Writing Your Tulsa Estate Planning Blog

There are many reasons why you should have an estate plan. One of them stands out above the others. Getting an estate plan will spare your family a lot of pain later.

One of the last things that most people would ever want to do is to cause pain for their loved ones. However, it is something that many people do inadvertently all the time.

The majority of American adults are in danger of doing it, simply because they do not have estate plans, as the Las Vegas Review-Journal explains in “Estate planning can save your family plenty of money and heartache later.”

Not having an estate plan, means your family will ultimately have to deal with everything you leave behind, including what happens with your assets. They will have to sort out your belongings and decide where everything should go.

They will also have to pay for the probate process to make sure that it is all done legally.

When your family has to pay and make decisions about your estate because you did not, it can cause them considerable pain and money.

Spare your family that pain and get an estate plan.

Reference: Las Vegas Review-Journal (Feb. 27, 2017) “Estate planning can save your family plenty of money and heartache later.”

Most older Americans have wills, but most younger Americans do not. It does not matter how old you are, however, you should have a will.

Survey after survey shows that the majority of Americans do not have an estate plan, or even a will. The New York Times recently reported on a new survey that shows only 42% of Americans have a will in “Why You Should Get Around to Drawing Up a Will.”

The good news is that the overwhelming majority of people over the age of 72 have a will. The bad news is that only one in five people between the ages of 18 and 36 have wills.

The problem is that younger adults often have a very big reasons why it is more important for them to have a will than it is for retired people. Younger adults are far more likely to have minor children that need backup parents appointed, if they are orphaned.

It is only through creating an estate plan that parents can give directions about who should care for their children and how that should be done. An estate plan is also the best way to make sure the children’s immediate and long-term financial needs are met.

Even young adults without children should have at least a will, since it is the only way to make sure that their assets go to the people they choose after they pass away.

As the article points out, many people believe you do not need to have an estate planning attorney to create a will. It is possible to create your own will using many do-it-yourself options.

Be advised, though, that the article also points out that both The New York Times and Consumer Reports have looked into do-it-yourself will services and found them lacking for all but the simplest of wills.

No matter how old you are, do yourself and your family a favor and contact an estate planning attorney, if you do not already have a will.

Reference: New York Times (Feb. 8, 2017) “Why You Should Get Around to Drawing Up a Will.”

Audrey Hepburn’s estate planning mistake has led to a long legal fight between her sons. It appears that they have finally reached an agreement.

Audrey Hepburn starred in some of the most beloved movies of all time. She came to symbolize beauty and grace in mid-century Hollywood.

When she passed away in 1993, she left behind a gigantic amount of memorabilia from her acting career, including some of the costumes and jewelry that she wore in her iconic roles. These items have obvious value to collectors, but so far no one has gotten their hands on them.

Why?

The items have been the source of a long dispute between her two sons.

Hepburn specified in her estate plan that everything she owned should be split between those sons equally, but she left no instructions regarding just how that was to be accomplished.

Which son should get which item?

Her memorabilia has been contested in court for the last two years, but the sons may have finally reached an agreement, according to the Daily Mail in “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

The sons have agreed to submit the question to mediation and use that process to determine the distribution of particular pieces of memorabilia. However, this will not be the end of all battles concerning Hepburn’s estate, since a charitable fund she founded is now suing one of the sons for interference with its affairs.

Hepburn’s mistake was not including some way for her son’s to resolve any disputes about who gets what in her estate plan. She could have made provisions for a mediator to resolve the disputes. That would have saved a lot of headaches and legal bills for her family.

Reference: Daily Mail (March 9, 2017) “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

When creating an estate plan, you will want to consider how to leave assets for the benefit of your spouse. There are several ways to do so.

Unless you and your spouse have a valid legal agreement otherwise, you will not be able to disinherit him or her in all but the most unusual circumstances. In every state, a spouse is entitled to a spousal elective share of a deceased partner’s estate, although the exact amount of the share varies between states.

