Wednesday, December 21, 2011
I am honored to appear on the Experience Pros Radio Show! I'll be discussing several estate planning questions.
Here are the details:
Thursday, December 22nd 2011
10:20AM Mountain Time
You can find the show here: On the radio dial, it's AM 560.
Streaming on the internet, it's www.560TheSource.com
I hope you'll join the show, listen in and even call in and participate!
Monday, December 5, 2011
We are always taking questions about estate planning here at our firm, and also do so on social sites like facebook; Google+; twitter and linkedin. You can connect with us there by clicking on the Contact Us tab above. From time to time, I like to publish some of the recent questions I have received so you can review them and determine if the information is helpful for you. Here are several recent questions and answers:
1. What is estate planning?
Estate planning is a catch all phrase that refers to legal arrangements you can make, either through legal documents such as a Will, or to contract arrangements you can make such as beneficiary designations on accounts or property. The planning portion of the phrase refers to a thoughtful analysis of your situation, needs, assets and goals to develop and implement a plan that is customized for you that involves both the legal and title arrangements.
There is no such thing as a "one size fits all" estate plan. Everyone's situation is different making their estate plan different as well.
2. Do I need an estate plan?
This is one of the most frequent questions I hear. The answer is, "it depends". Now, that's not a typical lawyer answer at all. It really does depend and it requires what I refer to in the first answer above: a thoughtful analysis of your situation, needs, assets and goals. Without this (we call this an estate planning assessment)it is not possible to provide each person with proper answer.
By doing the analysis one client at a time proper recommendations about the specific estate planning necessary to accomplish a client's goals can be given. So, to answer this question, ask yourself some questions. If you answer yes to any of these, then you should consider having an estate plan. Ask yourself:
1) Do you have minor children or a disabled child?
2) Do you care who makes decisions for you if you are incapacitated or controls your estate if you die?
3) Do you care where your assets go if you died suddenly in an accident?
4) Do have life insurance and other investments?
5) Is your property in more than state, or does it consist of operating businesses or farm or ranch property?
6) Are you concerned about keeping assets and estate private?
7) Is your estate near or over the estate tax exemption?
8) Are you concerned with protecting family property from future creditors?
There are other circumstances any client may have that would give rise to a need for estate planning, but a good place to start is those 8 questions. If you can answer any of them with a "yes" then you should schedule an estate planning assessment for yourself.
3. Since the estate tax exemption is so high, I don't need to do anything right?
Unfortunately, this is wrong. The level of the estate tax exemption keeps changing as Congress has decided (for whatever reason) to use the estate tax exemption as part of a political game. In fact, the current exemption may only be in place for 2011 as a new proposal to decrease it starting in 2012 was introduced just last week in Congress.
Relying on the government or Congress to do your estate plan for you is a risky proposition and we don't recommend it to any clients. A good rule of thumb to remember is: what the Congress gives one year can be taken away the next. With the frequency of changes to the estate tax laws coming from Washington, we recommend that clients focus on estate planning arrangements that will be workable for their family regardless of that Congress does. This is not always easy to accomplish for all clients and does require that thoughtful analysis I refer to above.
If you have a question that you would like our input on, don't hesitate to give me a call at 303-730-7100, send me an email, or just make a comment here. I hope you join our conversation and we look forward to hearing from you. Thank you for your interest.
Tuesday, November 22, 2011
As an estate planning attorney, as you might guess, I think a lot about estate planning. Recently, two experiences with clients reminded me of how important your estate plan is to protecting you and your family. The experiences of those two families is about the importance of having a current plan rather than one that is old and out of date.
Current Powers of Attorney
The first case involved a client who suffered an illness that left them incapacitated. The issue we faced is that the client's documents did not have current HIPAA language. This means that having the right family members with access to the client's doctors took some work. First lesson: make sure you have current Powers of Attorney that contain the appropriate HIPAA provisions so that the family members you want can speak to your medical providers should you suffer an incapacity.
A Current Will
The second case was more problematic. This client had not updated their Will concerning who would be the Personal Representative (that's the Executor in Colorado). When the client died two months ago, the family was not pleased that someone no longer involved with this client was named as the PR. We were able to solve this sticky problem with a series of meetings and negotiations. Lesson two: keep your Will or estate plan up to date.
What started me thinking about this is the holiday season. The holidays are when most people think the most about family (except some the stores that are forcing employees to work on Thanksgiving; a subject for a different article)and is always my busiest time of the year. So when you are thinking about your family this Thanksgiving, you might also think about whether your documents, Powers of Attorney, Will or estate plan are up to date and current. If not, how about that for a way to remember your family? Protect them and yourself with current documents.
And of course, if you don't have these documents yet, the holidays are probably the best time to get started.
What do you think? Please join our conversation with your comments, thoughts or questions. As always, thank you for your interest.
Wednesday, November 16, 2011
Many people want to have a Will or start their estate planning. However, one of the worst ways to do so is to try and do your Will online. This is definitely an area where the illusion of ease and simplicity can come back and hurt you and your family.
Here are the top three reasons to not do your Will online:
1. Online Wills Don't Work.
There's not much reason to do something online if it's not going to work for you. Generally, online Wills don't work and they don't work because of the reasons that the document is online in the first place. Read on.
2. Online Wills Are Overly Generic.
In order to make a document apply to millions of people simultaneously, the document must be built and structured extremely generically. In other words, having apply specifically to you takes work, the kind of attention that you get only with a qualified estate planning attorney and not online. These documents are full of traps for the unwary and if you don't have advice, how can you be sure of avoiding those traps?
3. Online Wills Fail to Comply with State Law.
Due to their generic nature, lack of planning and expert advice, most times online Wills fail to comply with even the most basic requirements of state law. If the Will fails to comply with state law, the Will itself fails. Moreover, the primary supplier of online documents, legalzoom has been sued in several states for a variety of state law violations. I have always failed to understand why people would think of dealing with a company like that which doesn't serve the interests of it's customers.
There are many more reasons to not do your Will online, but these top three should be considered by everyone. Given that you can do your Will with expert advice for about the same investment, consider that approach first.
Let me know if you have questions or comments and please join our conversation. Thank you as always for your interest.
Tuesday, November 8, 2011
Are you put off when you hear about estate planning? It's in the news, on TV and all over the internet. Many people gt intimidated when they hear those words, but there's no reason to fear or avoid getting started with your estate plan. Let's discuss just how easy it can be to get started.
First, the words, estate planning. Those words mean something different to everyone, but all they really mean is creating certain arrangements for your assets, property, insurance, IRA, etc. and for some creating a Will, Powers of Attorney and a Living Will. For others it can also involve creating trusts and focusing on estate tax planning. In fact, you may have already done some and you don't remember.
For example, if you have some insurance, you probably named a beneficiary. Perhaps the same with an IRA. Those beneficiary designations represent a form of estate planning. Perhaps you got a Will from military service, or some other source. Again, you have done some estate planning.
So, what about getting started and why would I suggest it's easy? Well, if you want to have a simple plan, then just make sure your beneficiary designations say what you want, especially if you haven't looked at them in a while.
Second, in a State like Colorado, you can use POD (Pay on Death) or TOD (Transfer on Death) beneficiary designations to direct bank accounts or brokerage accounts to the beneficiaries you want. This represents a probate-free transfer of the bank or brokerage account to your intended beneficiary and you don't need a Will to accomplish this.
Moving to the next step could involve protecting yourself with Durable Powers of Attorney and considering a Will. If your net worth is significant, you might also look at estate tax issues.
