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Category: Estate Planning (Page 1 of 5)

Lessons from Anthony Bourdain and Kate Spade on Planning for Your Estate When You’re Separated

Photo: Laurie Woolever/Grub Street

Photo: Wendy Maeda / The Boston Globe via Getty

By: Sarah Stewart Legal Group

The world was rocked this month with the news of the suicides of TV Personality and Chef, Anthony Bourdain and Fashion Designer, Kate Spade. Though the two share their tragic means of death, they also share something else.

When they died, both Bourdain and Spade were separated from their spouses.  Separations don’t only lead to legal battles in divorce court, they can also cause a whole new set of problems for estate planning.

When couples choose to remain separated for a longer period of time and don’t finalize a divorce, they open their families up to complex, and often, messy legal issues if one of them dies.

Deciding on Separation Instead of Divorce

Studies show more and more families are choosing to separate permanently instead of filing for divorce.  Bourdain was open about his choice to separate from, but not divorce, his wife of many years.

He stated in a People Magazine article in 2016 that his choice to separate permanently was based on his belief it led to a better co-parenting relationship of his child with his wife.

Though the concept may be nice for child-rearing, if possible, the arrangement has led to a hiccup in Bourdain’s funeral and estate planning.  By law, since they are still married, his wife is his beneficiary, and the person who makes decisions regarding his funeral and what happens to his remains.

It has been reported that his body will be cremated in France and the ashes shipped to the U.S. This decision may be difficult for family members who may have more of a stake and interest in funeral decisions than a wife he hasn’t lived with for several years.

Additionally, since she is still Bourdain’s wife, she will be eligible for certain Social Security and other benefits she would not have received had the couple divorced.  Benefits that may have gone to his child in other circumstances.

Kate Spade and her husband were reportedly separated when she died as well.  Her family will face similar challenges to Bourdain’s.

Proper Planning

If you choose to permanently separate instead of divorcing, there are some options to protect your estate.

(1) Healthcare Directives

If you are concerned that your spouse may be able to make healthcare decisions if you are unable to, you will want to consider putting an Advance Directive into place.

Although Oklahoma law does not provide that anyone can make those decisions without a valid Advance Directive or Court Order in place, in practice some facilities have policies that allow them to work with “closest kin.” Separated or not, if you’re married, that’s your spouse.

To protect yourself from that situation, you will want to implement a Healthcare Directive and choose a healthcare proxy to make those decisions.

(2) Trusts

Generally, couples separating are restrained from making any changes to legal documents during their proceedings.  The reasoning behind this requirement is that the couple is assumed to be working toward completing the divorce and separating the assets and the Court wants to make sure nothing is moved or spent before the finalization.

If you know that you will not finalize a divorce, you should talk to your family law attorneys about provisions in your paperwork for your case to allow you and your spouse to change your estate plans.

If an estate goes through probate, your spouse can always argue for a marital share.  If you do not have a plan in place, or only have a Will, your estate will go to probate.  With a Trust, going to court is less likely.

Though your spouse could still sue and argue for a marital share, if you both sign off on the documents, it is far less likely your separated spouse would take from your estate and you could have more control over who gets what.

If you are in a permanent separation, be sure to reach out to your financial and estate planning professionals today!

 

Legal Battles Possible Over Frozen Embryos When Couples Separate

By: Sarah Stewart Legal Group

Stories of legal battles over frozen embryos have been making the rounds in the news lately.  Beginning with the high profile case in 2013 between Sofia Vergara and her former fiance,  Nick Loeb, cases concerning couples’ frozen embryos became more popular.

Legal Issues

The problem couples face when they separate and have remaining frozen embryos is deciding what to do with those embryos.  They can decide whether to store the embryos, destroy the embryos, donate them to science, or donate them to a couple with fertility issues.

Courts addressing the issue face a strange mix of Constitutional, family law, and contract law questions. The case can become even more complicated when the couple was never married. Courts must decide what rights each parent has and what rights, if any, the embryos themselves have.

Michigan Case

An interesting case arose in Michigan this month when an unwed couple started a legal dispute over their frozen embryos.  The former couple have a child together who has sickle cell disease.  The mother believes she could use bone marrow from another child she conceives to ease her daughter’s suffering and possibly save her life.

