Why Updating Your Estate Plan is So Important

Most of us remember Sherman Hemsley as George Jefferson, the character he played in the popular television show “The Jeffersons.” When Hemsley passed away in 2012, his will named his longtime partner Flora Enchinton heir to his estate. However, when a man from Philadelphia named Richard Thornton claimed to be Hemsley’s half brother and challenged the will, funeral proceedings were delayed. It was four months before friends could properly say goodbye to Hemsley.

"Families, circumstances, and the law all change"

Hemsley’s will was signed only six weeks before his death, after Hemsley was already ill with lung cancer. It was this delay which gave Thornton grounds to challenge Hemsley’s soundness of mind at the time of the will’s signing. Ultimately, the will was found valid and Enchinton was able to proceed with Hemsley’s wishes, but not until Hemsley’s body had spent four months on ice.

Thomas Kinkade, famous for his paintings of cottages, bubbling streams, and rural churches, passed away the same year as Hemsley. In another similarity, Kinkade’s estate ended up in a lengthy court battle. Kinkade had been in the process of a divorce from his wife Nanette Kinkade when he died. He was also living with his girlfriend Amy Pinto at the time. Pinto laid claim to his home, where she was living, as well as $10 million and a part in his legacy. She produced two handwritten wills and refused to leave the property, even after a security guard was posted to ensure she did not steal any possessions.  Contrarily, his wife Nanette (with whom he had four children) submitted a 2000 will which bequeathed $12.48 million worth of assets to a living trust set up in 1997.

Ultimately the estate was settled, although details have remained private.

While you may think that something like this would never happen to you, it’s worth noting Hemsley’s estate was worth only $50,000 when his half brother challenged his will. I see families come in who haven’t updated their estate plans in years, or decades. Sometimes this causes serious confusion and problems when a loved one passes away, leaving unclear wishes. Families, circumstances, and the law all change. When we set up your estate plan it was the perfect estate plan for you at the time. But that plan may need to be updated.

The best way to avoid a lengthy estate battle is to come in regularly. I offer a free Three-Year Review for all my clients. It’s important to regularly check in with your lawyer, just as you would with a doctor. Moreover, state and federal laws regularly change, so checking in regularly assures your plan is up to date.

Other changes may make it relevant for you to come in earlier. For example, you should come in for a review if you are in the process of a marriage or divorce, have had the birth of a loved one you wish to include in your estate plan, have lost a loved one, have had a financial windfall, have bought or sold a house, or have purchased a business.

Coming in for a review ensures your will and estate plan avoid probate or messy estate battles. Waiting until you are sick or need something done imminently can lead to stress and disappointment, and sometimes, it may be too late.

When’s the last time you reviewed your estate plan? Call 630-574-0123- to schedule your free Three-Year- Review at the Law Offices of Daniel O Hands, P.C.

Marriage in Your Golden Years (Part 3 in a 3 Part Series)

Part 3: We Made Our Decision and We’re NOT Getting Married. Now What?

So you have considered the options and you have decided not to get married. This doesn’t mean you love your partner any less, but there are some provisions to make in the eyes of the law. Just because you’re not getting married doesn’t mean you can skip a visit to the estate planning attorney. In fact, it is essential for unmarried couples to see an estate planning attorney. With good planning unmarried couples can receive many of the same benefits as married couples and avoid stressful situations.

Health Care Decision Making- If you are an unmarried couple, you do not have any right to make decisions regarding your partner’s health care. If your partner ends up in the hospital, the hospital is not obligated to release any information to you regarding their health, or to even let you into the hospital room. Proper planning can eliminate this stressful situation. An attorney can create a Power of Attorney for Health Care for you and your partner, thereby giving you health care decision making rights. You can also sign a HIPAA medical release (Health Insurance Portability and Accountability Act) giving you access to your partner’s medical information.

Property- If your partner becomes incapacitated the court will assign a guardian to make financial decisions. You won’t automatically be given the right to make financial decisions for your partner. A Durable Power of Attorney for Property will give you that power and eliminate the need for a public court date to determine a guardian.