So, when you approach it from this direction, estate planning can be simple and not intimidating.
What do you think? Please join our conversation and leave a comment or feel free to ask any questions that you may have. You can also call our office or send me an email, I answer them all.
Thanks for your interest.
Tuesday, November 1, 2011
We provide all our clients with a client notebook containing all their estate planning documents. So you have this notebook, but how should you use it?
Here are some useful tips to make the notebook work for you:
1. Take the notebook out and read through it twice each year.
2. Pay attention to the provisions about your decision makers, how you are providing for your kids and/or grandkids and who you have in control if you become incapacitated or when you die.
3. While you read these sections, ask yourself if what you are reading matches what you now want to have happen. If you see an issue, it's time to call our office and schedule a review.
Here is an example: We had a client who recently had one of his agents resign from the Power of Attorney. When the client saw who he had named as an alternate, he knew it was time for an update. That's what you want to look for. Each time you look at your documents at home, look for these kinds of issues so you can make sure that your documents do what you want them to do.
Let me know if you have any questions concerning these issues. Thank you.
Thursday, October 27, 2011
In our continuing and unfortunately never-ending mission to expose scams, here's a new one called the Fake Referral. I found out about this scam this morning and if you know about it, you can protect ;yourself. Scammers and criminals are getting more and more clever in their efforts to steal your money. Here's the latest one, the Fake Referral Scam.
Here's how the Fake Referral Scam works: Someone claiming to be a financial planner etc. calls you and says "so and so referred me to you". Sounds legit, right? Well it isn't because that is not how professionals make referrals. Don't fall for the Fake Referral Scam. Professionals, like me, make referrals differently. If a client asks me to refer them to an accountant for example, I will provide my client with several names of accountants that I trust. I will never call the accountant and give them a client's name and number.
Tips to Protect Yourself from the Fake Referral Scam:
1. Get referrals from the referring professional directly.
2. If you get a call like this, either hang up, or call the professional who supposedly has made the referral and ask if they did so.
3. Write down the callers name and phone number and consider referring the caller to the proper authorities.
If you follow these three suggestions, you can avoid this latest scam, the Fake Referral Scam.
Let me know what you think and please join our conversation. Thank you as always for your interest.
Monday, October 24, 2011
Well, even though the media is constantly filled with articles about the importance of estate planning, less than 20% of people in the U.S. have even a simple Will and Powers of Attorney. Given how important protecting our families is, this is an alarming statistic.
So, to drive attention about the importance of estate planning, I bang the drum for it. Hopefully you read my posts and articles and one of them may spark your interest in this area. Do you know what would happen to your family if you were incapacitated or if you died unexpectedly? If you don't, and you want to make sure what you want to happen does, then planning your estate is for you.
So now you know why I am always posting about estate planning. Do you have questions about how this applies to you? Just ask and I'll be happy to answer any questions you might have. You can call, send me an email, or respond here. You can get all my contact info by clicking on the tab at the top of our website page at www.bhgreenberg.com and you can find me.
Thank you for your interest and I hope you join our conversation.
Thursday, October 20, 2011
The New Florida Power of Attorney Law
As of October 1, 2011, Florida rocked the legal world by adopting one of the strictest Power of Attorney laws in the U.S. See, Florida Statutes, ss. 709.2101-709.2402.
This new law will definitely affect you even if you are just traveling through or visiting Florida.
The new Florida requirements may make your existing Powers of Attorney obsolete if you are in Florida and get sick or injured. Clients of our firm already have compliant documents for Florida, however, if you are considering traveling to Florida, it's time for a review meeting.
How To Protect Yourself:
1. If you have a Power of Attorney, call your attorney and schedule a review.
2. If you don't have a Power of Attorney, call your estate planning attorney and consider getting one that will be compliant in your State and in Florida.
3. Make sure your Powers of Attorney do NOT contain "springing powers" as these are now illegal in Florida.
There are several articles below that provide you with information about how you can protect yourself and family with a financial and health care Power of Attorney. I encourage you to review these articles if you don't already have a Power of Attorney.
These steps can be important if you will be traveling to Florida or spending any time there at all. If you have questions about how this may affect your or a family member, please give me a call and we can discuss further.
I hope you enjoy our articles and encourage to join our conversation with questions or comments. As always, thank you for your interest.
Thursday, October 13, 2011
Hard times seem to draw out even more scams and scam artists than normal. Scammers prey on people during hard times and when our hearts are open after disasters and calamities. There are steps you can take that will help protect you and your family.
The Attorneys General in most States have websites dedicated to helping you avoid fraud and scam artists. I will not repeat those steps here, but I do urge you to use the websites available to you in your State to get information, report fraud and learn tips that will protect yourself and family.
What I want to discuss in this article is a particularly insidious scam that is prevalent now and targeting people during these hard times. That is job scams. There are different versions of the job scam, but they are all pretty much alike. In a job scam, part time work is offered to make calls, write letters or do some kind of "research". There may be incentives offered based on calls made, or other results obtained.
The people who pursue these types of 'jobs" are looking to supplement their families' income and do nice things for their families or themselves. Here's the scam part: after work is done, the scam artist comes up with some excuse not to honor their promise to pay for the part time work. Often they will turn it back on the unsuspecting person by complaining that the results don't merit compensation, or some other nonsense.
Wrong? Yes. Illegal? Probably. A scam? Most certainly. Avoidable? Most times not because many of these scams appear in the form of "affinity fraud". Affinity fraud involves a scam perpetrated by someone you know and usually from a setting that you trust, such as church or an organization you may participate in.
To protect yourself from a job scam, consider these steps:
1. Check everything out in detail.
2. Get all arrangements for your compensation and payment of same in writing.
3. Contact your local DA's office and your State's Attorney General Office to determine if the situation is legitimate.
4. Consider part time work from a trusted company or employer. Working for friends can be risky.
5. Contact your local BBB office to check out the situation.
These steps are a good starting point to help protect yourself and your family. Let me know your thoughts on scams and financial fraud and please join our conversation. As always, thank you for your interest.
Thursday, September 22, 2011
5 Ways to Protect Yourself and your Partner in a Domestic Partnership or Unconventional Relationship
If you already live in a State that recognizes same sex marriages or domestic partnerships or other unconventional relationships, that State's laws can protect you and your partner should a disability or death occur. But not always.
Even in those States and the vast majority of other States that do not recognize these relationships, there are five ways you can protect yourself and your partner. Learning about these will help you protect yourself and your partner. What most people desire is to protect themselves and their partners against unwanted intrusion or interference from well-meaning family members or friends.
1. Beneficiary Designations and Insurance Policies
You can name your partner as a beneficiary in policies or work benefits. Doing so can prevent unwanted intrusion of others seeking to control those benefits. Also, you may want to review with your car and homeowner's insurance agent whether your partner should be added as a named insured on those policies.
You can also use beneficiary designations to allow control and pass property to your partner in the event of an untimely death. This is especially important if you are not doing any estate planning or a Will.
2. Durable Powers of Attorney
If you want your partner to be present with you during illness or incapacity and to have the legal authority to make decisions for your assets and your care, then the only way to accomplish that is by having appropriate Durable Powers of Attorney. While you can do these on your own, they are legal documents and it is usually better to have the guidance of a qualified attorney.
3. Asset Titling
How you own title to various assets, property and accounts can go a long way in protecting yourself and partner. For example, if you have an older bank account that still includes a parent on the title, then that account will not be available for your partner should something happen to you. Checking and confirming all titles is crucial to making your wishes happen.
