EP Update

Wondering Whether You Need to Update Your Estate Plan?

December 13, 2022 By Gratia P. Schoemakers, Esq. Leave a Comment

Yes, You Do, and Here’s Why

Please allow us to be frank. It’s unrealistic to think that a piece of paper you draft, reflecting your life at a certain time, will work when your life has completely changed some years later. We’ll use the Kendrick family as an example.

Meet the Kendricks

Meet Bill and Karen Kendrick. They got their first estate plan in place when their daughter, Jessica, was born 30 years ago. They updated it when their son Steve came along 4 years later. After attending one of our living trust seminars 10 years ago, they got a fantastic trust-based plan in place, protecting themselves, their children, their grandchildren, and their dog, Sadie.

Unfortunately, the Kendricks didn’t join our client maintenance program; instead, they elected to take responsibility for calling us for updates themselves. Life got busy and, as you might guess, they never called to update their documents.

Here’s what’s changed in their lives in the last 10 years.

Jessica and Steve are now adults and have graduated from college.
Jessica is married and has two daughters. One of the girls may have autism.
Steve is also married, and he and his wife are expecting their first child.
Karen’s mother is now living with Bill and Karen.
Bill and Karen bought a vacation home in Florida.
Sadie had a litter of puppies but has since passed away. Bill and Karen kept two of the puppies.

Do you think their estate plan will still work the way they want it to?

Changes in Your Own Life

The Kendricks have experienced a lot of changes, but those changes are typical of what 10 years brings. Think about the changes in your life over the past 10 years — or since you last updated your estate plan.

Have you moved? Do you have more children or grandchildren? Have you started a business, suffered health problems, or purchased a new home? Do you have new accounts and investments? Do you now care for a parent, pets, or dependent children? Have you remarried, gotten divorced, or retired? Has someone you loved died? Have friends or family named in your plan as trusted helpers moved away, or has your relationship changed? Are your children now adults and able to help you? Do you want to help with grandchildren’s college or dance lessons? Do you see the world in a different way?

Many things have happened in the past 10 years. Your estate plan needs to reflect the changes in your personal life, financial situation, and goals. There have also been changes in the law. We stay abreast of these changes to protect our clients in better and better ways, so the way we do things has changed.

Is Your Estate Plan Out of Date?

If you’ve experienced changes like the Kendricks, or it’s been more than 3 to 5 years since you updated your estate plan, it’s time to come in. We’ll review your plan and chat with you about what’s been happening in your life. We can get you and your estate plan up to date, reflecting where your life is now.

Big “Life Changes” Often Mean Big “Estate Plan Changes”

August 29, 2022 By Gratia P. Schoemakers, Esq. Leave a Comment

Many people who put together an estate plan do so when they start a family – assuming they put an estate plan together at all during their lifetime. While putting an estate plan together is a good thing to do, many people make few updates once the plan has been created, despite other key life events happening over the years. This is a major mistake that can place your hard-earned money and assets into a costly probate or into the wrong hands. To make sure you do not run into these issues and your wishes are followed in the event of your death or incapacity, below are nine life decisions or events that should get you thinking about updating — or creating — your estate plan right away.

Important Life Decisions

There are several important life decisions that you should factor into your estate plan. They include:

Getting married: Estate planning after tying the knot does not have to be complicated. Simply updating your beneficiary information, purchasing a life insurance policy, and updating emergency contact information are all things that should happen right away. You should also consider preparing a will and a living will. As your marriage progresses, it may make sense to consider a revocable trust as well. Having discussions with your spouse about how you want your estate to be managed depending on different scenarios is also important.
Getting divorced: While couples do not plan for divorce, many spouses go through this process. For many, the emotional toll and legal complexities of divorce can be overwhelming. Oftentimes estate planning is overshadowed by the divorce, resulting in unintended consequences. Making sure you make changes to your estate plan as soon as your divorce proceedings have been finalized will make sure your ex will not end up with the house, life insurance proceeds or other assets of yours.
Buying life insurance: These policies are present in virtually all estate plans and serve as a useful source of liquidity, education-expense coverage, and financial support for your family or loved ones. Make sure to list all beneficiaries under the policy and make sure to update them as time passes.
Buying a new home: When you purchase or refinance a home or other real estate, you should always make sure the asset is titled appropriately. If you use a trust, sometimes a lender will take a property out of a trust during a refinance. The key is to make sure your title furthers your goals.
Having a child: While adding another member to your family is an exciting time in your life, it is not an excuse to forget to update your estate plan. A new child necessitates major revisions to your estate plan. This not only affects who will inherit your estate upon your death but will also require you deciding who will be the guardian of your children if you should die before they become adults. As your child grows and matures — and more children are added — your estate plan will likely continue to change.
Starting a business: If you start a business or ownership interest changes in a current business, you need to understand what impact these changes have on your estate plan. Even more, there may be tax implications that could affect your heirs without proper planning ahead of time.
Death of a loved one: The passing away of someone listed in your will is often overlooked in estate planning. These individuals may be named guardians to your children, have an inheritance allocated to them, be designated as emergency contacts, or may be named as executors of your estate. Leaving the role vacant can have terrible unintended consequences and necessitates transitioning new people to fill the void left behind by your loved one’s death right away.
Moving to another state or country: When you change your residency from one state to another, you must review your estate plan to make sure it conforms with local laws. The same is true if you move to another country. Likewise, if you have property in more than one state or country, special attention must be paid to how those assets will be distributed according to your estate plan and applicable law.
Change in work benefits: Whether this happened through a promotion, demotion, or your employer just changed the benefits they offer, this could impact the type of amount of assets you have available. Look at your estate plan to see if your goals are still achievable or if you can do more with what you have.