Wills and Trusts- Make sure you have a will or trust listing your partner as a beneficiary to your estate. Whereas married couples will automatically inherit a share of the estate from one another, an unmarried partner will have no right in the eyes of the court unless specifically noted. Also, as with any estate plan, make sure your family is aware of the terms of your wills or trusts.

Taxes and Gifts- Married couples can leave each other as much as they want without paying an estate tax. On the other hand, an unmarried couple cannot. Make sure you take time to look at the tax consequences of gifts when setting up your wills and trusts.

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Make sure you keep these important documents close at hand. Keep the original copies in a safe place, and have extra copies somewhere you can get to them easily. We recommend keeping the originals in a safe or lock box, and giving copies to close family members as well as your doctors’ offices. Keep an original somewhere you can quickly access in case of unexpected situations.

With proper planning, you and your partner can share the rest of your lives together without the unwanted consequences a marriage may create. Make sure you see an estate planning attorney to help draw up the above important documents which will allow you protection as a couple.

I work hard to ensure that my clients can live the lives they want knowing that their assets and healthcare decisions will be taken care of in the way they want. Estate planning can provide peace of mind now, and later down the road.

Unanswered questions from our series? Check out the information center http://handslaw.com/Page/information_center on our website.

To schedule a consultation with Mr. Hands call the office at 630-574-0123.

Marriage in Your Golden Years (Part 2 in a 3 Part Series)

Part 2: We Made Our Decision and we ARE Getting Married- Now What?

So, you have considered the factors and you and your new partner have decided to get married. Congratulations! Finding love later in life can be exciting, but can require a little extra planning.

BEFORE the wedding make sure that you and your spouse understand each other’s financial situations. While a younger couple may enter into a union planning on building a financial future together, you and your future spouse have already spent years building your financial estates separately. You don’t want years of work to be compromised. With proper foresight you can gain the marriage you want but protect your assets.

Be aware that whatever estate planning you’ve done to this point is going to be affected by your future marriage- make sure you talk your decision over with your estate planning attorney and your family. Be clear about your wishes so that your attorney can properly draw up your documents, and so that there are no surprises. Inheritance issues can be sticky to resolve, and they’re never pretty.

Take, for example, the case of Joe and JoAnne. Both had children from a previous marriage. Joe’s children believed that his estate would pass on to them at his death. However, the way the trust was written, when Joe died the whole estate instead passed to Jo Anne. When she died a few years later the estate therefore passed to Jo Anne’s children.

The result was that Joe’s children sued his attorney, claiming that their father meant for his estate to pass to them, but the judge could not find reasonable proof that Joe’s intent was for his money to pass to them, and so Joe’s children received no inheritance from their father. Being clear with your attorney and your family can help alleviate these problems. Make sure your wishes are in writing, and be sure you understand the agreement before signing it.

PRENUPTIAL AGREEMENTS: Your estate planning attorney can work with you to prepare a prenuptial agreement. Your future spouse will need their own attorney. A prenuptial agreement lays out in advance what will happen to the couple’s property in case of death or divorce. A properly executed prenuptial agreement commonly delineates each spouse’s right to the other spouse’s property on death or divorce. The major benefit of a prenuptial agreement is that it keeps your assets separate. You can make a lot of provisions in a prenuptial agreement- including timeframes.

There are basic requirements for a court to uphold a prenuptial agreement- as with any estate planning document make sure you have an attorney draw it up to assure it’s an appropriate legal document. It’s important that the agreement be prepared and executed prior to the marriage.

OTHER CONSIDERATIONS: In addition, make sure you discuss what happens to your home and any retirement assets, 401K’s, and other liquid assets with your spouse and attorney. Make sure you account for all your assets.

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Be sure you choose an estate planning attorney who understands your desires. Also, ensure that your attorney isn’t just plugging you in to a pre-existing mold. Each couple has a unique relationship, and likewise situation, and it’s important your attorney consider you as such.

When my clients come in I work hard to ensure that I develop an estate plan that fits their needs and desires. Our estate plans allow for many foreseeable and unforeseeable situations, and deal with each client’s unique situation.

Stay tuned for the next  entry- Part 3 in the 3 Part Series:

We made our decision and we AREN’T getting married- now what?

