St George Estate Planning

Not All Estate Plans are Created Equal

 

Office:   (435) 688-9117

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Three Estate Planning Myths: True or False

Estate planning lawyers eat, sleep, and breathe estate planning and see pretty much every kind of situation unfold. Individuals who have taken the time to create a substantial estate plan nearly always fare better than those who do not.  Still, there are a whole lot of myths and misunderstandings floating around that stop people from making the choice to protect their futures with an estate planning lawyer’s assistance.

In order to help as many people as possible, it is incredibly important to tackle these myths head-on and to debunk those that aren’t true.

T or F:  Estate plans are just for those with lots of assets.

The answer is false.  So many people end up unknowingly damaging their estates and hurting their heirs because they don’t think they have “enough stuff” to justify an estate plan.  This myth needs to be debunked!  As long as you own something, there will be a legal process to determine what to do with it after you die.  This process (probate) is not only long and drawn out, but it also costs money. That money comes from the estate itself, meaning that those precious few assets you wanted to pass on could end up being sold to pay for probate and taxes.  Fortunately, working with an estate planning lawyer ahead of time allows you the opportunity to protect your assets using whatever tools are appropriate for your situation.

T or F:  You don’t need an estate plan as long as your family knows your wishes.

The answer is false.  There are a couple of problems that estate planning lawyers encounter with this line of thinking.  First, and probably most importantly, is that just because you and/or your family wants things to happen in a certain way, there’s no guarantee they will.  Your loved ones will be forced to follow the state laws even if they don’t match up with your desires. Additionally, everyone experiences grief differently, and though your child or other loved one knows your preferences, he or she may find ways to subvert them for their gain.  The best way to avoid both of these kinds of drama is to work with an estate planning lawyer who knows how to ensure that things go the way you want as a matter of law.

T or F:  Trust funds are for more than passing on money.

The answer is true.  While we may have specific ideas about trust funds as a result of watching too many movies, a whole lot of people aren’t clear on what they can actually do.  For example, your estate planning lawyer can help you set up a trust to limit the taxes your estate (and heirs) will have to pay later.  They also provide you with a big say in how your heirs can use the money—do you want them to have free rein, to pay for an education, or to give the money to charity?  These are just some of the ways trusts are often used.

Even if you don’t have a ton of assets, a skilled estate planning lawyer can help you create a roadmap that will be followed by both the courts and those you’ve left behind.  From avoiding probate and excessive taxes to ensuring that your grandkids go to college, working with an estate planning lawyer in your area is the first step in protecting what you hold dear.

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7 Reasons to Update Your Estate Plan

So, you and your estate planning lawyer have put together an excellent plan for you.  Congratulations!  You are ahead of the majority of the population already.  Keep in mind; however, even though you finished the hard part, there is some maintenance that you and your attorney will want to do from time to time.  Your life and circumstances will likely change over the years, and you’ll want your estate plan to adjust accordingly.

Some of the changes that should precipitate a call to your estate planning lawyer are relatively obvious, but you can still overlook them.  After all, who has a baby and then thinks, “I should call my lawyer” in their sleep-deprived state?  For that reason, it’s a good idea to do the occasional mental inventory to see if you’ve undergone any of these life changes since you last updated your estate plan:

  1. You got married. While a spouse does often inherit by default, there are a lot of other considerations to make. As a bonus, your estate planning lawyer will likely have great suggestions on how to adjust your plan to save your spouse on taxes and other time and money concerns when dealing with your estate.
  2. You got divorced. If you don’t want your ex-spouse to receive your property upon your death, make sure the ex’s name is removed as a beneficiary of accounts and policies, taken out of the will, removed from trusts, etc. Contact your lawyer to make sure you don’t forget anything and to help make the process easier.
  3. You’ve been widowed. When one spouse passes away, the other will need to update his or her estate plan to reflect that change. Not only will your beneficiaries likely change, but you may also have an inheritance from your spouse that now needs to be incorporated into your estate plan.
  4. You had a child or grandchild. The birth or adoption of a new family member means that aspects of your estate plan may need to be changed to accommodate new needs. For example, you may want to create a college fund or set up a trust. Also, it’s crucial to have your estate planning lawyer draw up legal guardianship papers to determine who will care for your child should you be unable to do so yourself.
  5. Your financial situation has changed. Whether you’ve received some sort of windfall, gotten a significant increase in pay, or have lost your job, it is vital to review your estate plan to determine if it provides for these changes. If not, you’ll need your lawyer to adjust it appropriately.
  6. You’ve purchased real estate. A home often represents an individual’s most significant life investment, and you want to be sure to cover it in your estate plan. From how to pay it off to whom you want to leave it to and plenty in between, an estate planning lawyer will help incorporate this big change into your existing plan.
  7. You started (or ended) a business. Starting or ending a business warrants a trip to the estate planning lawyer’s office for plenty of reasons, not the least of which is that it will undoubtedly have some sort of effect on your financial situation. Succession planning is another significant aspect of running a business, as you’ll want to clearly outline what is to happen to the biz if you die or become otherwise incapacitated. A little legal stuff now will save big headaches later.