Consequently, if you make no provisions in your estate plan for your spouse, your spouse can elect to take his or her share and the court will alter your plans. Therefore, when you are creating your estate plan, you need to consider how to leave an inheritance for your spouse, even if you would rather not.

There are several different ways to do so, as The Times Herald discusses in “Options for leaving an inheritance to a spouse.”

The biggest decision is whether to use a will or a trust.

With a will, you can leave assets for your spouse to receive outright as free of any restrictions or control. However, there are disadvantages, especially if you want to avoid probate and ensure that the spouse will leave any remaining assets to heirs of your choice, when the spouse passes away.

With a funded living trust, probate may not be required. There are also ways to make sure that any remaining assets are given to people of your choosing. There are several different types of trusts that can be used to include testamentary trusts under a will, once the estate clears probate.

An estate planning attorney can go over your options and help you to determine the best option for you.

Reference: The Times Herald (Feb. 20, 2017) “Options for leaving an inheritance to a spouse.”

Estate planning attorneys repeatedly warn clients to review and update beneficiary designations on a regular basis. A recent case illustrates why.

Hopefully you have heard from your estate planning attorney about the need to update your estate plan, anytime that you have a significant change in your life circumstances. This includes going over your retirement accounts and life insurance policies to make sure beneficiary designations are up to date.

If you think that this is just a way for attorneys to get you back into their offices for more fees, then a recent story reported by the Wills, Trusts & Estates Prof Blog “Ex-Spouse Receives Bulk of Insurance Death Benefit” should change your mind.

A man named his wife as an 83% beneficiary on the group life insurance policy he received through his employer. His children were the other beneficiaries.

After he got divorced, he never updated the policy and the policy was not mentioned in his divorce proceedings.

When he passed away, his ex-wife refused to waive her status as a beneficiary. Under federal law, the ex-wife could only be removed from the policy, if a divorce decree mandated it.

State law was no more helpful in this case and the ex-wife received her share of the insurance money.

When an estate planning attorney warns you to review and update your estate plan, make sure that you listen and do so.

Reference: Wills, Trusts & Estates Prof Blog (Feb. 15, 2017) “Ex-Spouse Receives Bulk of Insurance Death Benefit.”

Family battles over an estate are not uncommon. While there can be several different reasons for these fights, there are a few reasons that are the most common.

Most of the time, litigation over an estate pits family members against family members. If there is a large sum of money involved, people have many reasons to possibly fight over what they consider to be their fair share. Sometimes these family battles just happen because family members do not get along with each other.

On the other hand, there are some common reasons for these fights as Wealth Management recently listed in “Five Reasons Families Fight over Estates,” including:

•When one sibling lives close to their parents and another lives a great distance away, leaving the sibling who lives closest more assets can lead to disputes.

•If a wealthy person gets remarried later in life and leaves a large portion of the estate to the new spouse, fights between that spouse and children from previous relationships are common.

•Any blended family situation can lead to family battles over estates, if proper plans have not been made.

•When wealthy people leave large sums to a trusted caregiver, then it is likely the family will fight with the caregiver over those assets.

•If the wealthy person has not adequately prepared and drawn up proper estate planning documents, then family fights over the estate are very likely.

Reference: Wealth Management (Jan. 30, 2017) “Five Reasons Families Fight over Estates.”

Improperly doing the little things in estate planning, often end up costing families the most money.

Talk about estate planning mistakes often focuses on the big picture things that people get wrong. Thousands of articles are written, whenever a celebrity or wealthy person makes a big estate planning mistake, such as failing to update an estate plan or not having one at all.

You can find article after article about complex trust provisions that are improperly drafted.

All of those things are important. We can and should learn from them.

However, it is important to understand, that for most people, small errors are the biggest problems in their estate plans, as the Pauls Valley Daily Democrat points out in “Oversights can cost your heirs money.”

For most people, minor mistakes like not having enough witness signatures on a will or not having the magic legal words in a trust document are what makes estate planning go awry. The law can be extremely formal at times and minding all of the little details matters.

