wills http://www.wisebread.com/taxonomy/term/8329/all en-US Should You Set Up a Trust for Your Child? http://www.wisebread.com/should-you-set-up-a-trust-for-your-child <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-set-up-a-trust-for-your-child" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mother_daughter_hugging_000076004239.jpg" alt="Woman wondering if she should set up a trust for her child" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you think of trust funds, what comes to mind? Spoiled rich kids, living off the money set aside for them by their uber-wealthy parents? If so, you may be surprised to learn that you don't need to be a gazillionaire to benefit from a trust.</p> <p>Read on to see if a trust might be right for your kids.</p> <h2>Estate Planning</h2> <p>Estate planning runs the gamut, from the basic to the complex, depending on your wealth and the complexity of your life. To put various estate planning documents, such as wills and trusts, into context &mdash; and to determine which ones you may need &mdash; consider the following three levels of estate planning.</p> <h2>Titles and Beneficiary Designations</h2> <p>For some of your assets, making sure they end up where you'd like them to requires very little effort on your part. You just need to make sure they are titled correctly or that you've designated the right beneficiaries. A will is generally not required. Even if you have a will, <a href="https://www.soundmindinvesting.com/articles/view/are-you-sure-your-beneficiaries-will-benefit-as-you-intend">titles and beneficiary designations</a> take precedence.</p> <p>If you're married and want property to go to the surviving spouse should the other spouse die, simply titling the property in both of your names &quot;with rights of survivorship&quot; will accomplish that. This includes your home and car. For other assets, all it takes to transfer ownership as you'd like upon your death is to name the right people as beneficiaries. This includes life insurance, individual retirement accounts (IRAs), 401K accounts, and bank accounts. These are relatively simple steps with important implications, so make sure you've made the right choices on titles and beneficiary forms.</p> <h2>A Will</h2> <p>For everything not specifically earmarked via title or beneficiary designation &mdash; property titled in your name only, and everything that doesn't come with a beneficiary designation form (jewelry, art, a baseball card collection, your prized parakeet) &mdash; <a href="http://www.wisebread.com/6-things-i-learned-about-money-from-famous-peoples-wills">you'll need a will</a> to get it where you want it to go. Otherwise your state's &quot;intestate&quot; laws will dictate who gets what. (Trust me, your state probably isn't interested in finding the best home for your bird.)</p> <p>It is all the more important to have wills once you have children. This is the document in which you name a legal guardian for your kids in the event that you and your spouse both die, and you specify who will manage money for your children until they turn 18 (or 21 in some states).</p> <h2>Why Try a Trust?</h2> <p>For many people, a will is enough, especially if they don't own a lot of assets and don't have a very complicated financial life. For others, a will isn't enough; they also need a trust.</p> <p>Once you accumulate more wealth, or if your life becomes more complicated (you have kids from a prior marriage, have property in another state, own a business), a trust may be in order. A trust does not replace a will; it is used in addition to a will. Here are some of its main benefits.</p> <h3>It Gives You More Control</h3> <p>Leaving a lot of money to an adult child can do more harm than good. With a trust, you can create a distribution schedule, perhaps giving them a quarter of the balance starting at age 25, and then another quarter every five years until it is all distributed. You can also name someone to manage the money while it is still owned by the trust and approve any early distribution decisions (perhaps you'd allow money to be accessed early for education or other purposes).</p> <h3>It Keeps Your Estate Out of Probate</h3> <p>Probate is a court-supervised process of validating your will, inventorying your assets, having property appraised, making sure assets are distributed according to the terms of the will, paying the bills of the deceased, and more. It is required if you have a will only, can take a year or longer, and can end up costing 2%&ndash;8% of the total value of the estate once you're done paying attorney's fees and court costs. A trust enables your heirs to bypass probate, freeing the trustee to wind down the estate without court supervision.&nbsp;</p> <h3>It Keeps Information Private</h3> <p>Your will becomes public record upon your death. By contrast, the terms of a trust are not required to be made public.</p> <h3>It Helps Customize Estate Distribution</h3> <p>Depending on the complexity of your situation, a trust may help you customize the distribution of your estate more easily than a will. For example, you may want to leave more to an adult child in a low-income profession than another who works in a high-income profession. Or, you may want to keep a tight rein on how inherited money is used by a beneficiary known for his or her free-spending ways.</p> <p>There are many types of trusts, but the most common type is a revocable living trust, which simply means you can make alterations if your circumstances change. Creating a trust requires the help of an attorney and could cost up to $3,000 to set up versus less than $1,000 for a will. However, the money-saving benefits of avoiding probate, and the added controls available for complex situations, may ultimately make a trust less expensive.</p> <p>There are many variables involved in determining whether you need a trust. If, after reading this article, you suspect you may, talk with an experienced estate-planning attorney to further weigh the pros and cons.&nbsp;</p> <p><em>Have you considered a trust for your heirs?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wills-the-basics">Wills: The Basics</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debunking-common-estate-planning-myths">Debunking Common Estate Planning Myths</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will">What You Need to Know About Writing a Will</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiaries estate planning heirs inheritance probate trusts wills Thu, 25 Feb 2016 11:00:09 +0000 Matt Bell 1660232 at http://www.wisebread.com 12 Financial Moves to Make When a Loved One Dies http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-financial-moves-to-make-when-a-loved-one-dies" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_holding_hands_000067142067.jpg" alt="Couple making financial moves after loved one dies" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are few things more challenging than a loved one's passing. In addition to being emotionally difficult, there is an enormous amount of work required to handle the person's estate.</p> <p>No one likes to discuss the finances of your departed loved ones, but there are many key things that should be done shortly after their passing. These 12 items are the most common financial priorities during a difficult time.</p> <h2>1. Do as Little as You Need To (At First)</h2> <p>Losing a loved one is a stressful, tiring, and emotional experience. That's why it's wise to avoid making any key financial decisions immediately. Decisions about money and property should be made with a clear head, psychologists say. It's important to begin collecting some documentation and making funeral plans, but many key decisions can wait a while.</p> <h2>2. Find the Will &mdash; and Its Executor</h2> <p>If your loved one planned properly, he or she outlined their wishes in a will and tasked a trustworthy person to carry things out. This is known as probating the estate. Things can get complicated if there is no will, or if the executor has passed away or is otherwise unavailable. But start by finding out if your loved one's wishes were written down. If you are the executor, you will need <em>letters testamentary</em> that prove you have the right to handle the affairs of the deceased.