The father refuses to consent to the release of the embryos. The matter is currently in litigation, but there should be an outcome in the next few months.

The Law

Historically, most of the parents seeking custody in a frozen embryo dispute have lost.  Courts usually see the Constitutional right of privacy of one parent who chooses not to reproduce prevailing over the right of the other to bear a child and any contract that existed before between the two.

Exceptions to this rule have applied where the parents in the case suffered from cancer and the treatments took away any other chance they had to reproduce.

Embryo Donation in Oklahoma

In Oklahoma, we do not have specific, published cases concerning custody of human embryos.  However, we do have statutes that address embryo donation in adoption. If an embryo is donated, Oklahoma statutes require both couples to consent to the donation and adoption. The consents must be filed with the court.

The statute states the receiving couple will legally be the parents of the child born from the embryo and the donating couple is relieved of all parental responsibility.

If you have questions about embryo donation or custody, consult with a health care attorney today!

 

10 Retirement Tips for Millennials

By Sarah Stewart Legal Group

Definitions of Millennials vary.  But, ultimately, when someone refers to a Millennial, they mean someone in their 20s or 30s.  Millennials tend to focus on their day-to-day financial needs and forget to focus on their future and retirement.

If you begin following these 10 tips now, you can have a financially free future, and yes, even retire one day.

(1) Start Saving Today

An interesting thing about investing money is money compounds.  That means the longer the money is invested, the more money it can make for you.

For example, if a 25 year old wants to have $1 million in retirement, they can start today and invest $880.21 per month with a 5% return.  If a 35 year old wants to retire with $1 million, they have to invest $1,679.23 each month with a 5% return.  For a 45 year old, the monthly investment would have to be $3,741.27 on a 5% return.

Find a great investment program that works for you.  Look for high returns and low fees.  And, start investing for your future!

(2) Be Consistent

Figure out how much you can save for retirement each month.  Then, do it!  Put your retirement account drafts on automatic withdrawal.  Try to increase the amount you’re saving each year until you reach the maximum amount allowed by the IRS.

(3) Have an Emergency Fund

Something will always come up.  The furnace will break.  The hot water heater will blow out.  The car will need new tires.

Plan for your emergencies now!  Save a little each month until you save 6 to 9 months of living expenses in a savings account.  This fund will be invaluable to you when you need it!

(4) Live Within Your Means

Buy what you need and what you can afford. Don’t try to keep up with the Joneses. It will pay off in the long run.

(5) Balance

Realize that you need to treat yourself sometimes and you need to save others.  The secret is balancing the two.  Find your balance.

(6) Don’t Forget Insurance

Term life insurance policies for Millennials are cheap.  Buy them while you’re young to protect your family when you’re older.

Also, remember that we’re not immortal.  Look into disability policies.  If you get hurt, they can help you pay the bills while you recover.

(7) Buy Low Sell High

When investing in stocks be sure to do your research on the best stocks to invest in.  But, once you know, remember the rule.  Always buy your stocks when they’re low and sell them when they’re high for the best return on investment.

(8) Grow Your Investments While You Grow

When you get that raise or promotion, devote a percentage of it to your investments.  That way, you can enjoy your hard work now, with the percentage you enjoy from your raise today, and in the future, with the percentage you devote to your investments.

(9) Pay Off Debts

Let’s say you pay off your car and get an extra $200 in your pocket each month.  Instead of using that money on furniture or a new toy, use that extra money to pay off the next lowest debt.  Continue this process until you’re debt free and imagine the lifestyle you can live!

(10) Determine Your Savings Goal

If we want to achieve a goal, we have to know what that goal is.  We can’t get where we’re going if we don’t know where we’re going.

Work with an advisor to calculate your retirement needs based on the lifestyle you hope to live.  Make a plan to save for that goal, and follow it.

5 Financial Concerns to Address Before You Remarry

By Sarah Stewart Legal Group

People who choose to remarry have more to lose than they did the first time around.  They have a more established career, more assets, and, often, children from a previous marriage.  When you remarry you need to be more cautious of protecting your assets and family before you begin your marital bliss.

