Posts Categorized: Wills

Protect Your Home, Family, & Assets From The Growing Threat Of Natural Disasters

by Tara Cheever ~ Attorney at Law February 28, 2022 Asset Protection, Estate Planning, Power of Attorney, Trusts, Wills

The WMO found that climate change has helped drive a five-fold increase in the number of weather-related disasters in the last 50 years, and these calamities are getting more severe each year. As a result of climate change, weather records are being broken all the time, turning previously impossible events into deadly realities.

Despite this threat, most homeowners lack the insurance coverage needed to protect their property and possessions from such calamities. Roughly 64% of homeowners don’t have enough insurance, according to a 2020 report from CoreLogic, the nation’s largest source of property and housing data. One major factor contributing to this lack of coverage is the mistaken belief that homeowners insurance offers adequate protection from natural disasters. READ MORE

Marital Disclaimers and the Clayton Election: Last-Minute Estate Tax Planning

by Tara Cheever ~ Attorney at Law February 25, 2022 Estate Planning, Power of Attorney, Trusts, Wills

Before diving into some of the particulars of using a disclaimer and the Clayton election, let us first lay some conceptual groundwork. The main objective of using a marital funding formula in estate tax planning is to take advantage of both (1) the estate tax marital deduction and (2) the estate tax exemption to eliminate the federal estate tax due at the first spouse’s death and to reduce or eliminate federal estate tax due at the surviving spouse’s death.

What is the marital deduction? In general, as long as they meet the requirements under federal estate tax law, transfers from a decedent spouse to a surviving spouse (provided the surviving spouse is a US citizen) are excluded from the decedent spouse’s estate and are not subject to estate taxes at the first spouse’s death. This is the unlimited estate tax marital deduction. The unlimited estate tax marital deduction essentially postpones the payment of any estate taxes until after the second spouse’s death. READ MORE

Updating Your Estate Plan For Divorce: 5 Changes To Make

by Tara Cheever ~ Attorney at Law February 22, 2022 Estate Planning, Power of Attorney, Trusts, Wills

Your marriage is legally still in full effect until your divorce is final, so if you die or become incapacitated while your divorce is ongoing and haven’t changed your estate plan, your soon-to-be ex-spouse could wind up with complete control over your life and assets. Unless you want your ex to have that kind of power, you need to take action as soon as possible.

However, keep in mind that some states have laws that limit your ability to change your estate plan once your divorce is filed, so you may want to consider making some or all of the following changes to your estate plan as soon as the divorce is on the horizon and before you’ve filed. READ MORE

Springing Financial Powers of Attorney

by Tara Cheever ~ Attorney at Law February 18, 2022 Estate Planning, Power of Attorney, Probate, Trusts, Wills

If you can no longer manage your affairs, you will need somebody to act on your behalf and in your best interest. A financial power of attorney (POA) is a legal document that lets you designate a trusted person to make financial decisions for you (sign checks, open a bank account, collect your mail, etc.). The financial POA can be immediate, meaning somebody else is authorized to act for you now and into the future, or it can be springing, that is, effective only if and when an event occurs (usually when you become incapacitated or unable to make decisions for yourself).

While every estate plan should feature a financial POA, a springing financial POA requires a little more nuance to overcome its limitations. Additionally, a springing financial POA can pose problems that may not be quickly resolved even when carefully written. That said, some people dislike the idea of making a financial POA effective immediately. They prefer to have a financial POA kick in only when necessary. READ MORE

Statements of Intent or Purpose in Estate Planning Documents

by Tara Cheever ~ Attorney at Law February 11, 2022 Estate Planning, LIfe Insurance, Trust Administration & Probate, Trusts, Wills

The reasons you, as a trustmaker, create a trust are certainly special and important to you. Still, your intent or purpose for creating a trust can also have significant legal ramifications.

For this reason, it is often critical that a trustmaker express in writing their purpose for creating the trust. There are essentially two different ways of documenting a trust maker’s intent – each has slightly different purposes, and sometimes both are generally called a “statement of intent.” READ MORE

Changes to the FAFSA Form and What It Means for Grandparents

by Tara Cheever ~ Attorney at Law February 4, 2022 Estate Planning, Guardians for Minor Children, Trusts, Wills

College tuition costs and student loan debt keep going up, so much so that student debt has reached a crisis point. Student loan debt in the United States is approaching $2 trillion and grows six times faster than the national economy. The average annual cost of a private four-year college is more than $32,000 – not including expenses such as housing, food, books, and supplies. Between 2005 and 2020, the average per-student debt level nearly doubled, from $17,000 to $30,000. 