4. HIPAA Authorizations
If you are not going to have Durable Powers of Attorney, then consider having your partner as your designated HIPAA Personal Representative. This will permit your partner access to you if you are incapacitated and if properly drafted permit your partner to make decisions for you. Again, this helps to avoid unwanted intrusion or interference by others.
5. A Will
If you want certainty about what will occur should you die unexpectedly than you should consider having a properly drafted Will. The Will can solve many problems for you such as who your Executor will be and cover how your want your property distributed. In States that do not recognize unconventional relationships, this can make all the difference between the result you want and immense heartache for your partner.
If you combine these five ways, you can ensure that you and your partner will create the result you want in the future. Let me know if you have any questions about any of these and how they might apply to your situation.
Thank you for your interest and attention.
Tuesday, September 20, 2011
Tax Reform, Tax the Rich or Class Warfare: Isn't it all just politics?
The politicians are at it again, this time in the supposed effort to reform our tax system and reduce the deficit. But it all smells like politics all over again.
One side (I'm not even going to dignify each side with their desired labels in this column) says that high income earners should pay more than the 40% they pay now. The other side claims that constitutes "class warfare". To me, it's all politics.
By framing the tax reform discussion in the way the politicians have, they have created a no-win scenario for us all. Tax reform is not about giving rich people the business. It is also not about inciting emotions by pitting different income earners against each other. Tax reform has always been and should always be about simplifying the tax structure so it is understandable, simple to comply with and is not filled with hundreds of exemptions and give-aways to special interest groups.
Tax reform is not about fairness since that is a relative and subjective concept. What is fair to one group is the goring of another group's ox. Tax reform cannot focus on what is "fair" if it is to be accomplished.
Second, for real tax reform to occur, politicians MUST stop viewing our money as theirs. What we pay in taxes is our money going to the government. The system that we fund through our taxes is the system that we elect politicians to work out and decide on, not to bring our country to crisis and stalemate as they argue over their petty positions of power. In other words, asking politicians to work on tax reform is like asking irrational people to make rational decisions.
For tax reform to work, it has to occur outside of politics which today are ruled by emotions and irrationality. As long as politicians act irrationally, then it our mistake to expect them to make rational decisions. Perhaps it is simple as realizing that we don't have the right people in Washington doing the business of our country. At least, they have demonstrated they are wrong for the job over the last 3 years.
What do you think? Let me know your thoughts and comments and join our conversation. When it comes to taxes, it is your money after all.
Thursday, August 11, 2011
"Oh boy, Bernie's back with more stuff on taxes." Well yes, but from a perspective that you may not have taken before. Here, I'm not going to try and teach you about taxes, we have plenty of time for that in other articles.
No, here I want us to focus on what taxes are, what their purpose in our system is, and when we talk taxes, whose money are we really talking about. So strap in because this can get bumpy.
Taxes in the news.
You have may have noticed that taxes are in the news quite a bit. And not just now, taxes are always in the news, it just seems like it's more now. Why? Why does the subject of taxes cause so much noise, commotion and controversy? Well, that's the point of this article. The controversy? Taxes involve someone's ox getting gored for the benefit of someone else. No matter how you approach the topic, because of that simple little truth, it will always be controversial.
The controversy is growing due to the country's budget and deficit crises. The so-called "Super Congress", actually a committee, must decide on new tax policy and deficit reductions in the next several months to prevent massive tax increases and budget cuts. The possibility of their success is beyond the scope of this discussion.
What are taxes?
Taxes are nothing new. They were invented the first time that someone decided they were sovereign over someone else. But for our purposes, you may remember the concept of, "rendering unto Caesar". So the simple explanation is that taxes are amounts that the government takes from it's citizens in exchange for the government and services they supply back. The quality of those services is also beyond the scope of this discussion.
In the U.S. the legislative history of our tax system indicates that the purpose of taxes is to redistribute wealth via government. That makes taxes a political animal. Again, the wisdom of this and it's historical results are not our subject today.
What are the main taxes?
While there are several hundred forms of taxes and fees that we pay to various governmental entities, the taxes I focus on here are:
1. Income taxes.
2. Capital gains taxes.
3. Gift taxes.
4. Estate taxes.
5. Taxes imposed on transfers to grandchildren or the generation skipping tax.
Let's expand on each of these so we know what they are:
1. Income Taxes.
Income taxes are imposed on your income as you earn it. You get to see these taxes up and personal every two weeks, or quarterly if you make quarterly estimates. Each pay period you can see what is coming out of your pay. In our system, we have what is referred to a "progressive" income tax. That means the more you make, the higher percentage of tax you pay. Currently, if your income is below a certain amount, you pay no taxes at all.
2. Capital Gains Taxes.
Capital gains taxes are incurred when you sell something that has increased in value. To buy that thing, remember you have already paid income taxes on the income you earned to buy the thing. Let's make the thing your home. If you sell your home and it has increased in value since you bought it (good luck with that given the recent past) then that increase is called gain. After certain exclusions, you would have to pay the capital gains tax.
3. Gift Taxes.
If you make gifts those gifts are subject to the gift tax. Dang, we can't even give something without a tax. That's right. Again after exclusions and exemptions if you make a gift, you may have to pay the gift tax.
4. Estate Taxes.
The estate tax is imposed against your property when you die if you die owning more than the exempt amount. Due to politics, these exemptions have been changing from year to year and the cause of many estate planners like myself going prematurely grey or even worse.
5. Transfers to Grandchildren or the Generation Skipping Tax.
Not believing the first four types of taxes were enough, the government decided that gifts to grandchildren or beyond the generational level of children should also be taxed. So after the exemptions available, this last tax is also imposed.
So to sum it up, you pay taxes as you earn your pay, taxes if what you own increases in value, taxes if make gifts, taxes when you die and taxes if you want to help your grandchildren and great-grandchildren. That's quite a few oxen getting gored.
The answer to my question above, about whose money is it anyway should be clear. It's your money!! We are talking about the government taking your money for it's various purposes. And do you know what all the controversy is about? The controversy is all about "fairness". What is a fair rate of tax for the government to take is also beyond the scope of this discussion. But I would sure like to hear your opinion on that topic!
To boil down the budget crises debate, it's all about whether the government should spend less, or should increase taxes on you. Those are the only two issues that are really going on. The reason it boils down that way is because money will not fall on the government from some aliens visiting (at least as far as we know now). Revenues to any government are enhanced by either spending less, or by collecting more.
Historically, governments are not too successful at spending less. They are very famous for increasing taxes. That's a very tender balance also. Increase taxes too much and the people who pay them are unhappy, sometimes to the point of replacing those politicians. Decrease spending too little and the budget crises remains unsolved.
What makes the current budget problem so intractable is we are attempting to solve a complicated non-political problem with many moving parts politically. It may not happen. But that too is a topic for another day.
So that's my little primer for you about taxes. What do you think? Where do you stand? Comment back and sound off, let's start a dialogue on the subject of taxes. It may not be fun, but it may be necessary because I'm not sure I trust the folks in Washington to solve this one.
Monday, August 8, 2011
Usually you expect me to be writing on an estate planning topic of some kind. Something about estate taxes and the like. Not this time though. Reports in the media over the weekend got me thinking resulting in this missive.
After distilling several dozen reports from the numerous medial outlets and supposed experts that I follow, I expected to wake up this morning to mass destruction and devastation. What a surprise when the day dawned bright and sunny here in Colorado with nary a destruction in sight. Oh well.
