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The Best Way to Take the Stress out of Estate Planning

September 3, 2015 by Leave a Comment

Slide1Brian Vnak, over at MarketWatch, just penned a piece titled “How to Take the Stress Out of Estate Planning.” He gives four ideas to support his title, among them, number 3: “Gift assets while you’re still living — addition by subtraction.” That’s a good idea, by the way, if only to take the monkey off your back, put there by Andrew Carnegie, who famously said:

The man who dies rich, dies disgraced.

Yankee’s short piece could have been even shorter, had he talked to me first. The best way to take the stress out of estate planning is to get it done. To do it now. To be done with it.

Filed Under: Estate Planning 101, Trusts, Wills

Estate Planning: How to Get Going and Why You Shouldn’t to Do It Yourself

August 28, 2015 by Leave a Comment

Slide1Courtesy of the ABA, here’s a link to an on-demand webinar that should answer a lot of your questions about estate planning. As the brief description of the webinar says, “The program is intended for the general public and does not require a background in the law of wills or trusts or tax.” Click on the link near the bottom of the page, enter your e-mail address and a few other details, and you’re set.

The webinar is 1 hour long and covers a lot of issues. If you have any questions, feel free to contact me.

By the way, access to the webinar ends in October 2015, so take advantage of access now.

 

Filed Under: Estate Planning 101, Trusts, Wills

Elective Share

June 26, 2015 by Leave a Comment

As we discussed in 5 Reasons You Need a Will, a valid will controls where your money goes when you die–except when it doesn’t. In some states for instance, the maker of a will–the testator–can’t disinherit a spouse.  In Wyoming for example, a disinherited spouse can “elect” to take 1/4 to 1/2 of the property disposed of by the will (reduced by certain items), depending on whether there are children and whether the disinherited spouse is a “parent of any surviving issue of the decedent.” In other words, the will won’t control where all the money goes in this circumstance.

Once again, whether the disinherited spouse has an elective share and how much that share is, depends on where the decedent is domiciled. If the decedent is domiciled in Utah, the surviving spouse’s elective share is 1/3 of the augmented estate–essentially the property disposed of by the will, reduced by funeral and administrative expenses, certain exemptions, and the like.

 

Filed Under: Elective Share, Estate Planning, Estate Planning 101, Wills

Wills 101

June 25, 2015 by Leave a Comment

Slide1When a person leaves a will, we say that he died testate as opposed to intestate. Blackstone defined a will as “The legal declaration of a man’s intention which he wills to be performed after his death,” a definition that maybe gives us some idea of where the legal term “will” comes from. Thomas Atkinson’s Handbook on the Law of Wills is a little more expansive and a lot more helpful (all emphasis in these quotes is mine):

A will is a person’s declaration of what is to be done after his death, which declaration is (1) revocable during his lifetime, (2) operative for no purpose until his death, and (3) applicable to the situation which exists at his death. Usually a will relates to the disposition of the maker’s property.

In other words, a will only functions after the maker, or testator, dies. Until then, the testator can change her will when she wants, willy nilly, if you will. (I’m sorry.) That is, while she’s alive, her will is revocable.

A person who receives money or property as directed by a will is called a beneficiary. Often a will names more than one beneficiary or classes of beneficiaries. For example, a testator might name her son James and daughter Julie beneficiaries, or she might simply refer to them as a class, as in “all my children, share and share alike.”

To make sure her wishes are carried out, the testator generally names an executor, the person who acts on behalf of the testator after she dies. (A quick note on terminology: If someone dies intestate {without a will}, the court appoints an “administrator.” If someone dies testate {with a will}, the will names an “executor.” Both the terms administrator and executor are included within the meaning of the term “personal representative.” Sometimes people use the terms executor and personal representative interchangeably.)

