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Articles Posted in Estate Planning

Maggie Kirchhoff, a certified financial planner with Business & Personal Finance in Denver, has been with her partner, Matt, for 13 years. The two do not plan to ever get married, and they know this means they won’t get the same automatic rights and protections that those who are legally married get, especially when it comes to death.

“A lot of spousal rights are inherent with a marriage certificate,” says Kirchhoff. “For unmarried couples, though, you have to make a concerted effort to cover all your bases.”

The number of unmarried couples who live together was at 18 million in 2016, up 29% from 14 million in 2007, according to the Pew Research Center. Among those age 50 and older, this increase was 75%: About 4 million were cohabiting in 2016, up from 2.3 million in 2007.

For most Americans, estate planning can be complex and daunting. It might seem overwhelming and expensive, and it isn’t easy to confront one’s mortality and make the necessary decisions for it. Nevertheless, it is essential that every American have one important estate planning document: A Health Care Directive.

A health care directive is a legal document which specifies the decisions for caregivers in the event of illness or dementia as well as giving directions for end of life decisions, including how the body should be handled after death. They are sometimes also called living wills, durable health care powers of attorney, or medical directives.

The Impact of Estate Planning

The financial abuse of elderly people in the United States is unfortunately a very serious problem, with more than $36 billion being stolen from elders each year according to The True Link Report on Elder Finance Abuse 2015.

The True Link study showed that seniors from all walks of life are susceptible to this type of manipulation, and a significant number of victims were younger seniors with college educations and not living in isolation. In fact, they lost more to abuse than those who were older, isolated, and less educated.

Unfortunately, the research shows that family members are the most frequent abusers of seniors. A relative might ask a widow or widower with assets for a “loan” to tide them over or invest in a new business and then fail to repay the loan (or the business fails or the investment is a scam). In cases such as these, the elder often has no recourse.

You know you need to create a will, but you keep putting it off – it’s difficult to think about dying and about who will take care of your family after you have passed away. But if you’ve only scribbled some notes or considered which lawyer to hire, you risk dying “intestate” — without a will that could guide your loved ones and would likely save them both from family fights and from losing money.

Financial planners say getting people to stop procrastinating on estate planning can be tough. Here is advice from several of them offering their best strategies for helping clients to get this done.

Remember whom you’re doing it for

Oftentimes, federal workers and retirees don’t bother with estate planning and think that getting a will off the internet and getting it notarized is all they need to do. However, this isn’t necessarily enough. If you are or were a career civil servant, own a house, have money in your TSP account, bank, or investments, you probably have an estate (you almost certainly do if these are true and you are also still married to your first spouse).

So what next?

A will is a very important part of an estate plan, but it is certainly not a complete estate plan on its own.

Many people know of the stories of well known celebrities, such as Prince and Aretha Franklin, who died without a proper estate plan in place. We want to plan for a good life and retirement, but it is important to also plan for a good end of life. Here are four ways you can refine your estate plan and take steps to protect your assets and prevent unneeded stress and uncertainty for your loved ones.

1. Review Beneficiary Designations

Many accounts can pass to heirs and loved ones without having to go through the process of probate. Life insurance contracts, 401(k)s, and IRAs can be transferred through beneficiary designations, so you get to decide who you want to inherit your accounts by filing out a beneficiary form. Oftentimes you can use these forms to name successors or backup beneficiaries and even split up accounts by dollar amount or percentages between beneficiaries.

Let’s say your oldest daughter is a strong-willed and successful accountant, and your son is a high school teacher who is good at managing money and being the family’s peacekeeper. You’re almost done with your estate planning but unsure about which of your children to choose to be the executor of your estate, and you don’t want to cause ill will between them.

Before you decide who to choose, consider the following advice when it comes to choosing an executor:

Success often means nothing. Just because someone is a financial professional, even an accountant, doesn’t mean that person will be a great executor of your estate – like in cases of a good doctor being a difficult patient or good lawyers being unsuited to represent themselves. People can be great at their jobs and careers but then be terrible when it comes to managing their and your personal affairs.

People often have more digital assets than they realize. What happens to these assets when a person dies?

Until recently, every individual site has had its own terms of service that determined who has ownership and access after a death and whether the assets are deleted, frozen or can be transferred. This has meant a hodgepodge of rules for survivors to need to sort through, and family members are often shocked to find they have no control at all. Irreplaceable images, photos, and history are often lost, as well as items of financial value.

However, almost every U.S. state has now passed the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA, and experts are gaining a better understanding of how this law helps their clients determine what happens to their digital assets after they die.

It can be very difficult to plan for events like aging, incapacitation, and death, but not planning for these events can cause families burden and grief and might also cost family members a significant amount of time and money.

It is estimated that over 50% of Americans haven’t created a will. The Future File business also estimates that less than 10% of the U.S. population has a complete legacy and wishes planning system.

Planning for difficult and unexpected events is vital but can often be difficult to navigate. Here are the top estate planning mistakes to avoid, according to experts in the industry:

When a second marriage joins two families together, it is often a time for celebration as two families come together and become a new family unit. However, it might also lead to inheritance fights, particularly between stepparents and children. A good estate plan is important to help avoid these quarrels.

Complications can arise especially when two people who marry both have children from previous relationships. It is common for married people to leave everything to their spouse. In these cases, children from the previous relationship may now see their inheritance go to their stepparent, who may then leave it to their own children. If additional children are added to the relationship, things can end up being even more complicated.

Each couple needs to redo their estate plan before getting remarried. Here are some ideas for reducing or eliminating disputes before they occur:

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