Entries tagged with “Estate Planning”.
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Mon 19 Oct 2009
Dear Liz: We want to have an estate plan that doesn’t cost a ton of money. We’re both in our early 40s and have no children. I’d label us middle class, with not much money left over after monthly bills. Lawyers want too much money to “help” us. Isn’t there a better solution?
Answer: If your estate situation is truly simple, you can draw up the documents you need with Quicken WillMaker software, which is available from the self-help legal publisher Nolo at www.nolo.com. The software costs about $50 and guides you through the process of creating wills and durable powers of attorney (which you need to name someone to make financial and health decisions for you should you become incapacitated).
Nolo also has an online will form, plus a number of books that can help you, including “Plan Your Estate” and “The Busy Family’s Guide to Estate Planning.”
The do-it-yourself approach can work when your situation is straightforward, but you should consider consulting an attorney if your estate ever gets big enough to worry about estate taxes or if complications (such as children or contentious relatives) become a factor.
Wed 2 Sep 2009
Posted by lizweston under Liz's Blog
[2] Comments
photo credit: Paula Perez
Something very cool happened recently that made me glad, once again, that I get to do what I do.
A young woman I know through mutual friends asked me if I was the Liz Weston who wrote for MSN. When I said yes, she said my column “Steps you must take when someone dies” was helpful to her and her husband when his mom died six months ago.
She said the column provided the checklist they needed to tackle all the responsibilities they faced in settling the mother-in-law’s estate.
Furthermore, she said, the experience convinced her to talk to her own parents about the arrangements they’d made to deal with incapacity and death. Her parents had tried to talk to her about these issues before, but she’d always brushed them off, fearful of even listening to what they wanted to say.
Rationally, we know that talking about death won’t cause it to occur. But a lot of us hate to think about losing our parents. Still, knowing some details about your parents’ arrangements and finances can help enormously when the time comes that they die or you need to take over for them.
By overcoming her reluctance, my new friend was able to talk with her parents, put their minds at ease and create a binder filled with the information she would need if they became incapacitated or died.
Among the things it can be helpful to know:
- Have your parents named someone to make medical and financial decisions for them, if they’re unable to do so for themselves? Who have they named, and have they formalized those choices by having powers of attorney drawn up? Having access to those documents can be critical in an emergency, so knowing where they’re kept and which attorney drafted them is important.
- Have they discussed what kind of measures they want taken if they’re incapacitated? Some people would want every means necessary to be taken to stay alive as long as possible, while others would want to limit heroic measures.
- Do they have long-term care insurance or a way to pay for nursing home or home care if they need it? Medicare doesn’t cover such costs, and Medicaid pays for nursing home care only for the poor. If your parents don’t have long-term care insurance or substantial savings, you may want to encourage them to meet with an elder law attorney to discuss their alternatives.
- Do they have a will or living trust? If so, where is it kept?
- Do they have a plan for distributing valuable and/or sentimental objects? Talking about inheritances can be an explosive topic in many families, but often parents can head off disputes by making it clear in advance who gets what.
For more on this topic, please read:
Mon 17 Aug 2009
Dear Liz: When you create a will and appoint someone to be the guardian of your children, must that person be present to sign legal documents accepting the job? And can that person later change his or her mind?
Answer: The person you name to be the guardian of your children does not have to be present when you create your will or other estate-planning documents.
But you better make darn sure that you have the potential guardian’s willing consent.
Taking care of someone else’s children is a huge responsibility, and not one that should be taken, or given, lightly. You’ll want to have a full and frank discussion with this person in advance, including what financial arrangements you’re making to take care of your children should you die while they’re minors.
Even if the person consents, understand that nothing is written in stone. Should you die, the person still could change his or her mind and decline the job. That is one of the reasons why you’ll want to name at least one back-up person in case your first choice can’t or won’t serve.
Also, many attorneys would advise you to name one partner in a couple as primary guardian, rather than both parties. If the couple later splits up or one dies, you don’t want any confusion about who you wanted to take care of your kids.
As difficult as these discussions and choices can be, you should make the effort. If you don’t name a guardian, they could wind up at the center of a bitter court battle, or in foster care. Your kids deserve better.
Mon 7 Mar 2005
Posted by lizweston under Estate planning, Q&A with Liz
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Dear Liz: I don’t have a question, but I want to share a personal experience that may help illustrate why people should make an estate plan.
My father died in 1982 and left my mother quite well off. Two years later, my mother remarried, sold the family farm and used the cash to build a nice home in a resort area. Two years after that, she died and my stepfather inherited her entire estate, including the nice new house.
I don’t believe either my father or my mother would have wanted this man to inherit everything instead of their children. I hope my experience may help parents to do much more diligent planning on behalf of their children, and perhaps even help children ask important questions before it’s too late.
A: Your situation is all too common. Although there’s a possibility that your parents ultimately didn’t want you to inherit, the more likely explanation is that they simply put off estate planning.
When you don’t have a will or a living trust, the rules of the state where you die dictate who gets what, and often the surviving spouse gets everything. If that’s not the outcome you want, you need to take steps now to make sure your wishes are honored.
Mon 3 Jan 2005
Posted by lizweston under Estate planning, Q&A with Liz
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Dear Liz: I’m an insurance professional responding to the reader who despaired because her husband’s parents refused to do any estate planning for their business, which her husband runs for them. If the parents have any kind of a competent life insurance agent, the agent has probably been talking to them about these estate-planning and business succession problems for a long time.
It’s entirely possible the parents have already completed the estate planning but chose not to tell their son and daughter-in-law. This is very common, especially if they don’t like the daughter-in-law or if there is marital discord. The parents also may not care whether the business continues or may plan to sell the business when they retire and let the son fend for himself.
A: If the parents are secretly planning to sell the business — either when they retire or at their deaths — they’re contemplating the one course of action that may be even more unfair than having no plan at all.
Assuming the sale wouldn’t generate enough cash for the son to retire, he would face the daunting task of starting his work life over again at middle age. If he’s devoted all of his energies to running the business, he may not have the contacts or the skills to make an easy transition.
If the parents were honest about their plans, he might have time to adequately prepare. Those preparations could, of course, involve leaving the family business — which is the outcome such secretive parents may be trying to avoid.
All this only underscores how right the daughter-in-law is to worry when no clear succession or estate plans have been announced.
Here’s another perspective:
Dear Liz: As a certified public accountant, I have seen so many miserable scenarios of unnecessary expense and chaos that result from people’s reluctance to plan for their deaths. Business owners can sometimes put off talking to the lawyer, but they usually have to talk to the accountant, since taxes need to be filed. The son could enlist the accountant to help put the facts to the elderly parents. The accountant will be able to show a pretty grim picture of what could be in store for the heirs and possibly the surviving spouse of the current owner. The son needs to act, since this situation can only get worse.
A: That’s an excellent suggestion. Many times a trusted third party can jump-start estate-planning discussions that have been stalled by family tensions, control issues, denial or simple procrastination.
And here’s one more thought:
Dear Liz: You recently had a query about how to deal with estate planning when a small-business owner is not yet ready to even consider succession. In our area, two universities have family business programs that can help with such issues, along with other topics specific to family-owned businesses. Other universities around the country have similar resources. In addition, the son could hire a consultant who specializes in family businesses so that estate and succession planning are handled to benefit the owners as well as the successors.
A: Indeed, there are more than 100 such centers in the U.S. alone and dozens of others worldwide, according to the Family Firm Institute, a nonprofit membership association of family business programs, educators and advisors. Family business owners and members can find programs and consultants by visiting the institute at http://www.ffi.org or by calling (617) 482-3045.
