Estate Planning Blog

How Current is Your Estate Plan?
How Current is Your Estate Plan?

How Current is Your Estate Plan?

How Current is Your Estate Plan? If “nothing has changed” in your life, then you shouldn’t need to update your will. However, estate planning is more than your will. The chances that “nothing” truly has changed after even a few years is unlikely.

Forbes’ recent article, “Old Estate Plans May Be Harmful To Your Wealth,” explains that if you haven’t updated your planning after the 2017 Tax Act, a more accurate comment would be to say that “everything” has changed. That legislation made significant changes by increasing the estate tax exemption, eliminating personal itemized deductions and many other details.

There could be another change in the state or federal tax or probate law.

On your end, you or an heir may experience marriage or divorce—or a death in the family or of a vital person named in documents. Maybe you moved to a new state or welcomed a new child or grandchild. Another change is a substantial change in economic circumstances, like a change in jobs or careers. You may now have new or worsening health issues. Finally, you may have second thoughts about a bequest, or there’s been a change in relationship with a fiduciary or beneficiary.

Don’t focus on a list of the changes that should trigger an update to your estate plan. Those types of changes are often obvious. It’s the less obvious changes that don’t make the lists and that you might not even consider as requiring you to update your planning and documents.

You might not even be aware of a major change in your state’s tax laws or whether it applies to your circumstances.

How Current is Your Estate Plan? It’s best to meet with your estate planning attorney any time you believe something important has occurred, like one of the events listed above. However, regardless of having a particular reason, you should meet every few years.

The bigger and more complex your estate is, the more complex your family, the more often that should be. For many, meeting every year is very prudent, certainly every year or two makes sense.

Reference: Forbes (September 27, 2019) “Old Estate Plans May Be Harmful To Your Wealth”


When Selecting Beneficiaries Gets Overlooked
When Selecting Beneficiaries Gets Overlooked

When Selecting Beneficiaries Gets Overlooked

When Selecting Beneficiaries Gets Overlooked. Here’s one way to mess up your estate plan: naming beneficiaries not by name, but by the generic term “children.” If yours is a blended family, your stepchildren may be out of luck, according to the article “Five mistakes to avoid when naming beneficiaries” from Delco Times. In many states, stepchildren aren’t recognized if the word “children” is used. Use your beneficiaries’ full names.

Here are more mistakes that people make about beneficiaries:

Failing to name a beneficiary on every account. The great thing about beneficiary designations as that they do not go through probate and beneficiaries receive assets directly from the custodian of the account. However, if you fail to name a beneficiary, the asset, whether life insurance proceeds or the entire balance of a 401(k) account will go to your estate, and then it will need to go through probate.  For retirement accounts, your heirs will also lose the ability to stretch withdrawals over their lifetime.

Failing to name a contingency beneficiary. What if the first person passes away before you and there’s no contingency beneficiary named? The asset goes through probate, as if there were no beneficiary named at all.  If both people die at the same time, all of the funds must go through probate.

Neglecting to review beneficiary selections on a regular basis. Beneficiary designations override a will, so it’s very important to keep them current. Every few years, review the accounts that you own and see what your beneficiary designation choices are. This is especially necessary, if you have been divorced, widowed or remarried. If you fail to take your ex-spouse off an insurance policy, for instance, there’s little that can be done when you die—even if you put your wishes that a new spouse or children receive the proceeds in your will. If the dispute goes to court, your new spouse or children won’t be likely to win, no matter what your intentions may have been.

Not communicating with your partner and family members. Talking with family members and loved ones about your wishes for your legacy and asset distribution is an important way to let them know what to expect when you die. It’s not an easy conversation, but it will be helpful to all. Knowing you have a plan will alleviate them from the worry of the unknown. There’s no need to talk specific dollar amounts, unless you want to. Instead, give them a high-level overview of what your intentions are.

