The New Estate Planning: It's All About the Family!

What is Estate Planning Really About?

Are you like 70% of the folks out there who don't like to think about or hear about wills, trusts and estate planning? Well, if you are, don't fret. Many people believe that estate planning is only for the rich. Not only is that false, wills and trusts actually do more to protect people who don't have millions of dollars and property.

Why estate planning is not for the rich folk!

As the preceding article from one of the top companies in the world reveals, estate planning is about your family. Creating certainty, protecting your spouse and loved ones, protecting children, it's ALL about your family.

So how did the myth start that estate planning was only for the rich? It dates back to when the federal exemption against the federal estate tax (some call it the "death tax") was very low. Do you know the history of this exemption? The exemption is used by the government to define when YOU are wealthy (rich) enough to have to pay estate tax when you die.

The History of the Federal Estate Tax:

Thanks to the good people at Cook & Cook, here is the history and it's shocking.

History of the federal estate tax exemption and rates:

Let's start with the year 1978, the year I started practicing law. The federal estate tax exemption (the definition of wealthy) was a mere $134,000! If your estate was greater than $134,000, you paid federal estate tax and if you look at the chart, the marginal rate of that tax was a horrifying 70%! As you can see from the chart, the exemption has increased over time, not even coming to close to keeping up with the economy or inflation.

So here is where the myth about estate planning started--we were all concerned as estate planners with reducing or avoiding this tax, the highest tax ever imposed on citizens of our country. When the exemption was low, the focus was estate tax planning. Most people were so incensed about the estate tax that they didn't pay proper attention to the real reason for estate planning--protecting the family.

The Federal Estate Tax in 2015:

So where are we today? In 2015, the exemption against the federal estate tax is $5,430,000 and is scheduled to increase in 2016 to approximately $5,515,000! Now that's more like what someone would expect as a real definition of wealth.

With the exemption against the estate tax at this level, the old, historical focus on estate tax planning is less relevant for most families. As you might think, far fewer families have estates over $5,430,000 than that old exemption of only $134,000. Because the exemptions are at historically high levels, the focus for most families is on protecting the family.

Most common is the desire to protect the spouse, then children and then other family members. I have always believed that protecting family should always be the driving reason for a client's estate planning and this focus should be reflected in documents such as wills, trusts and powers of attorney.

Good estate planners never let the tax tail wag the family dog! That's a good rule of thumb to remember when you think about your estate plan. Just because taxes are not a concern doesn't mean that we don't care about our families. We do and here are three short videos that illustrate just how important this is.

Estate planning for young families:

Estate planning for children over 18:

Estate planning for blended families:

So when someone says to you, "I don't have enough money to do a will or estate plan" share this article with them so they can have the full story.

Let know your thoughts on this and please join our conversation by commenting or sending me an email. Thank you for your interest.

Bernie Greenberg

The 6 biggest estate planning mistakes NFL players make | LifeHealthPro

Did you know that professional athletes have to do their estate plans, just like you do? Here is a list of the mistakes NFL players make and the list sounds familiar doesn't it?

The Super Bowl is this coming Sunday and my favorite team is playing. You can guess who that team is since I live in Colorado.

And wouldn't you know, an estate planning attorney can weave estate planning into a discussion of the Super Bowl.

Here is an excellent article that discusses how professional athletes must pay attention to estate planning to make their very short careers of value in their lives.

The 6 biggest estate planning mistakes NFL players make | LifeHealthPro:

'via Blog this'

Let me know your thoughts by joining our estate planning conversation. Also, let me know if you can correctly guess my favorite team.

Bernie Greenberg

What's New In Estate Planning

What's New in Estate Planning? What was Old is New Again!

Many people mistakenly believe that estate planning is only for rich folk. Others mistakenly believe that it is all about saving death taxes. While these areas can be part of an estate plan, neither is what estate planning is about.

What estate planning is about is protecting yourself and loved ones. I coined this phrase years ago: estate planning is not about how much you have but about how much you care about those you care about and for.

This is what is new again in estate planning. With the federal estate tax exemption making most estates non-taxable, estate planners are returning to their roots and focusing on what really matters with the estate plan--your family. As you read through the other articles here, you will find this theme repeated over and over.