Estate Planning Advice

Planning based on your life stages is important because your circumstances over the years will surely change. If you have any questions about estate planning — or have had to make a recent big decision in your life — contact us to learn more about your options.

Your Post-Honeymoon Legal Checklist

June 27, 2022 By Gratia P. Schoemakers, Esq. Leave a Comment

Your wedding is over, and the day was absolutely perfect. You went away on your honeymoon with your new spouse and had the time of your lives. Now you are back and can breathe a sigh of relief and watch the rest of the years ahead unfold before your eyes. Well, not so fast. Now that your honeymoon is over, there are several things you should be mindful of to make sure that the legal and financial parts of your life properly reflect your newly married status.

What To Do After the Honeymoon

As you start living happily ever after, make sure to attend to these post-honeymoon to-dos during the first few days (or even weeks) after your wedding. This will help you enjoy the memories of your wedding and honeymoon for years to come. The following checklist can serve as a reminder of some, but not all, of the tasks to which you should give your immediate attention:

In addition to the above, if you decide to legally change your name make sure to notify the following institutions:

Meet with a knowledgeable estate planning attorney to discuss the creation of a will or trust, or to update one from before you got married;
Review and update your medical proxy documents and provide copies to your necessary doctors’ offices;
Check and update beneficiary designations on any life insurance policies, 401(k)s, IRAs, annuities, and other investment accounts;
Seek advice from your tax preparer about whether or not you should adjust your with holdings to reflect your new marital status;
Obtain life insurance, if you do not already have coverage, and designate a beneficiary and a contingent beneficiary;
If you have or are planning to move, notify your auto insurer, banks, employer, and anyone else of your new address;
Add your spouse to your group health and/or dental insurance policy, if necessary; and
Change ownership of real property, if you choose to, to reflect your marital status;

Schools;
Employer(s);
Department of Motor Vehicles;
Creditors and debtors;
Social Security Administration;
Passport office;
Insurance agencies;
State taxing authorities;
Telephone and utility companies;
Banks and financial institutions;
Government benefit office.

Contact an Experienced Estate Planning Attorney

We are here to help guide you through the estate planning process and to make sure that the financial and legal aspects of your life correctly match your new marital status. Call or contact us today to learn about how we can help you enjoy your wedded bliss with financial and legal security.

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

June 14, 2022 By Gratia P. Schoemakers, Esq. Leave a Comment

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, it will be as stale as last week’s ham sandwich and may fail miserably when needed the most.

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 are still 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 a 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 (successor trustee, executor/personal representative, and agent under powers of attorney)
- 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 previously assigned 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 an estate plan review, as states’ 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, call or contact us today. We’ll review your estate plan and make sure you and your loved ones are protected.

Your Estate Planning Binder: Tips for Proper Care and Maintenance

May 16, 2022 By Gratia P. Schoemakers, Esq. Leave a Comment

You finally crossed “getting your estate plan done” off your list, and you’ve (rightly) breathed a huge sigh of relief. By tackling this challenge, you’ve not only established protections for your loved ones and legacy, but you’ve also freed up some important “mental space” that had previously been preoccupied.

Once you create the documents that make up your estate plan, your estate planning attorney will prepare a binder containing all pertinent documentation. This estate planning binder is critical because it provides key information regarding your intentions after you pass away or if you become incapacitated. Once your trust is fully funded, your binder should also contain information about your assets. This makes administration easier for your family. This binder should be stored safely, reviewed regularly, and updated, when necessary, in order to avoid confusion when your loved ones need to refer to it.

Before we get into the nuts and bolts about how to complete this review process – to help you stay in control now that you’re there – let’s first take a step back and clarify a point that confuses many clients. Your estate plans and your financial plans for the future are two completely different things. They are both obviously important, and they both should be kept in a safe place and reviewed often. However, the estate planning binder has special importance because it contains your wishes and instructions for what should happen if you become incapacitated and when you die… as well as who should be in charge of what at those times. But this binder is not the same thing as your financial plan. Your financial plan is a comprehensive plan of the assets you have now (and the assets you may need in the future) to help you achieve your goals in life.