When Selecting Beneficiaries Gets Overlooked. Some families find these conversations easier in the presence of an objective third party, like your estate planning attorney. If your estate plan includes trusts or any complex planning strategies, a family meeting provides a means of explaining the plan and the processes involved.

Reference: Delco Times (October 6, 2019) “Five mistakes to avoid when naming beneficiaries”


What Should I Know About Medicaid?
What Should I Know About Medicaid?

What Should I Know About Medicaid?

What Should I Know About Medicaid? Medicaid is the federal program that gives healthcare benefits to those who cannot afford them. Many people who end up requiring long-term care can pay for it out of their own their own assets, at least initially.

However, because long-term care expenses are so astronomical, many people end up accessing Medicaid benefits, after their own assets have been depleted.

The Medicaid program can help with paying for home care, assisted living, and nursing home care, explains Insurance News Net’s recent article, “Medicaid planning.”

It would be great if people would plan to qualify for Medicaid before they become completely broke, which would preserve their children’s inheritance.

For those who are thinking of transferring all of their assets to their children to qualify for Medicaid, the government has already thought of that. If you gift any assets to your children, you must wait 60 months from the date you gave the gift before becoming Medicaid eligible. However, there are perfectly legal strategies that a senior can use to become eligible for Medicaid, while still keeping considerable assets.

That’s why you should talk to an elder law or Medicaid planning attorney. These practitioners specialize in helping people qualify for Medicaid benefits far in advance of their assets becoming depleted.

Assets may be freely transferred between spouses to help gain eligibility for a spouse that needs care.

There are also many assets that are exempt for purposes of gaining eligibility. This includes a primary residence, rental property, certain IRAs and most vehicles.

It’s also important to remember that a person can enter into contracts with family members to provide care in exchange for a fee, without a 60-month look back.

With the guidance and planning from qualified legal counsel, seniors who require long-term care can get free government healthcare, while preserving assets for their heirs.

What Should I Know About Medicaid? Please contact an experienced Medicaid planning or elder law attorney for additional information.

Reference: Insurance News Net (September 29, 2019) “Medicaid planning”


You Can Protect Pets after You’re Gone
You Can Protect Pets after You’re Gone

You Can Protect Pets after You’re Gone

You Can Protect Pets after You’re Gone. Many of us consider our pets members of the family, but the law does not. In New York and Arizona, pets are considered property, reports the East Valley Tribune in the article “Trusts can help provide for a pet’s future.” That means you can’t leave them your house, or open a bank account in their name.

However, you can take measures to protect your pets from what could happen to them after you pass away. You Can Protect Pets after You’re Gone.

The simple thing to do is to make arrangements with a trusted family member or friend to take care of your pet and leave some money for their care. The problem is, there’s no way to enforce this, and it’s all based on good old fashioned person to person trust. What happens if something unexpected happens to your trusted family member or friend, and they can’t care for your pet?

You’ve also given them funds that they are not legally required to spend on your pet.

Another choice is to leave your pet to a no-kill animal shelter. However, shelters, even no-kill shelters, can be stressful for animals who are used to a family home. There’s also no way to know when your pet will be adopted, since most people come to shelters to adopt puppies and kittens. There is also the issue of the shelter. Will it continue to operate after you are gone?

The best way that many people care for their pets, is by having a pet trust created. An estate planning attorney in your state will know if your state is among the many that allow a pet trust to be created to benefit your pet.

Start by naming a guardian for your pets, including instructions on whether your pets should be kept together. If you are not sure about a guardian, name additional guardians, in case one does not wish to serve. Then determine how much money you need to leave for the pet’s care. This will depend upon the animal’s age, health and life expectancy. There will need to be adequate funding for any medical issues. The trust can specify whether you want your pet to undergo expensive surgeries or whether they should be kept comfortable at any cost.

You’ll want to make sure to name a guardian who you are confident will care for your pet or pets in the same manner as you would.

A pet trust will require you to name a trustee, who will be in charge of disbursing the funds as they are needed and can also check on the pet to be sure they are well, and your instructions are being followed. The money in the trust must only be used by the person for the care of the pets.