(To schedule a consultation with Mr. Hands call the office at 630-574-0123)

Marriage in Your Golden Years (Part 1 in a 3 Part Series)

Part 1: To Re-Marry, Or Not?

I see a lot of couples in my office who are considering marrying or remarrying. While all prospective couples have many factors to consider, for couples considering marriage in their later years there will be different, and possibly unexpected, factors to consider. Especially if you have a large estate, or if you have children from a previous marriage, there may be unexpected outcomes from a marriage in your later years that you deserve to know about before signing the marriage certificate.

Social Security- There are many possible effects of marriage on social security benefits.  If you were receiving benefits from a previous spouse, these benefits will generally cease once you remarry.  If both you and your potential spouse are receiving social security benefits there may be an increase on your taxes. Most importantly, social security benefits will begin to take into account not just you and your children, but also your spouse and their children. This may affect you positively or negatively depending on your situation.

The Family Home- Hypothetically, say your potential spouse moves into a property you already previously owned: pretend it’s the house your children from your past marriage grew up in. You may still want to ensure that the property is transferred to your children after your death. However, if your potential spouse survives you, you don’t want to your spouse to be evicted by your children. There are various ways to get around these problems with the appropriate planning, but planning is needed to assure it will all go smoothly.

College Financial Aid- If you have a college-aged child, you will want to check with your child’s school before remarrying. A new spouse could affect the financial aid your child receives depending on how your income is calculated.

Survivor’s Annuities- Any annuities you or your possible spouse are receiving may cease with a new marriage contract. For example, widows and widowers of military may lose their annuities if they remarry before a certain age. All of these factors need to be considered as you make your decision. 

Long Term Care- No amount of trusts or premarital agreements can protect a spouse from being responsible for the cost of long term care if you or your potential spouse should become incapacitated or need expensive health care. Moreover, your eligibility for Medicaid may be affected by a new marriage in your later years.

Personal Values- I often hear that older couples want to get married so they can set a good example for their grandchildren. Other couples may feel obligated to remarry if they are involved with their church or religious community. Some couples may feel that their own personal values would be compromised if they did not remarry but lived as a married couple. On the other hand, couples may have none of these concerns, but be worried about the effect on their previous estate, or the concerns of their children.

Ultimately, it’s you and your partner’s decision to marry. However, whatever your personal beliefs may be, it’s important to be informed and make a knowledgeable decision to avoid any ugly surprises for you or your family later down the road. An informed decision is always the best decision.

I help clients consider all their options when making a choice about proceeding with a new marriage. Every person’s situation is unique, and you deserve to know all the possible situations before deciding to marry or not.

  

Stay tuned for our next entry- Part 2 in the 3 Part Series:

We Made Our Decision and we ARE Getting Married- Now What?

(To schedule a consultation  with Mr. Hands call the Oak Brook office at 630-574-0123)

Invest in a Good Estate Plan Now, and Save Your Family Trouble and Money Later

In this uncertain economy, everyone wants to save money. Maybe you've started taking the bus, cutting coupons, or overseeing projects you would usually have left to a professional. While fixing that clogged drain without a plumber may have been a great way to cut costs, there are some tasks you shouldn't try to tackle alone.

Developing an estate plan is one project you shouldn't try at home, or even with an online service. Even if you don't have a large estate, you should still consult with a qualified estate planning attorney to ensure your estate is protected. A homemade estate plan can lead to unintended consequences and as a result your heirs may end up paying legal fees in excess of what it would have cost to have an attorney draw up your documents in the first place. 

Take, for example, the case of "John." John drafted his own will. He left to his domestic partner, Fiona, different assets including several bank accounts, his individual retirement account, and a percentage of a corporation. At John's death, his family challenged Fiona's inheritance. They first challenged the bank accounts John had left to Fiona. The bank had failed and had been taken over by another bank, so the bank accounts no longer existed. Therefore, John's family argued that no bank accounts should be transferred to Fiona. Also, John's IRA had titled his sister as the beneficiary, contrary to the will, so the money was paid to her. Finally, at John's death the family alleged that the will was ambiguous regarding the aforementioned corporation. They claimed John only meant to leave Fiona a percentage of his share, rather than his entire share. Needless to say, the family and Fiona ended up in a court battle.