There are, of course, other events that should likely trigger a call or visit to your estate planning lawyer, but these seven are some of the biggest.  Fortunately, with the major estate planning done, these types of updates will typically be relatively easy while benefitting you and your heirs greatly.

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How an Estate Planning Attorney Can Help Protect Your Assets

There’s a constant drive in our society to continually acquire assets.  After all, that’s one of the ways we accumulate wealth. We then ask an Estate Planning Attorney to help us pass on. However, simply gathering more and more assets isn’t always the best approach to building wealth. Those assets also need protection.  A good Estate Planning Attorney will want to go over ways to protect your assets. Some of those ways can include:

  1. Estate Planning. Your Estate Planning Attorney will help put together a long-term plan that provides for your loved ones. Most people, however, don’t necessarily understand all the tax implications that go along with various aspects of Estate Planning.  For example, certain Trusts can help your heirs avoid some taxes, meaning the amount you leave them will be larger. Some Trusts can shield your assets from the risks of life (for you and your heirs), including lawsuits, divorce, and bankruptcy. These are a few ideas to discuss with an Estate Planning Attorney.  The difference a Trust can make will amaze you.
  2. Insurance. There are several types of insurance on the market. The types that will benefit you the most differ from those designed for large groups of anonymous faces. It is important to note that, when it comes to protecting your assets, having insurance provides a way to pay for the unexpected without depleting your own financial resources. Yes, it costs up front, but it usually works out to be much less than not having insurance when you need it.
  3. Business Structure. You may not consider the structure of your business as a means of protecting it but it can be. In fact, the right business structure will protect more than just the business. For example, if a sole proprietor gets sued for a faulty product or workplace injury his or her personal assets can be used to pay for damages. Operating under a Limited Liability Corporation (LLC), on the other hand, can separate your business and personal assets so that one is not affected by the other.

These are just a couple of the ways that Estate Planning Attorneys protect their clients’ assets. Of course, every situation is different and has its own needs. Your attorney should be willing to look at your situation from every angle to advise you on the best route to take.

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5 Ridiculous Myths About Estate Planning

When it comes to Estate Planning, there are 5 ridiculous myths that could cause your plan to absolutely crumble and fall apart when your family needs it the most.

I’m talking about lengthy and expensive court battles, dishonored wishes, unnecessary government intrusion, taxes, and costs—all because of a few dangerous myths and mistakes that can cause your plan to fail in an emergency.

Well no more, as it’s time to debunk these myths and learn the truth about protecting your family and assets once and for all.

To make sure your plan works exactly how you want if the unthinkable happens, it’s important to get familiar with the top 5 Estate Planning myths and learn how to fix any mistakes that may be lurking in your documents.

Once armed with this knowledge, you can feel confident knowing that the documents you’ve spent so much time, money, and emotion on will actually work if the unthinkable happens.

Myth # 1:  Estate Planning is Something You Do Once and Never Have to Worry About Again

This myth is the number one reason why even the most expensive Estate Plans can fail after a person’s death or during the crises of life.

Estate Planning is not something you “do” once and never look at again. For your documents to remain valid and effective, they need to stay updated as your life and the law changes through the years.

For example, if you forget to update your Will, Trust, or beneficiary designations following a divorce, there is a good chance that your ex could still inherit a portion of your Estate.  Forgetting to update your documents following the birth of a child may lead to his or her accidental disinheritance under your current plan.  If your chosen Power of Attorney moves 5 states away and you forget to pick someone new then all your previous planning can work against you instead of for you.

It doesn’t matter how good your lawyer was or how fancy your plan.  If you don’t keep your wishes, financial and family status updated, your documents simply won’t work the way you intended them to when tragedy strikes.

Myth #2: Estate Planning Is Only for The Elderly or Super-Rich

Many people falsely believe that Estate Planning is only for the elderly or the super-rich.   They feel that unless they have a ton of assets, Estate Planning is not necessary and their family can just duke it out for their stuff when they die.

Estate Planning is not just about who gets your “stuff” when you pass. Nor is it just a tool for the rich use to minimize tax liabilities.  Estate Planning is about making things as easy as possible for your loved ones if something unexpectedly happens to you.

