What If Grandma Didn’t Have a Will and Died from COVID-19?

The latest report shows about 1.87 million reported cases and at least 108,000 COVID-19-related deaths were reported in the U.S., according to data released by Johns Hopkins University and Medicine.

Here’s a question that is being asked a lot these days: What happens if someone dies “intestate,” or without having established a will or estate plans?

If you die without a will in California and many other states, your assets will go to your closest relatives under state “intestate succession” statutes.

Yahoo Finance’s recent article entitled “My loved one died without a will – now what?” explains that there are laws in each state that will dictate what happens, if you die without a will.

In Pennsylvania, the laws list the order of who receives upon your death, if you die without a will: your spouse, your children, and then your parents (if still alive), your siblings, and then on down the line to cousins, aunts and uncles, and the like. Typically, first on every state’s list is the spouse and the children.

You may also have some valuable assets that will not pass via your will and aren’t affected by your state’s intestate succession laws. Here are some of the common ones:

  • Any property that you’ve transferred to a living trust
  • Your life insurance proceeds
  • Funds in an IRA, 401(k), or other retirement accounts
  • Any securities held in a transfer-on-death account
  • A payable-on-death bank account
  • Your vehicles held by transfer-on-death registration; or
  • Property you own with someone else in joint tenancy or as community property with the right of survivorship.

These types of assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will.

It’s quite unusual for the government to claim a deceased person’s estate. While it might be allowed in some states, it’s considered a last resort. Typically, we all have some relatives.

If you have a loved one who has died without a will, speak with an experienced estate planning attorney about your next steps.

Reference: Yahoo Finance (June 1, 2020) “My loved one died without a will – now what?”

What You Need to Do after a Loved One Dies

The Dallas Morning News’ recent article entitled “Three things to do on the death of a loved one” explains the steps you should take if you are responsible for a family member’s assets after they die.

Be sure the property is secured. A deceased person’s property becomes a risk in some instances. Friends and family will help themselves to what they think they should get, including the deceased’s personal property. Once it is gone, it is hard to get it back and into the hands of the individual who’s legally entitled to receive it.

Criminals also look at the obituaries and while everyone is at the funeral or otherwise unoccupied, burglars can break into the house and steal property. Assign security or ask someone to stay at the house to protect the property. You can also change the locks. Credit cards, debit cards, and checks need to be protected. The deceased’s mail must be collected, and cars should be locked up.

Make funeral plans. If you’re lucky, the deceased left a written Appointment of Burial Agent with detailed instructions, which can make your job much easier.

For example, Texas law lets a person appoint an agent to be in charge of funeral arrangements and to describe the arrangements. An estate planning attorney can  draft this document as part of an estate plan. You should see if this document was included. If you’re listed as the agent, present the paper to the funeral home and follow the instructions. If there are no written instructions, the law will say who has the authority to make arrangements for the disposition of the body and to plan the funeral.

Talk to an experienced attorney. When a person dies, there is often a lapse in authority. The decedent’s power of attorney is no longer in effect, and the executor designated in the will doesn’t have any authority to act, until the will is admitted to probate and the executor is appointed by the probate judge and qualifies by taking the oath of office and filing a bond, if required. Direction is needed earlier rather than later, on what you’re permitted to do. The probate of a will takes time.

It is best to get started promptly, so that there’s an executor in place with power to handle the affairs of the decedent.

Reference: Dallas Morning News (April 10, 2020) “Three things to do on the death of a loved one”

 

Do I Need an Estate Plan with a New Child in the Family?

When a child is born or adopted, the parents are excited to think about what lies ahead. However, in addition to all the other new-parent tasks on the list, parents must also address a more depressing task, making an estate plan with a new child in the family.  When a child comes into the picture, it’s important for new parents to take the responsible step of making a plan, says Motley Fool’s recent article entitled “As a New Parent, I Took These 3 Estate Planning Steps.”

Life insurance. To be certain that there’s money available for your child’s care and to fund a college education, parents can buy life insurance. You can purchase a term life insurance policy that’s less expensive than a whole-life policy and you’ll only need the coverage until the child is grown.

