Estate Planning Horrors

Formal estate planning laws have been around long enough, that if something bad can happen it likely already has.

In estate planning, there is very rarely anything truly new and unique. When people make estate planning mistakes, they are likely just repeating mistakes other people have previously made.

The annals of estate planning law are full of bizarre stories and the mistakes that people have made. If you think something your family goes through in estate planning or estate administration is unique, you are most likely wrong.

If you want to know how wrong, then you should watch a recent video by The Motley Fool “Haunt You Heirs From Beyond the Grave — With These Horrifying Estate Planning Errors and Oddities,” or read the transcript.

The stories include such things as a will being written on the bumper of a tractor which had to be removed and submitted to the court, so the will could be administered. That is probably not even the most unusual place wills have been written.

Another story includes a request to freeze the head of the deceased.

Most estate planning mistakes are not quite that strange. They are mundane.

The biggest mistake is just not planning at all.

If you would like to avoid repeating the mistakes people have made in the past, then you can easily do so.

All you need to do is to get the assistance of an estate planning attorney who has the knowledge and experience to avoid the mistakes.

Reference: The Motley Fool (Nov. 3, 2017) “Haunt You Heirs From Beyond the Grave — With These Horrifying Estate Planning Errors and Oddities.”

Emergency Preparedness

To properly prepare for an emergency, you need to do more than stock up on drinking water and food. You also need to make sure that your financial and estate planning documents are safe.

It has been a terrible past few months for disasters in the U.S. Powerful hurricanes have hit Texas, Florida and Puerto Rico. Forest fires have ravaged parts of California.

Millions of people are still trying to pick up the pieces and get back to their normal lives. It will be a long time before they are able to do so.

The most unfortunate will never be able to get back to normal since they did not survive, or they have lost loved ones to the disasters.

While it is impossible to avoid natural disasters, you can be prepared for one, as the Napa Valley Register discusses in “Your emergency financial first aid kit.”

Preparing for an emergency means you need to do things such as make sure you have a supply of non-perishable food and drinking water.

You should also have plans for somewhere to go, in case you need to evacuate.

Most people understand that they need to do those things. What you might not think about is how to prepare financially.

In any emergency, it is possible you will lose your important financial and estate planning documents. A fire does not care if a document is a will or a three-year-old “to do” list that was never thrown away.

You can prepare to protect your important documents.

FEMA even offers a kit you can use that will make it easy to replace any lost or destroyed financial and estate planning documents.

Reference: Napa Valley Register (Nov. 5, 2017) “Your emergency financial first aid kit.”

Finances and Grey Marriage

Older Americans are increasingly getting remarried. Those who do need to understand what it means for their finances and estate plans.

So-called grey marriages are increasing in the U.S. These are marriages that occur when the new spouses are in their retirement years.

It is a good thing that so many people are finding love in their later years. However, too many of them are not adjusting their finances and estate plans to account for their new situations.

That can lead to consequences down the road, as the Pittsburgh Post-Gazette discusses in “Late-life marriages can be complicated by money matters.”

The first problem is with retirement savings.

People who are newly married do not usually want to sit at home and be frugal. They would prefer to have fun with their new spouses, which often means going out for dinner more often and going on more vacations.

Having more fun in retirement is a good thing. However, people need to plan for it. They need to make sure they have enough funds to continue to support themselves in retirement.

The second problem is with estate planning.

In grey marriages, the new spouses often have children and even grandchildren from previous marriages.

It is important to craft estate plans that take care of families from prior marriages, while at the same time making sure the new spouse has adequate means of support.

This can all be accomplished but it requires some planning. The new spouses must work together to make sure that both of their families get what they deserve.

Reference: Pittsburgh Post-Gazette (Nov. 6, 2017) “Late-life marriages can be complicated by money matters.”

Estate Planning Basics

If you have never done any estate planning, you should become familiar with the basic concepts.

It is important for everyone to do some estate planning. Not doing any planning, means you do not get a say in who gets your possessions after you pass away.

The courts will decide using statutes written by your state government. Getting started in planning is not always easy, because people do not have the basic information needed. recently wrote about some of those basics in “Now is the time to consider the basics of estate planning.”

