by Thomas D. Begley, Jr., CELA

1. Grandchildren

Many grandparents would like to leave something to their grandchildren. Frequently, the grandparents have not thought of this idea, but are enthusiastic when it is presented to them. One way to remember the grandchildren in a Will is to leave a flat sum of money, i.e., $10,000 per grandchild, another is to leave the grandchildren a separate share. For example, grandparents with three children may want to divide their estate into four shares, one for each of the children and one to be divided equally among the grandchildren. Some grandparents want to establish trusts for their grandchildren and limit distributions for education. 529 Plans are also a popular idea for many grandparents.

2. Gifts/Loans to Children

Frequently, parents have made gifts or loans to one or more children, but not to all children. The Estate Planning attorney should ask whether the parents intended the gifts to be an advancement against the child’s share of the estate and whether they intend the loans to be repaid from the child’s share of the estate. Frequently, these loans are not documented and often children make no payments or default rather quickly.

3. Blended Families

A fairly high percentage of the population is engaged in a second or subsequent marriage. They have children by a previous marriage or marriages. Do the parents want to treat their children and stepchildren equally? If not, do they want to provide for their current spouse, and upon the death of the current spouse direct their estate to their own children? Do they want a portion of the estate to go outright to the children immediately upon death? Do they want their current spouse to have a life estate in the real estate in which the couple resides at the time of the first death? If so, who will pay the taxes, utilities and upkeep? Would the life estate end if the surviving spouse cohabits or remarries? Has a Prenuptial Agreement been signed? Should a Contract to Make a Will be considered?

4. Disability

Is there a family member with a disability? If so, is that family member receiving or likely to receive in the future any means-tested public benefits such as SSI or Medicaid? If so, a Special Needs Trust should be prepared.

5. Beneficiary Designations

The beneficiary designations on life insurance policies, annuities and retirement plans must be coordinated with the client’s estate plan. Clients should be advised to retitle any POD or TOD assets. IRA beneficiaries should be designated with a view toward rolling over and/or stretching out IRA distributions.

What a fitting quote from a literary giant of the twentieth century, a writer whose stories often pitted man against nature…an indifferent and relentless nature quick to penalize one’s mistakes.

And what an appropriate analogy to use when depicting the stripe of our stock market. Indeed, savvy investors remain hopeful at best that their astute selections will help them achieve their retirement goals. At the same time, the markets care less, of course, that we need money for retirement, or to pay medical bills. It rocks-and-rolls on a fevered pitch because it’s influenced, for the most part, by factors beyond our control.

‘Contributing’ to our retirement is only part of the formula…

However, we remain optimistic that by simply making contributions to our retirement funds and other savings accounts, that somehow our financial goals will be met.

But the heft and consistency of our contributions may not be enough if we don’t know how to make those funds grow over the years, making the mistake of not following the advice of a financial professional; making the mistake of not protecting our assets from nursing home costs through long-term care insurance, or leaving our heirs vulnerable to huge tax bills if we fail to make a Last Will as part of our overall estate planning.

Survey shows financial optimism…

Yes, we are a confident lot, and a recent survey published in Forbes attests to glimmers of hope we have about our financial futures. A National Foundation for Credit Counseling (NFCC) survey taken in December 2014 found that 49% of those responding expected their finances would improve by December 2015. Only 17% expected their situation to worsen while 23% were confident things stay about the same.

Since the Great Recession of 2008, consumers have held back on their spending, but the survey indicated that respondents were “experiencing the seven-year itch with a desire to spend again,” noted Gail Cunningham from the NFCC.

Will our new spending lead to more risk-taking?

But, as Cunningham notes,  and in our rush to start spending again, we can also “invite a personal financial disaster.” Even more reason to seek reliable financial and legal guidance.

TIAA-CREF: study indicates some can’t find the time to seek advice.

A lot of us, though, push back on the idea of spending money to get advice on how we should invest. TIAA-CREF study reveals that 44% of us think that financial advice costs more than they can afford to pay.

More striking, perhaps, is that 35% of those asked said that it’s “too hard to find the time to look for financial advice.” Interestingly enough, often the push back comes because we don’t know what questions to ask (32%).

