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Category: Estate Planning (Page 1 of 5)

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!

8 Tips for Managing Your Finances After a Divorce

By Sarah Stewart Legal Group

Divorces are seldom simple and neat.  Complex and contentious divorces can take years to resolve.  As if the Court process itself weren’t enough, when your divorce is finally complete, outside of basic items, such as changing your name and address, there are several financial issues you will need to take care of as well.

(1) Credit Issues

Be sure to cancel all joint accounts you held with your now-ex-spouse. You will need to set up separate accounts in your name only.

(2) Take Your Spouse’s Name Off Accounts As Beneficiary

You need to update your estate planning documents and contact your financial planner and banker to take your ex-spouse’s name off any beneficiary designations. You don’t want your ex benefiting from your death. Check all life insurance policies, retirement, pensions, annuities, and stocks to ensure you have disinherited your ex-spouse.

(3) Divide Retirement Accounts By Court Order (QDRO)

A Qualified Domestic Relations Order from your Court will be necessary to split retirement assets obtained through the marriage.  Have a professional help you work this out with your ex.

(4) Make Sure You Get Your Awarded Child and Spousal Support

In Oklahoma, the Department of Human Services provides a service where they will automatically withdraw your child support from your ex-spouse’s account for a minimal fee. They will also keep track of your ex-spouse if they change jobs and enforce your child support orders and collect back child support.  If your ex is unreliable, this is a great option!

For spousal support, can you arrange an automatic withdrawal in your Court order?  Make collection as easy as possible for both of you.

(5) Refinance or Sell Real Estate

If the Court ordered that you could keep certain real estate, make sure it is re-titled in your name only and refinance the property into your name as well.  If the court ordered a sell, get the property on the market.

(6) Get Health Insurance

If your ex covered you under their policy, you will need to get individual insurance to cover yourself.

(7) Budget

Your income is likely to take a dip since you will be living on one income instead of two.  Be sure to put pen to paper and come up with a reasonable budget for your new situation.

(8) Avengers Assemble

Pick a strong team of professionals to help you organize and plan your financial future.  You will need attorneys, financial planners, tax professionals, and other skilled professionals to help your journey.  Assemble that team of avenging superheroes now!

Speak to your divorce attorney about preparing your Order so that your ex will not shirk his or her responsibilities to you, such as signing documents to transfer property to you.

The best Defense is a strong Offense.  You know the points where your ex may be weak or unreliable.  Think those weaknesses through strategically and plan for them in your Court order to save yourself future headaches and stress!

3 Reasons Millennials Should Make Wealth and Estate Plans

By Sarah Stewart Legal Group

A lot of people avoid planning for their wealth and estates.  They, mistakenly, believe that estate and wealth planning are tools made only for the wealthy.

But, whether you have $50,000 or $5 million, planning is crucial for building wealth and to provide security, cost-savings, and peace for your loved ones after you’re gone.

There are 3 good reasons Millennials should plan for their estates and their wealth with a professional today:

(1) You Still Have Responsibilities After You Die

The government and creditors will try to collect what you owe them from your estate when you’re gone.

Someone will have to pay your income taxes for the year you died, property taxes on real estate you own, and possibly, state or federal estate taxes for your estate. Your estate plan will help your family manage these obstacles when you’re gone.

(2) Do-it-Yourself Estate Plans Are Not A Good Idea

Everyone’s estate is a little bit different.  We all own different kinds of property and have specific wishes for what we want to happen to that property when we die.  Online forms and services are one-size-fits-all solutions to a diverse field.

If you make a mistake in your estate plan today, your heirs will have to pay for it tomorrow, when you’re gone. There are so many deep, complex issues to consider that estate and wealth planning on your own is not the best route.  Speak to professionals to get your wishes in order.

(3) Digital Assets

We gain a lot of property throughout our lives.  Millennials should begin thinking of who they want to receive their 401ks, bitcoins, and other assets while they’re acquiring them, and name beneficiaries for the assets they can from the beginning.

Other types of digital assets require planning as well.  Who will manage and close your social media accounts, online payment accounts, and money-making assets such as blogs and online stores?

These issues need to be addressed in modern estate plans.

There are so many considerations in estate and wealth planning.  There is no better time to reach out to professionals and start than now!

3 Ways the New Tax Law Can Affect Your Family’s Wealth Plan

By Sarah Stewart Legal Group

Most of us are aware that Congress passed a new tax bill for the 2017 tax year.  The Tax Cuts and Jobs Act of 2017 will affect most of us come tax time.  But, how will the new law affect your family’s wealth and estate plan?

We discuss 3 ways the act can affect your family’s planning below.

(1) Annual Gifting

The Federal government allows everyone a set amount of money they can gift, per person, each year without the gifts cutting into their estate tax exclusion.  The new tax law still allows for annual gifting.  However, the amount each person can gift each year increased from $14,000 to $15,000 per gift.

The gift exemption can become a little stickier for those needing long-term care.  Keep in mind that those who receive Medicaid for long-term care may have these gifts counted against them for Medicaid qualification purposes.  In Oklahoma, the look-back period is 5 years and any gifts made in the prior 5 years will have to be paid back to, or counted against the assets of, the person attempting to qualify for Medicaid.

(2) Inheritance and the Adjusted Basis

Another area of the law that stayed the same is the adjusted basis for those who inherit assets that have gained value during the deceased’s life.  This rule allows heirs to avoid capital gains taxes on assets that have increased in value.  The rule applies to estates of all sizes.

