John Lane Law

Coronavirus News Should Make You Think about Estate Planning - John M. Lane Law, PLLC

“Nobody likes to think about their own mortality, and that's why so many people go without basic estate planning documents. Often, an event like the coronavirus can be the kick in the pants you need to get your affairs in order.”

The global Coronavirus (COVID-19) outbreak has many of us thinking about what could happen, if the disease spreads more fully across the general population. We all need to plan for what could possibly happen. To protect yourself and your family, it’s smart to be certain that you have the following these documents prepared and updated, says Motley Fool’s recent article entitled “The Coronavirus Should Have You Thinking About These 4 Things.”

1. A will or revocable trust. Be sure that your assets will pass to those who you want to receive them after your death. This is critical during crisis times. You don't want to make things any harder than they need to be. Create an estate plan to avoid potentially expensive and time-consuming processes like probate, which will have greater importance, if your family is confined to their homes in a quarantine situation. A simple will can cover what happens to your assets at death. This typically works well, especially for modest estates. State laws differ on how complicated a probate process would be with a basic will. Some people opt to use a fully funded revocable trust that doesn't require probate. For either a will or a revocable trust, make sure that it’s up to date and reflects your current preferences and family circumstances.

2. Updated beneficiary designations. If you have an IRA, 401(k) account, or life insurance policy, those you name as beneficiaries of that account will receive the proceeds, despite a totally different arrangement in your will or trust. Many of us also don’t designate any beneficiary for these accounts, which means added complications in the event of death.
3. Healthcare power of attorney. When we’re in the midst of this Coronavirus, it’s even more urgent that you'll be able to get the healthcare you need, if you're hit with this illness. A durable power of attorney for healthcare will give the individuals you choose the ability to make whatever medical decisions you specify on your behalf. An estate planning attorney can help you draft documents that match your specific wishes.
4. Financial power of attorney. You can designate an agent to help take care of your finances, if you become incapacitated or otherwise unable to handle your financial affairs. A general durable power of attorney for financial matters is another document that lets you delegate responsibility and authority to make financial transactions to the person you name.

Estate planning may not be the highlight of your week, but the Coronavirus outbreak has more people thinking about what they need to do. Make sure your family will have what they need even if something happens to you.

Reference: Motley Fool (March 8, 2020) “The Coronavirus Should Have You Thinking About These 4 Things”

What Happens to My Debt When I Die? - John M. Lane Law, PLLC

“When we think about retirement planning, our focus often keys on the question of how to maintain a monthly paycheck after we stop working.”

A retirement plan isn’t set without some thought and planning on how to transfer any unspent assets to people we’d like to benefit after we die, and to whom we can entrust important financial and health care decisions in the event we’re unable to manage those affairs.

fosters.com explores this in a recent article, “What happens to your debt in estate planning?” The article reminds us that this is where estate planning is needed. An estate plan is a set of instructions that lets us designate certain individuals to act on our behalf after we die, or while we’re living but incapacitated, and provides guidance about how our assets should be distributed to beneficiaries at death, or managed for us while we are alive but unable to do so on our own.

Wills, trusts, and beneficiary forms set out our instructions as to who will receive any assets that we leave behind. Wills name an executor who is responsible for an accounting of all of our assets and liabilities at death. The executor also works with the probate court to get our creditors paid, and distribute the remaining funds to our heirs. Trusts are similar, but don’t involve oversight by the probate court. When a trust is set up to own assets during your lifetime, a successor trustee is named at your death or incapacity to manage the trust assets and then distribute them at the specified time to the named beneficiaries.

Wills and trusts don’t have any control over accounts that have a joint owner or beneficiary designation, unless the estate or trust has specifically been named as beneficiary. IRAs, 401(k)s, life insurance, annuity contracts, and brokerage and bank accounts can all be created with beneficiary designations that serve as the instructions to their custodians, regarding who is to receive them after death.

Durable power of attorney documents for both financial matters and health care are also important components of a retiree’s estate plan. Because IRAs, 401(k)s and other retirement accounts can’t be owned by a revocable trust, trustees can’t manage them for you. An agent designated in a durable power of attorney can take any actions you authorize on these sources of retirement cash flow. A durable power for health care will specify the individual you authorize to make care decisions for you and what your wishes are regarding life-sustaining treatments.

