Tag Archives: Estate Planning

Do I Really Need a Will?

last-willYes, you do.  A will is a legal document which ensures that your property is transferred according to your wishes after your death.

If you don’t have a will, here are five things that can happen.  We found this list at nerdwallet.com.

  • Spendthrift heirs – If you have heirs who aren’t equipped to handle a large sum of money, receiving it may cause damage.  Perhaps these heirs are bad at handling money or, maybe, they’re drug or alcohol addicts.
  • Unexpected or contested heirs –  There may be confusion about who the beneficiaries really are.  Sonny Bono, musician and politician, died without a will.  His ex-wife, Cher, and a man who said he was Bono’s son tried to claim part of his estate, which his wife, Mary, contested in court.  Prince’s estate is another classic example.  Many people came out of the woodwork claiming to be relatives, entitled to a piece of his assets.
  • Property (and probate) in multiple states – If you own property in more than one state, your estate will have to go thru the probate process more than one.  Probate is a costly and timely process, even if you just go through it once.  Image if you own property in four states and your heirs have to hire four attorneys and go through the whole process four times.
  • Fabricated wills – If you don’t have a real will in place, it’s possible for someone to create a fake one – especially if your estate is large.  A famous case involved the estate of tycoon Howard Hughes.  When he died, several supposed wills surfaced, and his estate spent millions of dollars defending against the false documents.
  • Beneficiaries don’t like the court appointed executor – If there’s no will, the probate court will appoint one.  It may likely be an experienced attorney but not necessarily one the family knows.  It may take a great deal of time for this person to take inventory, appraise assets and distribute the estate.  If you have a will and name a family member as executor, that person will usually do a much faster job, possibly because that person is also a beneficiary.

If you don’t have a will, you should prepare one now.  Otherwise, your assets may not be distributed the way you want them to and a lot of extra money will go to attorneys and the probate court and not to your heirs.

For more information about wills, trusts and other estate planning documents, go to www.diesmart.com.

My father left his home to his kids — my stepmother sold it for $1 million

moneyologistWe read this recent column from MarketWatch and found it interesting enough that we are repeating it in its entirety.  If you have step children or step parents, you should be aware of what might happen if proper planning isn’t done.

He made his wishes clear, but his second wife had other ideas

Dear Moneyologist,

My brothers and I are mentioned in our father’s will as what he “wishes to happen” with the house he purchased for his second wife. He put the house in her name, but stated that if he should die first, he would like the wife to live in the house till she dies, but wanted the house to be sold and the proceeds to be split among his children.

After he died, my stepmother has sold the house for $1 million. She bought a new house for $500,000 and kept the difference. She has not put all the children on the ownership of the new house. Also, she has children from her first marriage who might want a percentage of the estate, including the new house. The will was made in Taiwan. I live in Texas.

Where do I and my brothers stand in this situation?

Betrayed Daughter

Dear Daughter,

When it comes to family drama, stepmothers fare about as well as mothers-in-law. That is, they get a hard time. Sometimes, it’s deserved, other times I think they fall victim to negative stereotypes. In one case, the stepmother wanted to cut her husband’s children out of his life insurance policy. And another stepmother obsessed over her husband’s children and what might happen to his credit score should he die. It’s easy to come down hard on stepmothers, mostly because of Grimm Fairytales. This 2009 book “Stepmonster: A New Look at Why Real Stepmothers Think, Feel, and Act the Way We Do” tries to debunk that myth. On this occasion, the jury is out.

Your father can’t leave his children something that he no longer owns. That’s not how life or the law works.

Your stepmother has downsized and created a nice nest egg. That was her prerogative. Your father can’t leave his children something that he no longer owns. He put his house in your stepmother’s name and, judging by his will, it seems that he wanted her to give it back. That’s not how life or the law works. If you could prove undue influence, you might have a case. You would need to provide evidence that (a) your father was not of sound mind when he signed over the house and/or (b) your stepmother somehow did not have his best interests at heart and tricked him into signing over the home. That would be an expensive and difficult process.

