or business goals.

One of the most important things you can do personally is to replenish or grow your emergency fund. One study found that just over half of Americans had an emergency fund to begin with and nearly 40% of those savers have had to tap into their emergency fund during the pandemic. Over half of the people who had an existing emergency fund before the pandemic had taken on additional debt rather than turning to their cash reserves.

This highlights just how important it is to have an emergency plan in place. Financial planning advice suggests that you have between 3 and 6 months of expenses stored up in an emergency fund. This can help to handle unanticipated bills or even a temporary loss of income. While it is challenging to build an emergency savings plan while things appear so uncertain, this and updating your estate planning documents are important end of year activities that can help you recalibrate and forge ahead into the new year.

If your life circumstances have changed over the last year or your financial planning picture has changed, this is a good opportunity to schedule a consultation with your estate planning and financial planning professionals in Virginia.

 

What Is Disinheriting a Beneficiary?

You’ve probably heard plenty of advice that you need to distribute your assets in your estate in a streamlined manner using estate planning documents. This is a basic tenet of the concept of estate planning and can be very beneficial for ensuring that your loved ones have an easier time receiving your assets in the future. However, you might have questions about when not to include someone in your estate.

Many people are surprised to learn that disinheriting a beneficiary or excluding them from receiving assets inside your estate is more common than you anticipate. It may be as a result of a beneficiary’s lifestyle choices, such as concerns over them being a spendthrift or a current addiction.

Furthermore, you might have a family member who is disabled and cannot receive assets directly without compromising their government benefits. When it comes to disinheriting, it is a best practice to explain either in a separate letter or in your core estate planning documents the reasons behind your decision. This can help to minimize the possibility of conflict or confusion in the future.

Hard feelings among family members can turn into legal conflicts and arguments that your estate is invalid. This can decrease the overall value of your estate and lead to in fighting among family members.

It is always best avoided where possible. For more information about the process of establishing estate planning documents that transfer assets to some and disinherit other beneficiaries, you’ll want the support of a Virginia Beach, VA estate planning lawyer.  

 

Is Cash King When It Comes to Your Estate Plan?

As we approach the end of 2020, it’s important to look ahead into 2021 and determine which of your estate and financial plans are aligned with your needs and expectations. There is a high chance that you can consider cash items king in 2020. When it comes to making charitable gifts, you need to have a clear strategy for passing these on. One general rule of thumb in most financial strategies has been to gift your appreciated assets.

The CARES Act, however, means that gifts of cash to public charities can be deductible in amounts up to 100% of your AGI for those people who do itemize their deductions. In order to receive this deduction, however, you must make the cash gift in 2020. You can both minimize your income tax exposure and carry out your charitable giving goals by considering this as part of some aspects of your estate plan.

If you have been putting off planning your estate because you need to discuss it with your loved ones, the holidays are a good opportunity to leverage time with family and discuss some of the most important issues when it comes to your Virginia estate plan so that you have a clear strategy going forward.

If you have previously established an estate plan, end of year if the perfect time to review it and determine that it still meets your individual goals. Schedule a consultation today with a trusted estate planning law firm in VA Beach.    

 

What Questions Should You Ask Yourself for a Purpose Driven Retirement?

Anyone who is approaching retirement has likely had a sense of purpose their entire life. This makes it all the more important to view this transition as yet another opportunity to open this new chapter in your life with a good sense of purpose. Looking ahead to retirement is not always just about exiting the workforce.

Do you know what you want your retirement to look like? And have you created all the tools and plans to make that happen? To accomplish your goals and help make this transition easier, be thoughtful about the process.

In fact, you might want to think about how you’ll navigate this transition by asking a couple of key questions that will help you prepare for a purpose driven retirement. These include:

  • Which goals do you have and how will you prioritize them with your new time? Do you want to pick up a new hobby, start a new business, or volunteer somewhere?
  • Can I still afford to enter retirement at the age I originally planned to? Recent events and changes in your own investment portfolio might prompt you to step back and look at whether or not now is the right time to retire or whether you may need to adjust your plans.
  • How will I incorporate giving and philanthropy into my overall financial and retirement strategy?
  • Do my estate planning documents still align with what I intend to happen during my older years and after I pass away?

Now could be a great opportunity to engage the services of professionals who can help you navigate this new transition and ensure that you have thought about it from all different perspectives. Schedule a consultation with a trusted estate planning lawyer to learn more about this.

 

Avoid These Estate Planning Mistakes Prior To The Biggest Wealth Transfer in History

One of the biggest wealth transfers that the United States has ever seen will take place in the coming 25 years. This is because it is anticipated that up to $68 trillion of wealth will be passed from current to future generations. This presents you a unique planning opportunity, but this requires those responsible for the funds and assets now to be forward thinking and proactive planning.

Taking a couple of planning steps now, being mindful of the possibility of disabilities, and other issues can enable you to create an estate plan that protect your loved ones needs and saves them thousands in taxes and legal fees while decreasing the possibility of delayed estate issues. One of the most common and easily avoided estate planning mistakes is failing to properly designate beneficiaries. This can be overlooked when you are first setting up your retirement plan or switching to a new investment company.

