Paul R. Tierney Law

Don't Give Your Money To That Bully Cousin Biff!

Very few individuals properly document the intricate details of their lifetime of work, investing and saving, creating a massive paper chase at the time of their passing.

 

You hear about those situations, but the recent PR Web article titled "Lost And Misplaced Estate Documents Take A Big Toll On Families" notes that more than 60% of adults in the United States will die without a basic estate plan—60%!  Also, the article reported that $4.9 billion in unclaimed assets are turned over to the government annually and only $1.7 billion of that is ever reclaimed. That's a lot of money!

 

Money that the probate court will in many cases have no choice but to turn over to the state.

 

If a decedent fails to have a properly drafted will, the laws of intestacy will direct the court to pay out his or her assets according to degree or relation to the decedent. So, if you want to leave a sizeable bequest to the Humane Society or the ALS Association, you'd better write a check right now or put it in your will before you die. Otherwise, it may be just too late. There won't be an option to do so if you pass without a will.

 

Likewise, if your only living relative is a cousin that gave you "snuggies" and "swirlies" (not enjoyable treatment and somewhat tortuous) as a kid, he may get a big payday when you die!

 

Speak to a qualified estate planning attorney and ask him or her to help you draft a will, create a trust, or whatever else you might need based on your specific circumstances.

 

Reference:  PR Web (March 12, 2014) "Lost And Misplaced Estate Documents Take A Big Toll On Families"

Do Your Estate Planning So That Grieving Relatives Don't Have That Burden

Only 35 percent of Americans have a will, according to a 2012 survey by FindLaw.com, a legal information Web site. If you die intestate, which is what dying without a valid will is called, your assets could be distributed according to the laws of your state or as the result of a costly court battle.

 

An recent article in The Washington Post, titled "Put Your Estate Plan On Paper Before It’s Too Late," warns us to stop thinking that everyone knows what we want. Why? Because everybody probably doesn’t know. Even if they do know, in their grief, they might not be able to make the decisions you would have preferred.

 

Grieving friends and relatives are in no condition to think clearly about "what you would have wanted." It will be hard enough in many instances for them to keep it together and take care of the basics and themselves. If you make the appropriate arrangements and draft the correct documents, you'll take many of those tough decisions out of their hands.

 

There's no need to be afraid that someone is going to steal from you. If you give into this fear, it can cost you more money to you or even the person handling your affairs. This includes those medical and hospital staff who may one day have to care for you. All their focus should be on your care, rather than refereeing your family drama or serving as a witness to it, which can be very stressful.

 

All sorts of unnecessary drama can follow your death simply because you didn’t take the time to make proper estate plans or couldn’t figure out somebody you could trust.

 

The Washington Post article lists some of the essential documents you need to assemble or prepare. These documents include financial statements, insurance policies, retirement and pension information, veterans benefits records, your will, guardianship instructions, and advance medical directives.

 

Help eliminate or minimize anxiety and frustration, as well as the potential for further conflict that might occur because you didn’t do at least some of the most rudimentary estate planning.

Start putting your affairs in order TODAY: DON'T WAIT!

 

Reference: The Washington Post (March 20, 2014) "Put Your Estate Plan On Paper Before It’s Too Late"

Business Succession Planning: What's That About?

Financial and estate planners are saying that many baby-boom small business owners have not planned for succession at their business. Most expect to sell or close them.  The impending retirement of thousands of business owners presents an economic challenge for Long Island and the nation because most haven't made plans for what happens after they leave. Studies estimate more than half of all privately held companies are run by baby boomers and 80 percent expect to sell or close them within the next 10 years.

 

One financial planner quoted in a recent Newsday article, titled "Panel Focuses On Boomer Business Owners' Retirement Plans," says that "Seventy-five percent of companies—and some estimates are higher—don't sell... The owners just close the doors and walk away."

 

This frequently occurs because business owners fail to prepare a family member or manager to succeed them, and they aren't psychologically ready for retirement, or they haven't considered how they will support themselves in old age.

 

If you have been a leader who has been prepared for every business contingency, preparing for a successor or sale should not be that difficult to tackle. Think of it as the next phase of your career and that of your enterprise.

 

Don't put it off!

 

Start well in advance with an audit and draft a business succession plan. Select that "first mate" who has shown an aptitude, desire, and work ethic to assume your duties and move the business forward.

 

If you are going to sell, this person may be your first choice to transition out of ownership more on your own terms. If you try to sell to an unknown buyer a week before you want to retire, it may be much more difficult and could cost you some of your profit.