It’s still unclear whether U.S. or Taiwanese law would apply here. According to Taiwanese law, “The making and effect of a will are governed by the national law of the testator [your father, in this case] at the time of the making of the will.” But that may prove fruitless. “If you can prove that the testator was the true owner, you can file a litigation against your father’s second wife,” says Ou Yang, Hung, managing attorney at Brain Trust International Law Firm in Taipei, Taiwan and adjunct assistant professor of law at Soochow University. “It will be very hard to prove that the testator was the true owner of the house.”

Put it in simpler terms: You may have to kiss that $1 million goodbye.

For information about estate planning, check out our website www.diesmart.com.

Just living together can cause unwanted estate planning problems

k11782415Many couples, especially those who get together later in life, are just living together.  For whatever reason, they’ve decided not to get married.  Living together, they accumulate stuff but who owns what?

One of the biggest problems with just living together is estate planning.  If you’re one of these couples and you’re not careful, your loved ones might end up losing their home and getting nothing.

If a partner dies without a will, this is called dying intestate.  In this instance, state intestacy laws determine who will inherit that partner’s assets.  In most cases, that means a biological relative may inherit those assets, not the surviving partner.  This is probably not what either of the partners really wanted.  To alleviate this problem, a will should be drafted and executed by each of the partners.   It should include a statement that directly disinherits biological relatives and leaves the assets to the surviving partner.

Another document each partner should prepare is an advance  healthcare directive and durable power of attorney.  Unless these documents specifically name the other partner to make their medical decisions for them, a physician will not follow the instructions of anyone except a biological relative because of potential family objections.

A further document that should be considered – a revocable trust.  This will enable the partners to transfer property and money between them and will allow one partner to transfer control of his or her assets upon death.

A last point you should be aware of – the unlimited marital estate inheritance exclusion.  This exclusion cannot be used by an unmarried couple.  Instead, there may be sizable inheritance tax repercussions if estate planning is not done correctly.

It would be smart for any couple living together without the protection of marital laws to consult an estate attorney to find out what the best plan of action is for them.

For more information about estate planning, check out our website www.diesmart.com.

 

Your never to young to write a will.

yelchinAnton Yelchinleft, the Star Trek star, died a few months ago in a bizarre automobile accident.  He was 27 years old.  His assets were about $1.4 million….and he had no will.  He also had no spouse or children.  Therefore, his parents are asking the probate court to make them administrators of his estate.

He may not have wanted his parents involved in his estate.  He may have wanted someone else to handle his affairs.  But we’ll never know.  Accidents do happen and you need to be prepared.  Write a will today.  Make sure that people know what your wishes are so that they can be carried out after you’re gone.

For information about estate planning, check out our website, www.diesmart.com.

Who gets your bible and your jelly jar collection?

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Do you have a tangible personal property memo as part of your estate plan?  I just read a Forbes article that really makes a good case for why one is necessary.

An example they used is as follow, “When a widow with incapacity issues and squabbling adult children died, the executor she named in her will rushed to her home and changed the locks just as one son showed up to take things left in her will to his siblings.”

“in another case, an elderly woman who lived in a run-down house despite having millions of dollars in securities in the bank, had told various nieces, nephews and friends from church that she would give them specific pieces of costume jewelry, the family bible and her collection of homemade jams.  What they were fighting over were these sentimental, valueless items because they had an emotional attachment to them.”

How can you prevent these kinds of squabbles at what is already a very emotional time in your family’s life?  Put everything in writing.  Don’t must make oral promises.  Spell out who gets what in a will, trust or personal property memorandum.  That way, there won’t be any guessing games or arguments.  Your executor will distribute specific items to those who you wanted to have them.

For more information about end of life planning, check out our website at www.diesmart.com.