Filed Under: Estate Planning, Estate Planning 101, Wills

5 Reasons You Need a Will

June 25, 2015 by Leave a Comment

No matter your economic circumstances, you should probably have a will, especially if you have a spouse, even more so if the two of you have children. Here are five reasons why:

1. You can use that new will to revoke the one you already have. That’s right: you already have a “will,” the one your state legislature drafted for you. Say, for example, that you live in Wyoming and you and your spouse have two children. And say that you die without having an attorney draft a will for you, that is, you die “intestate.” The Wyoming laws of intestacy–that “will” you didn’t think you had–direct that 1/2 of your estate goes to your spouse and the other 1/2 goes to your two children to share equally, regardless of whether that’s what you wanted to happen.

A state’s laws of intestacy cover all sorts of contingencies: Spouses with no children. Surviving children and no spouse. Deceased children who leave grandchildren. Etc. etc. etc. The problem is, of course, that the law probably doesn’t cover the situation the way you would want it covered. A properly drafted, valid will does.

2. A valid will is portable. Now suppose you’re fine with Wyoming’s law of intestacy. You love your spouse and both of your children. You’re okay with the “will” the Wyoming legislature drafted for you. In fact, you’re glad that your two children will share in your estate when you die. But suppose that you and your family decide to move to Utah, so you can take a new job. And suppose that you suffer a massive heart attack the first day on your new job. Guess what? Your children get nothing from your estate. Your spouse gets it all. Why? Because the Utah legislature says so, that’s why. Utah’s laws of intestacy are different than Wyoming’s, and because you moved to Utah, its laws govern. That doesn’t happen with actual wills because they’re portable; they go where you go, live where you live. (By the way, this discussion ignores a surviving spouse’s so-called “elective share,” which is a matter for another post.)

3. You can use your will to name a guardian for your minor children. If you don’t, the state will step in and do the job for you. Truth be told, the state will probably step in anyway if you nominate dud as guardian–the state takes the welfare of children seriously. However, if you are of sound mind when you name a guardian and if that person is a stand-up person, the court will generally approve your decision. Best practice, then, is to nominate a guardian in your will.

4. Your will is the place to name your personal representative (or executor). A personal representative or executor is charge with carrying out the instructions in your will about how to handle your property. Again, if you don’t name your personal representative, the state will.

5. Your will makes sure all your property makes it into your trust–if you have a trust. Such a will is called a pour-over will; that is, it “pours” the residue of your estate–the odds and ends, small accounts and expensive vases, you may have overlooked as you planned your estate–into a trust. If you have a trust. A subject for another 5 Reasons post, perhaps?

BONUS reason. Setting an appointment with an attorney to prepare a will that carries out your wishes will cause you to give serious thought to your family and your estate and to focus on the things that matter in a way that few other exercises will. Trust me. That’s an exercise well worth doing.

You need a will, one you had drafted, not one the state drafted for you.

Filed Under: Estate Planning, Estate Planning 101, Trusts, Wills

Personal Representatives and Executors 101

June 19, 2015 by Leave a Comment

Slide1Navigating the terminology of wills and trusts can get complicated. Take the terms personal representative and executor, for example. Many people use them interchangeably, but strictly speaking, they’re not. Wyoming law, for instance, says the term “‘Personal representative’ includes executor and administrator.” Great, but what do “executor” and “administrator” mean? Well, the Wyoming code defines those words as well:

“‘Executor’ means any person appointed by the court to administer the estate of a testate decedent.”

“‘Administrator’ means any person appointed by the court to administer an intestate estate.”

As you can see, which term we use depends on whether the deceased died testate–with a will–or intestate–without a will. Typically, the maker of the will–the testator–will name an executor in the will. In such cases, the court will almost always agree and appoint that person to be the executor, though in some circumstances the court may do otherwise.

The executor exercises authority granted or defined in the will. That authority may be greater or lesser than any powers provided by statute, depending on the objectives of the testator. In other words, as a testator, you want to be sure you grant your executor the authority necessary to do what you want him or her to do.

Filed Under: Estate Planning, Estate Planning 101, Wills
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