Monthly Archives: December 2015

Don’t let your ex-spouse get your life insurance proceeds

Jackie and Warren Hillman

Jackie & Warren Hillman

When you buy a life insurance policy, you name a beneficiary who will inherit the proceeds when you die.  It’s important to keep that beneficiary designation up to date or the wrong person may benefit.

One such case that went all the way to the Supreme Court was that of Warren Hillman. Hillman died in 2008 shortly after he was diagnosed with leukemia. He was 66. He had been married three times. When he died, his assets included a life insurance policy worth $124,558.03.

But Hillman made an all too common estate planning error. In 1996, while he was working for the federal government, he took out a life insurance policy and named his second wife, Judy Maretta, as his beneficiary. When he and Maretta divorced in 1998, he didn’t change the beneficiary designation on his policy. It was a policy that was part of a life insurance program for all federal employees and the law for that program says that the proceeds on death are paid according to the beneficiary designation.

He married Jacqueline Hillman in 2002 and was with her until he died.

Since his death, his second ex-wife, Judy Maretta, and his widow had been fighting over that money. In June, 2013, the U.S. Supreme Court found that Maretta was entitled to all of it because she was still listed as the beneficiary.

If your life circumstances change, be sure to update the beneficiary forms for any policies that you have. Otherwise, your ex-spouse may get your life insurance proceeds.

For further information about beneficiaries, go to www.diesmart.com.

 

 

 

An important holiday gift

present-clipart-Present-Clip-Art-932As we approach the end of another year, it’s a good time to have an important discussion with your family and other loved ones about what will happen when you die. It may be uncomfortable but it’s a gift you should give them before any more time passes.

You should tell them about your estate plan – not necessarily all of the details but where it can be found, that it is up to date and who you have named as your executor. The estate plan should, at a minimum, include your will and your advanced directive; it might also include a trust, a healthcare proxy and a durable power of attorney. You should reassure them that the plan is current and reflects your wishes at the present time. (If it doesn’t, you should get it updated immediately.)

Another critical thing you should discuss is your digital assets. If you pay your bills and conduct other financial transactions online, your executor should be able to access your accounts. The only way to ensure that this is possible is if you leave a list of your passwords for all of them.

You should make sure they know about any accounts that have beneficiary designations and that those designations are up to date. Otherwise, someone who is no longer in your life may inherit from those accounts rather than the person you really want the funds to go to.

Finally, you should discuss with your family and other loved ones your end of life care wishes. It’s not a pleasant topic but you should not burden them with having to make decisions which may not agree with what you would have wanted.

This is an important holiday gift that you should give to your loved ones this year.

For more information about making a digital asset inventory and other end of life decisions, go to www.diesmart.com.

 

5 Legal Documents every caregiver needs

biyExXGATIf you think a relative may be at risk of dementia or some other disease that will affect their reasoning ability, there are 5 legal documents you should get that relative to complete while still able to do so. Otherwise, when you become that person’s caregiver, you will need to go to court to apply for guardianship and the right to make decisions on his behalf. That court application will typically take 6 – weeks and cost you thousands of dollars. If another family member contests your application, it will only take more time and cost even more money. Don’t wait too long or it might be too late. Your relative may no longer be competent to make these critical decisions.

The 5 advance directive documents are:

  1. A durable power of attorney – It gives you the right to make financial decisions for that relative. Those can be things like paying bills, selling property and making investments.
  2. A healthcare proxy – This gives you the right to make medical decisions on the incapacitated relative’s behalf. This can include things like what course of treatment to follow, which physician to choose and where treatment should be performed.
  3. A living will – This states the medical treatment the person wants, or doesn’t want, so the decisions have been made before you take over. They include things like whether medical personnel should try resuscitation if the person’s heart stops, whether heroic measures should be taken, whether pain killers should be administered, etc.
  4. A current will – If the person has an old will, it should be reviewed to make sure that it reflects his or her present wishes and circumstances. Perhaps the will was written several years ago and needs to be changed. The will should state what should happen to all assets after he or she is deceased.
  5. You might want to also consider a living trust.   A living trust can make it easier for your fiduciaries to manage those assets while following the instructions of an incapacitated or deceased person.

State laws vary so you might want to consult an attorney when preparing these documents. And for more information about advance directives and wills versus trusts, go to www.diesmart.com.

 

5 ideas to consider when doing estate planning

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If you have a spouse and family, you’ll probably leave everything to them.  However, if you don’t have a spouse or kids and you’ve been procrastinating doing your estate planning because you’re not sure what to do about all of your stuff, here are 5 ideas you should think about consider.  We found them in the Rapid City Journal.

  1. Consider leaving something to close friends, caregivers or anyone else who you are close to.
  2. Think about charities that are meaningful to you.  What organizations have goals that match your own?
  3. Think about where a donation could benefit your community.  There are places like libraries, volunteer fire departments, arts organizations that would welcome some extra funds.  What about giving a piece of art to a hospital or buying a park bench?
  4. Build relationships with people who share your interest in collections of antique, tools or other items.  Then you can pass along your collections to people who will appreciate them and remember you.
  5. Don’t wait until you’re gone.  Consider donating collections to museums or giving personal possessions that you value but don’t necessarily use to someone who would appreciate them.

For more information about estate planning, go to www.diesmart.com.