Writing Your Tulsa Estate Planning Blog

There is possibly no greater blow to a person, than losing all of their assets to creditors. It can happen to anyone, but you can protect against it by utilizing estate planning tools.

You have probably noticed at some point or another, that the U.S. is a very lawsuit happy country, much more so than most European countries.

The reasons for this have a lot to do with the way that our court system is set up. Anyone can file a lawsuit for almost anything. There is very little to deter someone from doing so, in most cases.

Even if the plaintiff loses, he does not have to pay the defendant’s legal bills, which can be quite high. Consequently, no matter how wealthy a person is, they can be sued and potentially lose everything if the court system rules against them, rightly or wrongly.

Therefore, it is extremely important for the wealthy to protect their assets from potential creditors, as the Wills, Trusts & Estates Prof Blog discussed in “Asset Protection Measures.”

The good news is that protecting assets from potential creditors is not an inherently difficult task.

Estate planning attorneys have many ways to assist clients in doing that.

A trust is typically the best option for doing this. However, there are other ways to protect assets, including utilizing retirement accounts and college savings plans.

As a last resort, insurance can be purchased to protect against creditors.

You should protect your assets, and you should visit with an estate planning attorney to determine the best way to do so.

Reference: Wills, Trusts & Estates Prof Blog (May 31, 2017) “Asset Protection Measures.”

It is often noted that great family wealth has a tendency to disappear after a generation or two. That is because the same mistakes in handling that wealth are made over and over again.

There is little doubt that an ever increasing amount of America’s total wealth is being concentrated in fewer and fewer hands. Many wealthy people are amassing large fortunes that could potentially pass down through their families for generations.

This “generational wealth” has the potential to make some families wealthy for hundreds of years.

However, we know from history that rarely actually happens, when great wealth is passed down by families.

Most of the time, the wealth dissipates after a generation or two, even if we do remember the exceptions where that did not happen.

If you are someone who is going to receive an inheritance of generational wealth, then you need to know how to make sure that you are one of the exceptions that preserves the wealth.

Financial Advisor recently discussed in this challenge “These 5 Mistakes Destroy Generational Wealth.”
Things to avoid doing include:

•Do not spend recklessly as soon as you get an inheritance. Buying all of your dream items, is not a good idea immediately after receiving an inheritance.

•Do not think you can handle the assets without receiving proper financial advice.

•Take your time to make a plan about what to do with the money. There is no need to act right away.

•Make sure that you are not paralyzed by all of your investment options. You should not act right away in a rush, but you do need to act eventually.

•Avoid giving to every friend or family member with a hand out at your expense.

On the other hand, contact an experienced estate planning attorney who can help you form a team of advisors to help guide you to prudent decision-making.

Reference: Financial Advisor (May 23, 2017) “These 5 Mistakes Destroy Generational Wealth.”

“Forget finances, you’ll never be ready to retire, unless you’ve thought through exactly what you want your next chapter to be like.”

In the past, people usually retired when they reached 65. They stayed near their family homes and died after just a couple of years. We now see retirement very differently.

Some folks are now working well into their 70s or even 80s at their current job or at a new position. Some seniors continue to work full time, and others work part-time, with time for vacation trips and leisure activities in their routine. Some people remark that they’re busier now, than when they worked full time.

Kiplinger’s recent article, entitled “The Emotional Side of Retirement Planning,” explains that the majority of people who are happily retired, spent a lot of time thinking and planning for it.

People in their 60s should be thinking about retirement. While most have started to make plans, others have trouble formulating a strategy. Nevertheless, everyone wants to know whether they can afford to retire. The answer is usually “that depends.” It depends on the answers to some questions like the following:

•What do you see yourself doing your first week of retirement and how does that feel?

•If you’re married, how does your spouse feel about retiring?

•Do you think you’ll stay in your home or downsize?

•Do you want to live in warm weather or a cooler climate?

•How’s your health?

•Do you want to leave a legacy for your family or spend your money now?

Figure out what your retirement looks like. Before you consider whether you can afford to retire, check where you are both psychologically and emotionally. If you’re not ready mentally, then boatloads of money won’t make you 100% happy in retirement. It’s not unusual for people these days to spend 15-20 years in retirement.