It is not unusual for those approaching retirement to either delay creating wills, trusts and power of attorney documents or not to have reviewed them for many years. Because laws and relationships change over time, it is important to review estate planning documents regularly and consult with an estate planning attorney when updates are needed.

What happens to the debt? With good planning, there hopefully is no debt. But if there is, beneficiaries generally do not have to pay the obligation, unless the debt was owned jointly with a spouse or a co-signer. Unsecured debts, like credit cards, however, do become liabilities of the estate and payment of these debts will be overseen by the probate court. The executor will need to pay them from any assets passing via the decedent’s will. An experienced estate planning attorney should work through these items with you and your heirs to take care of your affairs while you are living.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: fosters.com (November 22, 2017) “What happens to your debt in estate planning?”

As an Executor, How Fast Do I Need to Settle an Estate? - John M. Lane Law, PLLC

“How quickly do you need to settle an estate when you are serving as an executor?”

If you’re accustomed to setting timelines in your life, when it comes to serving in the executor role, you’ll likely find it difficult because settling an estate can be impacted by many things far beyond your control.

The probate process is discussed in executor.com’s “How Quickly Do I Need to Settle an Estate?”

The answer to how long it takes to settle an estate when you are serving as an executor is, well, it depends. The process can typically take about a year, but there are several factors to think about.

When a will is filed with the court, it starts the process called probate. The probate court oversees the executor’s actions as he or she completes every step of closing the decedent’s estate. There are many things the probate court does, including making sure that the assets are properly distributed to beneficiaries. Of course, you have no control over the pace of the court. This includes such things as when your file will be reviewed, when hearings will take place and so on. That’s all up to the judge and his or her staff.

As executor, you’ll need to get letters of testamentary from the probate court before you can do anything with estate assets, such as bank accounts, autos, property, and investment accounts. You have to wait for the court’s approval to proceed. On the other hand, the probate court may set deadlines for the executor to accomplish specific tasks, like the distribution of the estate assets after an accounting of those assets has been completed.

 Larger estates obviously take more time to settle than smaller ones. As the asset types become more complex, the time required to spend settling the estate can increase dramatically. For example, if the deceased had ownership interests in a small business, extensive property holdings, or complex investments, it may take longer to organize these, so the beneficiaries receive their distributions as outlined in the will.

Another factor impacting the time to settle an estate has to do with whether or not the person died without a will. If that happens, it can take longer because the probate court has to appoint an estate administrator and more closely monitor the estate.

Some people are great about keeping records in their lifetime. This can really help to expedite the work of an executor.

Beneficiaries and surviving family members who are set to inherit, can delay things for several reasons. Some may be grieving and unable to provide required paperwork and information. Others may dispute the will, and some beneficiaries may be hard to locate. Keeping beneficiaries updated about the process and understanding that there will likely be obstacles can be useful, when it comes to both dealing with and avoiding beneficiary-related issues.

Patience, flexibility, and understanding will be vital to you when working through this challenging, complex process.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: executor.com (November 1, 2017) “How Quickly Do I Need to Settle an Estate?”

What about a Trust? Do I Need This? - John M. Lane Law, PLLC

“Do we need a trust? This is one of the most common questions people have when they start to discuss their estate planning needs.”

A trust is a legal vehicle for managing financial assets for the benefit of you and/or someone else. The property owner (the grantor or settler) transfers legal ownership to the trust, and a person or institution (the trustee) manages that property for the benefit of the beneficiary. It sounds pretty clear cut, but it can get complicated.

There are some misconceptions about trusts, which can lead to them being unused or misused. WMUR’s recent article, entitled “Money Matters: Five misconceptions about trusts,” provides several of these common misconceptions.

Trusts are used primarily to save on estate taxes. This depends on the type of trust and the size of the estate. A trust may impact estate taxes, but that’s determined by the tax law in effect at the time the grantor dies. The same is true of income taxes.

My estate is too small for a trust. Regardless of the estate size, trusts can be used to manage assets and control their distributions in a private way. This is because they aren’t public like probate court. A trust can contain provisions to manage your assets, if you become incapacitated and are no longer capable of doing so yourself.