It’s my personal belief that every adult needs an Estate Plan… some are just more complicated than others.

If you truly don’t have any assets, you still at the very least need a Power of Attorney, Living Will, HIPAA and Advance Health Care Directive to ensure your healthcare wishes are known and someone is legally able to make medical or financial decisions for you in an emergency.

If you have minor kids, Estate Planning is also necessary to ensure that your children are raised by the people you want if something happens to you.

For those in a non-traditional relationship, Estate Planning preserves your loved one’s rights to inherit your things or get involved in a medical crisis.   In a blended family situation, Estate Planning helps to prevent family drama and keeps the lines very clear as to who gets what if something happens to you (this is especially important if you have children from a previous marriage and you are now concerned about your Estate going 100% to your new spouse).

It’s not always about money.  For a large majority of people, Estate Planning is just about making things as simple and cost-effective for your loved ones during the transitions and crises of life.

Myth #3:  Having a Trust Guarantees Your Family Will Stay Out of Probate Court

Having a trust only guarantees that your family will stay out of probate court if you do it right.

By this I mean your assets need to be properly titled in the name of the trust for them to be protected by the trust.   This is called “funding” and it’s something that you need to stay on top of as you acquire new assets through the years.

Otherwise, any assets that are not properly owned by your trust at the time of your death will have to go through the probate court.

This is something that catches many families off guard following the passing of their loved one.  Incomplete or inadequate funding of a trust can make it as though you had no trust at all at the end of your life.  Your family will be subject to the expenses and delays of the probate court, while your wishes may go ignored upon your passing.

Don’t take the chance of having your trust fail when your family needs it the most.  Take the time to make sure all your assets have been properly transferred from your name into the name of the trust.

Myth # 4: Social Services Will NEVER Take Custody of Your Kids if You Have Guardians Named

Many parents properly name long-term guardians for their kids and believe that because of it, their children will never spend a day in social service’s care should they suddenly pass away.

While for the most part, this is true, there are still some (yet, avoidable) instances where social services may be forced to take temporary custody of your kids.

For instance, if your legal guardians live in another state or are not immediately available to care for your children following your passing (ie. they are traveling on business, in the hospital, unable to be reached) the authorities may have no choice but to place your children with social services until their legal guardians can arrive.

The only way to avoid this is by having short-term guardians named too. They are then authorized to legally care for your kids until their long-term guardians can arrive.

If you haven’t named short-term guardians for your minor kids, don’t wait one more day to do so. Talk to your attorney and ask to make this important update so your minor kids never spend one second in the care of the state.

Myth #5:  You Don’t Need to Tell Anyone About Your Estate Plan—It’s Better to Keep These Things Private

Ever see a movie where a family is going crazy trying to find a copy of their loved ones will after they pass?

Believe it or not, these situations happen all the time because people are afraid to talk to their loved ones about their end-of-life wishes or any Estate Planning they have in place.

However, if you don’t let your family know what documents you have and where to find them, they may be forced to spend a ton of unnecessary time and money working with lawyers to sort out your Estate.

Not to mention, they won’t know your true wishes or how to best carry them out if something happens to you. 

This could range from not knowing your preference about things such as life support, feeding tubes or other medical interventions in a serious emergency to not knowing the type of independent living facility or nursing home you would want if it ever became clear that you needed long-term care.

To avoid this type of confusion about your wishes and the plans you have in place, take the time to have open, direct and honest communication with your loved ones.  Talk to your family in advance about your documents, choices, and wishes, so there is no chaos, fighting or misunderstanding if the unthinkable happens.

I’ve Bought into The Myths—Now What?!

If you’ve bought into any of the Estate Planning myths we just talked about, I promise you are in good company.  Most people have bought into at least one myth about Estate Planning, which probably explains why so many plans fail each year.

The good news is that if you are still alive, well and of sound mind, there’s still time to fix any mistakes regarding your planning.

Perhaps for you, that means amending your documents to bring them up to date or to simply include some of the strategies we talked about above.

Or, maybe for you it means creating a plan from scratch, as you falsely believed Estate Planning was not applicable in your personal or financial situation.

Whatever your “to do” item may be, I encourage you to get it taken care of quickly while there is still time to make your planning right.   Accidents, illness, and death can happen without warning, so don’t put off any planning that you may need.

If you would like to make an appointment with the attorney to talk about a unique plan right for you please call 435.688.9117 or fill out the form on our Complimentary Strategy Session page.

