RetirementHomes.com - Estate Planning

Will myths keep your last wishes from coming true

aadmin — Wed, 17 Apr 2013 12:08:51 +0000

Whether you think your will is out-of-date or up-to-date, if any of the statements below sound like things that you have been saying to yourself, it is time to take another look at your will.

“I am married. Everything is going to my spouse anyway, I don’t need a will.”

Nigel Watson, a Toronto lawyer who has specialized in real estate, wills and estate law for over 40 years, says that a common misconception is that married couples with joint property believe that only one of them needs a will.

According to Watson, the biggest potential problem with that is the couple “overlooks the possibility of them dying together.” For a couple’s joint property and each individual’s assets, having a will means there is a plan in place no matter who dies first.

“I named an executor. That should be fine. ”

Make sure that when you name an executor for your will, you also name an alternate executor.

Over time, things can change and you may not be able to react right away if something happens to someone named in your will, so make sure when naming beneficiaries you also name alternate back-up beneficiaries. As well, if your children are under the age of 16 make sure to include guardians and alternate guardians as well.

“I can write this new will by hand and you can witness it for me.”

Watson explains a handwritten will, known as a holographic will, is only legal if it is not signed by any witnesses. As for a typed will, it requires the signatures of two witnesses, neither of whom can be named beneficiaries in the will.

“I don’t need to redo my whole will. I’ll just change that part and initial it.”

Changing a beneficiary by a line through a name or writing in a different dollar value, is not a change that will legally hold. According to Watson, altering a section of your will, without it being done properly and officially, will render the whole section invalid, and neither your original nor your updated instructions will be followed.

“My funeral plans are in my will, so all of my wishes will be followed.”

Watson says he has seen people want to include very elaborate funeral plans in their wills, but even the simplest of wishes may not be followed if they are only written in your will. It is likely your executor will not see your will until after your funeral. Make sure your executor or family knows about any requests beforehand. Similarly, if you have made any prepaid arrangements, be sure someone knows about them and where you store your documents.

“My do-it-yourself will has everything a lawyer’s will does.”

Watson warns that many will kits that are readily available online and in stores are missing an important element, clauses that give the power to named individuals to sell your property after your death, including real estate and stocks and bonds.

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Estate Planning

Legal and Insurance

Creating Your Own Charitable Endowment using a Donor Advised Fund

aadmin — Tue, 10 Nov 2009 19:29:15 +0000

A donor-advised fund is a simple, low cost, flexible vehicle for charitable giving, which can be used as an alternative to creating a more complex private foundation. It allows individuals or families to establish a legacy of charitable giving for a lifetime or in perpetuity. A donor-advised fund is a charitable fund managed by a third party who handles all record keeping, collects contributions, and then distributes them to charities as directed by the donor. The types of assets that can be used to fund the account include cash, stocks, bonds or mutual funds.

Donors take advantage of administrative simplicity and tax savings by conducting their grant-making through a donor-advised fund. Donor- advised funds are the fastest growing charitable giving vehicle in the U.S. Many individuals are now closing their private foundations in favor of the less administratively complex donor-advised fund. They can be used as a practical way to adopt a long-term approach to philanthropy and to consolidate charitable giving activities.

Current U.S. tax law allows the donor to get an immediate tax deduction for the market value of donated assets. By contributing appreciated securities, the donor can void paying a capital gains tax, thereby giving more money to their favorite charities. This double tax benefit makes donating appreciated assets to a charitable organization more advantageous than selling the assets, paying any capital gains tax and then donating cash. The donors gift to the donor-advised fund is irrevocable and the donor cannot reclaim assets they have contributed or access future income generated by the fund. Donor-advised funds have another significant advantage over private foundations they do not require annual distributions, which can be beneficial in periods when stock prices are lower.

Donors determine how contributions are invested and the time frame for charitable donations. Donors can recommend grants to any eligible public charity, consistent with their interests and values. A donor has the option of being recognized or remaining anonymous. Also, they can designate particular individuals as successors to assume all advisory privileges. A family member can recommend that gifts be made in honor of a loved ones memory, creating a family legacy of generosity for future generations.

