Monthly Archives: May 2020

Millennials Need Estate Planning Too!

The COVID-19 crisis is impacting people of all ages.  Jeremiah Amos, an associate attorney at Debra Robinson Law Group, has an important message to share about the necessity of estate planning for younger generations.

Many of my friends are getting married and starting families of their own, yet when I discuss my work as an estate planning attorney, the immediate response is “I should give your business card to my parents!” However, as Millennials settle down, we need to begin planning for our futures to protect our families through life’s changes.

The Last Will and Testament is the first document most people think of when they think of estate planning – it directs what happens to your estate after your death. Without a Will, the entire process is left up to the court. In Georgia, for a married couple with children, if a spouse dies without a Will, the estate is divided among the surviving spouse and children.

A minor child cannot legally own any property that he or she inherits. Without a good plan in place, a court would appoint someone to manage the assets. The person appointed is supervised by the court and must abide by strict rules. Once the child is 18, all of the assets must be distributed to the child, regardless of his or her ability to manage those assets. If the child’s parent had a properly drafted Will, the assets could have been left to the child in a trust. The Will would dictate terms ofthe trust, who would be in control of the assets, and how and when those assets may be used.

If both parents pass away, someone needs to care for minor children. The best way to ensure that the Court appoints the person of your choosing to fulfill this role is to name a guardian in your Will. Without any indication, the Court is left to appoint a guardian on its own. This uncertainty can result in legal conflicts between family members over who is best suited to care for minor children.

Millennials, we need to think of estate planning not only for our parents, but also for our own families. Making these decisions now protects your family, provides for their future, and alleviates unnecessary chaos and confusion during an extremely difficult time.

One Thing You Shouldn’t DIY

In light of the current pandemic, many Americans are becoming aware of the importance of creating or updating their estate planning documents. With the extension of some states’ stay in place orders, it may be tempting to create your own documents all on your own. Whether you are considering writing your own will or using an online “do it yourself” (DIY) document creator, there are many reasons why this is one project you shouldn’t undertake without the help of a professional.

What is a DIY estate plan? 

A DIY estate plan is something that you “do yourself” without the advice of an estate planning attorney. Someone who DIYs their own legal documents could be:

  1. Handwriting a “will” themselves; 
  2. Downloading a “fill in the blank” document that they got on the internet; or
  3. Using an online document generator that asks pre-set questions. 

Below are five common mistakes associated with DIY estate plans.

  1. DIY estate plans may not conform to the applicable law

Forms that can be found on the internet may claim to conform to your state’s law, but this may not always be the case. The laws that apply to estate planning are determined by each state—and there can be wide variations in the law from state to state. In addition, if you own property in another state or country, the laws in those jurisdictions may differ significantly, and your DIY estate plan may not adequately account for them. 

  1. A DIY estate plan could contain inaccurate, incomplete, or contradictory information

If you attempt to create a will using an online questionnaire, there is the possibility that you may select the wrong option or leave out important information that could prevent your will from accomplishing your goals. Potential problems could be made even worse when do-it-yourself services allow users to insert additional information not addressed by the service’s preset questionnaire: the information added by a DIYer could contradict other parts of the automated will.

  1. Your DIY estate plan may not account for changing life circumstances 

For example, if you create a will in which you leave everything to your two children, what happens if one of those children dies before you? Will that child’s share go entirely to his or her sibling—or will it go to the child’s offspring? What if one of your children accumulates a lot of debt? Is it okay with you if the money or property the indebted child inherits is vulnerable to claims of the child’s creditors? What if your will states your daughter will receive the family home as her only inheritance, but it is sold shortly before you die? Will she inherit nothing? As opposed to a computer program, an experienced estate planning attorney will help you think through the potential changes and contingencies that could have an impact on your estate plan– and help you design a plan that prevents unintended results that could frustrate your estate planning goals. 

  1. Mistakes in executing the plan can be easily made

Under the law, there are certain requirements that must be met for wills and other estate planning documents to be legally valid. For example, a will typically requires the signatures of two witnesses, but state law differs regarding what is necessary for a will to be validly witnessed. Some states require not only that the will be signed by the will-maker and the witnesses, but also that they all sign the will in each other’s presence. In other states, witnesses are not required to be in the same room when the will-maker signs the will, and they can even sign it later if the will-maker tells them his or her signature is valid.  

Similarly, for a valid power of attorney, some states require only the signature of the principal (the person who is granting the power of attorney) to be notarized, but some states require the signatures of both the principal and the agent (the person who will act on behalf of the principal) to be notarized. In other states, one or more witnesses are required—and these requirements may also differ depending upon the type of power of attorney (financial vs. medical) you are trying to execute. If you seek the help of an estate planning attorney, you can rest assured that all of the “i’s” are dotted and the “t’s” are crossed, and that your intentions will not be defeated because of mistakes made during the execution of your documents.