</p> <h2>3. Collect as Many Documents as You Can</h2> <p>Hopefully, your loved one had some sort of filing system for bills, tax receipts, and other financial information. Collect as much of this paperwork as you can, including anything associated with his or her estate planning, plus credit card statements, bank statements, life insurance policies, car titles, and any similar things you can think of.</p> <h2>4. Determine If the Funeral Was Prepaid</h2> <p>You may find that your loved one had already made plans with a funeral home to have arrangements paid for. But if not, you'll need to determine if there is money available from the deceased to pay for the funeral. This may require opening a special checking account for the estate.</p> <h2>5. Get Copies of the Death Certificate</h2> <p>As you work through the complicated financial matters after a loved one dies, people and institutions will request copies of the death certificate as evidence of the person's passing. Obtain dozens of copies from the state, as many organizations will require an original document. Always have a copy handy any time you deal with a bank or brokerage house.</p> <h2>6. Get in Touch With Financial Institutions</h2> <p>This is often a challenge, because most people have multiple bank accounts, plus various investment accounts, pension providers, loans, credit cards, and insurance companies. Start with the the life insurance company, as the policy may mean that there will be a payout that can be used toward final expenses. Then check with banks to stop any automatic payments, such as regular contributions to charity. Brokerage companies may freeze accounts once notified of a death, so plan in advance if you think this may pose a problem.</p> <h2>7. Call Utility Companies</h2> <p>If a loved one lived alone, it will be important to call the electric company, water provider, cable provider, and phone company to stop service and avoid any additional charges. (Make sure you clean out the fridge before cutting off the electricity.)</p> <h2>8. Contact Government Agencies</h2> <p>You need to contact the Social Security Administration to stop payments, and see if you are eligible for any death benefits. If your relative served in the Armed Forces, call the Veterans Administration. There are many state and local agencies that may also need to be notified, in order to stop payments from things like pensions or legal settlements.</p> <h2>9. Get the Credit Report of the Deceased</h2> <p>It will be important to contact credit bureaus to protect against a case of identity theft. But it's also helpful to review your loved one's credit report to see if there were any major errors or cases of fraud.</p> <h2>10. Hire an Accountant</h2> <p>Dealing with taxes can be very challenging following the death of a loved one. There may be inheritance taxes, and if they worked in the year of their death, they may owe taxes or at least have required tax forms you'll need access to. Let an accountant do a lot of the heavy lifting here. (See also: <a href="http://www.wisebread.com/14-reasons-why-an-accountant-is-worth-the-money">14 Reasons Why an Accountant Is Worth the Money</a>)</p> <h2>11. Change Online Passwords</h2> <p>If you have access to the online accounts of the deceased, you may want to consider changing the passwords for access. This will guard against anyone looking to steal your loved one's identity, and prevent others from gaining access to account information they should not have.</p> <h2>12. Roll Over Their IRA</h2> <p>If your wife or husband passed away, you are the beneficiary of his or her retirement account and can roll it into yours. Or you can tap the money immediately and you won't have to pay a penalty for early withdrawals. If your spouse was over 70 &frac12;, you may have to take a required minimum distribution.</p> <p><em>What steps have you taken to prepare for the loss of a loved one?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-need-an-estate-plan">Do You Need an Estate Plan?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wills-the-basics">Wills: The Basics</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-i-learned-about-money-from-famous-peoples-wills">6 Things I Learned About Money From Famous People&#039;s Wills</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family death estate planning inheritance probate taxes wills Wed, 03 Feb 2016 18:19:01 +0000 Tim Lemke 1649195 at http://www.wisebread.com 5 Reasons Why You (Yes, YOU!) Need an Advance Care Directive http://www.wisebread.com/5-reasons-why-you-yes-you-need-an-advance-care-directive <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-why-you-yes-you-need-an-advance-care-directive" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman-doctor-office-Dollarphotoclub_51563145.jpg" alt="doctor with patient" title="doctor with patient" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>What would you do if you were suddenly medically incapacitated? Would you want to be kept alive, given pain medications, or fed intravenously? Or, does the idea of being kept alive via medical machinery repulse you? Do you have a plan or directions for this sort of unexpected situation?</p> <p>You are probably thinking the same thing that I did about this kind of &quot;planning.&quot; I figured I could probably avoid doing anything about wills or Advanced Health Directives until much later in life. That's something only old people do, right?</p> <p>But an Advance Healthcare Directive is an important legal document that spells out instructions for your care &mdash; at any age. Young people get sick, too, and terrible accidents can happen at any age. If you become physically or mentally incapacitated and cannot express your wishes for medical treatment, the document directs providers how to proceed with your medication, life support, feeding, and other essential care.</p> <p>I've done some very hard thinking about Advanced Directives recently, and decided to sign one. Here is what it came down to.</p> <h2>1. I Continue to Hold the Power</h2> <p>If something were to happen to me tomorrow, whom would I trust to make decisions for me and carry out my wishes? Signing the directive would give me the ultimate power to direct my care &mdash; and decide who I want to execute them if I'm incapacitated. I am fortunate in that I have my husband and daughter to see my wishes through.</p> <h2>2. It Will Relieve a Burden on My Family</h2> <p>&quot;The importance of having an advance directive benefits not only the individual but the family members and other professional healthcare providers that may need to care for someone facing a serious or life-limiting illness,&quot; notes J. Donald Schumacher, President and CEO of the National Hospice and Palliative Care Organization. &quot;Equally important are the frank conversations that loved ones have with each other and care providers about the care that they would or would not want.&quot;</p> <h2>3. It's Easy to Sign</h2> <p>My doctor provided me with an <a href="http://www.nhdd.org/public-resources">Advance Directive form</a>, but they are also readily available on the Internet. In my state, you do not have to see an attorney (or even a notary) to sign a directive. I just asked a good friend to serve as witness on the form, which is legally binding in my state. If you do see an attorney to have wills or estate planning done, the Advance Healthcare Directive will likely be part of the package. Check your state's requirements about witnesses, notarization, and so forth.</p> <h2>4. It's Even More Important for Young (or Single) Folks</h2> <p>Just because you are young does not mean it's the wrong time to sign. As Stanford University says:</p> <p style="margin-left: 40px;">&quot;Even though a younger person may not think it is important to have an advanced directive, one of the most common reasons <a href="http://bewell.stanford.edu/advanced-directive-dana-welles">young people visit emergency rooms</a> is trauma, and in such cases individuals can lose the ability to speak for themselves. Furthermore, a single person living alone may have no one to speak for him/her regarding resuscitative measures.&quot;</p> <p>That's right &mdash; young or single folks need a directive as much as anyone.</p> <h2>5. It Doesn't Mean That I'm Giving Up</h2> <p>On my form, I can check that I want, for example:</p> <ul> <li>To have my life prolonged as much as possible within the limits of generally accepted healthcare standards that apply;<br /> &nbsp;</li> <li>That I want artificial nutrition and hydration;<br /> &nbsp;</li> <li>That I want treatment to relieve my pain or discomfort.