The greatest use of life is to spend it on something that will outlast it.
- William James, 1842 - 1910

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Estate Planning

Actor's family in court over control of affairs

aadmin — Thu, 22 Jan 2009 13:04:09 +0000

The family of Peter Falk will be headed to court in an effort to sort out who will control the actor's affairs.

After it was announced the Columbo star was suffering from Alzheimer's disease, his adopted daughter, Catherine Falk, filed a petition with the Los Angeles Superior Court that stated the actor should be placed under a conservatorship order to protect him.

According to the petition, Catherine said a conservatorship would "protect Peter from fraud or undue influence."

However, on January 20th, a week before the scheduled hearing for Catherine's petition, Falk's wife of 32 years, Shera, filed separate papers to block her adopted daughter from being appointed conservator. In court papers, Shera stated Catherine "never had a good relationship with him."

"[The court] need not take the drastic step of taking away Peter's rights under the guise of a conservatorship," Shera said in response to the petition. According to Shera, if a conservatorship is necessary, she should be the one who is appointed.

This situation may be a sobering reminder to senior citizens to find a lawyer and to ensure their affairs are taken care of to avoid potentially costly family disputes in court.

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Estate Planning

New act would protect seniors'granting power of attorney

aadmin — Fri, 05 Dec 2008 13:04:11 +0000

Through a new report, the AARP is warning seniors about granting a spouse or loved one the power of attorney over their finances.

In the worst cases, seniors have found their life savings wiped out and found there is no protection for them in those dire situations.

However, the AARP is pushing state lawmakers to adopt the Uniform Power of Attorney Act (UPOAA) to grant more protective rights for people who designate their powers of attorney.

"The power of attorney can be a license to steal because it grants broad powers with little oversight," said Naomi Karp, a strategic policy adviser at AARP.

The UPOAA would also make those who violate their financial responsibility through the power of attorney liable for damages.

According to the report, 12 state legislatures will consider the act in 2009. As of now, New Mexico and Idaho are the only states in the nation that have adopted the UPOAA.

Power of attorney can be beneficial for seniors who may not be able to handle their financial affairs by themselves. The AARP suggests seniors choose someone they can trust and to investigate the different types of power.

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Estate Planning

Wills are'a living legal document'

aadmin — Tue, 28 Oct 2008 08:24:32 +0000

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Estate Planning

Today's Seniors - Make It Easy on Your Heirs

aadmin — Tue, 08 Apr 2008 12:13:24 +0000

You've written a will, completed a durable power of attorney, and filed a set of medical directives with your physician. As far as you are concerned, your estate is in order. And from a legal point of view, you are right. If you have been well advised, your wishes about your estate will be clearly spelled out.

Following them may be another matter entirely. Tracking down your safe deposit key, insurance policies, and even your estate-planning documents can be a trial if your executors or heirs are not familiar with the way you arrange your records. For this reason, it is always a good idea to add a letter of instruction to your estate documents.

In your letter, you should specify the location of your vital records—tax returns, lists of medical expenses and other deductible items, and bank statements. You should list your social security number, policy numbers for life and long-term care insurance, and account numbers for bank or brokerage accounts (with passwords for online access). You also might include the phone numbers of people you do business with—accountants, attorneys, and financial planners—as well as the location of your address book. This will help your heirs in their efforts to notify family members, friends, and neighbors about your death.

As an addendum to your letter of instruction, you should take the time to list all your assets and liabilities. This will give your heirs a concise overview of your estate—and help them prioritize the financial issues they need to deal with.

You should also make sure that your heirs have enough ready cash to pay funeral costs and two or three months of utilities and other expenses. One way to do this is to set up an investment account with a pay-on-death (POD) designation to your executor.

In addition, you should provide the information your heirs need to disconnect these utilities when the time comes. Here again, a list is useful. This one should include your service providers and the location of recent bills. In many instances, you can also include an heir on your telephone and utility accounts as someone who is authorized to make decisions about it, including discontinuing service.

Your own experience will tell you that the passing of a loved one is a trial in itself—and that dealing with estate matters can add needlessly to the pain. Taking the time to clear the way for heirs is an act of love that they will appreciate and remember.