(1) Determine Your Consolidated Net Worth

Couples who remarry can have complex financial issues that should be addressed prior to the wedding.  Some may be paying child support or alimony, have investments in their names, and already started tax and estate planning strategies for their assets.

Couples should discuss these matters prior to the wedding.  Sit down and decide what your net worth is individually and then talk about it and determine what your joint net worth will be.  This discussion can open up more opportunities to discuss your money management styles and who will handle what in your marriage.

(2) Make a Marriage Agreement – in Writing

I know, I know.  It doesn’t sound romantic to talk about the possibility of divorce before you’re even married.  But, as someone who has been there before, you know the reality that your marital bliss could end one day, and you must properly prepare.

Each party should welcome a marriage agreement, in the form of a prenuptial agreement, preferably.  These documents allow you to specify what assets you want to keep separate in your marriage, so that you can claim them free and clear in a divorce.

(3) Talk About the Kids

Blended families create many different kinds of dynamics.  But, regardless of your family’s dynamic, the fact remains that the children and the spouse should be accounted for in financial and estate plans.  Children cost a lot of money.  You must be on the same page with your new spouse about what you will and won’t pay for when it comes to the kids.

Will you both contribute to the care of the children? Or will the spouse who brings the children to the marriage be solely responsible?  What if one of you makes significantly more than the other?  How will you plan for the children’s expenses?

Do you want your ex-spouse to manage any money that you leave to the children?  If not, you will need a more complex estate plan for your children.  Speak with financial planners and an attorney with experience in estate planning to plan for your blended family.

(4) Update Beneficiaries

Life insurance, retirement accounts, even banking accounts can have beneficiaries named that will receive these assets at your death.  It is very easy to forget to update beneficiaries on all of your accounts, but it is extremely important to do so after every major life event.  Marriage is one of the most important.

When you create a life with someone new, you want to know they’ll be taken care of when you are gone.  If you don’t update your beneficiaries, your Mom or Brother will still get the money if something happens to you, and your spouse will struggle.

(5) Change Your Wealth and Estate Plans

Another easy area to forget to update is your legal documents and wealth plans.  We often create these important documents and check it off our list, to leave them collecting dust in the safety deposit box.  But, as life changes, so do your plans.

Be sure to update these documents after you get married by reaching out to your estate and wealth planning professionals!

 

Wealth and End-of-Life Planning for Those Aging Alone

By Sarah Stewart Legal Group

Nowadays, people are living longer and longer.  Many choose not to have children.   Some simply outlive their families, leaving these aging people to plan for their end-of-life without their family.

When these people age, what happens when they can no longer make decisions for themselves?

In order to have someone who can help you make decisions and manage your assets when you cannot do it yourself, you must put important estate planning documents in place.  These documents include healthcare directives, durable powers of attorney, and possibly Wills and Trusts.

If you are one of these people, or may be in the future, what can you do?

When You Don’t Know Who to Pick As A Decision-maker

Without the planning documents previously named, no one will have the authority to act on your behalf.  That means, someone will have to Petition the Court to become your Guardian and make decisions for you.  If you do not have family, it is likely the party Petitioning to be your Guardian will be the State.

In these cases, the State has decided that you are unable to care for yourself and need someone to look after you.  When they cannot find a family member to do that, they will file to act as your manager and decision-maker. The State will not know you personally and what your wishes may be.  The State will add your name to a long list of other individuals they care for and look after.

Wouldn’t you much rather pick a loved one you trust?

Who Do You Pick

Often, professionals who aid in your estate planning will ask you to name a primary, secondary, and sometimes even tertiary agent to act on your behalf in your documents. For married couples, the primary agent is usually the spouse.  For singles, this is a harder decision to make.

If you have a large family, but no children of your own, you will want to think about who you trust the most and who you are closest to in your extended family.  Reach out to them and have a discussion about your wishes for end-of-life and that you would like them to act as your agent. It is best to choose someone with a similar belief system to your own.

But, what if you’re not close to your family?  Then, you will need to look to your closest friends and associates. This, of course, can be challenging if all of you are the same age, as you may be going through the same problems at the same time and not be able to care for one another.  You will want to name at least primary, secondary, and tertiary agents, and strongly consider naming younger friends as agents.

