EP Update

How to Minimize Legal Fees After Death

Death is a costly business. Aside from funeral expenses, legal fees can take a big chunk out of how much is left for your loved ones after you’re gone.

But it doesn’t have to be this way. Careful planning can minimize the legal fees your loved ones will pay after you die. Here’s how:

Make an estate plan – The cost of creating an estate plan will be far less than the legal fees your loved ones will have to pay if you don’t have one. But be careful – don’t try to write your own will or revocable living trust. Do-it-yourself or online plans often fail to include valuable cost, tax, and legal fee saving opportunities. You need the advice and assistance of an experienced estate planning attorney to create an estate plan that will work when it’s needed and minimize legal fees after your death.
Maintain your estate plan – Once you’ve created your estate plan, don’t stick it in a drawer and forget about it. Instead, fine tune your plan as your life and your finances change. Otherwise, when your plan is needed, it will be stale and out of date and will cost your beneficiaries time and legal fees to fix it. In a worst case scenario, a stale plan could lead to expensive and emotionally draining litigation between your family members. Regular maintenance of your estate plan makes it easier to carry out when needed.
Have a debt plan – Make a plan for paying off your debts and taxes after you die. This should include setting aside funds that your loved ones will have easy access to (for example, set up a joint bank account or a payable on death account) so that they won’t have to use their own assets to pay your bills until your will can be probated or the successor trustee of your trust can be appointed. If your estate is taxable, then make sure you have enough assets that can be easily liquidated to pay the estate tax bill. Life insurance can be another option for providing easy access to cash and paying estate taxes, but it’s important that you align your life insurance plan with your estate plan to get the maximum benefit.
Let your loved ones know where your estate plan and other important documents are located – If your loved ones don’t know where to find your health care directive, durable power of attorney, will, or revocable living trust, then their hands will be tied if you become incapacitated or die. While you don’t need to tell your loved ones what your estate plan says, at the very least you should tell someone you trust where your estate plan and other important documents are being stored. You should also make a list of the passwords for your computer and accounts you manage online and a contact list for all of your key advisors (such as your attorney, accountant, life insurance agent, financial advisor, banker, and religious advisor).

Following these practical tips will save your family valuable time and money during a difficult time.

Which Life Events Require an Immediate Estate Plan Update?

Estate planning is the process of developing a strategy for the care and management of your estate if you become incapacitated or upon your death. One commonly known purpose of estate planning is to minimize taxes and costs, including taxes imposed on gifts, estates, generation skipping transfer and probate court costs. However, your plan must also name someone who will make medical and financial decisions for you if you cannot make decisions for yourself. You also need to consider how to leave your property and assets while considering your family’s circumstances and needs.

Since your family’s needs and circumstances are constantly changing, so too must your estate plan. Your plan must be updated when certain life changes occur. These include, but are not limited to: marriage, the birth or adoption of a new family member, divorce, the death of a loved one, a significant change in assets, and a move to a new state or country.

Marriage: it is not uncommon for estate planning to be the last item on the list when a couple is about to be married – whether for the first time or not. On the contrary, marriage is an essential time to update an estate plan. You probably have already thought about updating emergency contacts and adding your spouse to existing health and insurance policies. There is another important reason to update an estate plan upon marriage. In the event of death, your money and assets may not automatically go to your spouse, especially if you have children of a prior marriage, a prenuptial agreement, or if your assets are jointly owned with someone else (like a sibling, parent, or other family member). A comprehensive estate review can ensure you and your new spouse can rest easy.

Birth or adoption of children or grandchildren: when a new baby arrives it seems like everything changes – and so should your estate plan. For example, your trust may not “automatically” include your new child, depending on how it is written. So, it is always a good idea to check and add the new child as a beneficiary. As the children (or grandchildren) grow in age, your estate plan should adjust to ensure assets are distributed in a way that you deem proper. What seems like a good idea when your son or granddaughter is a four-year-old may no longer look like a good idea once their personality has developed and you know them as a 25-year-old college graduate, for example.

Divorce: some state and federal laws may remove a former spouse from an inheritance after the couple splits, however, this is not always the case, and it certainly should not be relied on as the foundation of your plan. After a divorce, you should immediately update beneficiary designations for all insurance policies and retirement accounts, any powers of attorney, and any existing health care proxy and HIPAA authorizations. It is also a good time to revamp your will and trust to make sure it does what you want (and likely leaves out your former spouse).

The death of a loved one: sometimes those who are named in your estate plan pass away. If an appointed guardian of your children dies, it is imperative to designate a new person. Likewise, if your chosen executor, health care proxy or designated power of attorney dies, new ones should be named right away.

Significant change in assets: whether it is a sudden salary increase, inheritance, or the purchase of a large asset these scenarios should prompt an adjustment an existing estate plan. The bigger the estate, the more likely there will be issues over the disposition of the assets after you are gone. For this reason, it is best to see what changes, if any, are needed after a significant increase (or decrease) in your assets.

A move to a new state or country: for most individuals, it is a good idea to obtain a new set of estate planning documents that clearly meet the new state’s legal requirements. Estate planning for Americans living abroad or those who have assets located in numerous countries is even more complicated and requires professional assistance. It is always a good idea to learn what you need to do to completely protect yourself and your family when you move to a new state or country. We are here to help you get fully settled in and build a plan to protect you and your family.

