MAKING ESTATE PLANNING LESS DAUNTING

NPR is currently running an interesting series on financial basics for Baby Boomers. An NPR article published today (Article Link)  struck a chord with me because my office works to make the process of creating an estate plan as streamlined and friendly as possible. Of course, this can prove to be challenging at times, because many people do not realize that good estate planning is necessarily a collaborative process. That is, the Estates attorney must be able to determine the client's estate planning goals based upon information provided by the client. The attorney then uses this information to draft estate planning documents that best effectuate the client's objectives. However, many view the creation of an estate plan akin to having a CPA complete annual tax returns. In contrast, to create an estate plan the effectively meets your wishes your lawyer must understand more than your financial positions. 

Generally, this process includes the client filling out an intake sheet and then meeting with the Estates lawyer. Afterwards, a draft of the estate planning documents are drafted, which the client reviews. Finally, a signing ceremeony is scheduled—where the client executes the documents.

While this process does involves the client providing the attorney with information, the back and forth is imperative to the ultimate plans success. While one can choose to create his or her own or purchase a pre-made "estate plan", doing so will not distribute your assets and protect loved ones pursuant to your wishes. To create an estate plan that actually meets your goals and desires after you are no longer around, it is imperative to consult with an attorney who takes the time to know your overall objectives, family situation, and estate planning goals. While the process of creating and executing such a plan can seem work intensive—it is much easier and less expensive than failing to make any plan.

Because you have no say how your assets are distributed and your legacy is protected after you are gone—it is worth the time and effort to create an estate plan to ensure that your wishes are met.

If you are interested in ensuring that your family is cared for after you have passed away, please call our office at 415-625-0773 to schedule your free estate planning consultation with San Francisco’s premiere estate planning attorney, Matthew J. Tuller.

Baby Boomers—Necessity for Estate Planning Discovered

NPR published an interesting article about baby boomers and retirement planning in—what has been since 2008—such a volatile economic environment. In light of this confusion is the fact that many men and women of the baby boomer generation do not currently have an estate plan in place. For some, this stage of life is a time when an individual or family begins to realize the importance of having a well-drafted estate plan in place.

Similarly, new families—those who have had a child in the last three years—also begin to see the importance of having an estate plan in place. Beyond these two categories of people, this time of the year makes estate plan creation make sense. Because most people are in the heat of tax preparations, this time of the year is one where we all tend to gather financial information and documents, and our current and future finances are on our minds. Accordingly, this time of year presents a good opportunity for the creation or review of an existing estate plan as we are already in a financial mode—collecting and analyzing our financial documents and positions—which makes estate planning naturally flow.

For any of us who do not currently have a comprehensive estate plan in place that match our wishes and desires for the distribution of assets and protection of our legacies after our passing, it is time for us to consider getting a properly drafted estate plan in place.

If you are interested in ensuring that your family is cared for after you have passed away, please call our office at 415-625-0773 to schedule your free estate planning consultation with San Francisco’s premiere estate planning attorney, Matthew J. Tuller.

What’s On Your Worry List?

A comprehensive financial plan that is effectively executed delivers dollar savings in improved investment returns, lower taxes, lower fees, more efficient wealth and more stable income. However, an important outcome of this process addresses what may be on your worry list: running out of money, family strife, unexpected losses and making financial mistakes.

The Key Takeaways:

• Financial stress can negatively affect the health and emotional well being of you and other family members.

• Working with a financial planning professional can help you handle your financial situation, alleviate worry and, in general, help you feel more in control of your life.

Financial Worry is Common:

If money worries keep you awake at night, you’re not alone. People are living longer and health care costs, especially for long-term care, continue to rise. As a result, retirement savings must last longer and stretch farther than most anticipated. Even those who thought they were prepared for retirement may now be afraid of running out of money, especially for the surviving spouse. Many families are still recovering from losses in the stock market and job market. Credit card debt is at an all-time high, as is the cost of a college education. Many families find themselves in the middle of the sandwich: taking care of elderly parents and raising their own children.

What You Need to Know:

Worry about financial matters can negatively affect your health. It can lead to unhealthy coping behaviors like drinking, smoking and overeating. Cutting back on health care in an effort to save money allows small health problems to escalate into larger ones. If you have trouble sleeping, your mood, immune system and cognitive functions can be affected. All of these inevitably lead to more stress and can cause friction within the family.