</li> </ul> <p>It's not fun to think about the end of life or a possible tragedy. But signing an Advance Healthcare Directive is one way to reduce stress around these decisions and ensure your wishes are met.</p> <p>Have you created and signed an advanced care directive? Tell us about your decision in comments.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/marla-walters">Marla Walters</a> of <a href="http://www.wisebread.com/5-reasons-why-you-yes-you-need-an-advance-care-directive">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-do-to-save-money-that-end-up-costing-you-more">10 Things You Do to Save Money That End Up Costing You More</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-big-dental-bills-with-safe-and-inexpensive-products">Avoid Big Dental Bills with Safe and Inexpensive Products</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-money-lessons-to-take-from-the-great-depression">9 Money Lessons to Take From the Great Depression</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-would-it-cost-to-actually-live-like-a-queen-for-a-day">How Much Would It Cost to Actually Live Like a Queen for a Day?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-frugal-living-truths-every-stay-at-home-parent-should-know">5 Frugal Living Truths Every Stay-at-Home-Parent Should Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living advance care health care palliative care wills Wed, 31 Dec 2014 16:00:11 +0000 Marla Walters 1274863 at http://www.wisebread.com What Happens to Your Online Stuff After You Die? http://www.wisebread.com/what-happens-to-your-online-stuff-after-you-die <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-happens-to-your-online-stuff-after-you-die" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/laptop-178793917.jpg" alt="laptop" title="laptop" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Many people write wills for their physical property, but few even think about creating a plan for their <em>digital</em> estates. Without such a plan, your loved ones might be unable to access your digital files or the accounts could be deleted before they see them.</p> <p>A digital estate plan can help ensure that every online account will be accessed or transferred to the right person. And for those with networks of online-only friends and work colleagues, a digital estate plan can help inform those virtual friends of one's actual demise.</p> <p>Let's start with a look at the nature of the problem, and then we'll look at some solutions.</p> <h2>Terms of Service Agreements</h2> <p>Remember those &quot;I agree&quot; boxes you checked next to Terms of Service Agreements without so much as glancing at the fine print? They typically restrict &quot;non-authorized users&quot; (in other words, your survivors) from accessing your accounts.</p> <p>Plus, they often say accounts are nontransferable. While people violate service agreements all the time without repercussions, the agreements are legal contracts and <a href="http://computer.howstuffworks.com/internet/basics/web-site-terms-of-service.htm">violating them is a crime</a>, although a misdemeanor. Social media companies often say they allow heirs to <em>delete</em> the deceased's account and not much else. Photos, comments and stories, everything else (good and bad) is lost.</p> <p>A digital estate plan will help your executor access and manage your online possessions. While they do not guarantee access (because of those service agreements), they often persuade a service provider to approve login access, especially since the contracts can change.</p> <h2>Creating Your Digital Estate Plan</h2> <p>Experts recommend following these steps.</p> <h3>1. Create an Inventory</h3> <p>Make a list of your online accounts with their usernames and passwords. Include social media sites, online bank accounts and credit cards, and utilities paid online. Remember to update them when changing accounts and passwords or at least once a year.</p> <h3>2. Save It</h3> <p>Store them in a secure location like a safe deposit box, CD, flash drive, or encrypted computer file. Password managers such as <a href="https://lastpass.com/">LastPass</a> or <a href="https://agilebits.com/onepassword">1Password</a> make it easy to encrypt and securely store such data. Another popular password manager &mdash; PasswordBox &mdash; includes a feature called &quot;<a href="https://help.passwordbox.com/customer/portal/topics/319767-legacy-locker/articles">Legacy Locker</a>&quot; that stores logins and passwords and shares them with designated people upon your death.</p> <p>Don't include your logins and passwords in your actual will, which becomes part of probate court's public records.</p> <h3>3. Name a Digital Executor</h3> <p>Your digital executor can be different from your regular executor. The digital executor should be digitally adept and, like your traditional executor, be impartial and trustworthy. Be specific and name accounts the executor will be able to control, delete, and maintain.</p> <h3>4. Say What You Wish to Happen</h3> <p>Define what you wish to happen to your accounts. Do you want your Facebook account deleted or memorialized? Let your executor know if you're using <a href="https://support.google.com/accounts/answer/3036546?hl=en">Google's Inactive Account Manager</a>. Your executor is obligated to follow your instructions.</p> <h2>What Google, Facebook and Others Will Do</h2> <p>Google recently introduced its Inactive Account Manager. You can use the tool to name a &quot;trusted contact&quot; to be contacted if a Google account, such as Gmail, YouTube, or Blogger, becomes inactive for any reason. If your account is inactive for a period of time, which you choose, Google sends you a text or email. If you don't respond, Google can &mdash; based on your instructions &mdash; delete the accounts or allow trusted contacts &quot;to receive data&quot; from the accounts.</p> <h3>Facebook</h3> <p>Facebook won't release login information but will delete or &quot;<a href="https://www.facebook.com/help/www/150486848354038">memorialize</a>&quot; an account on the request of heirs. Memorialized accounts are essentially frozen in time. No one can login or add or change photos or anything else. Depending on the privacy settings of the deceased person's account, friends can share memories on the memorialized Timeline.</p> <h3>LinkedIn</h3> <p><a href="http://help.linkedin.com/app/answers/detail/a_id/2842/~/deceased-linkedin-member---removing-profile">LinkedIn</a> says it will shut down profiles of deceased members on request. It asks heirs to complete and electronically sign a form via DocuSign. If heirs have login information, they may want to download the deceased's contacts, although it's legally unclear if the contact lists belong to the LinkedIn members or their company.</p> <h3>Twitter</h3> <p>Twitter will shut down accounts of deceased users on request. According to <a href="https://support.twitter.com/articles/87894-how-to-contact-twitter-about-a-deceased-user">Twitter's policy</a>, heirs have to mail or fax a signed statement, a copy of the death certificate, and a copy of a government-issued ID like a driver's license.</p> <h3>Digital Media</h3> <p>When consumers purchase digital music and e-books, they technically only buy licenses to view or hear them. For instance, the iTunes terms of service agreement says accounts are nontransferable and will end if users don't meet the terms. But if agreements allow multiple computers per account, heirs could use that loophole to claim the purchased media.</p> <h2>Missing Login Information?</h2> <p>If a relative passes away without leaving login information, heirs <em>might</em> be able to obtain access with the proper documentation and patience.</p> <p>Google says it might provide <a href="https://support.google.com/mail/answer/14300?hl=en#1">Gmail access</a> if heirs send a copy of the heir's government-issued ID and the death certificate. But it makes no promises and warns the wait can be long.</p> <p><a href="https://support.google.com/youtube/answer/3306113?hl=en">YouTube</a> says it might grant access &quot;only after a careful review&quot; if heirs provide a copy of the death certificate and power of attorney document.