Estate Planning Archives | K.T. Williams Law

POD Accounts: Are You Using Them Correctly?

January 17, 2020/in Estate Planning /by KT Williams

Should You Use POD or TOD Beneficiary Designations?

Many of your accounts, such as life insurance and retirement accounts, automatically include beneficiary designations that you complete. On the beneficiary designation, you identify who will receive the retirement account or life insurance proceeds after your death. Perhaps, you name certain people as your designated beneficiaries. But you can also name a Trust as the designated beneficiary, and in some instances, naming a Trust makes the most sense.

Naming beneficiaries for certain accounts is common. For other accounts, it’s not common, but an available alternative if you know to ask for it. I want you to know your options and how to use them.

What Is a POD or TOD Account?

While retirement accounts and life insurance policies automatically include the option for you to name beneficiaries, other accounts do not. Your traditional checking and savings accounts and your investment and brokerage accounts rarely include beneficiary designation options unless you request it. When you request it, the designation will be called a POD (Pay On Death) or TOD (Transfer On Death) designation.

The terms POD and TOD can be used interchangeably. Through a POD or TOD designation, you name beneficiaries to the account. And each designated beneficiary automatically receives their share of the account at your death.

This means the designated beneficiary isn’t required to open an estate, have an executor appointed, or go through the probate process to get their share of the account. As you can see, using a POD or TOD designation can be a convenient way to make sure your accounts pass to the recipients you want to receive them. But care should be taken when using POD or TOD designations.

Should Your POD or TOD Designations Match Your Other Estate Planning?

Your beneficiary designations are part of your estate planning. The designation works to get the asset or account to the beneficiary you want. So in that respect, the designation is similar to instructions that you might include in your Last Will and Testament or your Trust.

But it’s important to remember that your Will or Trust doesn’t control who receives an account if the account contains a beneficiary designation. As you might imagine, trouble for your beneficiaries and family lurks around the corner if your Will or Trust doesn’t share the same beneficiaries as your POD or TOD designations.

Your POD or TOD designations should name the same beneficiaries you name in your Will or Trust. If they don’t match, you should clearly explain the difference in your Will or Trust. If there isn’t an explanation, you leave room for speculation about why there is a difference. Was the POD or TOD designation a mistake? Did the deceased understand their Will or Trust wouldn’t control the account? Did the beneficiary influence the deceased to make the POD or TOD beneficiary different than in the Will or Trust?

What Should You Do If You Use POD or TOD Designations?

If you use POD or TOD designations for any of your traditional banking or brokerage accounts, consider if the beneficiaries on those accounts are different than you show in your Will or Trust. You don’t need to do anything special in your Will or Trust if the beneficiaries are the same. But if they are different, you can save the beneficiaries in your Will or Trust and the beneficiaries on the POD or TOD designation from quite a bit of trouble and stress by including a short explanation in your Will or Trust. Your beneficiaries will then understand that you purposefully selected the beneficiaries for a reason.

You don’t want to leave room for anyone to think you didn’t mean to do what you did. One simple way to be confident that your Will or Trust and your beneficiary designations are properly expressed in your estate planning is for your estate planning (elder law) attorney and your financial representative to work together with you on your estate planning. I’ve consistently seen that when we work together, the old saying, “an ounce of prevention is worth a pound of cure,” holds true.

We’re ready and happy to work with you and your financial representative on your estate planning and elder law needs. Contact us to get started.

New Retirement Account Rules: Review and Update Your Estate Planning Soon.

December 20, 2019/in Estate Planning /by KT Williams

Earlier this year the U.S. House of Representatives passed a bill to change many rules about retirement accounts, such as Individual Retirement Accounts (IRAs). But the bill stalled in the Senate. The support in Washington was overwhelming, so it was just a matter of time before it would pass. And the time has come. The changes are here! So let’s explore the changes.

Required Minimum Distributions (RMDs) Not Required Until Age 72.

For many years, the law required a retirement account owner to begin taking minimum distributions by age 70 ½. Otherwise, severe penalties would apply.

Under the new law, an account owner can delay minimum distributions until age 72. This will allow those who do not need distributions to keep their retirement accounts intact longer. As a result, retirees will enjoy larger retirement accounts during retirement and higher balances may remain at the owner’s death. This potential for larger retirement accounts at death is offset by another provision in the law.

Mandatory Withdrawal of Inherited Retirement Account: 10-Year Rule

The law has allowed the owner of an inherited retirement account to take distributions from the account over the life expectancy of the beneficiary. Beneficiaries are usually much younger than the previous owner. So this allowed the payout of the retirement account to stretch over a long period of time.