Make sure that every retirement plan, life insurance policy and brokerage plan has accurate and updated beneficiaries associated with it. You can easily set up bank deposits like savings accounts and CDs and fail to neglect a beneficiary. It’s easy enough to add a transfer on death designation which allows this account to simply bypass probate and go directly to your beneficiaries.

Be mindful of the potential pitfalls of naming a minor as a beneficiary. You can instead list a guardian for the minor child inside your will, meaning that person is also appointed to manage any investments or property that the minor inherits until they achieve 18 of 21.

If you have established a trust, make sure that you follow through with funding it and have a consultation with an experienced estate planning attorney about your tax situation now and your anticipated tax situation in the future.

 

What Does Your Estate Executor Need to Do Immediately After a Loved One Passes Away?

An estate executor, which might be called different terms in different states plays an important role in closing out the final affairs of a recently deceased family member.

There are a couple of aspects of this process that take place over the course of later weeks and months or even years but some steps need to be undertaken immediately. It is important that whoever you choose to appoint as your executor is aware of these responsibilities and capable of serving in this role. Some of the tasks that need to be handled immediately include:

  • Ordering death certificates.
  • Arranging a funeral.
  • Contacting an attorney.

The entire settlement process of a typical estate can last anywhere from 6 to 18 months. Those cases that have instances of probate disputes and beyond might take longer. It is also important to be mindful about yearend calendar issues as it relates to legal or tax related filings.

The executor’s primary job is to manage and wind down the estate of the deceased person, resolving any debts, reviewing the will, distributing remaining assets to the heirs and filing legal paperwork. This typically begins by arranging the funeral and taking an inventory to understand all of the assets inside the estate. This can be followed by sending notifications, resolving debts, filing taxes, making distributions and wrapping up the case.

Being an executor is a big responsibility. For more information about how to choose the right person to serve in this role, contact an estate planning lawyer in Virginia Beach, VA.

 

 

What Happens If I Cannot Locate an Estate Plan?

If you heard from a loved one that they created a will or other documents in an estate plan but you are concerned about finding it in the immediate aftermath, you need to think carefully about where the will might be stored. There are several common places that people store their estate plans, including fireproof document safes or safe deposit boxes.

When we work with our Virginia Beach estate planning clients, we usually have a copy of their documents in our files, but your loved one might also keep their version elsewhere. This can make it hard for family members trying to respond to these issues quickly after a loved one passes away.

Any places where the person keeps their most important papers should also be carefully explored. Any place where papers in the home might have stacked up can be other options for trying to locate an estate plan. In some cases, a copy of an estate plan might not be stored in a place where you can easily check.

For example, if you don’t have access to a safety deposit box you would not be able to obtain the estate plan. If you know that your loved one had an existing relationship with an estate planning attorney, you can contact the attorney to determine whether or not this person had a copy of these materials.

The support of a knowledgeable estate planning lawyer can go a long way towards minimizing your challenges and helping you to get a clear picture of how you can create and store your estate planning documents so that it becomes easier for your loved ones if something happens to you.

 

 

Readiness and Age: Important for Discussing Estate Plans

Have you told your loved ones where your most important documents can be found? Do they know that you’ve executed a power of attorney? Do the appointed parties know their role? If your answer to these questions is “no”, it might be time to have a conversation.

If you are curious about what will happen to your estate or your loved ones if and when you pass away, it’s important to decide who needs to be looped into these conversations and who might be best served discovering these aspects after you pass away. If your children are still under the age of 18, for example, there is no great need to dive into all of the details around the complexity of your estate plan.

Those children who might be concerned about why you’re telling them this could be triggered into anxiety, whereas others might be reassured to know that you have plans for them if their current parents were unable to do so. Starting to involve children in other tasks, such as family budgeting, can give them a general perspective over this process.

Once your children have reached the age of 18, however, they may need to be involved in a different way with your estate plan. Consider what role, if any, you would want them to have in handling your financial matters after you pass away. Your individual family circumstances will dictate what this looks like for you and there can be very good reasons to appoint a trustee to manage assets on your behalf when you pass away. To decide what’s right for your family, you’ll need to consider your individual goals and schedule a consultation with an estate planning lawyer in Virginia Beach.

 

What Are the Disadvantages of Skipping a Power of Attorney?

You’ve probably heard that a last will and testament is one of the most important estate planning documents you can have. While this is certainly true, it can be a mistake to overlook key estate planning documents that should supplement the statements in your will like a power of attorney. Everyone should have a POA document regardless of your age, because it’s critical to ensure your wishes are carried out if you can’t speak for yourself.

A power of attorney names an agent, also known as an attorney in fact, to make decisions on your behalf if you are unable to do so or in specific circumstances. There can be many complicated questions around this process and it is important to appoint a party who is comfortable in serving in this role and someone you trust. A few different issues can arise if you do not have a POA document.

The judicial steps that lead to the appointment of another party can take some time. This can drain your friends and family of money and time at a difficult time in your life when you are incapacitated. The second major disadvantage of skipping a power of attorney is that you have no say in who your agent will be. The court will have authority to appoint someone to act on your behalf and even in the event that this person is close to you, they may not be responsible enough to make proper decisions.

That’s why it’s a good idea to exercise control over these concerns by establishing a power of attorney document. Schedule a time to sit down with your estate planning lawyer in Virginia Beach, VA to walk through the options.