You Can Protect Pets after You’re Gone. A pet trust will give you the peace of mind of knowing that your beloved companion animals are being cared for, even when you are not here to care for them. Speak with an estate planning attorney to learn how to make a pet trust part of your overall estate plan.

Reference: East Valley Tribune (Oct. 14, 2019) “Trusts can help provide for a pet’s future”


Busy People Need to Make Time for Retirement Planning
Busy People Need to Make Time for Retirement Planning

Busy People Need to Make Time for Retirement Planning

Busy People Need to Make Time for Retirement Planning.

If you’re a busy mom or dad; are committed to long hours at work or have a successful career, maybe a real estate developer or a physician, you’re too busy to think about retirement. However, just like you had to prepare for your current position, you need to prepare for your life after you stop working, advises the article “Retirement planning for the busy professional” from the New Haven Register. What busy people often don’t realize, is that before they know it, retirement is around the corner.

Making the transition to a successful, fulfilling retirement is not just about saving money, although that is an important factor. Here are a few tips to help you plan a great retirement:

Use your imagination. What would you want your life to look like during retirement? How will you spend your days? Write down goals and be specific. If volunteering is something you don’t have time for now, would you want to become active in your community during retirement? What would that be—running a small organization or pitching in as part of a team? Do you plan on spending more time with your family? If so, what does that look like? Being very detailed will help you set goals and allow you to estimate your retirement expenses.

Run the numbers. There are different scenarios that you can work through. For instance, if your idea of retirement is a schedule of non-stop travel, you can figure out what kind of trips you want to take—Elder Hostels or travelling first class—and what they’ll cost. If you already own a second home and plan to retire there, you have a good idea of what it costs to live in your second community. Consider investment returns, health care costs, taxes and life expectancy.

Review your financial and legal plans. It is never too early to plan for the legal and financial aspects of your retirement. Anyone over age 18 should have an estate plan, both to protect you and your family in the case of death and incapacity. You should have a will, a power of attorney, health care proxy and possibly a trust. A financial plan will give you a roadmap. Are you saving enough? Are there opportunities you are missing? Do you have the correct insurance in place?

Cut expenses and minimize debt. The less debt you have going into retirement, the better. Cutting expenses now will get you used to living within a tighter budget and controlling expenses. Write down your expenses to find out where the money is going. You will likely find some big surprises.

Are your advisors right for you now, and will they be right for you in the future? If you’ve put up with an advisor who never returns your phone calls for a few years, is that the person you want to depend on when hard decisions need to be made about investments and retirement? Your team needs to include an estate planning attorney, a CPA and a financial advisor. Each of them should have a good working relationship with the other, and they should all be making you and your family a top priority.

Reference: New Haven Register (Oct. 13, 2019) “Retirement planning for the busy professional”


Why A Health Care Proxy Makes Sense
Why A Health Care Proxy Makes Sense

Why A Health Care Proxy Makes Sense

Why A Health Care Proxy Makes Sense. Having a Health Care Proxy or health care power of attorney in place before it is needed, is one of the best ideas of estate planning, along with having a Power of Attorney in place before it is needed. Why? This is because taking a pro-active approach to both of these documents, means that when the unexpected occurs and that is exactly how things occur—unexpectedly—the person or persons you have named for these important roles will be able to step in quickly and made decisions.

Why A Health Care Proxy Makes Sense. Time is often of the essence, when these documents are needed.

According to the article “Medical guardianship versus power of attorney” from The News Enterprise, a health care proxy is a document that grants another person the power to make medical decisions for you, when you no longer have the ability to make those decisions for yourself. It is known by a few other names, depending on the state where you live: health care proxy, a medical power of attorney or a health care surrogate.

It needs to have HIPAA-compliant language, which will allow the person you name the ability to review medical information and discuss protected health information with your health care providers.