I am always reminded of the lessons of the one of the most important books of the last 100 years, The Black Swan. I recommend this book to everyone for many reasons. Today that reason is the absolute folly of attempting to understand what is happening in our world from reading the news (rare today I know) or watching it on TV or your computer. That exercise is simply unsuccessful.
You see, the media exists in it's own world of self hypnosis or more accurately, self-induced hysteria and insanity. According to the media (all the media) "if it doesn't bleed, it doesn't lead". The only reason I actually know what that means is because a reporter told me. It means, what the media wants to report on is: death, destruction, and mayhem. They WANT blood and in our world, if you look for that, you'll find some.
So, according to the media, (especially MSNBC who expects the world to end hourly)what is going on out in the world is unrelenting war, famine, destruction, chaos and mayhem. Might as well pack it all in right now if we are to believe them. But it's not true, not any bit of it. So sorry you Mayan world destructionists and other looney rapture and alien watchers, none of that is gonna happen.
The end of the world (or days if you will) has been predicted, prophesied and expected for thousands of years. Recently, we had two rapture non-happenings, preceded by: total world meltdown, total world freezeups, and the year 2000, all of which turned out to be much hysteria about nothing. In just a few months, according to some deluded and long dead Mayans, supported by a ridiculously bad movie from Hollywood, we will get 2012, another end of the world non-happening.
"How can you be so confident Bernie?" Well, it's easier for me to say than you might think. For me it's simple arithmetic. There have been approximately 13 million end of the world predictions in the last thousand years. Their batting average? A big fat 0. So, I'm not really going out on the limb at all when I say, it's just not happening. The odds are way in my favor.
So, how to avoid all this talk of doomsday, armageddon and just sad stuff? Don't watch or take seriously what you see on TV or read daily in the news. Here's the truth: just because something bad happens somewhere (and there's no shortage of that) there is no equation that says that it means anything. "Gasp!!" I hear you now. "It doesn't mean anything? Ridiculous." Maybe so, but if it did, you wouldn't be here now to read this article now would you?
That is the point of The Black Swan. In our effort to find meaning, we personalize things that have nothing to do with us so we can pretend that they do. Well, they don't. It doesn't mean that we shouldn't care and we shouldn't try to make our world better, we absolutely should. But let's not get swept up in the media's attempts to hypnotize us into thinking that the end is near. If we should have learned one thing as a species on this planet, it's that we just keep keeping on, especially here in the land of the free and the home of the brave. Let's not ever forget that is our birthright, and our gift to the rest of humanity.
So, let's knock off the talk of the end and focus more on the beginning. And let's get those knuckleheads in Washington to actually get something done. But more on politicians another time.
Let me know what you think. Is the media really just the bearers of bad news? I look forward to your comments.
Monday, August 1, 2011
Here are six sure fire ways to make sure your Will is up to date and current. I am often asked how someone can make sure about this. Let's discuss how you can tell if it's time for you to get your Will and estate plan reviewed.
If your Will or estate plan falls into any of the categories below, it is OUT OF DATE and requires immediate attention.
1. You signed your Will in 2009 or earlier.
If your Will or estate plan is from 2009 or earlier, it is out of date and probably obsolete. Many things have changed since 2009, including dramatically different laws and rules concerning estate taxes.
2. You don't have Durable Powers of Attorney than name a HIPAA Personal Representative.
With the introduction of patient privacy laws under HIPAA several years ago, it is vital that your Powers of Attorney comply with these federal rules. Failure to do so could result in many problems for your family and decision makers if you are sick or injured.
3. You have moved to a state different from where your Will was created.
Since the laws vary from state to state, when you move to a new state, it is always advised to have your existing Will and other documents reviewed. This guidance also applies to your titles and beneficiary designations.
4. You have either: gotten married, divorced, had a child or children or had any other significant event in your life
Life brings changes, some good, some not. These changes must be considered to make sure your Will and estate plan remains appropriate for you. If life has brought you a significant event, it's time to get your Will and estate plan reviewed.
5. You have an A-B Trust, or any any other kind of estate plan that mentions the marital deduction and estate tax exemption.
These kind of Wills and estate plans are now obsolete and hazardous to your wealth. If you don't know how the estate tax changes of 2010 impact your plan, and you don't amend your plan accordingly, your family is at risk.
6. You have a fill-in-the-blank form or Will from any internet site.
It is a certainty that your Will or estate plan is out of date and obsolete if you have one of these. Not only are these forms dangerous for your family (See, the several articles below on internet Wills), they are even illegal in some states. If you have these kind of documents, get them reviewed and replaced immediately to protect yourself and family.
There are many other methods we use to determine the soundness of your Will and estate plan. So we don't stop with only these six. These six ways are a good way for you to start and I encourage you to see if any of these apply to you.
Let me know your thoughts and comments and any question is welcome. Thank you for your interest.
Monday, July 25, 2011
Did you know that every estate plan consists of six steps? It's true and in this article we discuss each of those. As you proceed with your own estate plan, use this as your checklist to make sure that you include all six steps in your plan.
This discussion is NOT about what kind of estate plan you should have, or what your estate plan should say. This is about the six specific steps you want to make sure you complete in order to have the estate plan that is right for you and works for you. Notice that these steps are cumulative and should be taken in the order that I list them here.
We have also published this article as a video if you would like to watch and read along as well. You can find it on our YouTube channel at: www.youtube.com/BHGREENBERGLaw
Here are the six steps:
1. Decide to have an estate plan.
That really isn't is silly as it sounds. It's the first step and only you can take it. You have to decide that you want an estate plan before you can take action to get one. It's up to you.
2. Think about your goals.
You want to think about why you are going to do your plan. Is it to protect your kids, property, what are the three or four reasons driving you to do your plan? Write these down and think about them before moving on to step 3.
3. Schedule your estate planning assessment meeting with an attorney who specializes in estate planning.
At this meeting you will discuss your goals, the estate and estate tax laws and learn about your options for the different types of plans that might fit your goals and needs. Be prepared to ask questions and for specific recommendations.
You also want the attorney to give you a firm price on fees and expenses so you know ahead of time what your investment will be.
4. Work with your estate planning attorney to design, draft and sign your planning documents.
It may take several meetings to complete each of the tasks in this fourth step. Working with your attorney through these tasks will help make your plan better and ensure that it is yours. Remember, there is no plan until you have signed documents.
5. Coordinate titles to assets and all beneficiary designations with your plan.
This step is critical to the proper working of your plan. It is frustrating and potentially damaging to your family of you skip this step. The goal here is to make sure that your assets and beneficiary designations are synchronized with your plan. Each person is different, so don't just do something because Uncle Fred did.
6. Review your plan, titles and beneficiary designations with your attorney at least every two years.
Since people's lives change, the laws change and your general circumstances change, it is vital to make sure that you keep your plan up to date with changes in your life and the law. The only way you can accomplish this is to do periodic reviews with your estate planning lawyer.
There you have them, six steps to follow to make sure you get the estate plan that fits you and works when you and your family need it.
Let me know if you have questions about any of these steps or this article. We take all questions and comments and welcome your feedback. Thanks for your interest.
Thursday, June 2, 2011
In our series of articles responding to frequently asked questions about estate planning, we recently dealt with the question of who should have a Will. You can read that article below.
Today we tackle a different question, what documents are recommended for everyone regardless of their situation. Remember, the need for a Will is situation dependent. There are certain documents necessary that are not dependent on your situation.
Here are documents every person over 18 should have:
1. Durable Financial Power of Attorney.
This document permits your chosen person to deal with your money, property, bills and taxes if you are incapacitated.