  1. Assets may be left out of your estate plan

Many people do not realize that a trust is frequently a better estate planning tool than a will because it avoids expensive, time-consuming, and public court proceedings that would otherwise be necessary to transfer your money and property to your heirs after you pass away. Even if you have created a DIY trust, if you do not “fund it” (i.e., transfer title of your money and property into the name of the trust) it will be ineffective and your loved ones will still have to endure the probate process to finish what you started. 

Further, if you do initially transfer the title of all your assets to the trust, it is likely you will acquire additional property or financial accounts over the years that must go through probate if the titles are not transferred to the trust. Regular meetings with an estate planning attorney can help ensure that your plan accomplishes your goals and that your grieving family members are not left with major headaches after you die.

We Can Help

A DIY estate plan can lead to a false sense of security because it may not achieve what you think it does. If your DIY will is not valid, your property and money will go to heirs specified by state law—who may not be the people you would have chosen. An unfunded trust will be ineffective. Banks may not accept a generic power of attorney you found on the internet. Laws affecting your estate plan may change. 

These are just some of the mistakes or unforeseen issues that could cost your family dearly. An experienced estate planning attorney is aware of any trends in the law that could dramatically affect your estate plan and has the expertise needed to help you design and create a comprehensive plan. 

Call us today so we can help provide you and your family with the peace of mind that comes from knowing that you have an estate plan that accomplishes your goals and will avoid unnecessary attorneys’ fees, headaches, or conflict for your grieving family when you pass away. 

You protect yourself by washing your hands. What are you doing for your finances?

Many Americans spend a lot of time and effort in managing their finances. While most are worried about how the coronavirus (COVID-19) will impact their income—whether that’s because they are temporarily furloughed, find themselves suddenly without a job, or watching their investment and retirement accounts dwindle—there is another way COVID-19 can wreak havoc on American’s finances: lack of incapacity planning.  

As the coronavirus continues to expand across the country, thousands of Americans are unable to carry out normal financial responsibilities because they are too ill, or they are stuck abroad and unable to travel home, or from a lack of resources due to being isolated at home. 

While feeling healthy, individuals should plan ahead now and ensure that someone will take care of their financial duties by setting up a Financial Power of Attorney. This important legal document will not only protect your finances should you fall ill from COVID-19 but also from any events that might leave you incapacitated, like an injury or accident.  

Financial Power of Attorney: what is it?

A Financial Power of Attorney (FPOA) allows you to select a trusted family member or friend who will be responsible for managing your money and other property if you become mentally incapacitated (unable to make your own decisions) due to illness or injury. Without this document, bills won’t get paid, tax returns won’t be filed, bank and investment accounts held in your name will become inaccessible, retirement distributions can’t be requested, and property can’t be bought, sold, or managed.

What happens if I don’t have one and get sick? 

If you get sick and are unable to make or communicate your financial decisions and don’t have an updated FPOA in place, a judge can appoint someone to take control of your assets and make all personal and medical decisions for you through a court-supervised guardianship or conservatorship. 

Why would a court do that?—You may ask.  As an adult, no one is automatically able to act for you, you must legally appoint them through the use of an FPOA. Without it, you and your loved ones could lose valuable time, money, and control. 

WORD OF CAUTION: Don’t think you’re protected just because your assets are held jointly with your spouse, child, or family member. Here are three reasons why you shouldn’t rely on joint ownership:

  1. Limited power. While a joint account holder may be able to access your bank account to pay bills or access your brokerage account to manage investments, a joint owner of real estate will not be able to mortgage or sell the property without the consent of all other owners. 
  2. Tax liability. By adding a family member’s name to your accounts or real estate titles you might be saddling them with gift tax liability.
  3. Property seizure. You read that correctly. If your joint owner is sued than your property could be seized in order to pay their debt.  
  4. Medicaid disqualification. Putting a loved one’s name on a joint bank account or property title can disqualify them from receiving government benefits, such as Medicaid.   

Only a comprehensive incapacity plan will protect you and your assets from a court-supervised guardianship or conservatorship and the misdeeds of your joint owners. Do not rely on joint ownership as your plan—it’s simply too risky and unreliable.

Already got one? Chances are it’s outdated.

An FPOA can become “obsolete” in as short as one year. This is because many institutions don’t want to rely on stale, outdated documents. Depending on your circumstances, a stale, obsolete power of attorney may not be able to help you and your family with insurance contracts, retirement plans, banking and investment accounts, online personal accounts such as email, Facebook, Instagram and LinkedIn, and elder care and special needs planning.

If it’s been more than a year or two since you’ve signed your power of attorney, it might be time for a fresh one. Call us! We can help make sure you and your family are fully protected by helping you determine:

  • Who would be the best choice for this responsibility,
  • How much authority you should give your financial agent, and
  • When to make your power of attorney become effective.

Regardless of your priorities, there is a financial power of attorney right for your situation and goals. Determine your specific needs while you are of sound mind. Of course, nothing tops the advice and recommendations of an attorney experienced in these matters.  So if you are wavering between your options, give us a call.