A health care proxy may also include language for an advance medical directive, which gives instructions for end-of-life decisions. This is often called a “living will,” and is your legal right to reject medical treatment, decisions about feeding tubes and the number of doctors required to determine the probability of recovery and pain management.

A health care power of attorney does not generally empower another person to make decisions, until you are unable to do so. Unlike a general durable power of attorney, which permits another person to make financial or business decisions with you while you are living, as long as you are able to understand your medical situation, you are still in charge of your medical decisions.

A guardianship is completely different from these documents. A guardian may only be appointed, if a judge or jury finds you wholly or partially disabled in such a way that you cannot manage your own finances or your health. The appointment of a guardian is a big deal. Once someone has been appointed your guardian, you do not have any legal right to make decisions for yourself. A court will also appoint a legal fiduciary, who will make your financial decisions.

There are record-keeping requirements with a guardianship that do not exist for a power of attorney. The court-appointed representative is responsible for reporting to the court any actions that they have taken on your behalf.

To have power of attorney documents executed, the person must be capable of understanding what they are signing. This means that someone receiving a diagnosis of dementia needs to have these documents prepared, as soon as they learn that their capacity will diminish in the near future.

If the documents are not prepared and executed in a timely fashion, a guardianship proceeding may be the only option. Planning in advance is the best way to ensure that the people you trust are the ones making decisions for you. Speak with an experienced estate planning attorney now to have these documents in place.

Reference: The News-Enterprise (Oct. 13, 2019) “Medical guardianship versus power of attorney”


How Do I Calculate My Executor’s Fee?
How Do I Calculate My Executor’s Fee?

How Do I Calculate My Executor’s Fee?

How Do I Calculate My Executor’s Fee?

An executor’s fee is the amount of money that’s charged by the individual who’s been named or appointed as the executor of the probate estate for handling all of the necessary tasks in the probate administration.

If you’ve been appointed an executor of someone’s estate, you may be entitled to a fee for your services.

The executor or personal representative fee could be based upon a variety of factors. Some of these factors may be dependent upon the law in your state, says’s recent article, “Both of my parents died. How do I calculate the executor fee?”

In most states, the executor fee is set by statute. For example, in New Jersey, it is 5% of the first $200,000 of assets taken in by the executor, 3.5% of the next $800,000 of assets, and 2% on anything in excess of $1 million. Likewise, California has a sliding scale based on the amount of the estate.

The New York General rule. Under New York Surrogate’s Court Procedure section 2307, executor fees are based on the value of the probated estate. Fees range between 2 and 5% of the total amount of estate money the executor receives and pays out.

Under the NY Surrogate’s Court’s rules, executor fees are calculated as follows:

  • For receiving and paying out money not exceeding $100,000, the executor fee is 5%
  • For receiving and paying out additional money not exceeding $200,000 at the rate of 4%
  • For receiving and paying out additional money not exceeding $700,000 at the rate of 3%
  • For receiving and paying out additional money not exceeding $4,000,000 at the rate of 2.5%
  • For receiving and paying out all sums above $5,000,000 at the rate of 2%

However, in Minnesota and Nebraska, the law states that the fee should be “reasonable.”

The amount of work involved is determined by the specific estate. The executor is generally responsible for collecting the estate assets, paying the debts and taxes (if any) and then giving what’s remaining to the heirs.

If you elect to take the commission, it’s taxable income which must be shown on your personal income tax return.

In New Jersey, if there are co-executors, the statute says that an additional 1% can be included to the commission. However, any one executor cannot receive more than the amount to which a sole executor is entitled.

Note that the executor only receives a commission on what he or she takes control of as executor.

This means that the executor doesn’t get a commission on assets that have beneficiary designations on death or that are jointly owned with right of survivorship. These assets pass outside of the will and the executor doesn’t take possession of these assets.

How Do I Calculate My Executor’s Fee? In many instances, the probate estate of the first spouse to die is less than the second. That’s because many of the assets were held jointly with right of survivorship. As a result, they aren’t probate assets and are not subject to the commission.