</p> <p>Because the concept of digital wills is relatively new, it's unclear how the issue will evolve. Internet firms could change policies after more requests from grieving families. Few states have laws on digital estates but more may address the topic in coming years. Despite the uncertainty &mdash; or maybe because of it &mdash; creating a digital estate plan can help your family access your virtual self before it, too, expires.</p> <p><em>Have you considered what will happen to your digital self &mdash; and your digital property &mdash; after you pass? What steps have you taken? Please share in comments (which are forever, unless something happens to the server, or an heir asks that they be removed).</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/what-happens-to-your-online-stuff-after-you-die">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/estate-planning-why-me">Estate Planning: Why Me?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debunking-common-estate-planning-myths">Debunking Common Estate Planning Myths</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance digital will estate planning online property wills Tue, 20 May 2014 08:12:16 +0000 Michael Kling 1139916 at http://www.wisebread.com Post Divorce Finances: 7 Steps to Rebuilding Your Financial House http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/post-divorce-finances-7-steps-to-rebuilding-your-financial-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/post divorce finances.jpg" alt="new horizons" title="new horizons" class="imagecache imagecache-250w" width="250" height="333" /></a> </div> </div> </div> <p class="MsoPlainText">My, how life changes when you close one chapter of your life and open a new one. Severing a conjoined life and combined finances as a result of divorce is painful through and through. The jump to a single income lifestyle paves the way to feeling the cash crunch, and if children are involved it is even more pronounced. Even if the breakup is liberating, there is still some mopping up to do after the storm. </p> <p class="MsoPlainText">Here are seven things you can do to set your new life up on the right foot:</p> <p class="MsoPlainText">&nbsp;</p> <h3 class="MsoPlainText"><strong>Joint Banking Be Gone</strong></h3> <p class="MsoPlainText">Close all <a href="/separate-bank-accounts-till-death-or-banking-do-we-part" target="_blank">joint bank accounts</a>, joint non-registered investment accounts, and <a href="/sexually-transmitted-debt-eewww" target="_blank">credit cards</a>. Not only is this a tangible form of evidence to demonstrate a date of separation (in locales where you need to be separated for a time prior to applying for divorce), but it also protects each party from destructive actions the other may take in anger or apathy. </p> <p>   <br /> <br /> <h3 class="MsoPlainText"><strong>Remove all Beneficiary Designations</strong></h3> <p class="MsoPlainText">Here is a list of items you may need to look at in terms of removing joint or beneficiary designations:</p> <ul> <li>life insurance policies</li> <li>retirement funds</li> <li>auto insurance</li> <li><a href="/credit-card-insurance-no-thanks" target="_blank">credit card insurance</a></li> <li>pension funds through work</li> <li>health care plans through work</li> </ul> <p class="MsoPlainText">If you are required to designate a new beneficiary and are not sure who to choose just yet, simply choose your estate for now, or until you hear otherwise from your lawyer/accountant/financial planner. Although an estate designation may not be the most tax-efficient option, it will keep things simpler until all the divorce paperwork is properly nailed down and you get on your feet again. </p> <p class="MsoPlainText">&nbsp;</p> <h3 class="MsoPlainText"><strong>Create a New Budget</strong></h3> <p class="MsoPlainText">Flying solo means creating a whole new budget – a crucial step of the process. You may or may not have been actively involved in the finances while married, so creating a new budget could be an exercise in learning how much things cost, or simply reallocating income streams accordingly. </p> <p class="MsoPlainText">&nbsp;</p> <h3 class="MsoPlainText"><strong>Update Your Will</strong></h3> <p class="MsoPlainText">Updating a <a href="/wills-the-basics" target="_blank">will</a> doesn’t have to be a laborious process. If it is simply a matter of changing beneficiaries, a codicil (a one page addendum that attaches to the will) can suffice. </p> <p class="MsoPlainText">&nbsp;</p> <h3 class="MsoPlainText"><strong>Review Your Estate Plan</strong></h3> <p class="MsoPlainText">Although you will have covered most of the bases with reassigning beneficiaries and updating your will, your <a href="/estate-planning-why-me" target="_blank">estate plan</a> may incorporate some larger issues or opportunities given the new financial structure of your life. </p> <p class="MsoPlainText">For example, your previous estate plan may have been mindful of your ex-partner’s <a href="/is-it-time-to-talk-with-your-parents" target="_blank">parents</a> who are – or will become – financially or physically dependant. Or maybe children from a first marriage have been incorporated into the estate plan and now the structure of trusts or income streams needs to change. </p> <p class="MsoPlainText">&nbsp;</p> <h3 class="MsoPlainText"><strong>Don’t Blow the Financial Settlement!</strong></h3> <p class="MsoPlainText">Just in case you had eyes for a new stereo system or a bigger house, you may want to seek counsel before spending any financial settlement that arises as a result of your divorce. From tax efficiency, to your overall financial plan, there could be ways to greatly help or detrimentally cripple your finances by virtue of what you do with the settlement. </p> <p class="MsoPlainText">If you are the one doling out the settlement, then refer to the following point to help you sort through the noise:</p> <p class="MsoPlainText">&nbsp;</p> <h3 class="MsoPlainText"><strong>See a Financial Planner</strong></h3> <p class="MsoPlainText">Your <a href="/how-to-choose-a-financial-planner-yes-you" target="_blank">financial planner </a> will be instrumental in helping you with many of the above chores. Many financial planners can help with the transition and separation of accounts, but if you are uncomfortable meeting with the same planner you used as a couple, then ask around for a referral to a new planner who you can trust and establish a new relationship with. </p> <p class="MsoPlainText">You face lifestyle changes (in some cases drastic ones), income differentials, emotional transitions, tax plan modifications, and investment time frame readjustments. Your <a href="/asset-allocation-for-all-markets" target="_blank">asset allocation</a> plan may change, either because your investment personality is different from your ex-partner’s, or because you plan to utilize your investments differently (ie: your time horizon is longer, or you need to draw down on some investments now). </p> <p class="MsoPlainText">&nbsp;</p> <p> <span style="font-size: 10pt; font-family: 'Courier New'">As crushing and stressful the trauma of severing your life from a loved one can be, you must try to maintain a level head throughout the process. By covering off the bases above, and keeping your eyes on the road ahead, you can survive the ordeal and move forward without falling into so many of the traps that lurk along the way. Life will go on, and in some cases, may even improve. </span></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wills-the-basics">Wills: The Basics</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/estate-planning-why-me">Estate Planning: Why Me?