The new law requires the owner of an inherited retirement account to withdraw the full balance of the retirement account within 10 years of inheriting it. The effect of this change could be huge. Although there are a few exceptions to the 10-year distribution requirement, they are narrow.

The changes will force the complete distribution of the account over a shorter span than under prior law. This means taxes on the retirement account distributions will be paid sooner, and the taxes will be higher. Everyone with retirement accounts should review their estate planning to determine how the changes will affect them personally.

What Should You Do?

The best way to protect yourself from surprises and higher taxes is to be proactive. Evaluate your retirement accounts and your estate planning soon. Determine how the new laws will affect you and your family. Then, make changes to your estate planning for better protection and lower taxes. If you’re not sure how to get started, get your Estate Planning/Elder Law Attorney, financial advisor, and accountant involved. Estate Planning/Elder Law attorneys, like me, along with your financial advisor and accountant are your financial team. We are here to help you each step of the way. Contact us so we can help you. And let your friends know we are here to help them, too.

Family Meeting: The Time Is Right.

December 6, 2019/in Estate Planning /by KT Williams

We live busy, hectic lives. Because of that, it’s easy to put off doing important things, such as planning for the future. Yet we know we’ll have to face certain things in the future, including our retirement, our potential need for assisted living and nursing home care, and our death.

While we may be in full control of all aspects of our lives for a few of those events, we won’t be in control for all of them. And, frankly, we probably won’t have as much control of any of them as we would like. That means other people will be involved, too. Our financial advisors, our accountant, our insurance agent, and our estate planning/elder law attorney should be involved. But those closest to us, such as our spouse, children, siblings, and maybe even our parents will play important roles and shoulder a heavier burden at those times. So we should consider what each role is likely to be and take steps to make it as easy as it can be on them and us. One way to do that is through a family meeting.

What Is a Family Meeting?

A family meeting can take many different forms. It can be a scheduled time set aside for the meeting. Or it can be impromptu when most or all of those who should be involved are present. Family meetings around the holidays are very common because, even in our busy lives, we usually carve out enough time to visit around Thanksgiving or Christmas.

Regardless of the formality or impromptu nature of how the meeting arises, it involves an ingredient that can’t be overvalued: communication. Communication is the hallmark and focus of a family meeting.

What Is Communicated in a Family Meeting?

Parents usually initiate a family meeting. But, occasionally, children will initiate a family meeting. This is most common when a meeting should occur and no one else is stepping up to coordinate it.

Whether the parent or a child initiates the meeting, the meeting sets the stage for the parent to tell others their wishes. They may explain who they want to serve in fiduciary roles such as executor, trustee, or attorney in fact. They may tell the family how they feel about organ donation, life support, and end-of-life care. They may tell the family how they want their assets distributed after their death. And they may take this opportunity to tell stories of their life that have been important to them, to reflect on good times, and to spread the love and value they have for their family. Much good can come from a family meeting. But be prepared for some challenges that can arise.

What Challenges Arise with Family Meetings?

When we get frank, open communication from others, we may hear things that sting. I’ve heard plenty over the years. It’s not easy to take. But we can grow and benefit from even the toughest truth.

Family meetings allow for frank, open communication. And all involved need to truly listen to what is said and how it is said. It’s an important show of respect to everyone else who is there.
In the meeting, we may disagree. Can we express disagreement with patience and kindness? Hopefully so. But consider if an even better option is keeping our mouth shut. We must remember our role in the meeting. If we are a child whose parent is explaining what is important to them, is it proper for us to tell them why we disagree with them and why we want it a different way? Probably not, and that’s especially true if others there are giving us the “I wish you would shut up” look when we start talking. Even though communication is good, it’s not always easy.

Why Have a Family Meeting?

Have a family meeting because it allows those who care for you to know what matters most to you and so that you will know what matters most to those you care about.

Have a family meeting because it opens a door for communication that will lessen the opportunity for misunderstanding.

Have a family meeting because you don’t want to one day find yourself saying “I wish we had talked about that.”

Joint Accounts: Avoiding Unintended Consequences

November 22, 2019/in Estate Planning /by KT Williams

We use many tools in an estate plan. The tools may include Wills, Trusts, and Powers of Attorney. Also, the tools may include the beneficiary designations of retirement accounts and life insurance and carefully titling assets so that they pass the way we want. How an account is titled can play a major role in an estate plan. And I’ve seen the use of joint accounts prove very helpful, but I’ve also seen them lead to major, unintended consequences. So be very careful before you place someone on your account.

What is a joint account?