Actions to Consider:

1. Planning is an essential activity. A comprehensive plan incorporates budgeting, income planning, tax planning, retirement analysis, insurance and trusts.

2. A plan that isn’t executed lacks value. Expect to work with specialists to bring your plan to fruition: an advisor for planning and investments; a trust and estate attorney to draft the trust and estate documents; a CPA to implement tax strategies; an insurance agent to institute insurance products. If your resources are insufficient or uncertain, be open to changes that will alleviate financial stress and help you meet your financial priorities. For example, you may need to move to a less expensive neighborhood (or state). Your children may need to go to community college or state school instead of a four-year private university. A parent may need to live with you.

3. The sooner you take action, the sooner you can stop worrying.

If you want to ensure that your family is cared for after you have passed away, please call our office at 415-625-0773, to schedule your free consultation with San Francisco’s premiere estate planning attorney, Matthew J. Tuller.

Doesn’t Everything Go To My Spouse And Kids When I Die?

Many people think that if they die while they are married, everything they own automatically goes to their spouse or children. They’re actually thinking of state rules that apply if someone dies without leaving a will. In legal jargon, this is referred to as “intestate.” In that case, the specifics will vary depending on each state's law, so where you live when you die can significantly change the outcome for your family. However, the general rule is that your spouse will receive a share, and the rest will be divided among your children. Exactly how much a spouse will inherit depends on the state, though.

Now, it may seem like, “So far, so good.” Your spouse is getting an inheritance, so are the kids. But here are some examples of how the laws can fail many common family situations.

First off, if both parents of minor-aged children die intestate, then the children are left without a legal guardian. Kids don't automatically go to a godparent, even if that's what everyone knew the parents had intended. Instead, a court will appoint someone to be the children's guardian. In such situations, the judge seeks to act in the children’s best interests and gathers information on the parents, the children, and the family circumstances. But the decision is up to the court, and the judge may not make the decision that you, as a parent, would have made.

When it comes to asset division, in most cases, state intestacy law presumes that a family consists of a husband, wife, and their natural-born children. But, that’s not necessarily the way many families are structured, and things can become legally complicated quickly.

According to Wealth Management, one analysis has 50 different types of family structures in American households. Almost 18% of Americans have been remarried, and–through adoption and stepfamilies–millions of children are living in blended families. The laws just haven't kept up, and absurd results can occur if you rely on intestacy as your estate plan. Stepchildren that you helped raise (but didn’t legally adopt) may end up with no inheritance, while a soon-to-be-ex-spouse may inherit from you.

Say, for instance, a father has a will that allocates assets to his spouse and two children, then they adopt a third child. Then, the father dies in a car accident before he's able to revise his will. In some states, because the adopted child is not mentioned in the will, she may not be entitled to any inheritance.

If that isn't worrisome enough, consider that, in some states, the law provides that an adopted child still has rights to the biological parents' assets–and the biological parents are entitled to inherit a child's wealth. (Imagine if the adopted-as-an-infant Steve Jobs had died intestate, and his biological parents demanded a share of his estate!)

Of course, with a will or trust, you can control your estate and essentially eliminate the risk of these crazy results.

What if You and Your Spouse Are Separated?

State law decides what happens to your estate if you are separated from your spouse when you die. Much of the time, the court ignores your separation and just considers you still legally married.

Unless you have a prenuptial or postnuptial agreement, it is extremely difficult to disinherit your spouse. Again, even if a spouse is omitted from a will, state laws might choose to give a surviving husband or wife a share of the assets.

If you are separated from your spouse, and your divorce is pending, you should definitely talk with your divorce lawyer and an estate planning attorney about your options.

Creditors Win:

Intestacy provides no asset protection or preservation benefits. Without any protections in place, an estate's assets are still vulnerable to creditors, lawsuits, and others who may claim entitlement to the property. These claims would take precedence over the statutory requirements for inheritance. In other words, the family may not receive the lion's share of the estate. They'd get the leftovers.

The best way to safeguard and pass along what you’ve worked so hard to build is to talk to a qualified estate planning attorney. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.