Professional Guardians

If you’ve exhausted the list of people close to you and still do not feel comfortable naming someone as an agent, you will want to consider hiring a professional.

You may have a good connection with your local bank.  Often, they have departments that can act as Trustees for you and manage your assets when you no longer can.  In that situation, you would want to plan your long-term care ahead of time.

Sometimes attorneys and other professionals can be hired to act as Guardians.  You will need to find someone you trust and can see managing your finances and healthcare decisions long-term if you go this route.

You do not want to be forced to age in ways you would not want.  Reach out today to get your wealth and estate planning taken care of with a professional!

 

 

 

Plan Well For Your End of Life Like Barbara Bush and Betty Ford

Source: http://www.fordlibrarymuseum.gov/images/avproj/pop-ups/2008-NLF-021.html

By Sarah Stewart Legal Group

Everyone is familiar with former first ladies Barbara Bush and Betty Ford. Both impacted countless lives with their service, albeit in different ways. Barbara Bush advocated for children and literacy and died just days ago, on April 17th. Betty Ford was politically active and an avid feminist who died on July 8, 2011. Their deaths left a void in America’s hearts and can teach us valuable lessons.

Barbara’s Planning

Barbara Bush was an elegant woman.  Her death was no different.  She made choices in her estate plan that allowed her to decide how she would live out her final days.  Her well-lived life deserved nothing more than a well-planned end. The circumstances surrounding her death prove she had a healthcare directive in place.

Barbara chose to stop treating her chronic obstructive pulmonary disease and heart failure. She chose to return home for her final days. Her plans enabled her to spend her last days peacefully with her family, enjoying a bourbon as her last drink.

Without a healthcare directive, families are left wondering what their loved ones’ wishes were for their medical care and treatment at the end of their lives. A healthcare directive tells your family what you want, and who you want to make important decisions, like withdrawing life support.  Oklahoma law does not give authority to anyone, absent a directive, to agree to withhold or withdraw life support for a loved one.

Unlike Barbara, many U.S. citizens avoid planning their deaths. A study from the Palliative and Advanced Illness Research Center at the University of Pennsylvania in 2017 showed that 71 % of Americans do not have healthcare directives in place.

Let’s learn a lesson from this influential First Lady and make our plans today!

Betty Ford’s Special Wishes

Betty Ford was a spirited, opinionated, and lively first lady.  In keeping with her character, Betty Ford used her estate plan to get her wish of having Cokie Roberts deliver a eulogy based on how political partisanship hurts the United States.

Betty left Cokie Roberts instructions on her eulogy, stating she wanted Cokie to discuss government in the 1960s and 1970s and how the parties were required to work together, mostly because they often socialized together. She picked Cokie Roberts because her father was a Democratic Congressman known for working well with a Republican, Gerald Ford.

Many families struggle with funeral arrangements.  They ask themselves what their loved ones would have wanted.  The more specific you are in your estate planning documents, the less guesswork you leave for your family.  These are your documents.  Make your funeral the party, or non-gathering, you always wanted it to be!

Follow the examples of these strong, memorable first ladies.  Reach out to a professional to take action on your estate plans.  Or, at the very least, start thinking about and writing down your wishes so your family can honor them and you can put them in more binding form later.

Start talking to your families out loud.  Let them know what you want.  These conversations may not seem easy, but the reality is, few things that are worth it ever are.

The Importance of Business Exit Planning

By Sarah Stewart Legal Group

Oklahoma is a thriving environment for small business owners. In 2013, the Small Business Administration reported there were 337,066 small businesses in Oklahoma.  Small businesses were defined in this survey as companies employing less than 500 employees.

Though business owners are savvy and skilled at many things, small business owners often neglect to realize the importance they have in their community, and the importance of planning for the continuation of their businesses when they can no longer run them.

And, let’s admit it, just like everyone else, we all hope to retire some day! If you want to do that successfully, you have to plan adequately.

So, the question is what should these business owners do with their businesses? How can we successfully leave behind the day-to-day activities and retire from our businesses when the time comes?