Trusts limit your flexibility. This is not necessarily true. It is because a revocable trust can remain under your control as trust creator and be modified as you want in your lifetime.

You must designate a friend or relative as trustee. Perhaps. The trustee must manage and distribute trust assets according to the terms of the trust.  However, not everyone is up to the task of being a trustee. Designate a successor trustee, in case the primary trustee is unable or unwilling to serve.

A trust will protect you from creditors. Some trusts are specifically designed to protect a grantor from creditors, but not all of them do this. Asset protection can be very complicated and expensive.  Therefore, if you need to have these protections, work with an experienced estate planning attorney.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: WMUR (September 14, 2017) “Money Matters: Five misconceptions about trusts”

Simple Estate Planning Tools - John M. Lane Law, PLLC

“The longevity of successful retirement cannot be overstated, thus the importance of building, preserving and protecting one’s assets during retirement.”

When we look at the steps taken in our investing lives, the basics are simple. As working investors in the initial stages, the priority is accumulation and growth. Therefore, we participate in retirement plans such as IRA’s, 401-k plans, etc.

As Marco Eagle’s article, “Money Talks: Estate planning tools” explains, the next phase is the retirement stage, when the focus shifts from accumulation to preservation and maintenance of the nest egg.

Growth is a component of any retirement plan, but protecting your purchasing power during retirement is critical. You also want to generate a predictable stream of income during retirement, in order to avoid compromising your lifestyle.

The final stage of successful retirement planning is often overlooked: that’s the estate planning phase or the strategy of a succession plan to pass assets to your family. There are many estate planning tools that can be used to execute an estate plan. You can create a personal trust. Under this arrangement, your assets are transferred into a trust during your lifetime and then transferred by the trust at death. It’s important from both a tax standpoint and an allocation standpoint, regarding who receives what and how much. This is what your estate plan does for you and your family.

Work with an experienced estate and trusts attorney to establish your estate plan, so you can achieve your final objectives when passing assets to the next generation. Some individuals like the ability to exercise control with an effective plan to pass assets to their beneficiaries, without the need of trusts or probate.

There are many types of insured annuity strategies that will pass assets immediately to the beneficiaries, without the need of probate. Avoiding probate is frequently part of a strategy to make the assets available, immediately after the death certificate is issued.

Some see the foundation of their estate planning as the incorporation of life insurance. This lets the beneficiaries inherit assets, generally tax free. Avoiding a taxable event upon death is also appealing, based on both taxes as well as overall portfolio values. Talk to a professional about your situation.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Marco Eagle (June 11, 2017) “Money Talks: Estate planning tools”

The Time for Estate Planning is Now - John M. Lane Law, PLLC

“As the New Year turns, and with it, thoughts of income tax report preparation and filing, it might be a wise idea to do what many producers also do: spend time developing and honing transition and estate plans for their farm and ranch operations.”

The (Dodge City, KS) High Plains Journal, in “Estate planning is for everyone,” notes that people spend a lifetime working and building an estate to enjoy in their retirement years. Yet, many believe estate planning is only for the rich. This is not true. Putting in the effort now, will help you to avoid the confusion, delay, expense, and stress in your family that might occur if you were to die without an estate plan.

Speak with your family and manage their expectations to keep the lines of communication open. Most estate planning attorneys say that there are six basic steps in the estate planning process:

1. Start the discussion. Many families face a lack of communication as their greatest hurdle because family members don’t want to talk about estate planning. Parents may delay a discussion because the thought of growing old and dying is, honestly, not pleasant. Adult children may not want to bring up estate planning to avoid stressing parents and grandparents—and because they don’t want to look greedy. But the subject may come up when a neighbor, friend, or relative dies that may lead a family to having a discussion.
2. Take stock. Examine your present financial situation since it’s the foundation of your entire estate plan.
3. Develop goals. As you begin your estate plan, think about your objectives. These will vary from family to family due to differences in liabilities and assets, abilities and ages of survivors, the number of children, along with the values that are important to the creator of the estate plan. Your objectives may change with your age, or changes in marital status, income, assets or other factors in your life.
4. Use professional advisers. Estate planning is technical and complex. An experienced estate planning attorney can coordinate the work of other team members. Ask questions and make sure that you understand your plan and its implications.
5. Consider alternatives and implement the plan. There may be several ways to reach your objectives. Ask your attorney to explain the options. Once the plan has been created, it’s important to implement it.
6. Review and modify. Review your estate plan every few years. Tax laws and circumstances change, so it’s important to review and modify your plans with a qualified estate planning attorney when it’s warranted.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The (Dodge City, KS) High Plains Journal (January 30, 2017) “Estate planning is for everyone”

If it is So Important, Why Doesn't Everyone Make a Will? - John M. Lane Law, PLLC

“Understanding what happens to you when you die may help you understand the intricacies of your estate and make planning both simpler and more effective.”