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Living with a Lawyer

I am the Dawn of the end of his life. At least that’s what my dad says. My name is Dawn Brock and I am the youngest of E. Lawrence Brock’s children. For as long as I can remember my dad has had his own law office in Chino, California. The office has been as much a part of my life as living in my house. I visited the office long before I ever started working there. When I was little, if my dad forgot something at work I would go back with him to retrieve it. When  I got older, I started working there as the cleaning lady. Slowly, I gained more responsibility until I became a secretary. So many memories include that office and going to there has always been an important part of my life.

My dad has always been my amazing father, but he has also always been a lawyer. He never explicitly stated to us children that protecting our assets and having an Estate Plan was important. However, by watching him work and how he deals with his clients showed it to be an important truth.

For the longest time, I didn’t know what an Estate Plan encompassed, but I knew its importance. I knew it had something to do with protecting your assets after you died and distributing your valuables to those you wanted to receive them. However, I didn’t know the extent of what an Estate Plan does for you. Now, after years of working for my father, I have a limited knowledge of what an Estate Plan entails. I can’t explain it in any official capacity but maybe my simplistic view can shed some light on what may appear as a complicated process.

First, an Estate Plan is more than just one document. It is a group of documents that together protect you more completely than just a Will or Trust alone. The documents include a Trust, a Pour-Over Will, a General Power of Attorney, an Advanced Health Care, the HIPAA, and the Assignment of Personal Property. These main documents make up the contents of most Estate Plans. Each aspect of the Estate Plan does something different, but as a whole, they all work together to give you the greatest protection possible.

The Trust, the largest document, explains where all your assets go and who gets what after you pass away. The Pour-Over Will is, in essence, extra insurance for any assets not in the trust. It states that anything you own not already in the Trust will be distributed by or pored over into the Trust. The Power of Attorney is the document that explains who will be in charge of decisions for you when you are no longer able to make sound decisions. The Advanced Health Care tells the doctors how long to or not to keep you on life support and other medical procedures. The HIPAA tells the doctors who you have allowed access your medical records. Finally, the Assignment of Personal Property is the document that gives you the ability to give specific assets to specific people.

People might wonder why there needs to be so much detail in an Estate Plan. Why can’t they just write a will stating this person gets this and that’s all? Even though that sounds simpler, in the end, it isn’t. If you create a Will in that manner most likely something will be forgotten. That one forgotten thing can create a wedge that will leave an estate in Probate for years. As the daughter of an Estate Planning attorney, I think it is easier to contest a document with vague wording, rather than a set of documents that all work together to create a secure future for your assets and your legacy.

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Twenty Questions #20: Do You Have a Plan for Possible Incapacity?

Designed to deal with your affairs after death, an Estate Plan can also help prepare for incapacity. A thorough Estate Plan will name someone to take care of you and your assets if you become incapacitated. With the correct design, you can implement your plan in case of incapacity without the necessity of talking to doctors. Many of whom will not want to become involved in deciding if you have the capacity to sufficiently handle your financial affairs. You can create your own definition of incapacity through a well-designed Estate Plan.

The well-designed Estate Plan can be simple. If you have a Revocable Living Trust your affairs can be handled expeditiously. This allows your children to receive control of their assets sooner than if they must go through probate. Probate can become long, time-consuming, expensive, and complex; all the things of most people do not want.

A complete Estate Plan will have an Advanced Health Care Directive. This document allows you to decide many medical decisions before they arise. Including:

  • how long you want life support
  • how much pain medication you receive
  • what to do if you have Alzheimer’s or dementia
  • or other issues concerning long term diseases.
  • decisions regarding blood transfusions
  • organ donations
  • autopsy
  • and memorial and funeral instructions.

An Advanced Health Care Directive can contain all of this information. With a complete Estate Plan, you will give your family peace of mind because they know what your desires and wishes are.

A complete Estate Plan will also have a Durable Power of Attorney for property management. Some assets, such as retirement plans or 401ks, are not entered into the trust. If you become incapacitated or disabled the individual who has Power of Attorney for you can now manage those assets. The Power of Attorney enables your agent to transfer your assets into the Trust in the case of your incapacity. The Power of Attorney permits your agent to talk to the IRS and deal with them if necessary.

A complete Estate Plan can include all of these documents and then some. It allows you to plan for many different potential scenarios all while helping provide peace of mind for you and your heirs.

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Twenty Questions #19: In Case of a Lawsuit, Do You Want to Protect Your Assets?

Imagine, one year your child wants a pool party to celebrate their birthday. A day of swimming and playing in the water sounds fun and harmless so you agree. The invites sent, every child in the neighborhood eagerly awaits the party. When the day arrives everything seems to be going according to plan. The children are having a blast in the pool and laughter is abounding. You step inside to grab the cake when you hear a crash and the sound of a child crying. Rushing back outside you find a neighbor boy has slipped on the wet concrete and appears to have injured his arm. Concerned, his parents rush him to the hospital where they discover he broke his arm. Within a week, papers are delivered to your door. The boy’s parents have filed a lawsuit against you and are now suing you for medical expenses.