The biggest things people need to know are what is involved with wills and trusts and how they differ.

A will is a formal written document you can use to establish how your property should be distributed after you pass away. Your will is submitted to court after your death and the court appoints someone to make sure what you want done is actually carried out. A will has no effect until after you pass away.

A “living” trust is different. It does take affect before you pass away. Trust documents create a legal entity into which you transfer your assets. After you pass away, the assets are then managed or distributed, according to the directions given in the trust document.

A trust does not ordinarily need to be submitted to court. If you have a will, you do not necessarily need a trust. However, if you have a trust you still need a will.

There is a lot more to estate planning, including additional basic information that you should know.

The best way to learn that information is to schedule an appointment with an estate planning attorney and to get started planning.

Reference: (Nov. 2, 2017) “Now is the time to consider the basics of estate planning.”

Anyone Can Sell Human Bodies

To save money on funeral expenses, some families give their loved ones’ bodies to groups promising to use them for science. The market is not well-regulated.

There is a large demand for human bodies. Medical researchers and students need them for a wide variety of purposes.

There are also a lot of willing donors to give up human remains for research purposes. This is because many families cannot afford to pay for constantly increasing funeral expenses.

Where there is demand for a service, someone will step in and provide it.

People can now give the remains of the dead to companies that will cremate a small portion of them to give to the families and sell the rest to researchers. This market is poorly regulated, as Reuters reports in “In the market for human bodies, almost anyone can sell the dead.”

Investigators have found many troubling problems with some of these companies.

The article details what was found at one company. Investigators discovered that the company was thawing a dead body outside using a garden hose. They also found cardboard boxes that had once held human remains stacked in a dumpster.

The ideal solution is to plan for your funeral and how to pay for it, at the same time that you create an estate plan.

Doing this takes the burden off of your family.

If that is not done, families should be certain that any donation of remains is made to a reputable company that will handle their loved ones with respect.

Reference: Reuters (Oct. 24, 2017) “In the market for human bodies, almost anyone can sell the dead.”

What Aging Parents Need

When parents are about to retire, they need to think about more than just finances and healthcare. They also need to have legal documents prepared, so that their children can help them when necessary.

Planning for retirement can be challenging.

People usually need to save a lot of money before they consider retiring. When that is done, they need to apply for Social Security and Medicare.

At the same time, these same people need to make arrangements for where they want to live during retirement, if they do not want to stay in the same place.

Many people seek their children’s assistance for some of these decisions. They assume that if anything else is needed when they retire, then their children will be able to help them.

However, planning for retirement is not quite done until an estate planning attorney is consulted.

Some fundamental legal documents need to be drafted as Gambit points out in “The legal needs of aging parents.”

Parents need to think about the legal ability of their children to take over for them, when necessary.

For example, the children need to be able to handle the parents’ finances and make medical decisions for the parents, if necessary.

Preparing for that goes beyond just making sure a child has the knowledge to do those things. The child also needs the legal authority.

That is where a visit to an estate planning attorney comes in.

The attorney can draw up a general durable power of attorney to give a child the legal authority to handle the finances, when necessary. The attorney can also draw up a health care power of attorney to give a child the legal authority to make medical decisions, when necessary.

Reference: Gambit (Oct. 30, 2017) “The legal needs of aging parents.”

Parents Should Explain Finances to Their Children

Parents are often very reluctant to discuss the parents’ financial situation with their grown children. It is important to do so for things to go smoothly later.

If you are a typical parent then you probably expect that your children will inherit your assets. You probably also expect that when you get older and are unable to handle everything for yourself, your children will assist you.

That is what happens in most families.

However, most families also make a pretty big mistake when it comes to these expectations. They assume the children will be able to step in immediately and take over for the parents having little or no prior knowledge about any details.

This can lead to big problems, which is why parents should talk to the adult children about the finances as TC Palm discusses in “Acquaint grown children with your financial affairs.”

You do not need to tell your adult children every last little detail about your finances.

Nevertheless, they need to know enough so that they can take over with few problems.

They certainly need to know where to look for details regarding your assets. While you are at it, make sure your children are familiar with financial concepts that they might not know.

What do they know about basic “financial planning”?