A bank or investment account can be a joint account or single account. This relates to the number of owners. A single account is an account owned by one person. A joint account is owned by more than one. The owners of the joint account are joint owners, and each of them can control and use the account as their own. Spouses may have joint accounts, and I often see joint accounts owned by a parent and a child.

Why Have A Joint Account?

A joint account isn’t always a bad idea. It can be a convenient way for more than one person to write checks on the account and to make withdrawals. Often, when someone tells me they’ve placed a child on their account, the account changes were based on recommendations from a friend, child, or bank employee. The goal for the change is usually to allow the child to help the parent with writing checks, paying bills, or taking care of anything else that may come up with the account. And that goal is achieved when the child is placed on the account.

When the parent dies, the joint owner becomes the sole owner of the account. And the new owner doesn’t have any obligation about how the account is used. This can lead to unintended consequences. But there are other ways to achieve the convenience of having a joint owner without the unintended consequences that can arise.

What Are Some Unintended Consequences of Joint Accounts?

Some of the unintended consequences occur often. First, there is the joint owner, often a child, who uses the account in ways not intended by the parent. For example, the parent may only intend for the child to use the account for the parent’s needs. But the child, as a joint owner, can do anything they want to do with it. So the account is an easy source of funds to spend on things unrelated to the parent. And it happens far too often.

Another unintended consequence comes up when the parent expects the child who is a joint owner to split the account with others at the parent’s death. In other words, the parent often expects the child who is on the account to treat the account as part of the parent’s assets to be split equally with their siblings.

Sometimes it will work out exactly as the parent intended. But too often it does not. And even when it does, family tension can result as the siblings who were not joint owners wonder if they got everything their parent intended and if their sibling misused the money or took some that the parent intended to be split.

When a child decides not to split a joint account even though the parent intended it to be split, there are a few common justifications given. Often, the child decides that the parent really meant for them to keep the entire account balance for themselves after all. They justify this with the argument that the parent wouldn’t have made them a joint owner unless the parent wanted the child to keep the entire account at the parent’s death. And the child will ease their guilt by recalling all the help and care they provided for their parents while their siblings did very little or nothing at all to help. I’ve noticed that it’s easy to overestimate our contribution and underestimate the contribution of others.

These justifications may be true. But there are better ways to avoid the unintended consequences and family tension that arises. A Power of Attorney.

How Could A Power of Attorney Help?

A joint account is a fine idea in some circumstances. When there are no siblings to share in a parent’s estate, for example, a parent could add their only child on a joint account with them without some of the unintended consequences that could occur. Even still, you should evaluate carefully how much you can trust the person you would put on your account. Ask yourself – what is the risk that my money might be spent inappropriately? And when you have multiple children, there are the other factors. How great is the risk that the account may not be split the way I want after my death? What if my choice to have a joint account with one of my children creates suspicion and tension between that child and their siblings after I die? Are these risks that I am willing to take? If those risks bother you, there is a solution: A Power of Attorney.

The agent (attorney-in-fact) under a Power of Attorney typically has the authority to write checks on an account, to make deposits to the account, and to do anything else needed. But the agent is limited by law to only doing what is in your best interest. So the agent isn’t permitted to use the account for their own needs or desires. And if they did, they could be held accountable to you and your heirs.

Also, by using a Power of Attorney, you could rest knowing that the account will pass to the beneficiaries you desire. The account would be controlled by your Will or by beneficiary designations you put on the account.

Making someone a joint owner on an account gives them control and ownership of the account. Making them an agent under a Power of Attorney simply puts them in a position to help you. When the goal is to get help but not to give away an account, the Power of Attorney is usually a better option. If you would like some help evaluating whether a Power of Attorney or joint account is right for your situation, contact us. We’re glad to help.

Avoiding Problems: Inconsistent Beneficiary Designations

November 1, 2019/in Asset Preservation, Estate Planning /by KT Williams

At our death, we want our assets to benefit those who receive them. And we want our beneficiaries to receive them both gratefully and peacefully (without controversy from other potential beneficiary candidates). To avoid one problem that would stand in the way of these goals, make sure the beneficiary structure in your Will (or trust) and the beneficiaries on your financial accounts are the same. If they aren’t the same, then your Will (or trust) should say that you meant for them to be different.

Beneficiary Designations Are Good, But May Backfire.

Beneficiary designations for banking and investment accounts, such as Pay On Death (POD) or Transfer On Death (TOD) designations, have many uses, and they can be a helpful part of an estate plan. Those designations, like the beneficiary designations on your retirement accounts, tell the financial institution who the new owner of the account will be at the moment of your death. An account with a beneficiary designation doesn’t have to pass through your estate and won’t be subject to the probate process. That sounds like a good thing. Right? But the convenience you hoped to create by having beneficiary designations on your investment and banking accounts could instead backfire and cause problems among your beneficiaries, unless certain steps are taken.