Create a will. A will does more than just let you direct who should inherit if you die. It gives you control over what happens to the money you leave to your child. If you were to pass and he wasn’t yet an adult, someone would need to manage the money left to him or her. If you don’t have a will, the court may name a guardian for the funds, and the child might inherit with no strings attached at 18. How many 18-year-olds are capable of managing money that’s designed to help them in the future?

Speak to an experienced estate planning lawyer to get help making sure your will is valid and that you’re taking a smart approach to protecting your child’s inheritance.

Designate a guardian. If you don’t name an individual to serve as your child’s guardian, a custody fight could happen. As a result, a judge may decide who will raise your children. Be sure that you name someone so your child is cared for by people you’ve selected not someone a judge assigns. Have your attorney make provisions in your will to name a guardian, in case something should happen. This is one step as a new parent that’s critical. Be sure to speak with whomever you’re asking to be your child’s guardian and make sure he or she is okay with raising your children if you can’t.

Estate planning may not be exciting but it’s essential for parents.  Contact a qualified estate planning attorney to create a complete estate plan to help your new family.

Reference: Motley Fool (Feb. 23, 2020) “As a New Parent, I Took These 3 Estate Planning Steps”

 

What if I Don’t Have a Will in the Pandemic?

Forbes’ recent article entitled “The Dangers Of Dying Without A Will” reminds us that drafting a will allows you determine who will inherit your assets when you die and, if you have young children, who will raise them if you die and their other parent is deceased, and what if you don’t have a will during the Pandemic?  If you pass away without a will, the state will make these very important decisions on your behalf and they may end up being choices you’d never make if you were still around.

Those choices may not reflect your wishes, might create conflicts within your family and cause economic hardships for your loved ones. In addition, none of your assets will go to your favorite charities.

One more thing: no will means potential legal expenses that your estate must pay. Look at these examples of the issues dying without a will may create:

  • If you’re married and have children from a prior relationship, most of your estate may go to the children, leaving your current spouse in a financial hardship. He or she will need to deal with stepchildren (or your former spouse, if your children are minors) just to receive some of your assets.
  • If you’re single and die without a will, your assets might end up going first to your parents or your siblings, if your parents pass before you. You may have wanted your estate to go to others instead.
  • If you die and had an unmarried partner, no will may well leave him or her in a tough financial position, especially if they were financially dependent on you. State laws typically don’t recognize unmarried partners, so he or she could get evicted from the home the two of you shared, if you were the sole owner.

When you do write your will, work with an experienced attorney to be certain that it’s legally valid in your state. There’s no guarantee that the one you prepare without a lawyer will satisfy that criteria. If the probate court doesn’t recognize your will, it will be as though you died without one.

An experienced estate planning attorney will help you make sure your will meets your state’s requirements. This will reduce any potential fighting within your family and prevent them from challenging your will’s validity in court.

Life is now extremely fragile with COVID-19. The consequences of dying without a will have never been more profound. Talk to an estate planning attorney today!

Reference: Forbes (April 20, 2020) “The Dangers Of Dying Without A Will”

 

Am I Making One of the Five Common Estate Planning Mistakes?

You don’t have to be super-wealthy to see the benefits from a well-prepared estate plan. However, you must make sure the plan is updated regularly so these kinds of mistakes don’t occur and hurt the people you love most, reports Kiplinger in its article entitled “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes.”

An estate plan contains legal documents that will provide clarity about how you’d like your wishes executed both during your life and after you die. There are three key documents:

  • A will
  • A durable power of attorney for financial matters
  • A health care power of attorney or similar document

In the last two of these documents, you appoint someone you trust to help make decisions involving your finances or health, in case you can’t while you’re still living. Let’s look at five common mistakes in estate planning:

# 1: No Estate Plan Whatsoever. A will has specific information about who will receive your money, property and other property. It’s important for people, even with minimal assets. If you don’t have a will, state law will determine who will receive your assets. Dying without a will (or “intestate”) entails your family going through a time-consuming and expensive process that can be avoided by simply having a will.  A will can also include several other important pieces of information that can have a significant impact on your heirs, such as naming a guardian for your minor children and an executor to carry out the business of closing your estate and distributing your assets. Without a will, these decisions will be made by a probate court.