2. Durable Health Care Power of Attorney.
This document permits the person you choose to deal with your doctors and medical care issues if you can't speak for yourself.
3. Living Will
This document sets forth your wishes if you are unfortunately in a coma as a result of a terminal disease or injury and you can't speak for yourself.
4. An estate planning assessment.
This is not a document, but a planning meeting with an estate planning attorney. This meeting is recommended so you can make sure you don't miss something else that may be required to protect yourself, your family or your property.
These are legal documents and should be pursued with appropriate legal advice and assistance.
Let me know what you think about this article and if you have a question that you would like to see us address. Thank you.
Wednesday, June 1, 2011
Each week we answer all questions we receive from the public on various estate planning topics. Here is the most frequently asked question so far this week in its various forms:
1. Do I really need a Will? and 2. Does everyone need a Will?
This is actually a very good question and is not as simple as you might think. You probably thought I was going to answer that, "yes, everyone should have a Will". But that is not correct. Not everyone "NEEDS" a Will.
Since everyone's situation, family status and estate is different, the correct answer is "it depends". I know, a typical lawyer answer, but it is true. This is one of many reasons that internet Wills and estate plans don't work.
There are certain situations when a Will is mandatory. They include:
1. You want a specific result to occur if something happens to you.
2. You want specific people to handle your estate when you die.
3. You have children, especially minor children.
4. You are doing an estate plan anyway.
There is only one way to find out if you "need" a Will. That way is to meet with an estate planning attorney and go over your situation. You may find, like many, that you don't "need" a Will, but you "want" one in order to accomplish specific goals that you have.
There are dozens of different types of Wills and even more types of estate plans. So go ahead, and schedule a review meeting for yourself today. Find out about your situation and then make an informed choice to protect yourself and your family.
Monday, May 23, 2011
The 5 Biggest Mistakes - Barrons.com
Let me know your thoughts or if you have any questions.
Tuesday, May 17, 2011
In reviewing my last few entries here, I noticed that the topics were all of interest to me. As I do periodically, it's now your turn. What would you like to have discussed here next?
Remember, our focus is estate planning; estate taxes and estates, so let's try and stay in those areas and away from the usual minefields of politics, religion and Lady Gaga.
To start things off, I will say that it was an honor for me to be a presenter along with such luminaries as Brad Friedman, Jim Thomas and Susan Gindin today at a continuing legal education program at CLE in Colorado called, Social Media for Lawyers, by Lawyers. As we learned from Jim today, there really funny lawyers!
So now it's your turn. What estate planning, or estate tax topic would you like to discuss next? I'm looking forward to hearing from you.
Friday, May 13, 2011
Legal Forms | Estate Settlement Components | Bernard Greenberg - JDSupra
Friday, April 29, 2011
One of the frequent questions people ask me, is how often they should review their Will or estate plan? This is a great question!
Any Will or estate plan should always be reviewed periodically. There is no special rule for how often, but here are some useful tips you can follow:
1. Plan on reviewing your Will or plan with your attorney every 15 months.
2. If a significant event occurs in your life or family, schedule a review meeting.
3. If a significant financial event occurs in your life, schedule a review meeting.
4. If you take your plan out and read it and find you don't like something there any longer, schedule a review meeting.
If you follow these tips, you will keep your Will and estate plan current. If you have specific questions on this or any of our topics, please give me a call or drop me an email. Thank you.
Wednesday, April 20, 2011
While there are actually many more than five, here are the top five reasons to avoid internet Wills:
1. Internet Wills Don't Work:
Most folks who attempt to create an internet Will miss one or more important questions or drafting issues rendering the document useless. If you are going to do a Will, why not have one that actually works?
2. Internet Wills Can Work In Unintended Ways:
As with most fill in the blank documents, the end result is a function of what goes in. Remember GIGO? That stands for “garbage in, garbage out”. Since most folks who attempt to use these are not aware of legal details that apply to estates the documents they create, while enforceable, create consequences that are not intended.
3. Internet Wills Don't Apply to You:
When a form is made general enough to apply to millions of potential users, it usually will not apply to you. This is why well drawn Wills are custom for each client.
4. Internet Wills Don't Address Special Circumstances:
Do you have a disabled child? If so, forget internet documents. Internet documents cannot address any special circumstances that require special handling.
5. Do You Really Want a Will from one of OJ's Attorneys?
The most popular internet documents are from a company started by one of OJ's lawyers. While he may be a good criminal lawyer, he knows very little about Wills and estate planning. Enough said on that.
What are your thoughts? Please join our conversation.
Friday, April 15, 2011
The IRS announced today that the Form 8939 (more on that below) will not be due for filing on April 18, 2011. The reason provided by the IRS is not that the filing date has been extended, but because the IRS has not yet created and released the tax form for use by taxpayers.
Can there be doubt about why our tax system is such a mess? How in the world are people supposed to comply with a tax system that works in such a crazy fashion? Sorry, but I don't have the answers, I just wanted to provide you with the "through the looking glass" experience of dealing with our tax system and the numerous and complex forms that are required of taxpayers.
Now for Form 8939. Do you remember back in 2010 when there was no estate tax. It had been replaced with a new carryover basis system. The reporting obligations for that were supposed to be made on the new IRS Form 8939.
In December of 2010, Congress through those rules out the window (actually a very good result for taxpayers) by passing a new estate tax system retroactive to January 1, 2010. Under the new law, presently in effect, the $5 million exemption against the federal estate tax was made retroactive to 1/1/2010
However, since Congress passed the new law at the end of 2010 and since just a few people had died in 2010 expecting there to be no estate tax, 2010 estates have a choice. 2010 estates can elect to either go with the "no estate tax system" which is no longer law, or with the $5 million dollar exemption system which is now the law.
Estates desiring the "no estate tax" system, like the Estate of George Steinbrenner, are required to use Form 8939.
And as of today, 4/15/2011, per the IRS notice I am reporting on, that Form will not have to be filed on time (4/18/2011) only because Form 8939 doesn't exist since the IRS hasn't created it yet. By the way, I have the IRS draft Form 8939 in my possession. I can tell you that the reason there is no Form 8939 is that the IRS doesn't yet understand the new tax law passed by Congress and how the optional carryover basis system works. That's ok, no one else does either.
If you haven't yet, get those quarterly estimates in and remember tax day for 2011 is April 18th.
Let me know what you think about this article and join our conversation by commenting. Thank you.
Thursday, April 14, 2011
Where There’s a Will There’s No Way, Many Americans Say | Advisor One
To think that so many people would rather have a root canal or give up sex before making a Will is just shocking. Does that say something about how they feel about their families? I'm not sure.
The second reason I wanted to comment on this article is my distaste for internet Wills. I have written several articles explaining the reasons you should stay away from internet legal documents, I don't repeat all those reasons here. I do however, encourage you to read those prior articles before entrusting your own estate plan to the internet.
Let me know what you think, as I hope you join our conversation. Thank you.
Wednesday, April 13, 2011
As you know, the estate tax exemption became $5 million on January 1st of 2011. However, that exemption is reduced to only $1 million on January 1, 2013.
The President's announced plan would make the $1 million exemption permanent. This is a drastic increase in federal estate taxes resulting from an absurdly low exemption of $1 million and a top estate tax rate of 55%.
What is your take on this announcement? I don't know if the President has the votes in Congress to get this through, but if passed, it is a disaster for your family.
Please read the article below:
Obama Lays Out Plan to Reduce Deficit by $4 Trillion in 12 Years | Advisor One
Thursday, April 7, 2011
Recently I asked the above question by posting on several social networks. As you might think, there was a variety of responses.