Generally, the beneficiaries named in your Will (or trust) are the same beneficiaries you want to share in your accounts. But it’s not necessary that they be the same. The law doesn’t require them to be. Because the beneficiaries are usually the same and because the Will (or trust) is viewed as an expression of how you want your assets to pass, if the Will (or trust) and the beneficiary designations on your accounts are different, your beneficiaries are left to wonder why there is a difference.

The beneficiary who receives less than expected because an account’s beneficiary designation is different from the beneficiary structure of your Will (or trust) often presumes that a mistake was made or that you were unfairly influenced by the person who got more. If the beneficiary structure of your Will (or trust) and the beneficiary designations on the accounts had the same distribution pattern, there wouldn’t be the basis for the presumption. To avoid this problem, you should be careful to make the beneficiary structure in your Will (or trust) and the beneficiary designations on your accounts match. If you want them to be different, that isn’t a problem as long you take steps to make it clear that you knew there was a difference and that you intended it. In other words, if you want to avoid these problems, your Will (or trust) should say that you have intentionally created a different beneficiary structure through the beneficiary designations on your accounts. That will help show that someone didn’t take advantage of you or influence you unfairly to make an inconsistent beneficiary designation.

Working Together To Prevent Problems.

You, your financial advisor, and your estate planning attorney should work together to make sure that what you want to happen with your assets will happen with your assets. When you, your financial advisor, and your estate planning attorney work proactively as a team, you can avoid problems that might otherwise arise. If you have questions or want to be sure your Will (or trust) and the beneficiary designations on your accounts won’t pose a problem for you or your family, contact us. We will work with you and your financial advisor so that your beneficiary structures won’t stir up any unnecessary controversy.

Special Needs Trusts: The Basics – Continued.

October 11, 2019/in Asset Preservation, Estate Planning /by KT Williams

It’s difficult to overstate the benefits of a Special Needs Trust when one is needed. Often it covers a loved one’s unmet needs that remain after government benefits and family resources are exhausted. And it accomplishes this without causing the loved one to lose their government benefits, which might include SSI (Social Security Income), Medicaid, or housing benefits. You can find a deeper discussion of this here in an earlier article about Special Needs Trusts. In this article, I continue the explanation of Special Needs Trusts, describing the three (3) most common: First Party Special Needs Trusts, Third Party Special Needs Trusts, and Pooled Special Needs Trusts.

What Is a First Party Special Needs Trust?

A First Party Special Needs Trust is a Special Needs Trust created with the assets, or property, of the special needs beneficiary. In other words, the person with special needs owns or receives assets. If the assets would disqualify them from SSI, Medicaid, or other similar program, the assets can be placed in a First Party Special Needs Trust. When properly drafted, a First Party Special Needs Trust will permit the beneficiary to receive benefits from the trust without losing their government benefits, such as SSI or Medicaid.

While the First Party Special Needs Trust is a helpful tool, it comes with a trade-off. At the death of the special needs beneficiary, any assets left in the First Party Special Needs Trust must reimburse Medicaid for the benefits Medicaid provided the special needs beneficiary. In most instances, this payback obligation could have been avoided with careful advance planning. The assets could have been better preserved if a Third Party Special Needs Trust was used.

What is a Third Party Special Needs Trust?

A Third Party Special Needs Trust is a Special Needs Trust created with the assets, or property, of someone other than the special needs beneficiary. In other words, the person who wants to benefit the special needs beneficiary transfers assets, or property, into a trust established to benefit the special needs beneficiary. Through this Third Party Special Needs Trust, the special needs beneficiary can derive all of the benefits that he or she could derive from a First Party Special Needs Trust without the obligation to reimburse Medicaid at the special needs beneficiary’s death. Instead, the remaining assets can be distributed without restriction to other beneficiaries or charities, exactly as the family would want.

What is a Pooled Special Needs Trust?

A Pooled Special Needs Trust is similar to a First Party Special Needs Trust, but its unique characteristics make it a better option for many people. Occasionally, it’s difficult to find someone to serve as trustee of the special needs beneficiary’s First Party Trust. Perhaps, it’s difficult because the family is small or doesn’t have anyone capable of tending to the beneficiary’s needs. Or maybe it is difficult because the amount to be placed in the trust is so small that it isn’t practical to create a single trust for such a small amount. In those instances, a Pooled Special Needs Trust may be the best option.