# 2: Forgetting to Name or Naming the Wrong Beneficiaries. Some of your assets, like retirement accounts and life insurance policies, aren’t normally controlled by your will. They pass directly without probate to the beneficiaries you designate. To ensure that the intended person inherits these assets, a specific person or trust must be designated as the beneficiary for each account.

# 3: Wrong Joint Title. Married couples can own assets jointly, but they may not know that there are different types of joint ownership, such as the following:

  • Joint Tenants with Rights of Survivorship (JTWROS) means that, if one joint owner passes away, then the surviving joint owners (their spouse or partner) automatically inherits the deceased owner’s part of the asset. This transfer of ownership bypasses a will entirely.
  • Tenancy in Common (TIC) means that each joint owner has a separately transferrable share of the asset. Each owner’s will says who gets the share at their death.

# 4: Not Funding a Revocable Living Trust. A living trust lets you put assets in a trust with the ability to freely move assets in and out of it, while you’re alive. At death, assets continue to be held in trust or are distributed to beneficiaries, which is set by the terms of the trust. The most common error made with a revocable living trust is failure to retitle or transfer ownership of assets to the trust. This is where you need the direction of an experienced estate planning attorney as this critical task is often overlooked after the effort of drafting the trust document is done. A trust is of no use if it doesn’t own any assets.

# 5: The Right Time to Name a Trust as a Beneficiary of an IRA. The new SECURE Act, which went into effect on January 1, 2020 gets rid of what’s known as the stretch IRA. This allowed non-spouses who inherited retirement accounts to stretch out disbursements over their lifetimes. It let assets in retirement accounts continue their tax-deferred growth over many years. However, the new Act requires a full payout from the inherited IRA within 10 years of the death of the original account holder, in most cases, when a non-spouse individual is the beneficiary. Therefore, it may not be a good idea to name a trust as the beneficiary of a retirement account. It’s possible that either distributions from the IRA may not be allowed when a beneficiary would like to take one, or distributions will be forced to take place at a bad time and the beneficiary will be hit with unnecessary taxes.

Talk to an experienced estate planning attorney and review your estate plans to make certain that the new SECURE Act provisions don’t create unintended consequences.

Reference: Kiplinger (Feb. 20, 2020) “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes”

 

A Good Move to Make during the Pandemic

While most of those infected with COVID-19 will recover, about 20% need hospitalization and in the absence of widely approved treatment those who are placed in the ICU can be in grave danger.  Thousands of deaths from the coronavirus is making many of us look at death more seriously than we would otherwise. With our major health crisis, it’s not really the time to delay creating a will if you don’t have one already. Many Americans are looking to create a will and making a will is a good move to make during the Pandemic. If you don’t have this important document in place, it’s critical that you create one immediately — just in case.

Motley Fool’s recent article entitled “The 1 Move You Must Make During the COVID-19 Crisis” says that about 37% of Americans have a will. Without one, you’ll risk having little to no say over what happens to your assets in the event of your passing.

It’s not uncommon for people to say things like, “I’m not rich and have very little money to my name, so who cares who gets it after I pass?” This is not so. Even if you only have a modest amount of assets, it’s wise to make out a will, so your wishes are carried out.  If you have minor children, you need to designate a guardian to care for them, if you should die and they don’t have another living parent. This isn’t a question you want to leave unanswered and you don’t want to leave your family members to fight over who will take on the assume the responsibility of taking in your children.

Create a will with the help of an estate planning attorney. If you create one online, you risk missing nuances that may be important in the event of your passing. If your estate is somewhat complex, it’s worth the money to use a legal expert.  Another estate-planning document to create includes a financial power of attorney which designates someone to make financial decisions on your behalf, if you can’t.

A healthcare proxy is a person who can make medical decisions on your behalf. Ask your estate planning attorney to help you determine which documents will benefit you. This document could give you and your loved ones peace of mind, when comfort goes a long way.

Reference: Motley Fool (April 6, 2020) “The 1 Move You Must Make During the COVID-19 Crisis”

 

Do You Have an Estate Planning Blueprint?