Where to Keep Your Estate Planning Binder

Your estate planning binder should be kept in a safe place along with your other important financial information. We recommend keeping it secured in a safe deposit box at your local bank or in a fireproof strong box if you keep the documents at home. You can make photocopies or scans of the documentation for your own use if you wish to refer to them more frequently or have them as a backup. Remember though, the original documents have legal significance, so don’t create a situation where your family is forced to attempt to rely on copies – you need to safeguard your originals!

Who Should Have Access to the Binder?

You obviously have discretion regarding who can access your personal financial information. However, strongly consider retaining direct access yourself until circumstances require someone else to step in to take control. If you keep the binder in a safe deposit box, for example, you could keep a spare key in your home or office and notify your attorney, next of kin, or successor trustee as to the key’s location in case they need to use it. Talk to your bank about what limited access rights to the safe deposit box might be available.

How Often to Review Or Update Your Binder?

Your financial situation is likely to change over time – and perhaps more critically, other powerful and unexpected life events can shift your priorities and necessitate an adjustment to your plan.

For instance, the death of a spouse or life partner, a new marriage, an illness or accident that affects your child’s future, a sudden job loss or the surprising success of a business venture that you’ve plugged away at for years, or even a spiritual epiphany can reshuffle what’s important to you.

These events can also limit or constrain what’s possible for your future. Without renegotiating these commitments in a conscious way, you’ll likely feel intangible unease about them. The moral is that your binder should be reviewed periodically and updated to reflect the changes that happen in your life.

As a rule of thumb, we recommend reviewing your estate plan as follows:

A quick review once a year
A thorough review every 3-5 years to ensure the documents reflect your current finances and intentions
Any time you experience a significant increase or decrease in income or wealth
Any time you experience a major life change, such as a birth, marriage, or death in the family
Any time you consider a change in who you want to benefit from your estate plan

Keeping your estate planning binder secure and up to date will reduce confusion and likelihood of disputes when others need to enact your wishes for your estate. As always, we are here to help. For peace of mind, call or contact us to review or amend your current plan.

Just Like You Need a Medical Checkup, Your Estate Plan Needs a Checkup!

December 18, 2020 By Gratia P. Schoemakers, Esq. Leave a Comment

Whether or not you currently have estate planning documents, one important item to add to your calendar is getting an estate plan checkup.

Don’t Have an Estate Plan?

If you don’t already have an estate plan, then getting one in place should be at the top of your to-do list.

Why? Because without an estate plan, you and your property may end up in a court-supervised guardianship if you become incapacitated, and your property and your loved ones may end up in a time-consuming and expensive probate proceedings after you die.

Worse yet, if you don’t take the time to have any estate planning done, then the state where you live at the time of your death will essentially write one for you. It most likely won’t divvy up your property the way you would have and certainly will not protect your heirs the way you would.

A common misconception is that estate planning is only necessary for wealthy people. But this simply isn’t true – anyone with a bank or retirement account, a home, or a family needs to make a plan for what happens if they become incapacitated or when they die. Of course, the complexity of the plan will vary depending on your circumstances, but all estate plans should be put together with the help of an attorney who is experienced with the legal formalities required to create a valid will, trust, health care directive, and power of attorney in your state.

How Old Is Your Estate Plan?

Do you already have an estate plan?

If you do, then please pull your documents out of the drawer, dust them off, and look at the date you signed them.

Were your documents signed in the 80s or 90s, or, worse yet, before 1980? If so, please run, don’t walk, to an estate planning attorney, because your documents are terribly out of date and need to be updated as soon as possible.

Did you sign your documents between 2000 and 2009? Aside from the federal estate tax exemption jumping from $675,000 to $3,500,000 during that time period, state estate taxes disappeared in many states. Because of the significant changes in federal and state estate taxes, documents from this time period may be out of date and need to be tweaked in some shape or form.

Did you sign your documents between 2010 and 2017? Federal estate taxes, gift taxes, and generation-skipping transfer taxes went through major changes during these years, and “portability” of the federal estate tax exemption between married couples was introduced. Unfortunately, while your estate planning documents may only be a few years old, they very likely do not take advantage of the opportunities made available from recent changes in federal tax laws. And, it’s not just tax laws that are changing – modifications to state laws governing wills, trusts, health care directives, and powers of attorney may warrant some revisions to your estate planning documents as well.

And last but not least, regardless of what year you signed your estate planning documents, think about all of the changes in your life since you signed them. Did you get married or divorced, have a child or two or a grandchild or two, or move to a new state? Did you sell your business, retire, have a significant change in assets, or win the lottery? Any major changes in your family or financial situation will certainly have an affect on your estate plan.

Estate Planning Is Not a One Shot Deal

Estate planning is not a static event that you can grudgingly do once and then forget about it. On the contrary, estate planning is a continuing process, because life is a moving target that is full of constant change: Your estate plan needs to change as your life changes.

We are here to help you navigate the changes that have occurred since you had your estate plan prepared and ensure your wishes are still being carried out as you envisioned. For those needing an estate plan, we are here now and in the future to mold your estate plan as you move through the various stages of life.

Call or contact our office today or schedule your personal Estate Planning consultation NOW. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.