A Pooled Special Needs Trust is a Special Needs Trust that is made up of the assets of many different special needs beneficiaries. The assets are “Pooled” and managed as a single trust with subtrusts, or accounts, set up for each beneficiary who contributed assets to it. Through the accumulation of many small contributions from a variety of special needs beneficiary’s, a Pooled Special Needs Trust is able to cover the cost of managing the assets and the special needs beneficiary’s needs at a lower cost to each beneficiary than if the beneficiary’s assets were the only assets in the trust.

Like the funding of the First Party Special Needs Trust discussed above, the Pooled Special Needs Trust is usually funded with the special needs beneficiary’s own assets, or property. And the similarity between the First Party and Pooled Special Needs Trust doesn’t stop there. In addition, at the special needs beneficiary’s death, the beneficiary’s family will not have control of the funds remaining in the subtrust, or account, or be able to direct where they are spent or distributed. Instead, the funds remain in the Pooled Special Needs Trust to cover operating costs, fees, and other administration expenses so that the cost to the other trust beneficiaries remains as low as possible.

Which Special Needs Trust Is Right For Your Family?

A Third Party Special Needs Trust is the best way to benefit a special needs family member or friend. It has all of the benefits of the First Party and Pooled Special Needs Trusts, yet allows remaining assets at the beneficiary’s death to pass to whomever the family directs rather than reimburse Medicaid (First Party Trust ) or remain in the trust to cover ongoing trust expenses (Pooled Trust). The First Party and Pooled Special Needs Trusts have their place and provide valuable benefits, but we only resort to those when we must. Be that as it may, we’re fortunate to have them available. If you want to learn more about how to set up a Special Needs Trust or simply have questions about other ways to benefit someone with special needs, contact us. We want to help.

Power of Attorney: The Basics

October 4, 2019/in Estate Planning /by KT Williams

One of the most important tools for making sure help will be available when we need it is the Power of Attorney. The idea that we can take care of ourselves and won’t need help is a common one. Whether we were raised that way or simply don’t want to bother anyone with our needs, we resist the idea that we’ll need help. Nevertheless, the day is likely to come when we won’t be able to do everything for ourselves. Our limits might be physical, but they could be mental. Regardless, the Power of Attorney paves the way to allow others to help us with a variety of things, including physical activities, banking, shopping, driving, or paying bills just to name a few.

What Is A Power of Attorney?

The Power of Attorney is a document that gives someone, called an Attorney in Fact, the authority to do certain things for us. We can’t give them more authority than we have. But we can authorize them to do anything for us that we could do ourselves.

Does the Power of Attorney Expire If We Become Incapacitated?

The Power of Attorney should not expire if we become incapacitated. If it is a “Durable” Power of Attorney, the authority we gave our Attorney in Fact will continue after we are incapacitated. This allows our Attorney in Fact to help us regardless of our condition and throughout the rest of our life.

Does the Power of Attorney Extend Beyond Our Death?

The Power of Attorney terminates at the death of the principal. The Attorney in Fact is the “agent” for the principal and will no longer be able to use authority under the Power of Attorney when the principal dies. An Executor or Trustee will be required to take care of things after the principal’s death.

What Power(s) Does The Attorney in Fact Have?

The Attorney in Fact has all of the power(s) described in the Power of Attorney. We want our Attorney in Fact to have all of the Power and authority we can give them. Otherwise, they may not be able to do something for us that needs to be done. If we worry that our Attorney in Fact may misuse the authority we give them, we shouldn’t choose them as our Attorney in Fact. Instead, we should choose someone we trust to do what is in our best interest. The Attorney in Fact’s duty is to do what they believe in good faith to be in our best interest and what we would want them to do. Otherwise, they are acting outside the scope of their authority.

What Powers Should Be Obvious In A Power of Attorney?

In recent years, technology has changed rapidly and so have our laws. With those changes, the provisions of a Power of Attorney must change to keep up. If you aren’t certain that your Power of Attorney includes these provisions, you should consider having it reviewed and changed.

Your Power of Attorney should authorize gifting, estate planning, and asset protection planning. This is important so that your estate distribution and asset protection goals can be carried out. Most people want to protect their assets and to see their assets used to benefit their loved ones. With these powers, your Attorney in Fact can take steps with your estate planning/elder law attorney to accomplish these goals.

Your Power of Attorney should authorize your Attorney in Fact to sign other Powers of Attorney on your behalf. Many financial organizations, such as banks, investment offices, brokerage firms, and other professionals, require their own proprietary Power of Attorney to be signed in addition to the Power of Attorney you created with your estate planning/elder law attorney. By permitting your Attorney in Fact to sign these proprietary Powers of Attorney on your behalf, you are keeping the door open so that your Attorney in Fact can work with your financial advisor, accountant, and bank to take care of your needs.