 

Reference:Newsday (March 19, 2014) "Panel Focuses On Boomer Business Owners' Retirement Plans"

Do I Need A Will? Press 1 For "Yes," 2 For "Yes," Or 3 To Speak To Uncle "Lucky"

Every adult, no matter your age or net worth, needs an estate plan. An estate plan is made up of one or more documents such as a will, trust and/or beneficiary designation form that control who will pay your final expenses and distribute your assets according to your wishes. Your estate plan determines where your money in bank accounts, stocks, life insurance policies, personal property and real estate will go. Estate planning is important, no matter how small your estate.

 

This is sort of a no-brainer. You need a will.

 

If you don't have a will, then your assets may be divided by state law. Who wants that?

 

So, how does that work? Your heirs will get a portion based on their relationship to you (e.g., spouse, child, niece, etc.). And, yes, your blackjack-playing brother "Lucky" in Nevada will get the same split as your sister who volunteers with local charities three days a week.

 

What about any minor children? Your will should state a specific guardian and at least one successor in case the primary guardian cannot or will not serve. You don't want you kids in foster care or staying with Uncle Lucky in Las Vegas if you can help it.

 

An article from the Times Herald-Record in the Hudson Valley area of New York State, titled "Retirement & Estate Planning,"recently reviewed several other fundamental steps you should take to complete your estate plan.

 

After setting out the guardianship in your will, the article advises to secure a retirement account and insurance policy with beneficiaries. Finally, you can create trusts, which state how to distribute (and how not to distribute) your assets after your death.

 

That's a lot to remember. Don't rely on luck (or Lucky).

 

An additional step is to get the advice of an experienced estate planning attorney so your will and other documents are customized for your specific situation.

 

Resource: Times Herald-Record (Hudson Valley NY) (March 16, 2014) "Retirement & Estate Planning"

One In 44 Elder Abuse Incidents Goes DETECTED

“Reports indicate that elder financial exploitation is a growing problem,” said Jenefer Duane, a senior program analyst with the national Office of Financial Protection for Older Americans. “I know you see this in your daily work — elders victimized by scammers they don’t know, those closest to them, those cloaked in legal authority to access their money and those who exercise undue influence.”

 

Experts say enough hasn't been done when it comes to teaching the elderly about preventing financial abuse and exploitation. It’s a hidden crisis, and data is scarce.

 

A March article in the Miami Herald noted that statistics on elder exploitation are deceptively light. Why? Because there's no one central reporting mechanism.

 

Nonetheless, a MetLife Mature Market Institute study estimated the annual financial loss by victims at $2.9 billion in 2010, a 12 percent increase from the 2008 estimate.

 

The Herald article titled, “Elder financial abuse is a growing problem,” estimated that for each reported case another 43 go unreported. That's not a misprint! That means there is major work to be accomplished to help all seniors around the country.

 

A qualified elder law attorney can help seniors and their loved ones recognize the signs of abuse and ensure that the care for older citizens is in place.

 

As one elder law school professor commented in the article, “We are not going to solve this problem through legislation. We are going to solve this problem through education.”

 

Get informed. More importantly, be proactive and take action when you suspect abuse.

 

Resource: Miami Herald, March 18, 2014: “Elder financial abuse is a growing problem”

 

Lessons from Canada on Dodging Will Disputes

More than half of Canadians know that not talking about estate planning could result in potential conflict among family members after the death of a loved one. According to a report from BMO Wealth Institute, Canadians list conflict (54%), unpleasant surprises (37%) and financial or taxation issues (33%) as the pitfalls to avoiding the legacy conversation.

 

Our friends in the Great White North of Canada have much in common with those of us in the US—waiting until it's too late to talk about the will. This can create conflicts and hard feelings.  It seems no one in North America (at least the northern two-thirds) likes to sit down and have an in-depth discussion about a loved one's passing, estate, and bequests.

 

The Financial Post in Toronto recently published an aptly titled article, "Five ways to avoid a family blowout after you’ve died". This article sets out five ways to "avoid a Dynasty­-worthy brawl over your estate."

 

Before getting to those five ways, however, remember that communication is key. Be sure to clearly explain what you want to accomplish in your estate plan. Even if your beneficiaries don't agree, at least they’ll have a better understanding of your intentions.

 

While you are communicating the big picture, it's important to lay out the particulars. Don’t forget your personal assets, your executor, power of attorney, and the reasoning behind your choices. With that done, you can concentrate on the article's five steps:

 

1. Reflect

2. Meet as a family

3. Update your will and powers of attorney

4. Get insured

5. Appoint an executor

 

No one wants to leave their estate to family and have it create disputes. Take some Canadian advice and explain why your daughter gets the snow boots, then speak with an estate planning attorney today.

 

Reference: Financial Post (March 22, 2014) "Five ways to avoid a family blowout after you’ve died"

Let's See, What Would Grandpa's Password Be …

As we spend more of our lives online -- banking, collecting credit card rewards points, playing virtual reality games, creating photo albums, emailing, tweeting -- it's increasingly important to consider how beneficiaries can access those accounts and any assets they hold, once we're gone.