If things are not done precisely right, then all the proper planning in the world can be undone with the stroke of a judge’s pen.

Fortunately, there do not have to be any minor oversights in your estate plan.

You can go to an experienced estate planning attorney who will make sure that every little, formal detail is taken care of.

Reference: Pauls Valley Daily Democrat (Jan. 25, 2017) “Oversights can cost your heirs money.”

It does not matter how young you are and how close you think you might be to death. If you are an adult, then you need to have financial plans for what happens after you pass away.

When you are young and healthy, it is not common to think a lot about your own death. You would be correct to assume that you will not die anytime soon. However, you would not be safe to do so.

Illnesses and accidents can strike anyone at any time. They do not spare the young and healthy. Because of this, you should plan for what happens after you pass away.

It does not have to be too difficult.

Recently MarketWatch offered some tips in “Prepare financially for your death, no matter how young you are,” including:

•Get medical and financial powers of attorney. These documents will enable someone you designate to handle things and make important decisions, if you are incapacitated and unable to do so.

•Get a will. If your finances are not complicated, you might not need a complicated estate plan, but you should at least have a will.

•Get life insurance, if anyone is financially dependent on you so they will be taken care of, if you pass away.
Put some money aside for a funeral, so your family does not have to pay for it.

•Keep your financial records organized so someone else can figure things out in an emergency. Let someone know where to find everything as well.

•As things change in your life and your finances get more complicated and bank accounts get larger, review and update your estate plan to reflect your current situation.

Reference: MarketWatch (Jan. 31, 2017) “Prepare financially for your death, no matter how young you are.”

As much as you might want to help your children by giving them money they can use, it may be best to hold off and seek advice to make sure that you are doing so in the best way.

Most parents like doing nothing more than helping their children when they can and when the children deserve the help. Parents often understand that when their children are getting their careers and lives started, they might need some financial assistance to help them along the way.

Giving children a little money now, might go a long way to helping the child make a lot more money later. However, many parents are so eager to give to their children that they do not think through the best ways to make the gifts.

There are bad ways to give to children, as Kiplinger points out in “5 Ways NOT to Gift to Children … and 5 Better Ideas.”
The most important thing to understand is how giving a child something might affect them and you in the future. For example, if you give a child a large sum of money outright and the child gets divorced, it is possible that your child’s spouse and not your child could get part of the money in a divorce settlement.

Another common problem people run into, is naming a child as the joint owner of a piece of property. That can lead to big problems later, if the child has financial problems as creditors can go after the property.

The best thing to do is to be careful and talk to experts before giving money to a child.

Accountants and estate planning attorneys should be consulted to make sure that the tax and estate implications have all been thought through.

Reference: Kiplinger (January 2017) “5 Ways NOT to Gift to Children … and 5 Better Ideas.”

For most estate plans to go well, it is important that parents talk to their adult children about the family finances. While many parents claim that they do, the children say that they do not.

Estate plans often have many complicated pieces, since they reflect the complicated nature of people’s finances. Those who are not financial experts, often have problems dealing with the complexity of handling an estate, if they have not been told beforehand what they will be dealing with and how to handle it.

For this reason, estate planning attorneys normally advise their clients to have an in-depth conversation with their children about their finances. If the children are going to be called upon to act as a power of attorney in the event of incapacity or to administer any portion of the estate, then they need to know what to do before they need to do it.

Forbes reports that those conversations may not be happening nearly enough in “The Last Taboo: Your Parents Still Won’t Talk About Their Money With You.”

A total of 70% of parents report that they have had detailed conversations with their children. However, only 50% of their children report that those conversations have actually taken place.

What this suggests is that while parents might be giving what they think are detailed explanations about their finances, the children still have questions that should be answered.

It is important not to assume that your children know what they are supposed to do from a brief overview. Invite them to ask questions and answer any that they have.

Reference: Forbes (Jan. 31, 2017) “The Last Taboo: Your Parents Still Won’t Talk About Their Money With You.”