No one likes to plan for his or her death, but it’ll happen to all of us, says The Reading Eagle Business Weekly in the article “Make a will, plan for distribution of assets.”

You can pass your wealth to anyone you want, but state and/or federal taxes may be due on these transfers. The rules are also complex, and if you die without a will, the state laws of intestacy may say who gets your wealth.

Most folks make the mistake of signing their wills and life insurance policies, then putting them in files and forgetting about them. These documents and your intentions will become out-of-date. It’s not uncommon for a decedent to have been divorced for five years when they die, but the ex-spouse still inherits all of his or her assets. Why? Because the ex’s name is still in the will or is listed as the beneficiary of the life insurance policy. This happens more frequently than you might think.

Probate?

Probate versus non-probate assets is one of the most misunderstood concepts in estate planning. Probate is the process that deals with proving a will's validity by filing it in court. The will names an executor who is responsible for fulfilling its terms. The estate assets are identified and valued, then given to the individuals named in the will.

There are also non-probate assets that are transferred by operation of law. They specifically include accounts with beneficiary designations like IRAs, 401(k)s, pensions, retirement accounts, life insurance, annuities and transfer-on-death accounts. These non-probate assets supersede what’s written in the will. The beneficiary designations control them.

Do you have a will? When was the last time you reviewed it?

You should hire an experienced estate planning attorney to help structure an estate plan for both your will and beneficiary designations to allow for the efficient transfer of your assets.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Reading (PA) Eagle Business Weekly (January 17, 2017) “Make a will, plan for distribution of assets.”

Get the Basic Estate Planning Docs Signed - John M. Lane Law, PLLC

“Legal Documents Everyone Should Have”

Harrisburg Magazine’s recent article, “Protect Yourself,” recalls the case 25 years ago of a young woman named Terri Schiavo, who had a heart attack in Florida. She was resuscitated but suffered massive brain damage and was left in a persistent vegetative state. This created a lengthy legal battle with her husband—who wanted her feeding tube removed—against the wishes of Terri’s parents—who wanted her kept alive. After seven years and 14 appeals, Schiavo's feeding tube was disconnected, and she died in 2005.

A big issue in this fight was that those closest to her testified she never would’ve wanted to be kept alive in a vegetative state, but Schiavo hadn’t signed a living will. Therefore, if you fail to have the legal documents necessary to express those intentions, no one will know what they are. Without leaving your written wishes, you take important decisions out of the hands of your family. It is very important to have these documents for your own peace of mind, as well as that of your family.

End-of-life directives are just one of the legal documents that are needed to protect us. Wills and powers of attorney (financial and medical) are crucial for sound estate planning. A financial power of attorney, allows another individual, like a spouse or trusted friend, to take care of your financial affairs in the event that you become incapacitated, which is particularly useful as you get older.

A medical power of attorney is like a living will, but it details more than deathbed concerns. It also allows your trusted agent to be given your private medical information and to decide health care issues for you if you’re incapacitated.

Wills are extremely important, especially for those with children. They let you name a guardian for your children, if you and your partner pass away. This step will prevent the courts from deciding who should care for your children or a dispute by relatives over guardianship. In some states, a will is not required, but another legal document specified by state law will suffice.

Even unmarried people without any kids should have a will. If not, state intestacy laws will dictate how your property will pass to your heirs. If you die without a will, the state will distribute your assets to your next of kin. This could be someone you don’t really like or whom you’ve never met.

Everyone has heirs. Even if you think you don’t have anyone, there’s likely a cousin out there somewhere, and the intestacy statute will try to find the next of kin. If you have a properly prepared will, you can leave funds to charity, and make sure that the funds go where you want them to go—instead of to some distant relative with whom you have absolutely no relationship.