One of my friends actually responded that the phrase “estate planning” makes him think that I am posting again! In this article, I list some of the more prevalent and interesting responses and again ask for your thoughts.
It has always interested me how people who are not immersed day to day in estate planning think when they hear that phrase.
1. When I hear “estate planning” I think about a Will.
This is the most common response and one that I think of as well. Is that what you thought of?
2. When I hear “estate planning” I think about my family.
This is my favorite response and the one I suggest to all of my clients. To me estate planning is about family and family represents the reasons people plan their estates.
3. When I hear “estate planning” I think about taxes.
It is true, for many, thinking about their estates brings up thoughts about taxes. The impact of taxes on estate planning is a function of the size of the federal exemption against the estate tax, not a subject for this article.
Those are the three most common responses that people have when I ask them what comes to mind when they hear, “estate planning”. What comes to your mind? Please respond and share your thoughts on this topic and join our conversation.
Wednesday, March 23, 2011
Here's an article that may be of interest. My question is where is the transparency in government that we have been promised?
From Advisor One:
Let me know what you think of this and visit here often: B.H. GREENBERG & ASSOCIATES
I thought you would find this article about protecting your credit interesting.
How to Effectively Manage Your Credit Reputation [Personal Finance] - http://pulsene.ws/1610A
Monday, March 21, 2011
It's true. Knowing the code of Powers of Attorney, the difference between a FDPOA and a HCDPOA can save your life.
In estate planning, Durable Powers of Attorney are critical and fundamental. Every estate plan, if properly drafted, will consist of both of these documents.
FDPOA: The Financial Durable Power of Attorney.
A FDPOA or Financial Durable Power of Attorney represents your choice of financial decision makers for any period you cannot speak for yourself due to incapacity. Think of all the financial parts of your life, from paying your bills and other periodic payments to filing your taxes. Those things need to occur even if you are incapacitated. Your FDPOA can accomplish that for you.
HCDPOA: The Health Care Durable Power of Attorney.
A HCDPOA or Health Care Durable Power of Attorney represents your choice of health care decision makers to speak for you during incapacity. From medical treatment to living arrangements, decisions need to be made. If you cannot speak for yourself due to disability, your decision makers as listed in your HCDPOA can make these decisions for you.
So these letters: FDPOA and HCDPOA represent the Power of Attorney Code. Whether it's a FDPOA or a HCDPOA, knowing the code protects you and helps your family if you ever experience a disability which prevents you from speaking up for yourself. Knowing the code could save your life.
Let me know your thoughts about this and all of our articles. Join our conversation and leave your questions and comments or feel free to send me an email or give me a call. Thanks for reading.
Wednesday, March 16, 2011
You may have heard enough to make you nauseous about the 2010 tax act that changed all the rules we've ever known about estate planning. However, you may not have noticed that one of the most adverse parts of this new law is that your estate plan is now on a two year election cycle.
The 2010 estate tax changes expire on December 31, 2012. On January 1, 2013, all the estate tax and planning benefits of the new law disappear into the ether unless Congress passes a new tax bill before the end of 2012.
What this means is that estate planning has been placed on a two year election cycle by Congress. Whoever prevails in the 2012 elections will dictate what our new estate planning rules will be. No certainty, no continuity, no doing what's right for our country. Congress has geometrically increased the complexity of planning even the simplest estate.
There are several steps you can take to protect yourself and family from this latest example of Congressional foolishness. Here they are:
1. Make your estate plan flexible to respond to whatever Congress decides.
2. Consider building your estate plan so that Congress is removed from the equation. Avoid using formulas that are based on what Congress may change in the future.
3. Review your estate plan with your estate planner every election year.
4. Be proactive and not reactive. Plan before you need it when you are not acting under emergencies, disasters or family crises.
Let me know if you have questions about these four steps and how you can use them to protect your family.
Thursday, March 3, 2011
I thought you might enjoy this article from the New York Times.
Choosing the right Personal Representative is a crucial part of your estate planning.
How to Choose the Right Executor for Your Estate - NYTimes.com
Thursday, February 24, 2011
Your Power of Attorney has a limited useful life! This is the problem of age staleness with Powers of Attorney.
One of the crucial components of every estate plan is the Durable Power of Attorney. There are two types, one for financial matters and one for healthcare issues. Many people believe that when they sign their Powers of Attorney the documents are good forever. This belief is incorrect.
This article was requested by one of my clients who just dealt with the age staleness problem recently. A bank (which shall remain nameless) refuses to accept her husband's Power of Attorney. The document is less than four years old. The bank is afraid of liability without an affidavit from the husband stating that the Power of Attorney still reflects his wishes. Ridiculous? Yes! This is the problem of age staleness.
In age staleness cases, the bank has no legal leg to stand on. The Power of Attorney is legally valid. However, the bank can refuse to accept anything they don't like and request either an updated document or an affidavit. There are two options to deal with age staleness:
1. Fight tooth and nail with the bank or produce the affidavit.
2. Update your Powers of Attorney regularly.
In most cases the second option is the better one. How do you do this? When you meet for your annual or biannual reviews with your estate planner, ask if it's time for updating your Powers of Attorney. You should plan on doing so approximately every 3–5 years.
If you have questions about age staleness issues, or any other estate planning questions, feel free to give me a call. Also, if you have comments on this article, please leave them here or send us an email. Thank you.
Friday, February 18, 2011
It's Your Turn: What are you interested in? Are we writing about the right topics?
I am interested in what interests you about estate planning, Wills and trusts! I have written on these topics hundreds of times, but I want to make sure to cover the areas that you may find interesting or perplexing.
So now it's your turn. Comment back or write in. Whatever you would like to see covered or addressed. Even if it's about how politics now affects estate planning, we will address it.
Join the conversation and let us know your thoughts. What are your questions? What interests you in this area? What upsets you about these topics. It's your turn, we are waiting to hear from you.
Tuesday, February 15, 2011
In this series of frequently asked questions on estate planning, we take this question: “What is the difference between a Living Will and just a Will?”
This question is asked often since these two things sound so much alike. However, they are completely different and unrelated. Both are part of every client's estate plan.
Lifetime Documents: The Living Will.
A lifetime document is one which has validity during someone's life. A Living Will is a lifetime document. It is valid only while the maker is alive.
A Living Will addresses medical treatment near the end of life, such as a coma or similar condition. In my State of Colorado, the Living Will can either be simple and address only life support, artificial feeding and organ donation. Or, the Living Will can as extensive as you want and address many different medical treatment questions and living arrangements. I will address which type is better in a later article.
Another example of a lifetime document is a Power of Attorney. Previous articles discuss Powers of Attorney.
Testamentary Documents: The Last Will.
A Will, or “just a Will” as our questioner called it, is a testamentary document. A testamentary document is one which become valid upon the death of the maker. If you have a Will, it is not valid during your life. It's validity is created by your death. Previous articles here have covered the many different types of Wills.
So, the answer to our question is this: a Living Will is for your lifetime and expresses your wishes about medical treatment if you are unconscious or comatose. A Will is a death-time document and deals with the disposition of property, your children and similar issues. Detailed descriptions of these two documents appear in earlier articles here on this site and I encourage you to read those.
Let me know if you think this article answered our FAQ. Also, if you have comments or questions, please feel free to share them here. Thank you for your interest in estate planning.
Monday, February 7, 2011
Estate Planning FAQ: Frequently Asked Questions:
“ I really don't have anything, so I don't need an estate plan, right?”
