Estate Planning

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Think About Estate Planning

Aretha Franklin’s death without a will is a reminder that “you better think” about estate planning.

On August 16, Aretha Franklin passed away in her home after a long, private battle with pancreatic cancer. The Queen of Soul died without having a will or trust in place. Now her family must wrestle with not only their grief, but also the lengthy, complicated and expensive process of probate. Take this news as an important reminder to think about estate planning. Probate is the court-supervised process of gathering a deceased person’s assets and distributing them to creditors and inheritors.

How Often Do You Think about Estate Planning?

Franklin’s exact net worth is unknown, but it is estimated at roughly $80 million and includes the rights to many of her hit songs, according to Wealth Management Magazine. The complete lack of estate planning on Franklin’s part will likely result in the federal government taking a huge tax bite out of that figure, leaving less inheritance to her four sons. At the moment, there are no indications that any of Franklin’s heirs are in conflict regarding next steps. Unfortunately, without documented instructions for distribution of her estate, that could easily change.

When music legend Prince died two years ago, he also left behind no will or plan for what should happen to his $500 million estate. In addition, it was unclear who had control of his royalty rights and his unreleased music. Both performers led deeply private lives. Yet, without a will or trust in place, each of their estates now can and will be laid bare for all to see.

Everyone needs a will. The legal document expedites the settlement of an estate, keeps proceedings from going to probate, and helps keep private matters private. This is true regardless of the size or scope of your estate, legacy or fame.

By |September 24th, 2018|Current Affairs, Estate Planning|

Make Your Legacy Tangible

make your legacy tangibleEstate planning is about much more than the tangible elements of life insurance and trusts, or investment accounts and wills. That’s because your money and possessions are not the only representations of your life. What about your beliefs and wisdom, your personal experiences and family stories? These are your legacy. They are the most valuable assets you can pass on to your loved ones and community. So, how do you make your legacy tangible?

“The challenge with character and intellectual assets is giving them the same kind of physicality that financial assets are given,” explains Laura Roser, author of Your Meaning Legacy. “Legacy vehicles are the physical structures that enable you to pass on your non-financial assets.”

One simple way to pass on your legacy is to write a heartfelt letter. You can also create short videos or audio recordings in which you share family traditions, memories and other stories. For those feeling especially ambitious, it has become easier than ever to create biographies, memoirs and other specialty books.

Regardless of how simple or elaborate you choose to be, you’ll want to include these items in your estate plan along with instructions for how they are to be shared and preserved. Remember, too, you don’t have to wait until your death to share them.

Sharing your life stories today can benefit you and your family in multiple ways. For example, a 2006 study from Emory University shows that children who know and understand their family’s history exhibit strong self-esteem and a belief that they can influence events and outcomes in their lives. Additional benefits, according to Roser, include decreasing depression in older adults, connecting with family, and increasing the likelihood of a successful wealth transfer.

Charitable giving can also include a legacy letter, video or other vehicle that shares personal wisdom and values. Your thoughts and insights will make the gift all the more meaningful to the recipient. A college student who benefits from your scholarship will also benefit from knowing why you gave. Nonprofit employees will appreciate knowing funds to continue their work came from someone with shared beliefs and values.

Just like the drafting of important financial papers, documenting your non-financial assets should be done before it becomes urgent or too late. Why not start right now?

Ideas to Help Make Your Legacy Tangible

  • Pick a photo from your past and write a description of what was happening, how you felt when it was taken.
  • Record a two-minute video about your wedding day, the day your child was born or a family tradition.
  • Create a “Top 10” list (of things for which you are grateful, of mistakes you’ve made and learned from, or of actions you believe create a well-lived life).
  • Write a letter to your family telling them you love them and what you consider to be their greatest gifts.
By |July 30th, 2018|Books, Client Stories, Estate Planning|

Ease Financial Burden of Funeral Planning

gravestones and funeral planningLosing a loved one is never easy. To make matters worse, it’s difficult to make major financial decisions when you’re feeling overwhelmed and heartbroken. Funerals can be a significant expense. The average cost is about $10,000 according to the funeral-pricing site Parting.com. Thankfully, understanding the different expenses, knowing your options and planning ahead can help ease both the emotional and financial burden of funeral planning.

“In the best of all worlds, you or a loved one will have included funeral arrangement wishes in your estate planning,” said Carrie Schwab-Pomerantz, senior vice president at Charles Schwab. “That can save a lot of guessing, and money, for the people you leave behind.”

She recommends putting your preferences in writing and giving copies to family. Since the will is often not found or read until after the funeral, putting these preferences or instructions in your will is not advisable.

Tips to Ease Financial Burden of Funeral Planning

According to the Federal Trade Commission (FTC), the federal funeral rule allows funeral providers to charge a basic services fee that customers have to pay. The basic services fee includes services that are common to all funerals, regardless of the specific arrangement. These include funeral planning, securing the necessary permits and copies of death certificates, preparing the notices, sheltering the remains, and coordinating the arrangements with the cemetery, crematory or other third parties.

If budget is a concern, understand that you’re not legally required to purchase optional goods or services from your funeral provider. There are other businesses that may offer a lower price for things such as transportation, flowers, caskets, urns, facilities for memorial services, and more.

The FTC has an online guide that can help you plan manage your funeral planning and budget. www.consumer.ftc.gov/articles/0301-funeral-costs-and-pricing-checklist.

 

Image courtesy of tiverylucky at FreeDigitalPhotos.net
By |November 20th, 2017|Current Affairs, Estate Planning|

Common Estate Planning Pitfalls

Typical goals in creating an estate plan are to establish a legacy and create a straightforward guide for your heirs. Depending on how long ago you created your estate plan, it’s possible your wishes or priorities may have shifted. Your vision of your legacy and your directives may no longer be clear. That ambiguity can create additional stress and expenses for your loved ones and beneficiaries during an already difficult time. It’s wise to review your plan every three to five years. That way you can address and avoid common estate planning pitfalls in the transfer of your assets. In a recent article, Rande Spiegelman, vice president of financial planning at the Schwab Center for Financial Research, shared some potential obstacles.

Outdated Information

Review your accounts and beneficiary designations anytime there is a major change in your life, such as a birth, death or marriage in the family. Your heirs may not get the assets you intended when this information is incorrect. It may even override the wording of your will or trust in some cases.

Costly Probate

“A revocable living trust is one way to avoid the unwieldy and costly probate process, because your assets technically belong to the trust—even while you’re still alive,” Spiegelman noted. You should create what he calls a “pour-over will” after creating and funding the trust (by changing the title of your accounts and other assets into the name of the trust), he suggested. This states that assets not otherwise devised by your will should be transferred to the trust upon your death. Finally, be sure to name a successor trustee (in case you or another original trustee cannot fulfill the duties).

Misunderstandings

Dscussing your estate plan can be uncomfortable. Still, it’s wise to communicate as much as you can to your spouse, children or other heirs while you’re still living. Your openness about your intentions can help them manage their expectations and may reduce any confusion, conflicts or legal battles down the road.

By |September 25th, 2017|Estate Planning|