Student loan debt is an economic drag, limiting opportunities long after graduation. One of the most popular ways to save for education is a 529 plan, a qualified tuition program. These plans take their name from Section 529 of the Internal Revenue Code, but they are established and maintained at the state level. Every state except Wyoming has a version of the 529 plan.  READ MORE

Don’t Leave Your Children With The Babysitter Until You Read This

by Tara Cheever ~ Attorney at Law February 1, 2022 Estate Planning, Guardians for Minor Children, Trusts, Wills

As we head into the third year of the pandemic, we are coming to terms with just how fragile our lives and health are. If you haven’t gotten sick yourself, it’s almost certain you know someone who has, and many of us even know of one or more individuals who have died in the past two years. 

Although severe illness and death are always at risk for – and should plan for – the pandemic has forced many of us to face our mortality like no other event in recent memory. Some of those worst-case scenarios we thought would never happen now seem much more likely, and for some people, those unthinkable situations have even become a reality. READ MORE

Pour-Over Will: Not Your Average Will

by Tara Cheever ~ Attorney at Law January 28, 2022 Estate Planning, Probate, Trusts, Wills

If your estate plan is based around a living trust, you are probably familiar with the trust’s benefits over a standard will. Avoiding probate, reducing attorney’s fees, and providing privacy for you and your loved ones are the primary benefits of using a living trust.

Ideally, you transfer all your accounts and property into the living trust. At the same time, you are still alive by changing ownership from you as an individual to you as the trustee of the living trust or naming the living trust as the beneficiary of items such as life insurance or a retirement account. The trust, in effect, is a legal entity that is separate from your estate (the money and property you own). Since you create the trust while you are alive and will most likely name yourself as the beneficiary, you will continue to use and enjoy the accounts and property. READ MORE

5 Ways DIY Estate Plans Can Fail & Leave Your Family At Risk – Part 2

by Tara Cheever ~ Attorney at Law January 25, 2022 Estate Planning, Guardians for Minor Children, Incapacity, Personal Representative, Power of Attorney, Trust Administration & Probate, Trustee, Trusts, Wills

State laws are also particular about who can serve in specific roles like executor, trustee, or financial power of attorney. In some states, for instance, the executor of your will must either be a family member or an in-law and if not, the person must live in your state. If your chosen executor doesn’t meet those requirements, they cannot serve.

Furthermore, some states require the person you name as your executor to get a bond, like an insurance policy, before they can serve. Such bonds can be challenging to get for someone who has a less-than-stellar credit score. If your executor cannot get a bond, it would be up to the court to appoint your executor, which could end up being someone you would never want managing your assets or a third-party professional who could drain your estate with costly fees. READ MORE

5 Ways DIY Estate Plans Can Fail & Leave Your Family At Risk – Part 1

by Tara Cheever ~ Attorney at Law January 18, 2022 Estate Planning, Guardians for Minor Children, Incapacity, Personal Representative, Power of Attorney, Trust Administration & Probate, Trustee, Trusts, Wills

Creating your estate plan using online document services can give you a false sense of security – you think you’ve got estate planning covered when you most likely do not. DIY plans may even lead you to believe that you no longer need to worry about estate planning, causing you to put it off creating a proper plan off until it’s too late.

In this way, relying on DIY estate planning documents is one of the most dangerous choices you can make. In the end, such generic forms could end up costing your family even more money and heartache than if you’d never gotten around to doing any planning at all. READ MORE

QTIP Trust – Will My Spouse Get What They Need?

by Tara Cheever ~ Attorney at Law January 14, 2022 Estate Planning, Successor Trustee, Trustee, Trusts, Wills

A qualified terminable interest property (QTIP) trust is an estate planning tool that married couples can use to minimize uncertainty about the future and maximize certain tax advantages. Since no one can predict how much they will own at the time of their death, which spouse will die first, whether the surviving spouse will remarry, or what the estate tax rate will be when they die, a QTIP trust can help deal with and minimize these uncertainties without the need for a crystal ball.