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debunking-common-estate-planning-myths">Debunking Common Estate Planning Myths</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiary designations divorce and money estate planning joint accounts post divorce finances wills Tue, 28 Oct 2008 04:06:55 +0000 Nora Dunn 2548 at http://www.wisebread.com Wills: The Basics http://www.wisebread.com/wills-the-basics <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/wills-the-basics" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/wills.JPG" alt="mourning" title="mourning" class="imagecache imagecache-250w" width="250" height="180" /></a> </div> </div> </div> <p class="MsoPlainText"><span>As indicated in a <a href="/estate-planning-why-me" target="_blank">previous article</a>, planning for the future (even if the future means you&#39;re dead) is a necessary evil. Here are some of the basics of a will and what you need to know. </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>BASIC TERMINOLOGY</span></h2> <h3><u><strong><span>Will</span></strong></u></h3> <p class="MsoPlainText"><span>This is a legal document which outlines how your assets and belongings are to be distributed when you die. </span></p> <p class="MsoPlainText"><span> </span></p> <h3><strong><u><span>Executor</span></u></strong></h3> <p class="MsoPlainText"><span>Your executor (also known as &quot;administrator&quot;) is the person you designate in your will to carry out your wishes. </span></p> <p class="MsoPlainText"><span>Since they have to follow your will to the letter, it is best to meet with your chosen executor, gain their approval for such a responsibility (it&#39;s a big one), and then describe your wishes to them as outlined in the will. They should also ideally know where to find the will and other key documents if and when they need to. </span></p> <p class="MsoPlainText"><span> </span></p> <h3><strong><u><span>Beneficiary</span></u></strong></h3> <p class="MsoPlainText"><span>Beneficiaries are the people who receive your assets when you die. You designate them as you see fit in your will, and you can have as many beneficiaries as you wish. Beneficiaries can also include companies, charities, and other organizations. (If you designate an organization or charity as your beneficiary, it is best to consult with them first to determine how specifically to do so). </span></p> <p class="MsoPlainText"><span> </span></p> <h3><strong><u><span>Intestate</span></u></strong></h3> <p class="MsoPlainText"><span>If you die without a will, you are considered to be intestate. This is when the government steps in, and over a tiresome period will attempt to contact anybody who might be a family member with a right to receive any of your assets. They first need to find the most appropriate executor, since nobody will be allowed to touch anything you owned until one is appointed. All accounts without designated beneficiaries (and even some that are) will be frozen and assets locked up.</span></p> <p class="MsoPlainText"><span>If there are competing interests for who should be the executor, then intestate succession can become ugly, costly, and chaotic. </span></p> <p class="MsoPlainText"><span>And if somebody dies intestate, even joint accounts can be frozen (not always, but in some cases), so spouses who think their estate situations are simple and not in need of wills can sometimes be in for a nasty surprise. </span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>BASIC BENEFITS</span></h2> <h3><strong><u><span>Guardian for Children</span></u></strong></h3> <p class="MsoPlainText"><span>In your will, you designate a guardian for your minor children. You can also specify certain elements of how they are to be raised, and arrange how they will be financially cared for. </span></p> <p class="MsoPlainText"><span>If no guardian is selected, your kids don&#39;t get to pick, and sometimes the most logical guardian (for example a close friend who has been involved with the family since the beginning and would love to care for the kids) won&#39;t be respected - it goes by the book (worse case scenario: think &quot;wicked Aunt who hates kids and never went to a family picnic if you paid her&quot;). </span></p> <p> <span> </span></p> <h3><strong><u><span>Income Tax Savings</span></u></strong></h3> <p class="MsoPlainText"><span>Depending on where you live, there is usually a tax-friendly provision for the rollover of assets between spouses on death if it is properly specified in the will. Otherwise, there is a &quot;deemed disposition&quot; of assets often resulting in a tax bite before the spouse gains access to these funds. (General financial prudence dictates that you put off paying taxes until the last possible minute, in order to achieve greater overall gains using compound growth). </span></p> <p> <span> </span></p> <h3><strong><u><span>Trusts for Children</span></u></strong></h3> <p class="MsoPlainText"><span>If you die and your kids are the age of majority, they will have full access to the assets you bequest to them. Not to challenge your parenting skills in raising a responsible child, but really - what 18 year old (or 21 year old for that matter) is going to responsibly accept a financial windfall? Heck - many seasoned <em>adults</em> can&#39;t handle financial windfalls; young adults won&#39;t fare any better. Your hard-earned estate that you hoped would provide financial security for your kids could end up being spent in record time with very little to show for it. </span></p> <p class="MsoPlainText"><span>So in your will, consider setting up a trust. There are a few types of trusts (which go beyond the scope of this article), but basically you can set the terms as you wish. You can specify when and how your kids receive the money, and even how it is to be used or invested. Beware of setting too many restrictions: resentment can become a factor if the kids feel they have been unrightfully challenged, but most will eventually respect a decision to hold off divesting the funds until a later age. </span></p> <p class="MsoPlainText"><span> </span></p> <h3><strong><u><span>Family Law Protection</span></u></strong></h3> <p class="MsoPlainText"><span>Once again we trust our kids to make all the right choices in life, including their choice of spouse. However life happens, and sometimes marriages break down. If your hard-earned estate is left to your child and their partner (be they a husband or wife, or just a common-law partner), half of it could well disappear along with that marriage when it breaks down. </span></p> <p class="MsoPlainText"><span>In your will, you can insert clauses and terms to prevent this from happening. </span></p> <p> <span> </span></p> <h3><strong><u><span>Common Disaster Clause</span></u></strong></h3> <p class="MsoPlainText"><span>The best way to demonstrate the effectiveness of a Common Disaster Clause is by example: </span></p> <p class="MsoPlainText"><span>John &amp; Jane are married, with no children. They are both in a serious car accident, hospitalized in critical care. John passes away first, but Jane hangs on. However two weeks later, Jane too dies. </span></p> <p class="MsoPlainText"><span>Without a common disaster clause, John&#39;s assets would go to Jane, the surviving spouse. When Jane dies, her entire estate (which includes everything John brought to the marriage) would go to her side of the family (or whoever her contingent beneficiaries are if she had a will). John&#39;s entire family would be denied any inheritance (including heirlooms or other prized family items - it&#39;s not all about money). </span></p> <p class="MsoPlainText"><span>A common disaster clause diverts this problem by stating that if both spouses die within a certain amount of time (eg: a 30-day period) as a result of a common disaster, then their estates are split in half and distributed to their respective families accordingly. </span></p> <p> <span> </span></p> <h3><strong><u><span>Liability Clause</span></u></strong></h3> <p class="MsoPlainText"><span>This is inserted to protect the executor from being sued, for example in the case of an investment loss. This is particularly important if they are managing trust accounts. </span></p> <p> <span> </span></p> <h3><strong><u><span>Expert Clause</span></u></strong></h3> <p class="MsoPlainText"><span>This allows your executor to retain the services of an accountant or lawyer with regards to processing the estate or receiving estate-specific advice, and the estate can pay for it. Otherwise, the fees could come directly out of the executor&#39;s pocket. And although they may be a great brother or good friend, nobody appreciates a legal bill - much less an unexpected one!</span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span> </span></p> <p> <span>As I said earlier, it’s not all about money and cash grabs when you plan your will and estate. You are looking out for the best interests of yourself, your loved ones, and their loved ones too. Nobody likes to plan for the future in this respect, but once it&#39;s done it can be put to bed, and everybody can rest easily knowing that the future is taken care of. </span></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/wills-the-basics">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debunking-common-estate-planning-myths">Debunking Common Estate Planning Myths</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/estate-planning-why-me">Estate Planning: Why Me?