Your Power of Attorney should authorize your Attorney in Fact to access all of your electronic accounts, assets, and resources. Over the last several years, most people have embraced or, at least, accepted that technology is an inevitable part of our lives. We may have email accounts, online or mobile banking, investment, and credit card accounts. We may have a variety of social media accounts, and perhaps we have health tracking programs. All of these will have access restrictions, and the restrictions may vary from one account or program to another. So it’s very important that your Power of Attorney clearly state that your Attorney in Fact be able to access all of your accounts, apps (applications), programs, and email platforms.

Final Thoughts.

Changes in the law and technology will continue. If your Power of Attorney hasn’t been reviewed in the last 2-3 years, you should have it reviewed and consider having it redone. And every 2-3 years afterward it should be reviewed to be confident it keeps up with the changing times. Contact me to see if your Power of Attorney is up to date and contains the provisions it needs.

Choosing Well: Your Trustee, Executor, Attorney-in-Fact, Health Care Surrogate

September 27, 2019/in Estate Planning /by KT Williams

When you plan for your future, one of the questions you consider is “Who will help me AND carry out the plans I’ve created?” Although you can select one person to do it all, there are many roles to be filled, and different people can fill them. These roles include Trustee of any trust you create, Executor of your Last Will and Testament, Attorney-in-Fact under your Power of Attorney, and Health Care Surrogate in your Living Will or Health Care Power of Attorney. Each one is a fiduciary. Fiduciaries can hold a lot of power—they make crucial financial decisions, act as advocates for your wishes, make sure an estate’s debts are settled, and ensure that each beneficiary gets what they were intended to receive. When selecting who will carry out these duties, choosing well can be the difference between a seamless transition and a complete calamity.

Who To Choose?

When it comes to choosing the best individual for the role, you may be inclined to choose a loved one. A loved one may be a fine choice. But, I’ve seen close family members and friends turn out to be poor choices.

Unfortunately, in those instances, the warning signs were ignored. Those who serve in these roles have a great deal of responsibility. So you should carefully consider who would be most appropriate to fill each role. And you must not ignore signals that suggest against choosing someone for an important role of authority and responsibility.

Important Characteristics To Consider.

These are some important characteristics that you should look for when selecting any type of fiduciary. Naturally, many people are tempted to select a close friend or family member to serve in the fiduciary role, but it is crucial to make sure that the candidate has the capacity and capability to carry out the role you have in mind for them. They must be over age 18. Consider if they have any medical conditions or legal concerns that could get in the way of serving you. Also, consider their age, location, and how busy they are. Someone who seems great for a role might me too busy, although I’ve seen that some of the busiest people are also the most effective. Your fiduciaries should have these characteristics:

• Trustworthy
• Responsible and organized
• Accountable
• Independent
• Financially stable and secure

While any fiduciary should have these important characteristics, there are also more things to consider when deciding who is the best choice for specific roles. Your best choice for a trustee, for example might make a poor health care surrogate. Let’s look at some questions to consider for each role.

Agent under a Healthcare Power of Attorney:

Does this person have the ability to make tough, emotionally difficult decisions quickly? Will they be able to effectively advocate for your wishes to medical personnel and to family members? Do you both hold the same values? (For example, don’t pick someone who doesn’t believe in refusing or removing life support if you do!) Are they available to be quickly reached or to quickly arrive at a medical facility in the event of an emergency?

Agent under a Financial Power of Attorney:

Are they responsible and trustworthy? Are they sensible enough to make financial decisions, such as assessing investments and filing taxes? Are they wise enough to know their limits and when to seek guidance and help from professionals such as your CPA, financial advisor, attorney, or insurance agent?

Trustee of a Trust or Executor of a Will:

Is this person organized? Are they accountable? Can they withstand pressures from beneficiaries or third parties over the course of the trust or estate administration? Is the person in good financial standing (with a good credit history, no liens against them, etc.)? Would they likely be available and capable of serving as executor or trustee when the time comes, even if it is years down the road?

Final Thoughts.

If you cannot identify an individual in your family or circle of friends to fulfill any of these roles, or if you realize that a third party would be the best choice, then an institution (like a bank or trust company) should be considered. With a team of professionals dedicated to making sure tasks are completed on time and correctly and with years of experience, a bank or trust company should never be ignored as a viable option. Regardless, as you select your fiduciaries, select ones who can work together to ensure that your wishes are carried out successfully and that you are cared for properly. We are here to help as you try to choose well.