An estate planning attorney is necessary to ensure that an estate planning “Blueprint” for your assets is completed. this applies to people of all ages. Your assets can go to one of four spots:

  • Your family
  • Your friends
  • Charitable organizations or
  • The government.

Therefore, you need to avoid the last choice to confirm that your assets go to who you want them to.

Forbes recent article entitled “How To Create An Estate Planning Blueprint” reminds you to make sure your plan is optimized, so your beneficiaries can avoid probate and make the most of the gifts you plan to leave them.

Here are some ideas on how to make sure your estate is as planned as possible.

Set Regular Check-Ins. Estate planning isn’t a “set it and forget it’ task.” It needs regular reviews. Your estate is constantly evolving because of life events, changing laws and your financial circumstances. You need to talk to your attorney to make certain that all your assets, as well as circumstances, such as the birth or adoption of a grandchild, are recognized in your will. These meetings should be held every few years—but may be more frequent due to occurrences, such as a births, deaths, or divorces.

Think of the Future. Forecasting into the future can give you peace of mind now and make things easier for your beneficiaries. Failing to plan can create future problems for your heirs.

Look at Your Options. If you decide to create a trust, know your options and discuss different setups—and their tax implications—with an experienced estate planning attorney. Working through the pros and cons of options, can help you to determine the best options for you and your situation.

Tell Your Beneficiaries about Your Wishes. Let your beneficiaries know what you’re planning, so there are no surprises or hurt feelings. There’s no need to detail all of the financial details. Just give a summary of what you anticipate, as well as details about who will be the trustees and executors of your estate.

When it comes to your estate, paying for the professional services of a qualified estate planning attorney now, can help you and your family avoid issues in the future.

Reference: Forbes (April 1, 2020) “How To Create An Estate Planning Blueprint”

 

Common Will Mistakes to Avoid

Dying without a will (or “intestate”) means your estate assets will pass to your heirs according to the intestacy laws of the state. Under the state’s intestacy provisions, if your spouse is alive, and you had no children (with any person), your assets will pass to your spouse. In many states, if you had children your surviving spouse would get half of the assets of the estate and the other half would be divided equally among your children. If you didn’t have surviving spouse, your children would share equally in the estate.

The Aiken (SC) Standard’s recent article entitled “Avoiding mistakes with your will” says that a critical point to remember is that only your spouse must survive in order to be an heir. Typically, if one of your children had died, their children would get their share.

Every state has specific requirements for what constitutes a legal will. For example, in South Carolina, a will has these requirements

  • It must be in writing
  • The maker of the will (the testator) must be of sound mind
  • The maker of the will cannot be a minor
  • The will must be witnessed by two witnesses who were present when the testator signed the will and who also witnessed each other sign the document and
  • The will must be notarized.

The witnesses must not be beneficiaries of the will.

Because a will is so critical, you should employ the services of a qualified estate planning attorney. If you and your spouse already have a will prepared, it is important that these documents be reviewed periodically to make certain that your instructions are up to date and that your will recognizes any changes that have occurred in either federal or state law. People frequently forget about including certain assets in their wills, like special collections of memorabilia or other treasures.

Be sure that you designate an executor to serve in this capacity who is well-organized, calm and willing. You should typically name a person who’s younger than you and also name an alternate executor, in case your primary choice is unable to serve. If you have any minor children, you should name a guardian for those children. You can divide the duties of a guardian, by naming a different guardian to handle the children’s financial affairs and one who provides care for your children.

After your will is drafted, be certain you tell your family know where it’s kept and be sure that your will is in synch with other documents like your life insurance policies and other benefits that will pass directly to beneficiaries named in those documents.

It is important that you contact an experienced estate planning attorney to prepare your estate planning documents.

Reference: Aiken (SC) Standard )(March 22, 2020) “Avoiding mistakes with your will”

 

What are the Main Estate Planning Blunders to Avoid?

There are a few important mistakes that can make an estate plan defective—most of these can be easily avoided by reviewing your estate plan periodically and keeping it up to date.