(3) Estate Taxes

The greatest change in the new tax law affects the estate tax, positively, for high-wealth families.  The threshold for having to pay estate taxes has almost doubled with the new law from about $5.9 million per person before, to $11 million per person now.

For couples, the exemption amount is $22 million.  The exemption applies to estates from December 31, 2017 to January 1, 2026.

For more information on how these, and other parts of the tax law, affect you and your family’s wealth plan, consult a professional.

4 Considerations to Help You Plan For Your Bitcoins When You Die

By Sarah Stewart Legal Group

Cryptocurrency and Bitcoin have quickly become household names.  From a meager beginning not even a decade ago, the currencies have reached astounding popularity.

In 2009, Satoshi Nakamoto created the first ever cryptocurrency known as Bitcoin and the Bitcoin network. In 2011, other cryptocurrencies were created. By October 2012, more than 1,000 companies accepted Bitcoin as payment for goods and services.

In 2013, the coins were selling for $22 per coin, increasing to $160 per coin by the end of the year. In December of 2017,  the coins were worth $14,000 a piece and more than 160,000 merchants accepted the coins as payment for goods and services.

The extreme popularity and surges in value of the coin has begged the question, how do the owners plan for the transfer of the coins when they die?

Estate Planning for Bitcoin, other Cryptocurrencies, and Digital Assets

Since cryptocurrencies and other kinds of digital assets, such as travel and reward programs, are constantly changing, they are usually not addressed in typical estate planning documents like Wills and Trusts.

But, as with other assets that we own, digital assets are still a very real and important part of our lives.  As such, they deserve the same consideration and planning about where they should go after our deaths as any other assets we own. We must be proactive in planning their transfer and creating the documents we need to help our loved ones navigate our digital assets.

Digital Trustees

One option is to appoint a digital trustee in your Will or trust to exclusively handle the transfer of your digital assets. In selecting this special trustee, you would want to be sure they are technologically savvy and trustworthy.  You would also want to be sure to leave them clear directions on how you want your digital assets transferred.

List of Assets

For any estate plan, knowledge of where the assets are held is crucial.  But, this is probably even more true of digital assets.  Trustees will need to know where you are enrolled in rewards and travel programs and where other digital assets are held.  These items are fairly easy to transfer, but the trustee has to know where to find them.

Passwords

Some assets, such as cryptocurrencies, require a password.  So, keeping a list of all of your current passwords, whether on paper, online, or on a computer or other device where your trustee can gain access, is vital for transfers. Cryptocurrencies generally do not keep a centralized registry, so loss of these passwords can lead to a large loss of assets for your loved ones.

Passwords should not be kept in Wills because Wills have to be probated and are listed publicly upon the creator’s death.  That means anyone with the knowledge of how to access a Court case could find your passwords and transfer your accounts.

Good options for password storage include online password management systems or wallets; having a secure document on your computer or other device that your trustee knows how to access; or providing a paper document kept somewhere safe, along with your other planning documents.

Specific Rules for Each Account

Many digital accounts will have separate, specific rules for transferring ownership.  So, your trustee will have to be able to understand each company’s specific rules and follow their directions to transfer your property to your loved ones. Make sure you choose a trustee who can handle this responsibility.

Bitcoin and other digital assets are growing in popularity.  They continue to change and evolve.  So, it is important to have a plan in place for these assets at your death.

3 Intangible Benefits of Estate Planning

By Sarah Stewart Legal Group

We spend a lot of time discussing the tangible benefits of estate planning and the different types of planning tools on this blog.  An estate plan is a valuable part of everyone’s life and end-of-life plan.

Though the tangible benefits are varied and important, the intangible benefits of your estate plan can be just as valuable.  Today, we discuss 3 intangible benefits of creating your estate plan.

(1) Ease Pain and Grief of Loved Ones

Though it is never easy to lose a loved one, having a well-thought-out estate plan can ease a lot of pain, stress, and grief for your loved ones after your death.  Few things can add more stress to an already stressful situation than having to wade through mountains of documents, looking for assets, liabilities, and any evidence of an estate plan, or lack thereof.

One of the best gifts you can give your loved ones after your death is a plan for your assets and a list of your assets and debts, in an easy-to-find and access location. It will save your family hours of stress and the pain of sifting through all your belongings, and reliving countless old memories, just to find the things they need.

(2) Inspire Family Reflection

Estate planning requires focus, attention, and deliberate thought about one’s values and loved ones.  Some may be inspired through the process to write a memoir, or share family history and memories with loved ones. Some decide to write letters to their family members and friends telling them how important they are to the planner.  Estate planning can lead to a renewed sense of family, love and belonging.

(3) Repair Relationships

Since estate planning brings up memories of the people we have known and loved in our lives, it is not uncommon for the process of estate planning to repair interpersonal relationships. As people begin the process of thinking about who and what is important to them in their lives, they can recognize the people and areas of their lives where they feel they have lost something.  Sometimes, they will work to improve or fix that relationship or area of their lives, enriching the lives that they currently live.

Estate planning can be a difficult and time-consuming process for many.  Attorneys, financial planners, and tax professionals all have professional knowledge and experience that can only help you in your process.

Let 2018 be the year you explore the tangible and intangible benefits of having your estate plan in order.

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