 

A part of estate planning that you don't want to overlook is access. This means access to your bank accounts, credit cards, investments, and the like.

 

Fox Business discussed the preparations you should be undertaking now in a recent article entitled "Tips for Planning Your Estate for the Digital Age".

 

"Planning your digital afterlife," as Fox Business calls it, can prevent numerous headaches for loved ones by taking a few simple measures. This will decrease the chances of family members becoming online sleuths (by design or default) after you're gone. The article suggests these ideas:

• Keep a snail mail trail. Even if you do business mostly online, you should ask to receive some paper statements so your heirs can have info on your accounts from mail delivery; and

• Consolidate your accounts. Combining financial accounts or at least moving assets to a small number of institutions will make them easier to track.

 

Otherwise, Fox says, finding the records could be sheer luck.

 

As part of your planning, you should consult with an experienced estate planning attorney who can give you more ideas on how to set up your estate in the most efficient manner.

 

Reference: Fox Business (March 21, 2014) "Tips for Planning Your Estate for the Digital Age"

 

Are You Planning To Live To Be 100?

A new academic study suggests taking life expectancy into account when estate planning. In the paper, three economists from the Center for Retirement Research (CRR) at Boston College found that folks who expect to live longer plan, on average, to work longer too. And if a health shock or the earlier-than-expected death of a parent leads them to lower what the paper calls their “subjective life expectancy,” they tend to adjust their retirement planning accordingly.

 

This study discussed in Forbes arrives at a somewhat simple conclusion—if you want to live longer, you're going to have to work longer. Does this mean that you can put off your estate planning?

 

Not quite.

 

This recent Forbes article, “Essential Number For Retirement Planning: Your Personal Life Expectancy,” encourages everyone to get their strategies and planning documents in place now, so that you can enjoy your retirement when it does arrive.

 

Healthy people don't know their exact life expectancy, nor can they anticipate accidents, Acts of God, and other unforeseen circumstances. For that reason, we can use sound estate planning advice, and you can get that from an experienced estate planning and/or elder law attorney.

 

Resource: Forbes, January 21, 2014: “Essential Number For Retirement Planning: Your Personal Life Expectancy”

Who Will Take The Helm If You Aren't Able To Guide The Ship?

Planning ahead in life seems to be difficult at times. But, when it comes to planning for major life and death decisions, it is important to do it now and ask for help from a professional.

For many business owners, especially sole proprietors and owners of small businesses, keeping the enterprise running is a 24-7 job. Even on your day off, you're still probably not off—and not too far away. Just in case.

Hopefully you are fortunate enough to have a son, daughter, or a trusted employee you have mentored to run the business if and when you're not around. In addition, this “successor” might be the very person who can assume ownership or take over the operations when you pass.

Even though your successor may be ready now and waiting in the wings, it's still good to prepare a financial power of attorney. A recent article in the Birmingham Business Journal, "Four essential estate planning documents every business owner should have," speaks to this issue and what you can do to be prepared. Just in case.

A financial power of attorney can eliminate stress and confusion should you become incapacitated and unable to participate in the running of your business, let alone decide important business issues. The person you appoint as your financial power of attorney will make all of your financial decisions and that can greatly reduce costly and lengthy legal proceedings.

Reference: Birmingham Business Journal (February 28, 2014) "Four essential estate planning documents every business owner should have"

So You're An Expert In Social Security? Really?

Think you know enough about Social Security to make the best decision about when to claim your benefits? Join the crowd. In a just released survey of 55 and older workers, 24% say they are “very  confident” and another 53% described themselves as “somewhat confident” that they know enough to make that big decision.

Those numbers alone should give you an uneasy feeling. If three-fourths of older Americans think they know when to claim their Social Security benefits, don't you think at least half of them must be mistaken? Since when do 75% of Americans agree of anything?

The survey results in the recent Forbes article "Big Retirement Mistake: Thinking You Know When To Claim Social Security, When You Don't" should prompt you to speak with an elder law attorney. He or she can help you make the decision to claim your Social Security benefits—not when other older workers believe it's right—but rather based on your specific situation.

As you read more of this article, you will see that the majority of Americans claim Social Security right at age 62 or within a few months of retirement (the latter of the two), but don’t start spending their 401(k)s and IRAs before age 70½ when the required minimum distributions from traditional pre-tax accounts must begin. Many individuals would be further ahead if they were to spend some 401(k) money earlier in retirement and postpone claiming Social Security.

Your estate planning attorney will work with you and your financial advisors to maximize your income throughout retirement, and analyze your specific family situation, pensions, savings, investments, and taxes to determine what the best course of action is for you—regardless of what the others might think is correct.

Reference: Forbes (March 11, 2014) "Big Retirement Mistake: Thinking You Know When To Claim Social Security, When You Don't"