If you care about yourself and family, you will do a plan and make arrangements to protect yourself and family. Every person's plan is different and every plan contains certain components. And making what was the first focus of estate planning new again is very exciting to  me. As an estate planning attorney, it is refreshing to see this return to the core values of estate planning.

What do you think? Please join our conversation and leave a comment here or send me an email. Thank you for your interest.

Bernie Greenberg

What Happens When You Die Without a Will or Estate Plan: 6 Consequences You Need to Know

The Consequences of Dying Without a Will or Estate Plan: What do you need to know?

According to recent statistics, many people die without a Will or any estate plan. Less than 25% of adults may have a plan at all. While this is alarming by itself, it pales compared with the consequences your family will face if you were to die without a Will. We explore six of those consequences in this article so you can decide for yourself.

Here are 6 important consequences of dying without a Will or estate plan:

1. Your State Provides You With a Will.

Your State has a plan for you if you don't do one yourself. Since this is being forced on you and your family and involves choices made by someone other than yourself, this may not be to your liking and the State's choices may not be those you would have made.

2. A Court Decides Where Your Children will Live and be Raised.

By far, this is the primary reason that clients with young children will do Wills or an estate plan. Imagine the issues that this could create for your children and how you would feel knowing that this consequence was easily avoided. The choice the Court might make may not be your choice. When our goals include protecting our children, this is mission critical in estate planning.

This occurs if you die without a Will as part of a public proceeding creating even more stress and problems for your family. Many clients do not want their families subjected to this type of public scrutiny.

3. A Court Decides Who Your Executor (Personal Representative) will be.

If you don't do your own Will or estate plan, a Court will decide who your executor will be. The Court's choice may not be your choice. This is also a public process in Court. Imagine the problems from these two examples:

A. You are in the middle of a divorce and die without a Will. You might not want your estranged spouse as your executor but they have the first priority to appointment if you die without a Will or estate plan.

B. You are single and in a committed relationship and die without a Will. Your intention is for your partner to be your executor, but that may not occur if you die without a Will or estate plan.

4. Your State Determines Where Your Property Goes.

When you die without a Will, your State has a default plan called the law of intestacy about where your property goes and how it gets there. This could mean that your spouse is forced to share your estate with children. Most couples want the surviving spouse to inherit everything with the kids as secondary beneficiaries. If you want your own plan, then you can't die without a Will or estate plan. Are you sensing a theme here yet?

5. Children's Inheritances are in Short Term Court Managed Conservatorships.

These conservatorships last to your State's age of majority. It may be your plan to have a child's inheritance last for a longer period of time. Dying without a Will insures that this will not occur. For example, all money could be distributed to your child before they are ready for the responsibility. The inheritance passes to your child unprotected from the risks of unwise spending; creditors and predators. Most parents do not want this result.

6. Property Passes to the Surviving Spouse With No Protections.

Many clients seek to protect the surviving spouse by making sure inherited property is not subject to risk of creditors and predators. When you die without a Will, your spouse becomes a target for con-artists and the unscrupulous. This is a particular problem with seniors. We hear constantly about the importance of protecting ourselves in later life, but so few people do so.

All six of these problems and negative consequences are eliminated by doing a properly designed and drafted Will or estate plan.

Since a crucial part of estate planning is protection of family, protecting them against these six consequences or at least considering doing so is important. Are these important factors and goals for you? If so then make sure you have a current and valid Will or estate plan in place and be prepared for the unplanned and unexpected.

Let me know your thoughts on this topic and join our conversation by leaving a comment or sending me an email. Thank you.

Bernie Greenberg

What To Do If A Loved One Dies: 10 Steps

It is difficult enough when a loved one dies and even more difficult and challenging if you are the administrator of the estate or trust. Knowing the steps to follow and building your checklists and road map will help make this very difficult time less trying.

As an estate and trust lawyer, I am asked frequently, "what do I do if my spouse dies", or "what are my first steps". This article will help start to answer those questions.

Your Ten Initial Steps of Estate or Trust Admnistration:

Here we explore your initial administration tasks and checklist. Use this in your meetings with the estate or trust lawyer to help guide your meetings and in developing your master action list of all tasks you are responsible for. Your master action list is your list of ALL actions and tasks that you take or assign to others from the beginning to the end of the estate or trust administration.