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiary estate planning executor family law intestate trusts wills Tue, 22 Jan 2008 08:45:49 +0000 Nora Dunn 1659 at http://www.wisebread.com Debunking Common Estate Planning Myths http://www.wisebread.com/debunking-common-estate-planning-myths <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/debunking-common-estate-planning-myths" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/Will.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Given the tens of millions of Americans nearing the Golden Years, the fields of retirement and estate planning are expanding by leaps and bounds. Along with the growth of work for financial advisors and estate planning attorneys, has come the advent of self-planning. From managing your entire investment portfolio from your home computer, to preparing your own Wills, Trusts and advanced-directives using an online document-preparation service, the &quot;do-it-yourself&quot; sector of financial and estate planning is enjoying huge growth. </p> <p> As more and more Americans rely on websites like LegalZoom to help them prepare pre- and post-mortem documents, it is important to understand the several &quot;myths&quot; of estate planning, and how these online sites fail to convey the risks involved with self-prepared documents.</p> <p><strong>Myth #1: You Need a Will</strong><br />This is an absolute lie, perpetrated by online companies and sometimes unethical attorneys looking to generate business. Don&#39;t get me wrong, most people could benefit from a Will, but not everyone needs a Will. If you have minor children, you will want to prepare a basic Will as soon as possible to ensure guardianship of your children passes to a trusted family member or friend in the event of your premature demise. However, if you have no minor children, there are other ways to assure the meaningful disposition of your assets when you pass other then a Will.</p> <p>For example, let&#39;s say Robert Jones is a widower with two adult children. Robert owns his personal residence that he&#39;s lived in for several years, has a life insurance policy, a small bank account and a rather large IRA account that pays him income on a quarterly basis. Robert also has a pension and receives income from Social Security. My advice here is that, in the absence of extreme family matters, i.e. his children are divorced, he is expecting to inherit a large sum of money from a relative, etc., there is no pressing need for Robert to have a Will. The personal residence can be re-titled (in most states) to give Robert a Life-Estate and pass the home to his two children when he passes away (outside of probate). Also, Robert&#39;s life insurance, bank and IRA accounts can all pass to his children by either naming them as Beneficiaries (in terms of the insurance and IRA) and also making the bank account payable to his children on death. Now, if we were to mix in several equity accounts, multiple pieces of real estate and different gifting ideas, Robert&#39;s planning becomes more complicated. But, for now, you can see that the idea that everyone needs a Will is simply misleading. </p> <p><strong>Myth</strong> <strong>#2: A Trust Automatically Avoids Probate</strong><br />Trust planning is becoming more and more popular in the U.S., mainly because it is a creative way to meaningfully pass along large assets to your descendants while hopefully avoiding a probate proceeding. Without getting into too detailed a discussion about the different kinds of trusts available (they vary by state) it&#39;s important to note that having trust will not automatically avoid a probate proceeding when you pass. The first step after you execute your trust is to re-title your assets that you wish the trust, vis-a-vis the trustee to manage. If you pass away without re-titling all of your trust assets, then those assets which remain outside the trust will be subject to disposition according to your Will, and a probate proceeding will be likely. </p> <p><strong>Myth #3: Everyone Needs A Trust</strong><br />This is nothing more than a ploy for business. Playing on the example from Myth #1, Robert Jones does not need trust-planning at all. While it is true Robert could have some type of trust to ensure the proceeds from his IRA account are managed/distributed according to his wishes, the truth is most of Robert&#39;s assets will pass to his descendants by operation of his beneficiary designations. Trust planning is advantageous in several situations, including second marriages, families who wish to provide for adult/minor children, including a child with a disability, high net worth individuals and those who hold certain types of assets, i.e. large investment funds, several pieces of real estate, etc. However, for most Americans trust planning will do little beyond cost you a chunk of money annually (trustees are entitled to annual commissions for managing your property in most states) and create more of a paperwork shuffle in managing and distributing your assets. </p> <p><strong>Myth #4: Giving Away My Money Is The Only Way I&#39;ll Qualify for Medicaid</strong><br />Many online sites and attorneys advise elderly clients to actively give away their money in order to lower the available resources and qualify for Medicaid (to defer the cost of nursing care or placement in an assisted-living facility). The truth is, most baby-boomers are very independent when it comes to managing their finances, so while this type of strategy may have worked in the 1980s and 90s with the Depression-era babies, it will serve little utility as the baby boomers reach retirement age. There are several different ways to qualify for Medicaid without giving up total control to your money, and if anyone tells you otherwise they are flat-out lying. However, based on new federal regulations placed into effect almost two years ago, Medicaid will now require you to provide financial history account statements for five years prior to your Medicaid application. The lesson for those who feel they may need nursing-care and placement within the next decade, purchase long-term care insurance, and start keeping accurate details and records of your finances. </p> <p><strong>Myth #5: I Should Name My Estate As Beneficiary of My IRA/Life Insurance</strong><br />Don&#39;t do this. I cannot think of any benefit here, especially because estates generally pay higher taxes than individuals, this type of planning will have serious tax consequences for your estate. The reality is a lot of people name their estate (i.e. Estate of Robert Jones) as the primary beneficiary of their IRA/life insurance/annuities, etc. This is bad for tax-planning purposes, and also because now those assets are forced to pass through your estate (rather then directly to your intendend beneficiaries) and will be subject to probate. This is a bad idea all around. </p> <p>I hope you enjoyed my first post, and will look forward to many more posts which intersect the areas of personal finance, taxes and estate planning. </p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/anthony-marrone">Anthony Marrone</a> of <a href="http://www.wisebread.com/debunking-common-estate-planning-myths">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wills-the-basics">Wills: The Basics</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/estate-planning-why-me">Estate Planning: Why Me?