Studies have shown that for small business owners, on average, at least 85% of our net worth is tied up in our businesses. In order to properly withdraw assets from a business, you need to make a plan early.

The best exit plans will explore (1) when you will leave your business, (2) how you will sale or transfer ownership in your business, (3) how much money you will need to retire from your business.

You will also want to consider other factors that may be important to you, like how to care for long-time employees, maintain your business’s reputation, and stay involved with your community.

When making your succession plan, be sure to think about (1) asset protection- both for your business and your personal assets, (2) how to minimize taxes and maximize value, (3) training a successor, (4) continuing the business, and (5) wealth and estate planning.

Your exit plan should be fluid, allowing you to adjust to changing circumstances in your business.  What if your first choice for successor isn’t available?  How would you determine a secondary option? What if an unforeseen buyer offered you a lot of money to buy your business?  What could they offer to buy you out?

To properly transfer a business to someone in your family or an employee, you will want to start the process at least 6 to 8 years ahead of time. If you want to sell, you should begin courting buyers at least 2 to 3 years in advance.

In every financial and business matter, the more you plan, the better it is for you and your family.  Thorough planning ensures your course of action when you are ready to step out of your business.

It is never too early to start your exit plan, and the plan can be updated as your circumstances change. The most important thing is to start!

3 Considerations to Secure the Financial Future of Your Child with Special Needs

By Sarah Stewart Legal Group

In a 2011 study, the federal Centers for Disease Control and Prevention estimated 1 in 7 children are diagnosed with developmental disabilities. That means more than 10 million children in the U.S. have developmental disabilities.

Though the amount of help each child may need in the future varies, one thing is certain, for families with children with special needs, planning for your child’s financial future is even more important.

Special concerns for families with members with special needs include securing proper and affordable health insurance, appropriate life insurance, and wealth and estate planning with a qualified planner who has an awareness of how those plans can impact the child’s benefits.

Health Insurance

Insurance premiums for children with special needs can be pricey.  But, given the extra medical attention they may need, insurance is worth it in the long run.  Shop around for the best fit for your family.

Life Insurance

Life insurance is important for every family.  But, in a family with a member with special needs, the right life insurance can be invaluable.  Your family can use life insurance to help care for a family member with special needs when you are no longer able to do so yourself.

Wealth and Estate Planning

Though many families expect to raise their children and send them out on their own around the age of 18, families with members with special needs are different.  Often, these families care for their members with special needs well past the age of 18, making the division of assets at a parent’s death extremely important.

If an heir of an estate has benefits in place for his or her special needs, an inheritance can disqualify the heir from those benefits.  So, it is important to put a Special Needs Trust in place with Trustees that you can rely on to manage inheritances on the heir’s behalf.

A properly established Special Needs Trust can provide for the heir without removing established benefits, name someone to care for the heir after his or her parent’s die, and put a plan into place to help the heir as he or she grows older.

If you have a child with special needs, planning is not just a convenience, but rather a necessity.  Reach out to professionals today to help you plan for your child’s future.

 

6 Concerns for Married Couples with a Significant Age Gap

By Sarah Stewart Legal Group

Research shows that 5% of first marriages and 20% of second marriages are between couples with an age difference of at least 10 years. Married couples with age gaps face different financial planning challenges than their counterparts of the same age.

If you or someone you love is a partner in an age gap marriage, here are 6 things you must consider to ensure a healthy future and retirement.

(1) Plan For the Younger Spouse

Many Americans struggle to save enough for their own retirement.  If you add a younger spouse into the equation, it can be even harder. When the older spouse starts to near retirement age, you should consider how you will continue to invest and how much you can withdraw to protect the younger spouse’s retirement.

Couples with a significant age gap may need to put more of their retirement into stocks than same aged couples. They also need to take care with their withdrawals.  Too much withdrawal too soon can deplete your retirement and not allow for enough growth for the younger spouse.

(2) Timing Retirement

Usually, couples prefer to retire at the same time.  Age gap couples have to balance working long enough to save enough for retirement with retiring early enough to fulfill their retirement goals with their spouse while they are both able.