No, usually that's wrong. But read on.
This is one of the most frequently asked questions I hear about estate planning and Wills. The answer is usually, no, that's not right. Rarely though, it is possible to meet someone who really doesn't need a plan.
Let's explore this question further. Let's start with the thought that estate is not a question of how much you have (money or property) but about how much you care about 1) yourself; 2) your family; and 3) your decision making power. Beginning with this thought makes it easier to understand why most people really do need estate planning.
Let's assume that you are right and you have little if any property. If you answer any of these nine questions with “yes”, you need an estate plan:
1. Do you have kids?
2. Do you have any life insurance?
3. Do you care who raises your kids if you died unexpectedly?
4. Do you care who would control your children's money from your life insurance if you died unexpectedly?
5. Do you care who makes decisions for you if you can't make them for yourself?
6. Do you have anything that you want to leave to a particular person, or where what you do have goes if you died unexpectedly?
7. Do you care how you would be treated if you were in a coma?
8. Do you want to be an organ donor?
9. Do you have pets that to you are like your kids?
So how did you do with these nine questions? Did you answer any of them with “yes”. If you did, then you are proving that estate planning is not about how much you own.
Did you answer every question with “no”? If you did, then it is possible that you don't need an estate plan. However, I would still recommend you review these issues carefully before make your final decision.
If you did answer any of the nine questions with a “yes”, do you feel differently now about our frequently asked question? I hope so. I'll leave you with this quotation of mine:
“Estate planning is not about how much you have, but about how much you care about those people and things you do care about.”
That one sentence sums up best why just about everyone needs some type of estate plan. In my over 32 years of practicing law, I have met less than a handful of people who truly didn't need even a simple estate plan.
That's all for this installment of Estate Planning FAQ. I hope you found this article informative and thought provoking. Please feel free to add your comments and questions. If you have a question that you would like to see addressed in Estate Planning FAQ, please let me know. Thank you.
Monday, January 31, 2011
In this series of estate planning FAQ's, we are covering your questions on estate planning. In this article, we answer, “What is estate planning?”
Estate planning can mean many things to different people. Here is the definition from investorwords.com:
That's not a bad definition, but I believe it is too specific to make estate planning understandable. I want us to take the focus off of specific documents and put it on goals and objectives.
Here is the definition that I like:
Estate planning is about creating arrangements, usually legal, to make what you want to happen in the future happen, no matter what the future holds.
I like that definition because it gets more accurately at what real estate planning is about. Let's match my definition with some examples to make this point.
Assume that you want your kids to go to college. When you start a college fund, like a 529 Plan, that is a form of estate planning. But,
How do you make sure that goal is realized if you get sick, become disabled or die too soon? You might add an insurance plan to supplement the 529 Plan. That's estate planning too.
Now, how do you make sure the insurance money will be spent for your kids how you want, like to provide that education? You might consider establishing a trust for your kids in a Will or revocable trust that provides guidelines to the trustee to make educational opportunities for your children happen. Again, elegant examples of estate planning, or, creating arrangements to make sure what you want to happen does, even in an uncertain future.
Now, you can expand on those examples with more details that make you and your family original and unique. Your unique details provide the first clue that every estate plan is, and should be, different. No family is the same, their goals are unique and their resources unique as well. What one family may do to reach similar goals may be quite different than what you might do.
Another example illustrates this. Let's stay with our college education goal. One family with substantial resources may be considering Ivy League schools in their planning. Another family may focus on State colleges and student loans. Same goal, college education, but different planning due to the different family situations and resources.
When you look at estate planning this way, it takes on an additional meaning:
Estate planning provides the means to control the outcome of future events and circumstances.
We sometimes get to focused on the means of estate planning; Wills, Trusts, Durable Powers of Attorney, etc., and forget that those are just means and tools. What estate planning is really about is you, your family and your resources. That's what makes estate planning so interesting. Each one is different, unique and special.
What do you think? Did this article answer for you the question, “What is estate planning?” Let me know your thoughts.
In our next article, we will start to look at some of the tools that we use in estate planning, like Wills and Durable Powers of Attorney.
Estate Planning FAQ:
Over the next few articles, I will address the most frequently asked questions I get about estate planning; Wills; Trusts and probate.
If you have a question or questions that you would like to see addressed, please send them in to me or post them here.
You can always get our latest news and comments about estate planning at: Our website and we encourage you to check back there often.
So stay tuned for our series on Estate Planning FAQ. In the next article is: What is estate planning?
Tuesday, January 25, 2011
I commented below on a story in the January 25th edition of the Wall Street Journal.
Here is the corrected link to the Wall Street Journal story:From
Investors Weigh In on For-Profit-College Regulation - WSJ.com
This story alarmed me because it suggests that our legislative process may be corrupt. What this involved is lobbying attempts by some Hedge Fund operators to have Congress crack down on for-profit colleges. At the same time these hedge fund guys were pushing for Congress to act, they were shorting the stock of several of these colleges.
My point is this: there should be complete transparency in our legislative process. I have no problem with these people lobbying for Congressional action. My argument is their doing so without telling Congress that they have shorted or are shorting the stock in these colleges. You see, if Congress does act, their short bet that the stock would go down would be correct and the hedge funds would make millions.
So if you are going to lobby Congress to pass legislation, then at least be honest and up front about why you are there.
What's your opinion?
Here is an interesting example of that.
Let me know what you think of this story from the Wall Street Journal about who is lobbying for certain laws to be passed: stock market speculators.
A 'Short' Plays Washington
The actual link to this story appears in my entry just above this one. So remember to read the entry just above this one to find the link to the actual WSJ story.
Thursday, January 20, 2011
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010: Yes, We Do Have A New Tax Bill
We Have a New Tax Law and Called the Above Name!
As I write this, it's January 20, 2011. We got our new tax law back in December of 2010. I am writing this because this week alone, I have met with over 10 people who were not aware that this new tax law existed.
Strange? Perhaps. But tax lawyers like myself do not always remember that people who do not focus on estate taxes do not pay attention to changes in the estate tax laws. Remarkable, but true.
I have written before about some of the details of this new tax law. The estate tax parts of this new law are retroactive to January 1, 2010! I will not repeat those descriptions in this article.
People Are Unaware of the New Tax Law!
Since the first of the year, I have met with several people who expressed surprise that a new tax bill had been passed and signed by the President. This has amazed me because of how much my firm has tried to educate our clients and the public about what is going on with estate tax laws.
However, the truth is that most people do not pay attention to these tax law changes. So, what should you do about all this?
First, schedule a meeting to meet with your estate planning attorney and learn how and if these changes apply to you.
Second, if you don't have a Will or estate plan yet, make 2011 your year to get one. You can review all of my earlier articles about why this is the best thing you could do for yourself and your family in 2011.
Third, if you don't want to stay current on what is happening in the tax world, follow our blog here. Come visit here often and check in from time to time. Who knows, it just might be fun and even (gasp) educational.
Let me know if you found this article helpful and if you have any questions. Thank you.
New tax laws mean it's time to review your estate plan. Here's why:
The Congress has passed several new tax laws that affect your estate and estate plan over the past 10 years. Each time, the new law has major adverse impact on your family and your plan.
Additionally, for people unfortunate enough to die during these periods, their families face enormous uncertainty in how their family member's estate must be handled.
The only way for you to know how these changes in the law affect you is to review your plan with your estate planning attorney. Here are recommendations:
- Review your plan at least every two years. The meetings could be short and simple, or if the change in the law is major, the meeting will be more in depth.
- Don't skip a review.