This issue isn’t pleasant, but preparing for disability and death with legal documents provides undeniable protection, as well as peace of mind for you and your family.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Harrisburg Magazine (December 2016) “Protect Yourself”

Planning for Incapacity is Wise Move - John M. Lane Law, PLLC

“At any age you can become incapacitated or have a temporary illness.”

Many of us are not very proactive in estate planning or aware of the issues of elder law, even though we know that eventually we will all face incapacity and/or death. The Arizona Jewish Post’s article, “Estate planning and elder law benefit all ages,” reminds us that life can change in mere seconds.

Estate planning and elder law attorneys say that everyone needs these three documents—a will, a health care power of attorney, and a financial power of attorney.

A will. If you die with no will, state law has a pecking order as to who will inherit your assets, starting with your spouse and children. A valid will must be signed by the person who wrote it, witnessed by two non-relatives who saw them sign and notarized as to the identity of the signer and witnesses.

Your will should name a personal representative, otherwise known as an executor. This should be done far ahead of time to be certain that they are willing and able to undertake the task. Let this person know the location of a copy of your will.

A living will details your end-of-life choices. Without authorized directions, your family may not be able to make the decisions you’d want. A living will can also include funeral wishes.

A medical power of attorney gives the individual you select, the authority to make health care decisions for you, if you’re incapacitated.

A financial power of attorney lets your appointed agent make financial decisions, pay your bills and take charge of your bank accounts, if you’re unable to do so.

A revocable living trust is a document that lets you assemble all of your assets in one place. The assets must be retitled to the trust, not to you as an individual. A trust can help with out-of-state real property or leaving money to a child with special needs who is receiving means-tested government benefits. When you die, the assets in the trust aren’t subject to probate, and are distributed as you instructed in the trust.

Speak with an experienced estate planning attorney for personalized advice that considers your assets, divorces, stepchildren and many other factors.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Arizona Jewish Post (December 2, 2016) “Estate planning and elder law benefit all ages”

Check This Checklist and See What You Need to Do for Your Estate Plan - John M. Lane Law, PLLC

“No matter your age, this estate planning checklist will help you get started on the process.”

People tend to put off estate planning. As a result, they risk dying without leaving their financial affairs in order and handing their heirs a host of potentially significant problems.

The Business Times recently published an article entitled “Use this checklist to get started on your estate planning.” The article discusses some pointers for those averse to buckling down and creating an estate plan.

Create a will if you don’t have one. A 2015 survey found that 54% of Americans ages 55 to 64 and about 70% of Americans ages 45 to 54 don’t have a will in place. A legally valid will could save your heirs from expensive problems with probate.

Add related documents. Depending on your estate planning needs, you may need a trust, durable financial power of attorney and medical powers of attorney, as well as a living will.

Review beneficiary designations. Check your documents and verify the designated beneficiaries. These take priority over the provisions of wills when it comes to retirement accounts, life insurance, and other non-probate assets.

Make a list of assets and debts. Give your heirs an estate planning organizer so that they can reference it if you pass away. List your real property and personal property assets, as well as real estate you own and its value. Also list personal property items that have a monetary worth. You can also list your bank and brokerage accounts, retirement accounts, other investments and insurance policies. Finally, make a list of your credit card debts, mortgage, home equity line of credit, and any consumer loans.

Consider making gifts to reduce the size of your taxable estate. The lifetime individual federal gift, estate, and generation-skipping tax exclusion amount is unified and is set at $5.45 million for this year. So a married couple can transfer up to $10.9 million tax-free.

Reduce, communicate and make wise decisions. Consolidate your IRAs and bank accounts to shorten your list, eliminate statements, reduce paperwork and avoid fees. Tell your heirs which causes and charities you value and select a reliable executor.

Work with an estate planning attorney. Do-it-yourself estate planning is not recommended because there are numerous financial, legal and emotional issues and pitfalls to avoid.

Ok, you’re not a multimillionaire yet. But if you own a business, have a blended family, have a child with special needs, are concerned about dementia or want to pave a smooth road for the loved ones left behind, use this checklist to get going now.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The Business Times (Sept. 20, 2016) “Use this checklist to get started on your estate planning”