Kudos to those who do get financial advice because a list of ‘positives’ generally begin to surface with 86% of those surveyed saying they actually “took action” to influence their financial outcomes, including changing their spending habits (62%) to making changes to their retirement and savings accounts (53%).

Sitting down with an experienced estate planner can bring a litany of insights to investment decisions that might be headed in the wrong direction. For example, the simple act of naming beneficiaries in both TOD and POD categories can avoid these transfer of assets from the public eye via probate courts.

Treat investor checkups like an annual ‘physical.’

If we are a people steeped in self-reliance, then that very fact can often set our financial goals back; this, because we reach for an over-the-counter solution (online ‘wills’) when we need a measured and steady hand on the tiller.

Much like that annual physical checkup, investors need to an experienced eye to give us the big picture, and provide us with a detailed strategy that includes retirement, insurance (disability…long-term care??) in a well-executed estate plan.

Contact us to link your financial strategy to your estate plan.

The post Estate planning entails making the right financial decisions, like choosing beneficiaries. appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

What a fitting quote from a literary giant of the twentieth century, a writer whose stories often pitted man against nature…an indifferent and relentless nature quick to penalize one’s mistakes.

And what an appropriate analogy to use when depicting the stripe of our stock market. Indeed, savvy investors remain hopeful at best that their astute selections will help them achieve their retirement goals. At the same time, the markets care less, of course, that we need money for retirement, or to pay medical bills. It rocks-and-rolls on a fevered pitch because it’s influenced, for the most part, by factors beyond our control.

‘Contributing’ to our retirement is only part of the formula…

However, we remain optimistic that by simply making contributions to our retirement funds and other savings accounts, that somehow our financial goals will be met.

But the heft and consistency of our contributions may not be enough if we don’t know how to make those funds grow over the years, making the mistake of not following the advice of a financial professional; making the mistake of not protecting our assets from nursing home costs through long-term care insurance, or leaving our heirs vulnerable to huge tax bills if we fail to make a Last Will as part of our overall estate planning.

Survey shows financial optimism…

Yes, we are a confident lot, and a recent survey published in Forbes attests to glimmers of hope we have about our financial futures. A National Foundation for Credit Counseling (NFCC) survey taken in December 2014 found that 49% of those responding expected their finances would improve by December 2015. Only 17% expected their situation to worsen while 23% were confident things stay about the same.

Since the Great Recession of 2008, consumers have held back on their spending, but the survey indicated that respondents were “experiencing the seven-year itch with a desire to spend again,” noted Gail Cunningham from the NFCC.

Will our new spending lead to more risk-taking?

But, as Cunningham notes,  and in our rush to start spending again, we can also “invite a personal financial disaster.” Even more reason to seek reliable financial and legal guidance.

TIAA-CREF: study indicates some can’t find the time to seek advice.

A lot of us, though, push back on the idea of spending money to get advice on how we should invest. TIAA-CREF study reveals that 44% of us think that financial advice costs more than they can afford to pay.

More striking, perhaps, is that 35% of those asked said that it’s “too hard to find the time to look for financial advice.” Interestingly enough, often the push back comes because we don’t know what questions to ask (32%).

Kudos to those who do get financial advice because a list of ‘positives’ generally begin to surface with 86% of those surveyed saying they actually “took action” to influence their financial outcomes, including changing their spending habits (62%) to making changes to their retirement and savings accounts (53%).

Sitting down with an experienced estate planner can bring a litany of insights to investment decisions that might be headed in the wrong direction. For example, the simple act of naming beneficiaries in both TOD and POD categories can avoid these transfer of assets from the public eye via probate courts.

Treat investor checkups like an annual ‘physical.’

If we are a people steeped in self-reliance, then that very fact can often set our financial goals back; this, because we reach for an over-the-counter solution (online ‘wills’) when we need a measured and steady hand on the tiller.

Much like that annual physical checkup, investors need to an experienced eye to give us the big picture, and provide us with a detailed strategy that includes retirement, insurance (disability…long-term care??) in a well-executed estate plan.

Contact us to link your financial strategy to your estate plan.

The post Estate planning entails making the right financial decisions, like choosing beneficiaries. appeared first on The Elder Care Firm.