- Don't rely on your interpretation of the news to decide whether or not to have your plan reviewed.
- If you don't have a plan, then it's time to meet with an estate planning attorney for your first time.
- There are very few people alive who don't need an estate plan, so don't use that to not meet and find out about your situation.
- When you schedule your meeting, ask what you should bring and review so you will be prepared for the meeting.
- Ask what the charge is for the meeting so there are no surprises.
- Not to be repetitious, review your plan, review your plan, review your plan.
Follow these simple steps and stay current on the law and keep your plan current and your family protected.
Was this article helpful? Please comment or leave your questions. Thank you.
Let me know what you think if you try it out.
"Computers are incredibly fast, accurate and stupid; humans are incredibly slow, inaccurate and brilliant; together they are powerful beyond imagination." -- Albert Einstein
Wednesday, January 19, 2011
It is common for clients to name family members as a Personal Representative or Trustee. However, before take on the responsibility you need to think carefully about your responsibilities.
The article below should be required reading before you take on the job:
trustee breach fiduciary duty paradee
Clients also need to be careful in their selection of decision makers. Before you make a selection that creates a disaster, make sure you discuss it thoroughly with your estate planning attorney.
Sunday, January 16, 2011
This is just one list of the worst estate planning mistakes. There are dozens of mistakes that people make with their estate planning. This is my list of the 10 worst mistakes I see in my practice.
Don't be fooled by how common or ordinary these mistakes seem. There very ordinariness is what makes them so dangerous to the family.
1. Not Having An Estate Plan:
This mistake should really need no explanation. It is the worst mistake of all because it leaves your family and you completely exposed. You are reliant on the legal system of your State to take care of your property; your spouse and your children. Generally, this is not the preferred way to take care of your loved ones.
2. Thinking You Don't Need An Estate Plan:
This is a common mistake that usually leads to the first mistake. There are several reasons that people believe that estate planning is not necessary. They think they don't have enough property or they don't have family that depends on them.
These factors could be present, however, the truth is that there are very few people who don't need some kind of planning. Even if you have no property ( a rare circumstance) or if you have no family, you would still want to protect yourself from disability.
3. Not Properly Protecting Your Children:
Children and their protection is a primary goal of estate planning. This is crucial if your children are young or disabled. A proper estate plan will allow your kids to be raised by those you trust, in the manner you support and the financial future of your kids to be protected.
4. Not Knowing How to Calculate the Size of Your Estate:
Many people who don't pursue an estate plan fail to do so because they think they don't have a large enough estate. Unfortunately, approximately 96% of all clients don't know how to calculate their estate.
Invariably, people forget something that creates estate value when they tell me how much they are worth. They routinely forget life insurance (See, the next mistake!), pension plans and other assets.
When you do your estate plan, learning how to correctly calculate your estate is one of the initial steps.
5. Not Including Life Insurance When Calculating Your Estate:
As just referred to, many people fail to include their life insurance when considering their estate size. They do this because people remember that life insurance is income tax free. However, it is not estate tax free and if you own or control the insurance policy, it is part of your estate.
Insurance proceeds alone can be significant and if not planned for, can create havoc in your plan.
6. Creating a Will From an Online Form:
Most experts (and I) agree that online or fill-in-the-blank forms are an inappropriate estate planning solution. Why? They don't work, people fill them out incorrectly and they create numerous unintended consequences.
7. Having Just a Will:
A Will, while important, is not an estate plan. The Will is just one component to every estate plan. The plan should also include, at a minimum, Durable Powers of Attorney, Living Wills, and tax and probate analysis.
8. Not Synching Beneficiary Designations With Your Plan:
Many people have benefits from work, insurance policies and IRA's. All your beneficary designations need to be coordinated with your estate plan. Failing to do so will mean the plan will fail.
9. Not Considering Tax Consequences:
Almost everything we do has tax consequences, including our estate planning. Congress has changed our estate tax rules repeatedly over the past several years and more changes are coming.
It is vital to the integrity of your plan to consider how these tax rules work and how changes to those rules impact yourself, your family and your plan.
10. Not Working With an Estate Planning Expert:
Even though I am a fan of the movie, My Cousin Vinnie, the truth is your cousin, uncle, brother, sister or neighbor cannot help you with your estate plan. Unless they are a full time estate planning specialist, you should stay away from their amateur estate planning approaches and ideas.
I can't tell you how many times we have had to re-do or clean up estate planning documents that came from a non-expert source. I recommend to all clients to view their estate plan like their medical care. They would not let their cousin perform surgery on them so don't let that same cousin try and do their estate plan. Like surgery, estate planning is best done by experts.
That's my list of the top 10 worst estate planning mistakes. Do you have your own? What do you think of this list? Please comment on your thoughts and experiences. Thank you.
Wednesday, January 12, 2011
Right before the end of the year, Congress passed and the President signed a major new tax law. What does it mean for you?
Our new tax law is far reaching and will affect every aspect of your life. Over the next few days, I'll have several articles for you about different features of this new law.
Before getting into details, let's just list several features of the new law.
1. The Bush era income tax cuts have been extended.
2. The estate tax exemption becomes $5 million retroactive to 1/1/2010.
3. The carry-over basis rules that were in effect for 2010 estates with a 0 estate tax are now optional via election for 2010 estates.
4. The new $5 million estate tax exemption means that old style A-B or Marital Deduction trusts are no longer viable and will create major problems for your family.
5. Unused exemption from the first spouse's death now can be used at the second spouse's death, but require the filings of estate tax returns with the IRS.
That's just a quick introduction to the new law. Many more details will follow.
Tuesday, January 4, 2011
You've made a wonderful New Year's resolution to finally get your Will done this year. It may surprise you to know just how many people each year make the same resolution. In this article, I will cover the information you need to know to get started on this resolution and bring it to completion.
So where do you begin? Well that's actually an easy question to answer. It's the same answer to the question of knowing which Will is right for you. There is no such thing as a Will "out there" that is right for you and your family.
You see, there are dozens of different kinds of Wills. Let's review just several to demonstrate what I mean. There are Wills for:
1. Single people.
2. Single people with minor children.
3. Single people with grown children.
4. Single people with grown children and grandchildren.
5. Single people with dependents not their children.
6. Married couples with the same combinations as listed above for single people.
7. Unmarried couples with all the same combinations.
8. Domestic partners with all the same combinations as above.
9. Same sex partners with the same combinations.
10. Wills for situations that are too numerous to mention.
In other words, every person's Will is (and has to be) different than every other person's Will. This is because everyone is different! This is why internet and fill-in-the-blank documents don't work and are so dangerous. It is impossible to properly tailor those documents so they can work just for you.
If all this is true, then how do you start on this resolution? That's easy. You make an appointment with an estate planning attorney for an initial estate planning assessment. By having this meeting, you will learn what type of Will fits your situation.
You will end up with recommendations of how to proceed with your estate planning. I have written prior articles about how to find such an attorney and the qualifications you should insist on from that person. Please refer to those articles elsewhere here for reference.
The last point I want to emphasize is that your Will is just part of this resolution. I have written prior articles on the proper components of an estate plan. Your Will is just one of several necessary components. You want to make sure that you add Durable Powers of Attorney and a Living Will. Refer to the prior articles here if you want more details on these components or just give me a call.
Congratulations on your resolution and I hope this article helps you bring it to a pleasant conclusion. Completing your Will and other basic documents represents one of the best gifts you can give your family and yourself for the new year.
If you have questions about this article or your estate planning, feel free to give me a call or send me an email or message.