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Articles Posted in Estate Planning

End-of-life planning is often a sensitive topic to talk about with our closest family and loved ones, but it is also a necessary topic to discuss to set families at ease and to avoid unnecessary stress and legal hurdles.

Estate planning meetings usually involve adult children with their elderly parents, but these conversations are for those of every age, as you can never know when you’ll need a well-planned estate.

As you start estate planning with a loved one closest to you, here are 3 important recommendations:

Many people think of a Last Will and Testament as the main tool for “normal” estates, with trusts only being for large estates. However, revocable living trusts are one of the most underutilized estate planning tools.

Living trusts are documents that give a set of instructions for the use of one’s assets during their lifetime and for the distribution of those assets after their death. Although they aren’t necessary for everyone, living trusts can be useful even for small estates, depending on the type of property and the needs of everyone involved.

Living trusts are a user-friendly trust option and provide these four major benefits:

When it comes to estate planning, people tend to focus more of their attention on large items and accounts such as real estate, business interests, and investment accounts. When this happens, personal possessions that might seem mundane and a part of everyday life are often overlooked.

It’s these day-to-day objects, however, that can lead to some of the biggest arguments among loved ones of someone who has passed away. These items – articles of clothing, framed photos, collectibles – often hold much more sentimental value for our loved ones after we have passed than we recognize while we are alive.

It’s also difficult to determine what’s fair when it comes to how personal items are divided. How do you assign a value to an old musical instrument or a worn T-shirt that multiple family members want to keep?

About four out of every ten families are blended families, according to recent statistics.

Estate planning for blended families can be complex, both in terms of the logistics surrounding financial and tax planning and the emotional aspects of those decisions. Here are tips to consider if your family is a blended family:

First, it is important to have a Will and to keep this Will updated. Depending on what state you live in, you might face unique challenges (in some states, for example, a stepchild who has not been legally adopted by you is not considered to be your child for purposes of intestate succession).

Last week I wrote about 3 important components of planning for your non-financial legacy. Here are 4 more essential components to include in your legacy planning:

4. Family Heritage

The roots of your family tree are part of your identity and show you some of the family behaviors and patterns you can build upon or learn from. There are a number of online resources you can use to do family research and go back several generations to learn more about where your family originated from. If possible, you might want to try to locate photos, letters, stories, and other documents that belonged to your ancestors. A DNA ancestry test can also give you more insight and information regarding your origins and health history. Learning more about your family can help to shape your identity and give you knowledge that you may wish to pass down to future generations.

Much of estate planning focuses on financial planning and documents such as wills and trusts. While making these plans for how you will pass on your physical assets, it is also an opportune time to focus on your intangibles. What impact do you want to have on your family and the world, and what kind of legacy do you want to leave behind? How do you want to establish and pass on memories, values, traditions, philanthropic vision, skills, and beliefs together with your family?

7 Components of a Non-Financial Legacy

Here are 3 intangible components to consider in your estate planning process, and I will write about 4 more next week:

Those who draft Wills often include a “no-contest clause” in a decedent’s Last Will and Testament. If an heir challenges the validity of the decedent’s Will, this clause provides for the disinheritance of that heir. Although the no-contest clause could have this effect, it might also be defeated during a challenge to the Will. Also, if the litigation is settled before trial, parties often reach an agreement in which the no-contest clause would not apply.

An heir to an estate might challenge the validity of a no-contest clause in the same way that they would challenge the validity of the decedent’s Will. This heir might call into question the decedent’s capacity to execute a Last Will and Testament or assert that a third party exerted undue influence over the decedent. There are also other ways a Will might be challenged, but these two ways are the most common.

When deciding whether to challenge a Last Will and Testament that contains a no-contest clause, an heir will often consider the inheritance they would receive under the current Will compared to what they would gain if their challenge were successful. If the heir has little to gain from contesting the Will, it may make sense to forego a challenge to it. On the other hand, if they could inherit a considerably higher amount (especially if they are set to inherit very little under the current Will), an heir might be more likely to challenge it.

In last week’s post, I wrote about the importance of digital assets and including them in your estate plan. Here are a few steps you can take to plan for these assets:

(1) Create a Digital Assets Inventory: Digital assets don’t have a physical presence, so a digital wallet holding Bitcoin couldn’t be located in the same way a coin collection in a house would be found. A digital assets inventory identifies digital assets stored on devices or online and provides the information needed to access them.

You will want to create (and frequently update) this inventory in order to make instructions for and access to your accounts as straightforward as possible for your fiduciary. At a minimum, this inventory should include the information to access your primary email account and cell phone. You’ll want to give access to the primary email where electronic financial statements and bills are sent, as well as where password reset emails would be sent so that your fiduciary can use this to access your other online accounts. Your cell phone holds many of your digital assets (texts, pictures, apps) and might be needed for two-step authentication to access certain online accounts as well.

Nearly everyone has a digital presence these days, but many people fail to consider their digital assets when designing their estate plan. As a result, loved ones of someone who has passed away often face great difficulties in trying to access, collect, maintain, or close their digital accounts. After addressing what digital assets are and why they should be addressed in an estate plan, I will write next week about the steps one can take to plan for their digital assets.

What Are Digital Assets?

More and more essential parts of our lives are moving online or onto a cloud, and the COVID-19 pandemic has accelerated this trend.

With a Google account, you have options to control your data and the tools to manage your account – and you can also tell Google how to manage this account as part of your estate plan.

Google accounts and apps are used for a wide variety of purposes, including email, creating and managing documents, spreadsheets, photos, and navigation. In order to use Android phones and tablets, Chromebooks, and to install mobile apps, you also need to have a Google account set up.

Managing your digital assets is a vital part of estate planning. If you become disabled or pass away, what will happen to your online accounts? When it comes to powers of attorney and executing your will, what does the law require regarding these accounts?

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