How To: Prepare for your Estate Planning meeting

September 6, 2019/in Asset Preservation, Estate Planning /by KT Williams

Important appointments like those for our annual physical with our physician or for going over our tax returns with our accountant can be intimidating and stressful. You might feel that way about your upcoming estate planning meeting, too. But you shouldn’t feel that way. Instead, realize that the meeting is a great step toward securing and controlling your future. And to make the most of the meeting, here are a few tips to help you prepare for it.

What Do You Want To Accomplish? What Are Your Goals?

One of the first things I plan to ask you is what you want to accomplish through our working together. Is it to make sure your assets pass to certain beneficiaries? Is it to limit taxes? Is it to protect your assets from nursing home costs? Is it to make sure your children or spouse are protected in the event you die young or otherwise unexpectedly? Is it a combination of several of these goals? Give it some thought before the meeting. It’s not necessary that you are certain of your goal. But it’s helpful if you have given it some thought. We will explore it more deeply in the meeting and help focus our attention on achieving your goal.

Consider Your Family’s Unique Dynamic.

All of us are unique, and our families are unique. So, you and your family should be treated uniquely. You deserve it. You shouldn’t be treated as if you were no different than everyone else who wants to plan their future. When we meet, I’ll ask you about your family. And it’s important for you to be honest. If you have someone who isn’t good with money, you should say so. If you have someone with substance abuse problems, you should say so. If you have someone, perhaps a child, whose spouse is overbearing, untrustworthy, or deceitful, you should say so. This will help us form a structure for your estate plan that will provide benefits without the risk that their uniqueness will cause problems.

Know Your Assets.

Identify your assets, their value, and how they are titled. In other words, have a good idea about what you have and in whose name it is owned. That will help us determine the best way for your assets to be protected and passed to your preferred beneficiary.

Think About Who You Trust and Want In Important Roles.

Who do you trust to do what is in your best interest? Will they take care of your family members, too? The executor of your estate identified in your Last Will and Testament should have good organization skills, be able to handle finances, and not give in to undue pressure that might come from someone who doesn’t have the estate or its beneficiaries’ interests as a priority. Your Attorney-in-Fact under your Power of Attorney should possess the same qualities as your executor, and they can be the same person. The authority of the Attorney-in-Fact will end when the person who gave the authority dies. If you have a trust, your trustee should possess these qualities, too. The trustee will manage the trust assets, handle them for the trust beneficiaries, and follow the directions contained in your trust. Obviously, the trustee must be someone who is trustworthy. You should be confident the trustee will do what you want and will follow the instructions in your trust for the trust’s beneficiaries.

It will help us with your planning if you have the contact information for your family members and any non-family members who you want to serve in an authority position like those identified here. Having that information at the planning meeting isn’t necessary, but it will be needed before the planning is completed.

Keep An Open Mind.

The planning that was done for your friends or family might be similar to what is appropriate for you. But don’t count on it. You are unique. Your assets are unique. Your goals may be unique. So, your planning should be appropriate for your unique circumstances. That means you need to keep an open mind about what planning may be most appropriate for you and strongly consider the recommendation that is made by the expert who is evaluating your situation and recommending the best way to handle it.

Ask Questions.

Ask questions if you don’t understand something about your estate planning or that is discussed in the estate planning meeting. I always try to fully explain the topics we cover in the meeting, but some of the topics are more complex than others and more difficult to explain and understand. Your questions may be the only way for me to know you don’t understand. I want you to be confident about what you’re doing and why you’re doing it. But it is hard to be confident if you don’t understand what is being done and why it is being done. Always feel free to ask questions until you have a solid understanding.

Make An Appointment.

Getting ready for your estate planning meeting starts with making an appointment. The goals that matter to you will not be achieved if you don’t begin the planning process. So, schedule your estate planning appointment. We’ll take you through the process and make it painless and enlightening. When we’re finished, you will have taken care of an important and necessary task for you and your family, and you will have relief and confidence that you’ve done it well. Contact us to get started.

Preparing For The Unexpected… Sickness, Death, Or Expense: What Should You Do – Part 2.

August 23, 2019/in Asset Preservation, Estate Planning /by KT Williams

The benefits of preparing for the unexpected are wide ranging. Avoiding delay, saving money, and earlier care in a health crisis are just a few. In Part 1 of this series, we talked about important first steps to prepare for the unexpected. These steps included making lists of important information such as your bank accounts, investment and retirement accounts, insurance policies, real estate and other assets. Also, you were encouraged to compile a list of all of your electronic login credentials with the corresponding password. Our electronic footprint and widespread use of electronic media, accounts, and storage (our photos in the cloud for example) makes it necessary for us to keep our account login credentials handy for our use and for use by those who may need to help us one day.