This is not meant to be used as your master action list, but as a guide to follow to understand the initial steps in estate or trust administration and to help you build your master action list. Here is an excellent article from the Colorado Bar Association that you will also find useful.

Your First Ten Steps:

1. File the decedent's Will with the Court or determine the requirements to register the decedent's trust. You will also determine the necessity of obtaining taxpayer identification numbers for the estate or trust.
2. Take steps to reduce identity theft by contacting Social Security, the DMV, all banks and brokerage firms where the decedent held accounts. The Death Certificate will be necessary at some places.
3. Close the decedent's accounts, but not trust accounts if there are any.
4. Determine the property and assets. You will do this with the estate or trust attorney. You will be creating schedules of assets based on how assets are owned by the decedent. I have discussed in prior articles the ways that assets can be owned.
5. Obtain asset values. All of the assets must be valued as of the date of death. These are easy to obtain, and the estate or trust attorney can help you.
6. Determine if a probate proceeding is necessary. This will depend on your state law, the type of assets and ownership or title by the decedent.
7. Determine whether estate, inheritance or death tax filings are required for either the IRS or individual states. Again, the estate and trust attorney will guide you.
8. Start your accounting as of the date of death. You are required to track all receipts and all disbursements from the date of death forward.
9. With the guidance of the attorney determine who will receive copies of the decedent's Will and/or trust.
10. Commence the estate or trust administration.

These ten steps will get you started, provide direction and help you in developing your master action list. Administering an estate or trust is like playing croquet, you learn the map, then proceed through the right hoops in the right order until you get to the finish.

I'd like to hear your comments. Did you find this helpful? Do you have further questions? Please join our conversation and let me know. Thank you.

Bernie Greenberg

Why People Delay Estate Planning--Your Thoughts

Recently, in discussions with several professional groups, we have addressed the increase in people putting off their planning. In our discussions several reasons for this negative development were raised. Things like:

1. Why bother?
2. My estate isn't big enough.
3. The estate tax exemption now protects me.

There are other reasons, but these seem prevalent. As you can imagine, reasons such as these have no validity, but do prevent people from protecting their families. In my town of Castle Rock, CO, I am the only full-time estate planning attorney. Helping folks work through these issues is very important and I would like to hear what you think.

What are your thoughts about these issues? Do you think these reasons are valid? What did you focus on when you decided to proceed with your estate plan? How do you suggest to people the importance and need for estate planning?

Studies show that people will spend more time and money every year on a vacation then they will ever spend on their own estate planning. Given how important it is to protect family.

I look forward to your thoughts and comments. Thank you.

Bernie Greenberg

Is Time Your Ally or Enemy? 3 Ways to Make Time Your Estate Planning Ally

Whether time if your friend or enemy in your estate plan is a critical factor in whether you and your family will be protected. In this article, I explore the 3 ways you can have time be your friend and ally.

Recently, David Scott wrote in in his article about business succession planning about time as an ally or enemy to the business owner contemplating succession planning. Mr. Scott's points are well taken and apply equally to estate planning.

Time is your ally when you use time to get things done before they are needed. Any part of your estate plan, your Will, Durable Powers of Attorney, potential trusts for children etc. are all examples of documents that you may not  need until later. However, they are all documents that you can't create after they are  needed. If you get them done now, time is your friend and ally. If you wait too long, time is your enemy because you are out of time and you and your family are in trouble--it's too late to do the planning.

By doing your estate plan before it is needed, you and your family are protected against unplanned and unexpected emergencies, accidents and illnesses. That's the reason to do IT NOW! Then the plan is done, it is in place and you have used time wisely--as an ally.

Whenever you wait and procrastinate time is always your enemy. A need can arise, the family is in crisis mode or worse, chaos and it was all preventable. Solving the need is more difficult, more complex and always more expensive.

3 Ways to Have Time be Your Friend and Ally:

1. Start your estate plan now. Do it and get it done before any need arises. Starting now is easy, and will save you and your family money, heartache and TIME later. There are numerous articles here that discuss the specific components and documents your estate plan requires. Also, my firm's website has a good section on estate planning you should read.