The most common form of a QTIP trust is a testamentary QTIP, created when the first spouse dies. This QTIP is a marital trust established as part of a married couple’s estate plan to hold money and property for the surviving spouse’s benefit. This trust may be the only one created at the first spouse’s death, or it may be part of a multiple trust arrangement where, after the first spouse’s death, the family trust (or credit shelter trust) receives an amount equal to the federal estate tax exemption and the marital trust gets the rest. READ MORE

Preventing Family Conflict And Disputes Over Your Estate Plan

by Tara Cheever ~ Attorney at Law January 11, 2022 Estate Planning, Trusts, Wills

Family dynamics are highly complicated and prone to conflict even during the best of times. But when tragedy strikes a household member, even minor tensions and disagreements can explode into bitter conflict. And when access to money (or even quite often, sentimental items of furniture or jewelry) is on the line, the potential for discord is exponentially increased. Ultimately, there is no higher cost to families than the cost of lost relationships after the death or incapacity of a loved one.

By becoming aware of some of the leading causes of conflict over your estate plan, you’re in a better position to prevent those situations through effective planning. Though it’s impossible to predict how your loved ones will react to your estate plan, the following issues are among the most common catalysts for conflict. READ MORE

Life Insurance and Estate Planning: Protecting Your Beneficiaries’ Interests

by Tara Cheever ~ Attorney at Law January 4, 2022 Estate Planning, Trusts, Wills

A common misconception people have about life insurance is that they only need to designate their spouse, child, or loved one as the policy’s beneficiary to ensure that the life insurance benefits will be available to the beneficiary when they die. Life insurance is a significant financial and estate planning tool. Still, there is no guarantee that your beneficiary will receive or keep the benefit from your insurance without certain protections in place.

Despite the estate tax exemption currently being at a historic high, the exemption amount will likely change under the current administration or sunset in 2026 at the latest. Therefore, if you have purchased life insurance, consider taking the extra step to ensure that your loved ones’ financial futures are secure. READ MORE

Untangling Tangled Titles: Homeownership, Property Deeds, and Estate Planning

by Tara Cheever ~ Attorney at Law December 17, 2021 Asset Protection, Estate Planning, Trusts, Wills

Do you own the home you live in?

If you are currently living in a property that you inherited, but the deed has not been transferred into your name, you may be surprised to learn that, under the law, you are technically not the owner. This legal situation is known as “tangled title.” A tangled title negatively impacts a property’s current occupant in several ways. It can also harm generational wealth and even contribute to fraud.

Most of their wealth is tied up in their home for many households. However, until a tangled title is resolved, you cannot take full advantage of your home’s value. Untangling a tangled title is often a complicated legal process that requires attorney assistance. There are costs, but not straightening out a title could be much higher in the long term.

Title and deed are legal terms used in real estate. The person who holds the title to a property is that property’s legal owner. A deed is a legal document used to transfer property ownership to another. Although a deed is an official written document, the title merely refers to the concept of ownership rights. You cannot hold a home’s title in your hands.

Titles can often get tangled in the intrafamily transfer of homeownership. A tangled title most commonly occurs when the person whose name is on the deed passes away and a surviving relative continues living in the home without their name being on the deed. READ MORE

Decanting: Redoing Your Loved One’s Estate Plan

by Tara Cheever ~ Attorney at Law December 10, 2021 Estate Planning, Trusts, Wills

Decanting is an essential tool that emerged in some states in the last century. This tool is increasingly being used to remedy situations where a now-irrevocable trust needs to be fixed because of changing circumstances that appear to work contrary to the trustmaker’s intent.

Decanting gets its name from the practice of pouring wine from an old bottle into a new container, allowing the undesirable sediment or impurities to remain behind in the original container and the pure wine to be held in a much cleaner container, thereby enhancing the quality of the wine before consumption. Similarly, trust decanting aims to pour the trust property from an outdated or problematic trust into a newly drafted trust with the necessary improvements so that the beneficiaries can enjoy the trust property without the undesirable elements of the old trust. READ MORE