Michigan probate is the process through which a court determines how to distribute property after an individual dies. Some assets are distributed to heirs by the court (probate assets) and some assets bypass the court process and go directly to beneficiaries (non-probate assets). With POD and TOD accounts, the account owner names a beneficiary (or beneficiaries) to whom the account assets are to pass when the owner dies. Generally all that is required to get the money or control of the account is for a beneficiary to show the bank manager or the brokerage firm an original death certificate. The funds pass outside of probate, meaning that the beneficiaries can receive the money quickly without the involvement of the probate court. The account assets also receive a “step-up” in basis when the original owner passes away, meaning that no capital gains tax should be due if investments are liquidated in order to be transferred.

Only the account owner has access to the assets while alive; the named beneficiaries have no control over the account, and the owner can change beneficiaries at any time, if competent to do so. If the named beneficiary predeceases the account owner, then the assets are distributed to the remaining beneficiaries or to successor beneficiaries, depending on what the owner writes on the beneficiary designation form or online. If there is only one beneficiary and he or she predeceases the owner, and the owner makes not subsequent changes to the beneficiary designation, the assets go into the account owner’s probate estate.

But receiving assets could be a problem for certain beneficiaries, such as a child with special needs who depends on Medicaid and other public benefits. If the account amount is large enough, it could be advisable to do special needs planning to avoid the assets interfering with the receipt of public benefits. (For more on special needs planning, visit Special Needs Answers.)

Also, some attorneys discourage passing assets through accounts like these for the simple reason that people sometimes forget about the accounts, and their existence can confuse an individual’s estate plan. For example, the will may say that everything should be distributed equally to the account owner’s three children, but the POD or TOD account passes assets to only one child, creating unequal shares among the children. If avoiding probate is the goal, it may be better to put all assets into one revocable trust that clearly states who should get what. But these potential problems are much less of an issue if the estate is a simple one – for example, one surviving parent with only one child..

One type of asset always creates an issue–that is the house.  In Michigan to avoid probate with real estate we typically use a Legacy Deed.  It’s a special type of deed that avoids Michigan probate at death and can pass directly to your beneficiaries.

The post Avoiding Michigan Probate without a Trust: PODs and TODs appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

Michigan probate is the process through which a court determines how to distribute property after an individual dies. Some assets are distributed to heirs by the court (probate assets) and some assets bypass the court process and go directly to beneficiaries (non-probate assets). With POD and TOD accounts, the account owner names a beneficiary (or beneficiaries) to whom the account assets are to pass when the owner dies. Generally all that is required to get the money or control of the account is for a beneficiary to show the bank manager or the brokerage firm an original death certificate. The funds pass outside of probate, meaning that the beneficiaries can receive the money quickly without the involvement of the probate court. The account assets also receive a “step-up” in basis when the original owner passes away, meaning that no capital gains tax should be due if investments are liquidated in order to be transferred.

Only the account owner has access to the assets while alive; the named beneficiaries have no control over the account, and the owner can change beneficiaries at any time, if competent to do so. If the named beneficiary predeceases the account owner, then the assets are distributed to the remaining beneficiaries or to successor beneficiaries, depending on what the owner writes on the beneficiary designation form or online. If there is only one beneficiary and he or she predeceases the owner, and the owner makes not subsequent changes to the beneficiary designation, the assets go into the account owner’s probate estate.

But receiving assets could be a problem for certain beneficiaries, such as a child with special needs who depends on Medicaid and other public benefits. If the account amount is large enough, it could be advisable to do special needs planning to avoid the assets interfering with the receipt of public benefits. (For more on special needs planning, visit Special Needs Answers.)

Also, some attorneys discourage passing assets through accounts like these for the simple reason that people sometimes forget about the accounts, and their existence can confuse an individual’s estate plan. For example, the will may say that everything should be distributed equally to the account owner’s three children, but the POD or TOD account passes assets to only one child, creating unequal shares among the children. If avoiding probate is the goal, it may be better to put all assets into one revocable trust that clearly states who should get what. But these potential problems are much less of an issue if the estate is a simple one – for example, one surviving parent with only one child..

One type of asset always creates an issue–that is the house.  In Michigan to avoid probate with real estate we typically use a Legacy Deed.  It’s a special type of deed that avoids Michigan probate at death and can pass directly to your beneficiaries.

The post Avoiding Michigan Probate without a Trust: PODs and TODs appeared first on The Elder Care Firm.