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance estate planning myths trusts wills Sat, 19 Jan 2008 18:51:58 +0000 Anthony Marrone 1650 at http://www.wisebread.com Estate Planning: Why Me? http://www.wisebread.com/estate-planning-why-me <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/estate-planning-why-me" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/estate planning, why me.JPG" alt="shoes" title="shoes" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>A friend of mine mourned the loss of her husband, who died of a heart attack at age 56. Although most people understand their mortality by the time they reach their fifties, this man didn&#39;t believe in insurance or planning for the future, and hence died with no coverage, very few assets, and no will. </p> <p>For years prior to his death, my friend fought a losing battle with her husband, encouraging - even begging - him to consider a will, <a href="/is-it-time-to-talk-with-your-parents" target="_blank">powers of attorney</a>, and insurance. His never-changing reply was <em>&quot;What do I care? I&#39;ll be dead anyway. Everything will go to you and that&#39;s that&quot;</em>. </p> <p>But amidst her grieving, as she rifled through the last of his belongings, filed his last tax return, and consolidated his finances into hers, she was left with nothing but bills. Lawyer&#39;s fees, accountant&#39;s fees, taxes, probate, funeral bills, a mountain of debts he wasn&#39;t forthcoming about, and a whopping tax bill reflecting years of mismanagement of his assets and taxes - all adding up to a substantial sum of money. And with each new bill, actual resentment towards her late husband brewed. <br />After three years of toiling to resolve his estate (which appeared uncomplicated at the onset) and paying off the <em>ensuing bills which ended up being over $100,000, my friend wanted a divorce from her late husband.</em> </p> <p>I cannot stress enough how important it is for everybody to consider their estate plan and to prepare a will. Even young single people can benefit from having a will - or at least their parents and siblings can, especially if there is any sort of division of loyalty among family members. Governmental legislation has a formula they apply for the division of assets (and debts) in the event of there being no will, but it certainly is not ideal. And even the simplest of estates can become muddled in confusion and resentment if not dealt with properly. <br />For example: You have a spouse and two small children. Legislation will designate the first &quot;x&quot; dollars of your estate value to your spouse, and then will divide the remainder equally between your spouse and children. The children&#39;s inheritances will be paid into a court system and held until they are 18 years old, with many restrictions as to how that money can be used prior to then. </p> <h3>What is your Estate? </h3> <p>Your estate is everything you own when you die; from the shoes on your feet, to your retirement accounts, to insurance policies. </p> <h3>What makes up an Estate Plan? </h3> <p>Things that should be reviewed as part of an estate plan include wills, powers of attorney (although they come into effect while you are still alive but incapacitated), and insurance policies.<br /><strong>For business owners, a succession plan is crucial</strong>. Otherwise, your employees, customers, and suppliers will be left &quot;holding the ball&quot; if you disappear unexpectedly. Your children or spouse may lose out on inheriting something they could be interested in, as there are muddy waters around corporate succession if there isn&#39;t anything documented in the charter papers about it. Also, if you have a business partner and they die without properly planning their own estate, their share of the business could be left to an uninterested and incompetent spouse by default. Or worse - their share of the business goes to minor child to be held in trust. In both cases your own share of the business is in jeopardy. </p> <h3>Okay, I want to start planning. What next? </h3> <p>Firstly, you should take a snapshot of your current estate situation; consolidating information into one easy document or notebook. Things to document include: </p> <ul> <li>Bank account information (bank addresses, account numbers, etc)</li> <li>Security Deposit Box location</li> <li>Financial assets (institution, account numbers, approx value)</li> <li>Financial debts (institution, account numbers, approx value)</li> <li>All other assets (car, house, jewellery, incidentals)</li> <li>Insurance policies (location of policy, type, company, policy number, amount)</li> <li>Memberships (gyms, auto association, miscellaneous - your executor needs to know this information in order to cancel services or gain access to automatic insurance benefits)</li> <li>Pension information (company, amount, survival benefits, who to contact)</li> <li>Location of powers of attorney</li> <li>Numbers of people (friends and family) to be notified</li> <li>Contact info for lawyers, accountants, financial planners, and other key team members</li> </ul> <p>Ultimately this information will be kept with your will when you have one, but for the meantime it is a launching pad for you to start planning your estate. </p> <h3>Planning Your Estate</h3> <p>Once you have an idea of what you own, you can formulate a plan for how you would like it to be doled out to those you love. Sometimes it&#39;s easy: &quot;everything goes to my spouse&quot;. But even the simplest of situations can become complicated: what if your spouse goes with or before you? <strong>Determine not only the beneficiaries, but also the contingent beneficiaries for everything</strong>. <br /><strong>Consider who your executor will be</strong>. (And of course, then decide who the contingent executor will be). <br />It is common practice not to choose parents as executors, as more often than not they don&#39;t succeed their children. Instead, choose somebody close to your age or younger. (For people in their 20s and 30s without a spouse or siblings, you could initially nominate a parent, but may eventually want to designate your lawyer to the task. </p> <h3>See a Professional</h3> <p>Many people are enticed by the simplicity of a hand-written will, or using one of the numerous inexpensive legal will kits that are widely available. I cannot discourage this more! These boilerplate home-made wills are fraught with terminology that is vague, leaving loopholes for potential ugliness to crop up when your loved ones need it the least. There are improperly drafted wills that have literally torn families apart, or left them in waiting for literally decades for resolution due to a clause that had to go to the courts for interpretation. <br />The best way to avoid this can of worms is to accept the short-term pain of using a lawyer for the long-term peace of mind of having an iron clad will in place. Most lawyers will also keep a copy of the will in their offices, so if yours gets lost or burns in a fire, there is always an accessible copy. </p> <h3>I Don&#39;t Want to Plan my Will Now! It&#39;s Gonna Change…</h3> <p>Yup. If life rolls the way it should, it will toss you lots of curve balls that mean changes to your will. Moving in with new spouses, booting old spouses out, serious family quarrels (and not just spats - I mean serious!), and close friendships are all legitimate reasons to review your estate plan. <br />The good news is that you don&#39;t have to completely redraft your will to change small clauses or beneficiaries; more often than not an addendum at the end will suffice, thus minimizing legal fees and complications. </p> <h3>I Don&#39;t Have any Family. Why Bother? </h3> <p>If you die and don&#39;t have any family members at all who the government can contact to wrap up your estate, then the government gets to keep everything. <br />Now I&#39;m not anti-establishment or anything, but why not instead make sure that your favourite charity, community sports league, or even quirky café down the street benefits instead? </p> <p>Although morbid in nature, estate planning doesn&#39;t have to be a morbid chore. In fact, envisioning how the future for your family, friends, and favourite charities could be simplified or improved with a properly planned estate can actually be a comfort - especially once it is in place and you can forget about it. </p> <p>We&#39;re here to live life now; but let&#39;s not forget where we came from and where we&#39;re going. </p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/estate-planning-why-me">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debunking-common-estate-planning-myths">Debunking Common Estate Planning Myths</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-time-to-talk-with-your-parents">Is it Time to Talk with your Parents?