Investopedia’s article from a few years ago entitled “5 Ways to Mess Up Estate Planning” lists these common blunders:

Not Updating Your Beneficiaries. Big events like a marriage, divorce, birth, adoption and death can all have an effect on who will receive your assets. Be certain that those you want to inherit your property are clearly detailed as such on the proper forms. Whenever you have a life change, update your estate plan, as well as all your financial, retirement accounts and insurance policies.

Forgetting Important Legal Documents. Your will may be just fine, but it won’t exempt your assets from the probate process in most states, if the dollar value of your estate exceeds a certain amount. Some assets are inherently exempt from probate by law, like life insurance, retirement plans and annuities and any financial account that has a transfer on death (TOD) beneficiary listed. You should also make sure that you nominate the guardians of minor children in your will, in the event that something should happen to you and/or your spouse or partner.

Lousy Recordkeeping. There are few things that your family will like less than having to spend a huge amount of time and effort finding, organizing and hunting down all of your assets and belongings without any directions from you on where to look. Create a detailed letter of instruction that tells your executor or executrix where everything is found, along with the names and contact information of everyone with whom they’ll have to work, like your banker, broker, insurance agent, financial planner, etc.. You should also list all of the financial websites you use with your login info, so that your accounts can be conveniently accessed.

Bad Communication. Telling your loved ones that you’ll do one thing with your money or possessions and then failing to make provisions in your plan for that to happen is a sure way to create hard feelings, broken relationships and perhaps litigation. It’s a good idea to compose a letter of explanation that sets out your intentions or tells them why you changed your mind about something. This could help in providing closure or peace of mind (despite the fact that it has no legal authority).

No Estate Plan. While this is about the most obvious mistake in the list, it’s also one of the most common. There are many tales of famous people who lost virtually all of their estates to court fees and legal costs, because they failed to plan.

These are just a few of the common estate planning errors that commonly happen. Make sure they don’t happen to you: talk to a qualified estate planning attorney.

Reference: Investopedia (Sep. 30, 2018) “5 Ways to Mess Up Estate Planning”

Coronavirus News Should Make You Think about Estate Planning

The global Coronavirus (COVID-19) outbreak has many of us thinking about what could happen, if the disease spreads more fully across the general population. We all need to plan for what could possibly happen. To protect yourself and your family, it’s smart to be certain that you have the following these documents prepared and updated, says Motley Fool’s recent article entitled “The Coronavirus Should Have You Thinking About These 4 Things.”

  1. A will or revocable trust. Be sure that your assets will pass to those who you want to receive them after your death. This is critical during crisis times. You don’t want to make things any harder than they need to be. Create an estate plan to avoid potentially expensive and time-consuming processes like probate, which will have greater importance, if your family is confined to their homes in a quarantine situation.

A simple will can cover what happens to your assets at death. This typically works well, especially for modest estates. State laws differ on how complicated a probate process would be with a basic will. Some people opt to use a fully funded revocable trust that doesn’t require probate. For either a will or a revocable trust, make sure that it’s up to date and reflects your current preferences and family circumstances.

  1. Updated beneficiary designations. If you have an IRA, 401(k) account, or life insurance policy, those you name as beneficiaries of that account will receive the proceeds, despite a totally different from arrangement in your will or trust. Many of us also don’t designate any beneficiary for these accounts, which means added complications in the event of death.
  2. Healthcare power of attorney. When we’re in the midst of this Coronavirus, it’s even more urgent that you’ll be able to get the healthcare you need, if you’re hit with this illness. A durable power of attorney for healthcare will give the individuals you choose the ability to make whatever medical decisions you specify on your behalf. An estate planning attorney can help you draft documents that match your specific wishes.
  3. Financial power of attorney. You can designate an agent to help take care of your finances, if you become incapacitated or otherwise unable to handle your financial affairs. A general durable power of attorney for financial matters is another document that lets you delegate responsibility and authority to make financial transactions to the person you name.

Estate planning may not be the highlight of your week, but the Coronavirus outbreak has more people thinking about what they need to do. Make sure your family will have what they need even if something happens to you.

Reference: Motley Fool (March 8, 2020) “The Coronavirus Should Have You Thinking About These 4 Things”