Years ago this scenario would have seemed extreme, but situations like this are occurring more and more often. Asset protection is a bigger concern today than it was in the past. People are more prone to file a lawsuit now than they were before. This has led to almost everything having a warning label for information that can seem like common sense, just in case. However, people still sue others and it can be difficult to protect against such lawsuits.

While difficult to protect your assets from a lawsuit or creditor’s claim it is not impossible. You can make a gift to your children in your Estate Plan. When worded correctly such a gift can protect the assets. Then, they should not be subject to creditors and lawsuits.

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Twenty Questions #18: Do You Care If Your Assets Are Consumed?

Heat radiates from the flames spreading across the open field. The firemen rush to contain the fire. It has already consumed much of the landscape in its path. Despite gallons of water dropped on the flames, they continue to grow. The situation continues to go from bad to worse. Miles away a family sits watching the horror unfold on the evening news, a fire burning safely in their fire place. This fire provides warmth and a sense of security. The family watches as finally, the firemen contain the flames but it is too late; the damage done, most of the field is lost.

Those fires could be your assets in the future. If you have a $500,000 parcel of real estate in California and that is the only asset the total probate costs could exceed $26,000. If the equity in the property is only $100,000 the fees are still $26,000. Just like the field on fire, fees consume your assets. Eventually, everything works out, but with a huge portion lost to fees.

If that same estate is in a Revocable Living Trust then the fees to transfer the property to your heirs will be considerably less than $26,000. Therefore your heirs will receive a greater percentage of your estate because of your complete Estate Plan. This is the warm, safe fire, resting comfortably in the fire place. However, just like an incorrectly used fireplace can create danger, an Estate Plan prepared incorrectly may cause fighting among the children. This could lead to a substantial amount of the assets being consumed. It is not unusual for probate or trust litigation to consume 30%, 40%, 50%, or more of the assets of an Estate.

A solid Estate Plan created specifically with your family in mind is not only the fire in the fireplace. It is fire insurance in case something goes wrong.

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Twenty Questions #17: Are Your Sons or Daughters-in-Law Perfect?

Divorce is never thought about at the beginning of a marriage. However, situations arise that may lead your child to seek a divorce. If that happens you don’t want your child’s inheritance to end up with your son or daughter-in-law. With out the proper planning, that may happen. Without the correct documents prepared appropriately, the gifts you leave your child may end up with their spouse. Developing or designing an Estate Plan where it stays with your child and grandchildren is possible.

If a child’s marriage fails, you can protect that child’s inheritance. An Estate Plan allows you to prevent your child’s inheritance from becoming part of the marital property. As a result, this will prevent its loss in a marital settlement. Protected in an Estate Plan, your assets remain maintained by your child until they pass it along to their children. Not given to the ex-son or daughter-in-law in a divorce.

Creating an Estate Plan this way can ensure that valuable family heir looms stay in the family. Whether it has monetary value or sentimental value the gifts you leave your children will be invaluable to them.

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Twenty Questions #16: Do You Want to Give Your Family Guidance for the Future?

I have a horrible sense of direction. I truly do. When I first learned how to drive I got lost almost every time I went someplace new. I would even look up directions to places only a few blocks away. Then I would print out those directions, and take them with me. I did this because I knew I was terrible at remembering directions. I had to really learn to pay attention. It took a while but eventually my sense of direction improved. I have learned how to identify major streets and follow patterns in different neighborhoods. I still get lost occasionally. However, now I have an easier time finding my way again. Just like how I needed directions for the road some people need directions for their lives.

A personalized Estate Plan can give guidance to the trustee. It can explain how you would like your assets distributed in particular situations. Children are often prone to frivolity. This could lead them to spend all the money you left them without much serious thought. With the guidance provided in an Estate Plan, the trustee can help your children grow and mature before they can choose that option. After all, you would not give a 16-year-old the keys to a powerful sports car the first day he received his driver’s license. Instead, you would spend time training that 16-year-old to help them learn how to manage the car. The same idea applies when giving your children their inheritance. Give them the Trust and Estate Plan to provide guidance and training for handling the resources you entrust to them.

You would never provide your children with a large check without knowing what they wanted it for just because they asked. Instead, you would inquire as to why they want the money and then help them handle the funds in a mature way. An Estate Plan can give that guidance. Not only at the immediate time of your passing, but for guidance in the future as well.