If that’s the case, the commission on the first spouse’s estate would be much less than the commission on the second estate.

Reference: (October 10, 2019) “Both of my parents died. How do I calculate the executor fee?”


Be Prepared: Death Happens when We’re Not Looking
Death Happens when We’re Not Looking

Be Prepared: Death Happens when We’re Not Looking

Death Happens when We’re Not Looking. There are hard topics, like sickness and death, that estate planning prepares for. Then there’s the unexpected, says Wicked Local Dedham in the article “Five Things to consider before getting hit by the bus.”  Be prepared: Death Happens when We’re Not Looking. Without an estate plan in place, families have to cope with the pain of a sudden loss, in addition to managing a funeral and estate minus any advance planning. It makes a bad situation worse.

The solution is relatively simple: have an estate plan and a “just in case” plan ready.

Access to money for expenses. If your family needed to get funds to pay bills and funeral expenses, how would they do that? If you don’t have close family nearby who you can count on, who will take care of these things for you? Note that today, when most banking statements and billing payments are done online, you’ll also need to have a list of online accounts and either name someone to manage your digital property or list your passwords. Plan for how someone you trust, will access this information.

Life insurance and other assets with beneficiaries. If you have one or more life insurance policies, does anyone but you know about them? Do your beneficiaries know that they are your beneficiaries? If your employer or former employer offers life insurance, disability insurance or any other benefits, make sure that someone else besides you knows about them. If you receive a pension, does your pension get transferred to your spouse, or do the payments stop when you die? Do you know what your Social Security benefits would be to a surviving spouse, or family members?

End-of-life medical decisions. If you don’t have an Advance Directive in place, it’s time to speak with an estate planning attorney and add this to your estate plan. If you don’t have a will, Health Care Power of Attorney or other documents prepared, now would be the time to get these plans in place.

You should have a named Health Care Agent, named in your Health Care Power of Attorney, who understands your wishes for end-of-life care, if you should suffer a stroke, be critically injured in an accident or experience an illness that leaves you incapacitated. These conversations are not just for you, but for your loved ones. It will give them peace of mind to know that they are following your wishes, if a hard decision, like removing you from life support, needs to be made.

Final arrangements. Does anyone know your wishes for burial or cremation? Do you want a traditional funeral or a memorial service? Who should be notified of your passing? Making this information available for those who will be in charge, is a kindness to them. If they need to get names and emails from your computer, make sure they know how to log into your system. You could also print out a list and tell them where you are placing it.

Last will and testament. The first question is, do you have a will? The second is, does your family know where it is located? Tell your family and the person you have selected as the executor about the existence of your will, where it can be found and where other important documents are located. If you haven’t had your will created or haven’t reviewed your will in three or four years, it’s time.

Be prepared: Death Happens when We’re Not Looking. Death does not come without a lot of paperwork. For some people, a bad health diagnosis serves as a wake-up call and that’s when they decide to put their affairs in order. For others, the death of a close family member or friend is the trigger. Whatever motivates you, speak with an experienced estate planning attorney to have an estate plan created.

Reference: Wicked Local Dedham (Oct. 10, 2019) “Five Things to consider before getting hit by the bus.”


Can I Protect My Daughter’s Inheritance from Her Loser Husband?
Can I Protect My Daughter’s Inheritance from Her Loser Husband?

Can I Protect My Daughter’s Inheritance from Her Loser Husband?

Can I Protect My Daughter’s Inheritance from Her Loser Husband?

It’s not unusual for a parent not to fall in love with their child’s choice for a spouse. They may even go as far as to try and make certain that their daughter- or son-in-law doesn’t get their inheritance.

You can shield your money from your new son-in-law, says’s recent article “My daughter is getting married. How can I protect her inheritance?”

A good strategy is to create a trust, either as part of a will, or a living trust that would receive the estate assets for the benefit of the child and the child’s children.