Early retirement can stop retirement savings from growing enough to support both spouses and can affect Social Security payments after retirement.

Social Security is calculated based on your highest 35 years of pay, so if you have not worked for 35 years or are making much more now than you did before, early retirement can affect your income.

(3) Retirement Distributions

At 70 1/2 most IRAs and employer-held retirement accounts require you to take distributions from the account. Age gap couples can use a rule that allows them to take less in distributions than other same-age couples.

To use this benefit, the spouse must be at least 10 years younger and a beneficiary of the account. The benefit increases the larger the age gap. This benefit allows you to keep money in the account to grow longer.

(4) Use that Pension

If one of you is fortunate to have pension benefits, you will need to choose the right survivor option. Joint survivor options will generally lower the initial payments of the benefit, but will allow the benefit to continue through the life of the younger spouse.

(5) Plan Social Security

When the older spouse earns a higher wage, it can be smart to wait to take their benefit until the spouse is 70. The benefit will grow between 6.5 % and 8 % annually and the survivor benefit will be higher.

The Social Security Administration provides a retirement estimator you can use to estimate your benefits.

(6) Unique Wealth and Family Planning

Many remarried couples with age gaps will need to consider planning for children from prior marriages. Under Oklahoma law, if there is no plan, the spouse will take 1/2 of marital property and an equal portion of non-marital property to the deceased’s children.  If this is not the outcome you want, you need to use estate planning tools to properly plan for your estate.

Charles Manson’s Family Fights Over His Body and Estate…Will Yours Fight Over Yours?

By Sarah Stewart Legal Group

Everyone has heard of Charles Manson, the Swastika-bearing, notorious cult leader who was sentenced to death in 1971 after being convicted of urging his followers to commit 9 murders. The most famous of these murders was the murder of then-pregnant actress and wife of director Roman Pulanski, Sharon Tate, and 3 of her friends.

Manson’s sentence was commuted to life in prison in 1972 after California abolished the death penalty. He spent almost 46 years in prison and was known for carving a swastika into his head before his court hearings.

Charles Manson has fascinated the public and earned a cult following from his rise to notoriety in the ’70s through his death in November 2017. Following his death, 3 people have come forward attempting to claim his body and his estate.

The dispute has caused Manson’s body to remain frozen in the morgue, under an alias, for over 3 months.

The “Heirs”

Jason Freeman claims to be Manson’s grandson through Manson’s deceased son, Charles Manson, Jr. who changed his name to Jay White before he committed suicide in the early 1990s.  He claims he communicated with Manson in the years before his death.

Michael Brunner is the son of Manson and ex-cult member Mary Brunner. He stated in a 1993 interview that he did not want to have a relationship with his father.

Both men want to cremate Manson’s body and hold a private ceremony to scatter the ashes.

Michael Channels was a long-time friend of Manson. They wrote each other for 30 years while Manson was in prison. Mr. Channels has presented a 2002 Last Will and Testament that he claims was made by Manson and disinherits all of Manson’s family members.

Mr. Channels claims he spoke to Manson about his plans after death and wants to carry out his wishes of scattering his “dust” in the desert.

Manson’s son, Brunner, seeks to claim the body and entire estate as the only true heir.

He claims White took a DNA test to prove his relation to Manson and the test came back negative.  He also claims the Will was fraudulent at worst and invalid at best as Channels signed the Will as a witness and the sole heir under the Will.

Court proceedings are underway to determine the heirs to the estate.

Your Solution

Even in the best of situations, the death of a loved one can bring out the worst in people.  Add in fame, wealth, or simply personal attachment to a belonging, and the battles can rage out of control for any family.  Charles Manson is not an exception, but rather an all to common example of how a family can feud after a loved one’s death.

If you want to avoid these kinds of headaches for your heirs, you need to establish a solid wealth and estate plan that includes a trust.

Though a Will is a good tool, it is open to dispute because it has to go to court to allow distribution of the assets.  A trust is not impenetrable, but is harder to attack.

If you want your heirs to have the easiest time possible finishing your affairs after you’re gone, you need to reach out to estate and financial planning professionals as soon as possible. The longer you wait, the harder it is to get started!

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