Have you funded your living trust? The
living trust is only a tool for avoiding probate and guardianship if your assets
have been transferred into the name of the trust.
Do you have too much or the wrong property held
jointly? Joint ownership does avoid probate but will not avoid estate
taxes. Also, taxes held as joint tenants with right of survivorship will go to the
joint owner regardless of what your will says.
Have you planned for the possibility of
incapacity? While no one wants to discuss this unpleasant thought, the fact
remains that two in five adults will need nursing care at some time in their life.
Some of this planning includes preparing a health care power of attorney and living will
and preparing a durable power of attorney. The durable power of attorney is one of the
most important documents that everyone should consider. It is a very simple and
inexpensive way to avoid the hassle and expense of a guardianship proceeding in court.
Have you planned for the costs of incapacity?
Long term healthcare insurance--home care and nursing home care--is a very
popular and effective tool for defraying the cost of catastrophic illness. While Medicaid
may be a viable option, all too often there are endless restrictions imposed on the
ability to be eligible. Also, Medicaid only covers nursing home care, not care at home.
For further information about Medicaid Planning, please call our office.
Have you ignored the issue of estate taxes?
Leaving all your property to your spouse does not avoid estate taxes on your
death.
However, such a plan wastes the first-to-die’s $650,000 exemption.
Proper planning allows both spouses the use of their $650,000 exemption, allowing them to
shield a total of $1,250,000.
Have you made your pre need cemetery and funeral
arrangements? This is a very important part of your estate plan and should be
done
while you are well and in control of your decision making. It is not only a way
to save a great deal of money, but it will also save your loved ones much hardship and
pain at a time when they are least likely able to cope with it.
Do you own your own life insurance in your own
name? If you do, it will be included in your estate for estate tax purposes.
You might want to consider transferring the ownership to the actual beneficiary, or
transferring ownership to an irrevocable life insurance trust.
Can someone else find " the papers?"
It is very important that all your documents be kept together in a convenient
location for someone to locate them when the need arises. Your safe deposit box is not a
convenient location if you need your documents on the weekend.
Have you named the right person to be " in
charge"? While close family members are the logical choice, some people
may want to consider a bank or trust company because of their professionalism, neutrality
and expertise.
Have you updated your estate plan? Does
your will say your 35 year old son is going to live with Uncle Sam if you die? Since most
people do not want to discuss dying, they will prepare an estate plan, put it away and
forget about it. Please be aware that ongoing changes in the law, health and family
situations require that your estate plan be reviewed periodically.
Understanding and avoiding these pitfalls and mistakes will give you
and your family the peace of mind you all deserve.
This article appeared in The Miami Herald, Sunday, August 1, 1999.