One great way to make things easier for your children is to get an estate plan. Going through that process can give you an idea of what you need to let your children know.

Reference: TC Palm (Oct. 30, 2017) “Acquaint grown children with your financial affairs.”

Common Marriage and Estate Planning

Courts in many states today are reviving the old concept of common law marriage. However, not every state is which creates the need for estate planning for couples who consider themselves to be common law spouses.

In most states, the idea of common law marriage has been abolished for a long time. Only a small number of states recognized the concept until recently.

Courts in some states are beginning to recognize these marriages again.

Why? Probably because more couples are choosing to live together for long periods of time and acting like married couples, despite never making it “official” through the process of formally getting married.

By recognizing the existence of a common law marriage, the courts are then able to treat the couple as they saw themselves when it comes to divorcing or settling an estate.

Not all states will recognize these marriages though as the Wills, Trusts & Estate Prof Blog points out in “Why Common Law Couples Need an Estate Plan (New York).”

What makes a valid common law marriage varies from state to state.

Normally, if the couple holds itself out to the public as married or tells a government agency that they are married, then a common law marriage exists. For example, if the couple files a joint tax return with the IRS, then the existence of a common law marriage will be recognized in those states that allow them and the couple will be in trouble with the IRS in other states.

Since not all states recognize common law marriages, it is important that you understand that you will still need an estate plan to protect your common law spouse’s interests in some states.

Even if you act like you are married, you are not actually “married” in most states and you need to account for that in your planning.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 25, 2017) “Why Common Law Couples Need an Estate Plan (New York).”

Little Things That Cause Estate Problems

When families fight over estates, it is not always over things of great importance. They often fight over the little things.

Much of the discussion about how to avoid family feuds over estates focuses on major items. The focus is on making sure that everyone gets his or her fair share of the estate’s wealth, so they will be satisfied and not challenge the estate.

That is an important discussion, but little items of personal property can also be a problem, as CNBC discusses in “7 Ways that cheap Tweety Bird figurine can screw up your estate.”

Potential problems include:

• Items that do not have great monetary value can still have great sentimental value to family members. If two people want the same item, it can be difficult to resolve that dispute.

• Do not tell anyone verbally they can have a piece of personal property without putting that in writing in your estate plan. If other people want the same item, the person you want to have it will have no way of proving that you said they could have it.

• Do not just let your family divide all your assets between themselves when you pass away. It is most likely that they will fight over who gets what.

• Even if you have given someone access to a safety deposit box and told them they can have the contents after you pass away, you still need to make that official in your estate plan.

• Make sure that any unusual items have been planned for, such as digital media accounts and frequent flyer rewards.

• Items regulated by the government can be complicated. You should plan accordingly.

• Your executor will need to have the authority to change the locks on your door. You would be surprised how often people simply walk in and help themselves to items that they want.

Reference: CNBC (Oct. 10, 2017) “7 Ways that cheap Tweety Bird figurine can screw up your estate.”

Protect Your Greatest Asset

Estate planning is about more than just figuring out what happens to your possessions when you pass away. It is also about what happens to your family.

When people think about estate planning, they normally think about possessions and money. They think that estate planning is all about deciding who gets what possessions and who will inherit their money.

For some people, this is not something that they care about too much. They think it is of no importance to them what happens to their money. After all, they will not be around to spend it or to see who does, so why bother with it too much?

Estate planning, however, is about much more than that, as NJ Biz recently discussed in “Why haven’t you protected your greatest asset?”

The most important thing you have is your family, especially if you have minor children. Estate planning is about protecting them.

Yes, most of the focus is on possessions and money. However, the point of estate planning is to decide the best way to leave your possessions and money to your family.

It is about making sure that your family is cared for after you pass away.

When you plan your estate, you can make sure that your assets can be used by your family to meet its needs.

If you have minor children, then estate planning is also about making sure that a responsible person takes care of them and handles the assets for the children, until they are old enough to do so for themselves.

You need to plan for your family.

Think about them as the reason for estate planning, instead of just thinking about it as a way to deal with your possessions and money.

Reference: NJ Biz (Oct. 9, 2017) “Why haven’t you protected your greatest asset?”