Now What? You compiled all the information. What do you do next? In this, Part 2 of the series, let’s cover what you should do after gathering the information.

Keep the information current and updated. You spent valuable time locating, sorting, and compiling the information. Make sure your efforts pay off. Keep the information handy, easily accessible, and up to date. Otherwise, your efforts could end up wasted if the information can’t be found when needed or if it isn’t updated regularly. None of us want to waste our effort. You should check the accuracy of the information every six (6) months or sooner if you get a new electronic account or if your login ID or password changes for any account.

Build Your Professional Advisor Team and Use It. Most people rely on trusted professionals to guide them. Each advisor plays a vital role. And just like other teams that have players with unique skill sets, the members of this team have unique skill sets that serve an important purpose. Leaving a member out of this team could leave you unprepared. If you don’t have a full team, build it. It’s easy. It only takes a call, email, or message. And if you aren’t sure who should be on your team, get suggestions from the other advisors you use.

Financial Advisor, Insurance Agent, CPA, And Estate Planning/Elder Law Attorney. This is your team, and they should work together for you. We each have unique skills and experience, and we use these skills and experience to help you and those who matter to you. When you talk to your team members, tell each one you want them working together.

Preparing for the unexpected in your life justifies spending a little time with these professionals who see the unexpected every day. Your financial advisor, insurance agent, CPA, and estate planning/elder law attorney have seen unexpected and surprising life experiences in their clients and friends and have learned from them. We use that learning to better advise you so that you can avoid the problems others have faced so that you can take advantage of opportunities others have missed. Preparing ahead and being proactive about your future is time, effort, and money well spent. It’s the kind of investment that pays off for a lifetime.

Inform Your Spouse or Power of Attorney. If you are married, you and your spouse may have worked together in gathering all of this information. That’s good. It’s easy to forget in our busy life to tell our spouse something they should know, such as details about retirement options, beneficiary designations, and insurance elections that we may have available. Gathering the information together can help bridge the gap and make sure each of you are aware of your property, accounts, insurance, and retirement benefits. Even if you didn’t gather the information together, you should tell your spouse how to find the information if you intend your spouse to use it one day. If you aren’t married or if you don’t intend for your spouse to access the information, make sure your Attorney-in-Fact (that is the person you named as your agent in your Durable Power of Attorney) can access it. They may need it to help you.

Make Sure You Can Answer These Questions. There are several questions that you should be able to answer. They help determine if you are well prepared for the unexpected. If you can’t answer these questions or if you aren’t certain of the answer, contact your team and get to work. It’s not OK to simply say “some of these questions don’t apply to me because I’m too old or because I’m young and I have plenty of time to worry about it later.” These questions are too important to ignore. Here are a few of them.

1. How are you going to pay for nursing home care? Statistics show that at least 70% of adults will need nursing home care. Nursing home care costs approximately $7,000 per month in our region, and the cost is increasing rapidly. You could use all of your savings and hard-earned assets. That doesn’t sound good to me, and it probably doesn’t sound good to you either. There are plenty of other options. The other options may not be available if you don’t plan ahead.

2. Who is going to assist you and make decisions for you if you become incapacitated? You need a capable, trustworthy person who will take care of your financial and health care needs.

3. Has your estate planning, including your Power of Attorney, been updated to comply with changes in the law and with advances in technology. For example, your Attorney-in-Fact should have authority to access the electronic accounts and memberships you’ve created. If that authority isn’t specifically stated in your Power of Attorney, your Power of Attorney should be updated.

4. Are you taking all of the tax deductions and income exclusions that are available to you? The tax code is complex, and its complexity continues to grow.

5. At what age will you retire and what will your retirement income be when you retire? These questions can be answered even if you are many years from retirement. Helpful tools exist to calculate these figures and to forecast important trends. And this isn’t only for people who are near retirement. If you are young, answering these questions will help you boost your income later and, perhaps, put you on the right track for higher income soon.

6. Do you have the insurance coverage that you need? Insurance is often overlooked, but it is an important part of preparing for the unexpected. The amount and type of health insurance, Medicare supplemental health policies, life insurance, long-term care insurance, or home and automobile coverage that we need varies from person to person and with our stage in life. Reviewing this regularly with your agent and professional team is important. You want the right coverage, not too much and not too little. Be proactive in managing your insurance coverage.

Planning ahead and preparing for the unexpected is time well spent. We never regret planning ahead. But we regret when we don’t. Time is available. Take action now. Don’t wait for the unexpected to happen. Contact us for help.