The Stages of Retirement:

Many people first think of retirement like it’s a long vacation. Some return to school and take fun courses, change professions or find new hobbies and interests. Many new retirees do more traveling or get involved with church or charities. But after the novelty of retirement declines, many people gravitate to a slower and more settled lifestyle.
Physical health may start to decline, and at some point, many aren’t able to live on their own and require assistance. Some try to stay in their homes with help, some go to assisted-living facilities and others enter nursing homes. Everyone has a distinct set of circumstances, and decisions must be made on an individual basis. Available finances impact how, when and where someone retires. With more resources, there will be more options. However, every potential retiree needs to have a well-thought-out plan in place that makes sense for them financially and emotionally. Speak with an elder law attorney about creating your game plan.

Reference: Kiplinger (May 2017) “The Emotional Side of Retirement Planning”

Most people would prefer to stay where they currently live when they retire. That means that they need to do some planning.

Generally speaking, the longer elderly people can remain in their homes, the better off they will be. It is good for the elderly to stay where they are comfortable and where they have built up support networks of friends and family.

It is certainly what most people would prefer to a nursing home. It is also normally better than moving to a new home that a person is not used to. Nevertheless, if aging in place is what you would prefer when you retire, then it is important that you take stock of your home to see if that will be possible.

The New York Times reported on this in “Planning to Age in Place? Find a Contractor Now.”

Most homes are not designed and built with the elderly in mind. If nothing else, most homes have far too many stairs that are frequently difficult for elderly people to navigate.

Older homes can be even worse.

For example, many older homes have smaller doorways. Consequently, someone in a wheelchair cannot comfortably get through such doorways, if they can at all.

There are all sorts of things you might not even think about, that can make a home a bad place for an elderly person to live.

Therefore, if you would like to stay in your home in your later years, you need to plan for that now.

Your home most likely needs to be remodeled in some ways to make it safer and more livable. That should be done before the changes are absolutely necessary.

Reference: New York Times (May 19, 2017) “Planning to Age in Place? Find a Contractor Now.”

Most Americans pass away owing debt. What happens to that debt after they pass away?

It is not a secret that most Americans owe money to someone. The people of the U.S. are used to buying things on credit and, as a consequence, they have debts.

Most people would like to be rid of all that debt by the time they pass away. Unfortunately, the reality is that most of them will not.

Approximately 73% of people in the U.S. pass away while still in debt. The average amount of debt is $61,554, but that average goes down to $12,875, if mortgage debt is not included.

Market Watch discussed this in “What happens to your debt when you die?”

Because you are likely to pass away while still in debt, it is important to understand what will happen to that debt, to make sure it is not a burden on your family.

If it is debt that you alone are responsible for, then your estate will pay the debt out of any available funds before any assets are distributed to your heirs. If you estate does not have enough assets to cover your entire debt, then most types of debt die with you.

However, there are exceptions.

For example, any family member who still lives in a house with a mortgage would be responsible for the mortgage payments, if he or she wishes to stay in the home.

What this means is this: you should not worry about most debt being a burden to your family. However, if you wish to ensure that your debt does not eat up the inheritances of your heirs, then you should do some estate planning to avoid that.

Reference: Market Watch (May 29, 2017) “What happens to your debt when you die?”

When someone says that you should trust them to handle an estate and be fair to you, it is not usually a good idea to agree to that idea, without first seeing the estate plan so you know what you are supposed to receive.

Barry White passed away in 2003. To date, his estate has stayed out of the news.

For a celebrity estate it has been a smooth estate administration by all appearances. However, Darryl White, Barry’s son, has now filed a lawsuit opening up the estate to public scrutiny.

Darryl claims that when his father passed away, his widow told Darryl that she would make sure he got his fair share of the estate, as long as he agreed not to challenge the estate. For his part, Darryl claims he never even saw his father’s will to know what he was supposed to receive.

He received regular payments until 2015, when they suddenly stopped. He believes the money is now being wasted by his stepmother.

Darryl has filed suit and is demanding to see the will to know what it is he should be receiving.

TMZ reported on this story in “Barry White’s Son Sues My Dad’s Widow Can’t Get Enough of His Dough.”
In one sense, this is not an unusual story.

It is very common for children to have fights with a step-parent over an estate. On the other hand, this is an extremely unusual story.

It is not at all common for a child to trust the step-parent enough to agree to her terms, without at least seeing the estate plan and knowing what the child is supposed to inherit.

If nothing else, this case illustrates why it is an obviously bad idea for the child to agree to that.

Reference: TMZ (May 24, 2017) “Barry White’s Son Sues My Dad’s Widow Can’t Get Enough of His Dough.”

Many wealthy people are torn between wanting to leave a large inheritance for their children and fears that their children will not be able to handle the wealth.

Wealthy parents whose children do not get independently wealthy on their own, often fear that leaving those children a large inheritance would be a mistake. The children might not be able to handle the money and it might cause them to give up their own careers.