Is Your Estate Plan As Stale As Last Week’s Ham Sandwich? 5 Reasons to Update Your Estate Plan

Estate plans are almost magical: they allow you to maintain control of your assets, yet protect you should you become incapacitated. They take care of your family and pets. And, if carefully crafted, they reduce fees, taxes, stress, and time delays. Estate plans can even keep your family and financial affairs private. But one thing estate plans can’t do is update themselves.

Estate plans are written to reflect your situation at a specific point in time. While they have some flexibility, the bottom line is that our lives continually change and unfold in ways we might not have ever anticipated. Your plan needs to reflect those changes. If not, if will be as stale as last week’s ham sandwich and can fail miserably.

If anything in the following 5 categories has occurred in your life since you signed your estate planning documents, call us now to schedule a meeting. We’ll get you in ASAP to make sure you and your family get protected.

Marriage, Divorce, Death. Marriage, remarriage, divorce, and death all require substantial changes to an estate plan. Think of all the roles a spouse plays in our lives. We’ll need to evaluate beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney.
Change in Financial Status. A substantial change in financial status – positive or negative – generally requires an estate plan update. These changes can be the result of launching, winding down, or selling a business; business and professional success; filing bankruptcy; suffering medical crisis; retiring; receiving an inheritance; or, even winning the lottery.
Birth, Adoption, or Death of a Child / Grandchild. The birth or adoption of a child or grandchild may call for the creation of gifting trusts, 529 education plans, gifting plans, and UGMA / UTMA (Uniform Gifts to Minors Act / Uniform Transfers to Minors Act) accounts. We’ll also need to reevaluate beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney.
Change in Circumstances. Circumstances change. It’s a fact of life – and when you’re the beneficiary or fiduciary of an estate plan, those changes may warrant revisions to the plan. Common examples include:
- Children and grandchildren attain adulthood and are able to serve in trusted helper roles
- Relationships change and different trusted helpers need to be named
- Beneficiaries or trusted helpers develop overspending or drug / gambling habits
- Guardians, executors, or trustees are no longer able (or no longer wish) to serve in their preassigned roles
- Beneficiaries become disabled and need a special needs trust to receive government benefits
- Guardians for minor children divorce, move to a new state, or are, otherwise, no longer appropriate to serve
Changes in Venue. Moving from one state to another always warrants estate plan review as state’s laws differ. Changes may be needed to ensure that you’re taking full advantage of – and not being penalized by – your new state’s laws. This is also true when purchasing a second home outside of your state.

Estate Plans Are Created to Help, Not Hurt, You

Old estate plans get stale just like old sandwiches do. You wouldn’t rely on last week’s ham sandwich for lunch; please don’t rely on your estate plan from yesteryear. If you’ve experienced any of the changes we’ve mentioned in this article, it’s time to come in and chat. We’ll review your estate plan and make sure you and your loved ones are protected.

Dennis Hopper Saves Heirs with Last Minute Estate Plan Changes

Dennis Hopper, known for his role in Easy Rider, wanted to leave his fortune to his family. Well, not everyone in his family. Hopper made numerous estate planning changes in the last months of his life. His goal? To make sure his heirs shared his approximately $40 million in wealth and that his fifth, and current wife, Victoria, did not.

The 5^th Marriage Isn’t Always the Charm…

At least that was the case between Hopper and his fifth wife, Victoria Duffy-Hopper, who was six years younger than Hopper’s oldest daughter from a previous marriage. It’s a long and rather ugly story, so let’s just touch on the highlights:

Hopper divorces four times and has several children.

Hopper marries Duffy, who is younger than all of the above children, and they have a daughter together.

Things go bad. Hopper files for divorce, accusing Duffy of being insane, inhuman, and volatile. He obtains a restraining order against her, but she refuses to move out of the home.

Things get worse. Victoria responds by claiming that Dennis is not mentally competent. She alleges that his adult children from his prior marriages improperly influenced him to file for divorce and suggested that he change his estate plan. She claims their motive was to cut Victoria out of his estate as well as the couple’s six-year-old daughter.

Hopper, at age 73, dies of cancer while all of this was happening.

Although Hopper died before this ordeal was over, he did some very smart things during the divorce process to ensure that his children received the bulk of his wealth. What he did applies to everyone.

Don’t Wait To Update Your Estate Plan!

Hopper made numerous changes to his estate planning documents instead of waiting for his divorce to be final. These included:

Changing his life insurance beneficiary designation

Making sure Duffy was not listed in his will or trust as a beneficiary

Verifying that his prenuptial agreement was in order

In the end, Duffy sued the estate for, well, everything and anything she could. When all was said and done, she settled with the estate, but for much less than she wanted. The majority of Hopper’s estate went where he wanted it to go – to his children. The lesson learned? Don’t wait to update your estate plan. Take action!

We Have the Tools and Advice You Need

It is imperative to update your estate plan documents when any significant or life changing events occur such as:

marriage

re-marriage

divorce

birth

adoption

income changes

circumstantial changes (to the health or wealth of loved ones)

change of state of residence

Even if you haven’t experienced anything “significant” since you last updated your estate plan, changes in the law (especially tax law) may make re-evaluating your estate plan a smart thing to do. We have the tools you need to make sure that your wishes are carried out after your death.

EP Update

Estate Plans Are Created to Help, Not Hurt, You

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