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bequests estate planning wills Wed, 16 Jan 2008 01:31:21 +0000 Nora Dunn 1636 at http://www.wisebread.com Is it Time to Talk with your Parents? http://www.wisebread.com/is-it-time-to-talk-with-your-parents <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-it-time-to-talk-with-your-parents" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/crucial conversations.jpg" alt="parents" title="parents" class="imagecache imagecache-250w" width="250" height="244" /></a> </div> </div> </div> <p class="MsoPlainText"><span>It’s no secret that <a href="/money-matters-why-all-the-secrecy" target="_blank">talking about money and financial matters</a> in general can be a topic not many like to broach. And with friends and acquaintances, it’s understandable that you may wish to keep a few cards close to your chest. </span></p> <p class="MsoPlainText"><span>With your parents (and other family members) though, <strong>not</strong> talking about money can be detrimental in more ways than one. Because life happens when you’re busy making plans, and some of the most important decisions might need to be made when you feel under pressure and unprepared. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>It can be difficult to contemplate, but the fact is that even though your parents may be in good health right now, the potential for a health crisis to occur only increases with age. Planning ahead won&#39;t prevent the situation, but it can help you be prepared to make better decisions at a time when emotions could cloud your judgement.</span></p> <p class="MsoPlainText"><span>By developing a strong financial plan now, as well as setting in place legal mechanisms for the responsible administration of their finances, your parents can ensure they&#39;ll get the needed and costly medical, home or institutional care without eroding overall family finances, especially if they should become unable to make their own decisions.</span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>I had a great uncle (think “eccentric rich uncle”) who was getting on in age and suffering mentally and physically with dementia. He also didn’t have a will or power of attorney. When he became ill and institutionalized, the state took over his finances and property, and although they made the best decisions they could on his behalf, it was all according to the book and they had no leeway for suggestions from his family and friends who knew of his wishes. The entire situation could have been easily averted if he had his finances in order, proper legal documentation, and had discussed it all with his family. As it happened, he died in a place he hated, and the few bequest wishes he had were never respected. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>Although the issue of finances may be awkward, it is in everyone&#39;s interests to ensure that your parents are properly taken care of. If you’re not part of a family who openly communicates about finances, try raising the topic casually, and perhaps by raising small issues first. This will help both you and your parents feel more at ease with some of the trickier conversations that may eventually have to happen. </span></p> <p class="MsoPlainText"><span>You may even discover your parents have been waiting for you to take the first step. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>Once you are comfortable getting down to brass tacks, it would be best to assemble a complete picture of your parents&#39; financial situation:</span></p> <p class="MsoPlainText"><span> </span></p> <h2><span>Income</span></h2> <p class="MsoPlainText"><span>Where do your parents derive their income, and do any conditions apply? For example, company pension plans may have strict limits on the amount and duration of income to a surviving spouse.</span></p> <h2><span>Assets</span></h2> <p class="MsoPlainText"><span>Get a picture of their assets (and liabilities for that matter). Locations of necessary paperwork, accounts, and safety deposit boxes is also key. </span></p> <p class="MsoPlainText"><span>Many assets also allow for beneficiary designations within the account setup; ensure that these beneficiary designations are consistent with their wishes.</span></p> <h2><span>Expenses</span></h2> <p class="MsoPlainText"><span>Identify all your parents&#39; current expenses and determine whether their income (along with any government aid) will be sufficient to cover projected home or personal care costs.</span></p> <h2><span>Insurance</span></h2> <p class="MsoPlainText"><span>Do your parents have extended health care plans? Should they consider <a href="/critical-illness-insurance-for-wise-bloggers" target="_blank">critical illness</a> or <a href="/long-term-care-insurance-for-wise-bloggers" target="_blank">long term care</a> insurance? Have they properly provided for each other with life insurance (if needed)? </span></p> <p> <span> </span></p> <h3><span>Consider estate plans:</span></h3> <p class="MsoPlainText"><span> </span></p> <h2><span>Will</span></h2> <p class="MsoPlainText"><span>Without a will, there is an increased potential for litigation and unexpected family quarrels, and the very real possibility that their wishes won&#39;t be properly respected. Ask your parents if they have up-to-date wills. Leaving things until “later” or ultimately “the system” will cause untold amounts of grief in the end. I have seen improperly drafted or vague wills take literally decades to resolve; meanwhile all assets are held by custodians and nothing is distributed. You’re not trying to swoop in for the loot by discussing wills with your parents; you are attempting to make sure their wishes are carried out. If you don’t know what they meant in drafting “xyz clause”, then nobody will. </span></p> <h2><span>Executor</span></h2> <p class="MsoPlainText"><span>Have they designated a Personal Representative (also referred to as an executor or liquidator) in their wills? This is the person (or trust company) who is responsible for winding up their affairs and distributing assets and bequests. And if the executor is you (all the more reason to be having this conversation –many executors don’t even know they were so designated until it’s too late and they are in the thick of it), make sure you know all the logistics like where exactly their will, insurance policies, legal documents, and financial papers are located. It is also worth asking who their contingent executor is; it is always prudent in making wills to designate a contingent executor, and if that person is you, it is still a grave responsibility not to be taken lightly. </span></p> <h2><span>Enduring power of attorney</span></h2> <p class="MsoPlainText"><span>This gives a designated person the power to make financial decisions on each parent&#39;s behalf, if that parent becomes incapacitated. Most couples designate each other as their power of attorney, with a child or other family member as their contingent power of attorney. If you are the primary or contingent power of attorney, there is a lot that goes unsaid in the legal wording of this document. Make sure you know exactly what your parents’ wishes are with regards to their preferences for personal care when they are incapacitated, as well as maintaining their financial affairs. As power of attorney, you will have carte blanche with their affairs and you need to know how to deal the ins and outs in a manner consistent with their needs and desires. </span></p> <h2><span>Living will</span></h2> <p class="MsoPlainText"><span>(Sometimes called a health directive) - provides explicit directions about the personal and medical care to be provided for each parent should they become incapacitated. It is also referred to as a <strong>Power of Attorney for Personal Care</strong>, and should be addressed with the same degree of gravity as the Enduring Power of Attorney. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>Talking about all this stuff doesn’t have to be the soul sucking depressing experience that it may seem to be at the onset or on paper. Sure – you have to discuss a number of “what if” scenarios that we all would rather not imagine, but the peace of mind you and your parents may feel by virtue of knowledge and understanding is not to be underestimated. <strong>Preparing for the unknown gets us one big step closer to understanding it.</strong> </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span> </span></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/is-it-time-to-talk-with-your-parents">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/wills-the-basics">Wills: The Basics</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/estate-planning-why-me">Estate Planning: Why Me?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance communication estate planning powers of attorney wills Sat, 15 Dec 2007 23:17:11 +0000 Nora Dunn 1502 at http://www.wisebread.com