In some cases, the children might also waste all of the money and leave nothing for their own children. Despite this common fear, the wealthy parents do want to leave their children large inheritances.

This tension creates problems for many people as they plan their estates, as the Wills, Trusts & Estates Prof Blog points out in “New Focus for Estate Planning.”

The key to resolving this tension is to understand that estate planning can be about more than just transferring a lot of assets to heirs. With a traditional will, heirs get all of the assets at once, which leaves open the possibility that assets will be misused.

There are many kinds of available estate planning tools that can be used to make sure that heirs do not waste everything.

Many types of trusts will help preserve the assets.

Of course, this can only be done, if an estate planning attorney knows that the client fears his children will waste an inheritance. The attorney needs the client to express these fears, so the attorney can devise the best plans.

Reference: Wills, Trusts & Estates Prof Blog (May 17, 2017) “New Focus for Estate Planning.”

It is currently difficult to know what the best possible estate planning method might be in the near future, since tax reform is uncertain. A spousal lifetime asset trust can be used as a way to plan around that uncertainty.

Given recent events in Washington, it is understandable if wealthy people are more than a little nervous about their estate plans. Just as it appeared that Congress was about to turn its attention to long-promised tax reform, President Trump has been distracted by ongoing investigations into his campaign.

While a special counsel has been appointed to oversee that investigation, a continuing steady stream of leaks has kept the pressure on lawmakers. This casts doubt over their plans for tax reform, since it is a contentious issue that has many in Congress deeply divided.

It is not clear what the President wants on some of the key items of reform.

All of this makes it difficult for many wealthy people to know how effective their estate plans might be and how to make changes to them.

Recently, Wealth Management offered a solution to the uncertainty in the form of a spousal lifetime asset trust in “SLATs Provide Flexible Plans for Many Clients.”

Like any other trust, SLATs do not have to go through probate. They also offer estate tax and capital gains tax benefits.

They key thing about them, is that they are an extremely flexible form of trust. They are more adaptable to changing circumstances than many other trusts.

That makes them a great tool for uncertain times, when no one can be certain what the tax future will look like.

If you are interested in a SLAT or want to know what your other current estate planning options are, talk to an estate planning attorney.

Reference: Wealth Management (May 15, 2017) “The Rise of Donor Advised Funds.”

There are many ways to leave a charitable legacy. One of the best is the increasingly popular donor advised fund.

Giving to charity is not as simple as writing a check and sending it in the mail. Sure, it can be done like that, but if you want to make sure you are getting the best possible tax benefit for the charitable gift, then you need to do more planning.

This is especially true for wealthy people, who would like to create a charitable legacy that will outlive them.

While you can create a charitable legacy through several different methods, donor advised funds are popular a good way to do so as the Wills, Trusts & Estates Prof Blog recently explained in “The Rise of Donor Advised Funds.”

With a donor advised fund, you can invest money now that will be used for charity later. The donor gets an immediate tax benefit and can invest however much he or she wants.

Contributions can be made over time or all at once, whichever is more beneficial. The donor does not have to actually advise how the funds are invested, if not interested in doing so. However, they can, if they are interested.

If you are considering a donor advised fund or any other type of charitable legacy, it is important to seek out the advice of an estate planning attorney. That way you can make sure you are leaving your legacy in a way that makes the most sense for your personal situation and the type of legacy you want to leave.

Reference: Wills, Trusts & Estates Prof Blog (May 18, 2017) “The Rise of Donor Advised Funds.”

Technology is changing so rapidly that people and the law are not keeping up. This creates problems in estate planning.

It was not that long ago when the Internet was new and primarily seen as nothing more than a source of entertainment for most people. That has changed dramatically.

More and more people are now conducting business online and our digital accounts have become a large part of our personal lives.

When planning their estates, however, people have not kept up with the pace of technology.

People do not think about how they want any digital assets that they have to be passed on to their heirs.

Laws have also not kept pace, as Investment News discusses in “Most estate plans aren’t dealing with digital assets properly.”

By default, what happens to digital accounts and assets after we pass away is a patchwork of the individual terms of services of the different websites that we use.

Every website has different rules about the accounts and whether they can be passed to heirs and under what circumstances they can be passed down.

Some states have attempted to address this problem by adopting proposed uniform laws, but there is a long way to go for the law to catch up with technology.

If you would like to have a say in what happens to your digital accounts after you pass away, it is important that you speak with an estate planning attorney about it, so you can make appropriate plans.

Reference: Investment News (May 11, 2017) “Most estate plans aren’t dealing with digital assets properly.”