You may think, my family gets along great with my partner or fiancé; this would never happen to us. However,  in the shock and uncertainty following a loved one's death relationships can become very strained. Had John taken the time to consult a qualified estate planning attorney for a soundproof estate plan, his family and partner could have avoided the resultant lawyer's fees and multiple trips to court.

Let's look at the case of "Simon" for another example of a problematic estate plan. Simon split his property evenly amongst his three children. However, his eldest son "Jim" died before Simon passed away. This raised some questions when Simon's estate was being settled. Should Jim's share be redivided amongst his siblings, or should it go to his heirs? Jim had two children and a step-son. Should the inheritance go partially to his step-child? Should all his children be treated equally, or should his biological children receive a larger share? Things can get complicated when situations such as this arise, and unless you've planned for contingencies like this your wishes may not be followed.

At the Law Offices of Daniel O. Hands, P.C., when we hand someone a completed estate plan we don't just hand them a piece of paper. They leave with a thick book and a variety of different documents to cover all their needs. We take time to go over the documents with our clients to ensure everything is drafted according to their wishes. Most importantly, our estate planning documents provide for contingencies. That's why they're so thick. Unborn children, the death of a beneficiary, divorce, and special needs are just a few contingencies that can be accounted for with a properly created estate plan.


Make sure your estate plan is up to date, and remind your friends and family that spending the money now to preserve their estate will save their loved ones money and troubles further down the road.

Estate Planning Can Be Fun(ny)!

Estate planning forces us to consider many unpleasant possibilities and realities we often don't like to think about. However, estate planning doesn't have to always be serious. Below are a series of estate planning "funnies" to help lighten the mood.





Why women are superior estate planners:

Carl was a 35-year old bachelor who worked for his father's extremely successful business. When he learned his father was very ill, and that he would inherit a large sum of money, he decided he needed a wife with whom to share his wealth. 

One night, at an investment meeting, a stunning woman walked through the door. Carl was speechless; she was by far the most beautiful woman he had ever seen. After the meeting he approached her. "I may not be much to look at," he said, "but my father is very ill and in a few years I will inherit 20 million dollars." The woman was very impressed. She took his card, and agreed to call him. 

A few days later she called as promised.

"Guess what?" she said. "I'm your new stepmother."

How to solve the deficit: 

Obama Befriends Rich Elderly Widow In Hopes She'll Put Nation In Her Will

Click the link above to view this comic video from the Onion News Network. (The Onion is a fictitious news source.) In this story, newscasters speculate on Obama's friendship with billionaire widow, Adelia Scott. Sources say he has spent time with Mrs. Scott, watching countless hours of "Pride and Prejudice," bringing her chocolates, and listening to stories about woman's baseball in order to secure a place for the US Treasury in her will. The White House Deputy Press Secretary denies the accusation that the president has any ulterior motives for befriending Mrs. Scott other than their mutual enjoyment of activities such as cross-stitching, visiting the doctor, and growing prize-winning petunias. Watch this video for a chuckle.

Why You Should Never Let Your Pet Plan Your Estate:


Dilbert's Advance Health Care Directive


Click the above link to view this recent Dilbert comic by Scott Adams. In this comic strip, Dilbert reads over the Advance Health Care Directive his megalomaniac dog Dogbert has prepared for him. Dilbert says he might have some changes to make, as it states that he should be killed if he has a headache, itch, or complaint.

 Why You Should Never Let Your Pet Plan Your Estate, Part II:


 Dogbert Amends Dilbert's estate plan

Then, a few days later, Dogbert hands Dilbert an amended estate plan. It's not much better. Follow the above link to view the comic.

(We promise we won't draw up documents that look like this at the Law Offices of Daniel O. Hands, P.C.!)

Daniel Hands Invited To Speak at Event

Real-estate agents from Realty Executives on the Move in Cary have invited Mr. Hands to speak at a seminar on Saturday, April 16 at the Sun City Meadow View Lodge in Huntley. He will be presenting on wills and estate Planning. Other topics presented will be reverse mortgages and independent and assisted living. This event is hosted by the Frits Team (http://www.fritsteam.com). The seminar includes lunch and will run from noon until two. To make a reservation call 847-516-8282 by April 14.