A trust is a fiduciary arrangement that lets the trustee maintain trust assets, on behalf of a beneficiary or beneficiaries.

Trusts can be created in many ways and can specify precisely how and when the assets can be allowed to pass to the beneficiaries.

The trustee is a person or company that holds and administers the trust assets for the benefit of a third party. A trustee can be given a wide range of authority in the trust agreement. The trustee makes decisions in the beneficiary’s best interests, and they have a fiduciary responsibility to the trust beneficiaries.

Trust assets can be used for the health, education, maintenance and support of a child. The assets that are left over (if any) at the death of the child and any remainder are directed to go to the grandchildren outright or in trust.

Provided the assets distributed to the daughter aren’t commingled with the assets of her husband, those assets wouldn’t be subject to equitable distribution, if they couple were to one day get divorced.

The daughter can also enter into a prenuptial or postnuptial agreement. With this type of agreement, her spouse waives the right to any assets inherited by the daughter.

Talk these types of situations over with a qualified estate planning attorney.

Reference: (September 27, 2019) “My daughter is getting married. How can I protect her inheritance?”


Mark Twain’s Estate Plan Went South, Despite His Efforts
Mark Twain’s Estate Plan Went South, Despite His Efforts

Mark Twain’s Estate Plan Went South, Despite His Efforts

Mark Twain’s Estate Plan Went South. Despite His Efforts.
“I came in with Halley’s Comet in 1835. It is coming again next year, and I expect to go out with it. It will be the greatest disappointment of my life if I don’t go out with Halley’s Comet.” Mark Twain

Mark Twain was right. He was born the same year that Halley’s Comet appeared and he passed away one day after the comet’s closest approach to earth. A month later, his last will and testament was admitted by a Connecticut probate court appointing three friends as executor trustees to administer his estate. According to the article “Who will advocate for your estate?” appearing in 83 degrees, his choices turned out to be a terrible mistake.

Twain thought long and hard about his estate. He selected a railroad executive, a businessman and a banker to be his executors. He had two concerns: to protect his only child and sole heir, Clara Clemens, and to keep his money in the family.

He understood the complexity of his estate, which included manuscripts, stocks, bonds, copyrights, real estate, book deals and the management of The Mark Twain Company. He also knew that his daughter was a spendthrift. The three executors, he thought, would advocate for him and protect his daughter.

His trust specifically directed quarterly income payments to Clara, “free from any control or interference from any husband she may have” because of her tendency to marry, divorce and remarry.

However, three executors were not enough. One died, another quit under duress and the third was forced to resign. Without having named perpetual successor trustees to implement Twain’s wishes, the estate was up for grabs. Clara remarried and her next husband borrowed $350,000 against the estate. Clara then disinherited her own daughter before dying. This promoted Nina to file an undue influence lawsuit against her stepfather. A probate judge eventually awarded Clara’s second husband 65% of Twain’s estate for life.

Mark Twain’s Estate Plan Went South. Despite his efforts. How was it possible that this happened? Who was looking out for Mark Twain’s wishes? Sadly, no one.

Whether estates pass via a last will and testament or revocable trust, selecting the right executors and trustees—and naming successor executors and trustees–is a key step to a successful estate plan. Our heirs today include minor children, grandchildren, stepchildren, half-siblings, dysfunctional relatives and ex-spouses. The challenges they present to executors and trustees have only become more complex, since Twain’s time.

Twain had one heir, and he was aware of her weaknesses. He planned right, but selected the wrong individuals to be his executors. They were not up to the task of managing his complex estate and his daughter’s life decisions. This is a case where a professional executor and trustees would have likely been a better option.

Speak candidly with your estate planning attorney about your potential executors and trustees. Will they be able to manage the necessary decision making and personalities in your family? Consider whether an impartial and trustworthy professional might be a better option.

Reference: 83 degrees (August 27, 2019) “Who will advocate for your estate?”