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Estate Planning

Estate Planning and Wills

aadmin — Thu, 21 Jul 2005 08:35:39 +0000

Estate Planning and Wills - Celebrity Wills

Mr Robert Monahan, a Senior Estate Planner with Australian Executor Trustees', said many principles used by celebrities when drawing up their Wills also could be applied in far more routine circumstances for everyday Australians.

"Even though the value of the Estate may vary by millions of dollars, there are still many important lessons to be drawn from the best and worst celebrity Wills.'

One of the most common flaws with Wills is that they were not kept up to date and the Will of Diana, Princess of Wales, clearly illustrated the impact this oversight can have on family members.

Despite advice to the contrary, Diana did not revise her Will following her divorce from Charles in 1996. As a result, her Will was somewhat out of date when she died unexpectedly a year later. Diana's initial Will was rather general and gave virtually no instructions in regards to her intellectual property rights, which are now extremely valuable.

The potential tax ramifications of this could have been monumental and her main beneficiaries, Prince William and Prince Harry, could have been denied access to many millions of pounds.

Luckily the executors of Diana's Will agreed to make some variations following her death to ensure her Estate was distributed as she would have wished.

Ideally, people should review their Will every few years, even if it is only to make sure it still reflects their objectives and wishes. While Diana's initial Will did not reflect her true wishes, Elvis Presley and members of the Kennedy family, however, were obviously more mindful of the potential value of intellectual property rights and had their Wills drawn up as such. The Wills of Elvis and Jacqueline Kennedy Onassis were ahead of their time and made very specific reference to intellectual property."

Also in contrast to Diana, Australian mining magnate Lang Hancock was extremely diligent in updating his Will. Hancock's Will, a 36-page document, was regularly updated right up until February 1992, less than two months before his death. Lang was quite specific with his request and even introduced a no-contest' clause in an attempt to prevent any in-fighting among family members.

Renowned Australian artist Brett Whiteley, who had a well-known aversion to lawyers, opted to write his own Will and had it witnessed by his daughter and her boyfriend.

The Will was misplaced and a battle for Whiteley's Estate ended up being fought out in the courts. Not having a Will is like throwing a deck of cards in the air. It is almost impossible to predict what will happen. There are also many cases where home-made Wills have cost relatively small estates tens of thousands of dollars.

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Estate Planning

The Probate Process

aadmin — Thu, 30 Jun 2005 09:25:02 +0000

Most states provide for a court probate proceeding following an individual's death to:

Oversee and approve distribution of the deceased's assets to beneficiaries named in the will and legal heirs.
Calculate and approve payment of state and federal estate and income taxes.
Resolve claims of creditors and disputes among heirs.

Generally, the size of the estate determines the formality of the required probate proceeding. State law determines the required probate process. Completing the probate process can require between 6 months and several years depending on the size of the estate and complexity of issues involved.

Role of the Personal Representative

The personal representative (known as executor in some states) is designated by the deceased's will or appointed by the probate court to administer the probate of the estate. The personal representative's primary responsibilities include:

Collecting and managing the assets and property of the deceased.
Paying taxes, claims, costs of probate, and debts of the deceased.
Distributing assets to creditors, beneficiaries and heirs.

Generally, the personal representative is reimbursed for expenses incurred in the probate process. The court approves the expenses incurred in the probate process and these expenses are payable from assets of the state. Most states provide that the personal representative can receive specified additional amounts of compensation which are also subject to court appeal.

Tax Issues

Estate and income tax issues are addressed in the probate process. It is recommended that these matters be reviewed by the personal representative with an attorney or accountant.

Generally, no estate taxes are due on assets disbursed to the deceased's surviving spouse. Also, currently, no federal estate tax is due on the first $600,000 of assets of the estate. Issues regarding estate, income and state inheritance taxes should be addressed with an attorney or accountant.

Settling the Estate

When the matters discussed above are documented and resolved to the satisfaction of the probate court, the court enters an order formally transferring property, settling claims and closing the estate of the deceased.

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Estate Planning