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Estate Plan

Declare Your Independence from Court Interference!

While the rest of the nation celebrates its independence on July 4th, you can rest assured that you too can declare independence for your family — from court interference.  Life can be unpredictable.  Whether it is a financial issue, the birth or adoption of a child, sickness or incapacity, it is important to be prepared with proper estate planning.  In fact, failure to put together a comprehensive estate plan can leave you and your loved ones at the mercy of the court when it comes to distributing assets or caring for a minor or sick family member.

Estate Planning Basics

Simply put, estate planning addresses how to manage your property in the event of your death or incapacity.  Some estate planning tools you have likely heard of before include last will and testaments, living wills, trusts, powers of attorney, and healthcare directive.  Estate planning is a great method not only to plan your family’s financial security, but to use tools to keep your family’s personal business outside of the courtroom.

Avoiding Probate

When someone passes away without a will it is referred to as being intestate.  A person who dies intestate will have his or her assets distributed according to local intestacy rules.  Probate is the legal mechanism by which your assets are distributed upon your death.  The process of probate takes time, costs money, and can be a hassle and burden for the family you left behind.  One important estate planning tool that will help avoid a drawn out legal process includes a fully funded trust with up-to-date beneficiary designations.  By having a fully funded trust and/or up-to-date beneficiary designations when you die, there are no assets in your estate, and therefore no need for probate.

Death is not the only time a court may become involved in your and your family’s personal lives.  The court may also intervene in the event you become incapacitated.  The court may appoint a guardian or conservator to handle your personal and financial matters, essentially pushing out your loved ones and stripping their ability to help and make important decisions on your behalf.  There are several estate planning tools that can help you determine who you want to be in charge should you become incapacitated.  These include using a power of attorney, a fully funded trust, as well as a healthcare directive to appoint and give instructions to those you trust to make these difficult decisions for you when you need it most.

Protecting Your Loved Ones

Another important benefit of a solid estate plan is protecting those who are most precious to you — your minor children.  It is important to understand that simply naming guardians in your will for any minor children you may have is not enough in and of itself.  While a will does ensure your children will be properly cared for in the long-term, often there are significant lapses of time from when the need arises to care for your children and when your wishes are actually carried out.  Making sure your estate plan accounts for this gap is vital in preventing the state from taking over and allowing someone you do not want to raise your children from having a chance to take control of their lives and inheritance.

Declare Your Family’s Independence

There are many moving parts to a concise estate plan that must be considered in order to properly protect yourself and your loved ones.  An estate planning attorney can explain your options under applicable law and craft a plan that best suits your family’s needs.  There is no need to wait and leave your family’s future to chance.  Contact us today so we can get you on the road to independence.

How That “Simple” Fix Can Really Cost You and Your Family

Joint Tenancy Pitfalls: The ‘Simple’ Fix that Can Leave Your Family Broke

There are many ways to own your assets.  When you die, it is only natural that you want your family to share in the bounty of your hard work.  As a way to simplify the transfer process and avoid probate, you may be tempted to add a child or other relative to the deed or bank account utilizing the ownership type of joint tenancy with right of survivorship (JTwROS).  However, while this type of ownership delivers a lot of potential benefits, it may also be masking some dangerous pitfalls.

Under JTwROS, when one owner dies, the other owner(s) inherit the deceased owner’s share of the property proportionately.  Its benefits are specific: ownership is transferred automatically without entering probate.  Because the property is transferred outside of probate, it is possible to keep this inheritance out of the clutches of creditors of your estate.  On the surface, this seems like a smart way to streamline the inheritance process, sidestep creditor baggage, and bureaucratic charges.  But the risks may outweigh the benefits.

You May Pay the Price

One of the main problems with JTwROS is that when you enter into this kind of agreement, you open yourself up to additional liability.  When you agree to a JTwROS, you put your assets on the hook for the other owners’ creditors, ex-spouses and flights of fancy.

Another problem with JTwROS, as it relates to real estate, is that there are now multiple owners of the property.  You must now get the approval of the other owners if you would like to mortgage, refinance, transfer, or sell the property.  It does not matter if you are the only one who is occupying the property or paying the expenses, by adding additional people as owners, you are giving away control.

With respect to any bank accounts, once you add an additional owner, that individual, as an owner, has the right to go to the bank and withdraw whatever money is in the account.  The bank is merely going to make sure that the individual is listed on the account and will freely turn over your money to him or her.  If a joint owner’s creditor serves the bank with a garnishment order, they can also seize the money in the account, even if the joint owner was only added to help avoid probate.

Disinheriting Loved Ones

While JTwROS can have some impacts on you, it can also disrupt your estate plans because instead of property getting handed down, it’s handed over.  For example, if someone with children remarries and a new spouse is added to the deed as a joint tenant, that new spouse will inherit the property, not the kids or grandkids.  Because there’s a new spouse involved, the new spouse’s family will then be the ones to inherit upon his or her death, leaving the whole ‘branch’ of the original family may be disinherited—and not always intentionally!

Questions?  Give Us a Call

Although there are some advantages to a JTwROS, don’t let simplicity or speed be your only measures.  Call or contact us so we can discussing all of your options and tailor a solution that will best fit your needs.