2. Complete your plan soon after starting. I have heard stories from clients about having started a plan with a different adviser and not receiving drafts or documents for months. This is not how estate planning is done when done properly. Even complex estate plans can be designed, drafted, signed and funded in days to a few short weeks. As part of this second step, make sure assets are titled correctly and your beneficiary designations are drafted correctly.

3. Review your plan. Even after you create your plan, you want to make sure, from time to time, it does what you want. Follow the review schedule suggested by your estate planner. Staying current with changes in your family, property and the law makes time your ally.

Time can be either your friend or your enemy. The choice is yours and hopefully with these three steps, you can choose wisely. Good luck.

Please join our conversation and leave a comment or send me an email with your thoughts and ideas. Thank you.

Bernie Greenberg

Specialization: Don’t Leave Home Without It! 4 Reasons Why You Should Care About Specialization

4 Reasons Why Specialization Matters

Recently I asked my readers how they feel about specialists, those experts who limit their work to a limited area of specialization. I thank Denver attorney, E.C. Lewis for sharing her thoughts about specialization.

The concept of “specialization” is not limited to professionals like lawyers and doctors. Many fields have specialists as I discovered concerning auto mechanics. Before I list the four reasons that dealing with a specialist is the smartest move you will ever make, let’s explore specialization further.

A specialist is someone who limits their work to a certain and defined area. Certain professional specialties even have certifications required before the specialization can be claimed. Here is a good working definition:

Someone who has limited their work to a defined area, either has a certification or recognized expertise in that area, and does that work full-time with at least seven consecutive years in the specific area.

What are your thoughts about this definition? If we accept this definition, then when isn't someone a specialist? Consider these examples of someone who is not a specialist:

1. Advertising on TV, radio, or social media.
2. Simply claiming to be one.
3. Accepting any work that comes their way without limiting their work to the one certain area.

There are four reasons to work with a specialist in whatever area you are considering. They are:

1. Specialists are experts.
My favorite example of this is in the medical field. If I break my leg, I am not going to the heart doctor. I know this seems silly, but it illustrates the point of expertise. Don’t you want to deal with someone who is an expert in your area of need?

2. Specialists are more competent.
Competence is a function of two factors: first is knowledge, the knowing of the expert's area; and second, experience. Nothing beats the value of having done something many times, this is how we learn, how to avoid mistakes and problems and how to improve. Consider this: the military; fire fighters or athletes are constantly training, constantly repeating, over and over what it is they do. I have heard this referred to as developing unconscious competence. From repetition comes experience and from experience comes competence. Specialists are simply more competent.

3. Specialists protect you.
Only a competent expert can anticipate what might go wrong in a project. Being able to anticipate problems allows the specialist to protect you from these risks. Here’s an example from my life: I tried to install a carpet strip at the edge of the kitchen. I am not a specialist in this type of work. Not knowing the material of the floor almost cost me big as the nail I was attempting to use exploded and hit my arm like a bullet. When I had a carpet specialist look at the project, they had an answer that was safe and effective. That is a perfect example of how a specialist protects their customers. They know the problems and now to solve them before someone gets hurt.

4. Specialists save you money.
Since a specialist knows what to do, how to avoid and solve problems, the specialist can get the project done timely, without loads of “do-overs” and since problems are avoided, usually at the lowest cost. Here’s another example: a client of mine needed to replace the timing chain on his older vehicle. He got two estimates, one from a specialist and one from his buddy. The buddy’s estimate was 40% lower than the specialist. Can you guess the result? That’s right, he went with the lower estimate and by the time the buddy's work was repaired properly he had spent over twice the estimate from the specialist. I also see this in my estate planning practice. Clients will try and create their own estate planning documents or work with non-specialists and end up spending huge fees to fix the problems created.

My point with this article is that there are actual and measurable benefits to dealing with specialists. This is true in any field, car repairs, medical services, legal services and in my specialty estate planning. Since there are so many people offering services in areas that they don’t specialize in, being aware of this can help you protect yourself and your family.

What are your thoughts about specialists? Please join our conversation and comment here or send me an email with your comments. Thank you.

Bernie Greenberg