If you make a mistake in naming beneficiaries for your life insurance policy, the people you love will end up being hurt.  Insure.com recently provided a list of the 10 life insurance beneficiary mistakes to avoid.  We elaborate on how they’ll affect you and how to fix them.

1.  Naming minor children.  If proceeds of your life insurance are directed to your minor child (instead of to a trust for his/her benefit), a Judge will decide who controls the proceeds and when your child receives them.  And your child could get access to all of that money at 18! That’s bad news. And unnecessary.  A Personal Family Lawyer® can counsel you on the best way to leave life insurance proceeds to minor children.

2.  Naming a person with special needs.  By naming a child with special needs child or other person eligible for government benefits as a beneficiary, you could unwittingly disqualify them from receiving those benefits. Instead, you could name a special needs trust. We can help you with that.

3.  Not considering community property and/or spousal rights.  You don’t have to name your spouse as a beneficiary, but if you live in a community property state, your spouse will need to sign a waiver before you can name someone else as beneficiary. And, if you name a married adult child as the beneficiary of your policy (without a trust), you could be putting your child’s inheritance at risk inadvertently.

4.  Ignoring tax consequences.  While life insurance proceeds are usually income tax-free, they are subject to the estate tax.  Talk to us about these issues so we can identify any traps for the unwary.

5.  Trying to use your Will.  A properly executed beneficiary designation form always trumps your Will, so don’t make the mistake of thinking you can change beneficiaries by naming someone else to receive insurance proceeds through your Will. 

6.  Failing to update.  Many ex-spouses are enriched by a life insurance benefit because their ex forgot to update the policy’s beneficiary form.  Review your beneficiary designations every time you have a significant life change, or at least every three years.

7.  Not being specific.  You should name your beneficiaries in as specific a manner as possible, which means using their legal names, not just a designation such as “my spouse” or “my children.”

8.  Not informing family or losing track of policies.  If you have a life insurance policy, tell your family about it.  Otherwise, it may be overlooked and the benefit never claimed.  We track our clients’ assets using a Family Wealth Inventory that is updated regularly so no assets are lost after your passing.

9.  Not considering individual circumstances.  If you leave a large sum of money to an adult child with a substance abuse problem or someone not equipped to handle money, this can lead to more problems.  Consider establishing a trust that can protect your beneficiaries’ inheritance.  We can even protect these assets from bankruptcy, creditors and divorce, for multiple generations.

10.  Naming only one beneficiary.  If you name only one beneficiary and that beneficiary dies at the same time, or before you, the proceeds of your insurance could go end up directed by State law or a Judge.  To prevent this from happening, name secondary and tertiary beneficiaries.

If you would like to learn more about protecting the inheritance you’ll leave behind, call our office today to schedule a time for us to sit down and talk. 

Unfortunately, money has a habit of bringing out the worst in people, even in the best of families.  One of the most important reasons to get your North Carolina estate plan handled is to keep your family out of conflict.  And, yet, without the right counsel, your estate plan could actually cause conflict!

Here’s what to do to make sure that’s not the case for your family:

Communicate Your Plans Ahead of Time.  In our office, we recommend inviting adult children into the planning process and let them know ahead of time why you have made the decisions you have made.  This can be a difficult conversation and one we are extremely skilled at handling.  We don’t recommend doing it without the guidance of trusted counsel.

Do Not Put One Sibling In Charge of Another Sibling’s Inheritance.  Unless agreed to ahead of time by both siblings, putting one sibling in charge of another will almost always lead to resentment and disagreement.  You can avoid this with strong communication and agreement ahead of time. Or you can appoint someone else to care for your child’s inheritance. We can help you think that through, so call if a child in your family will need inheritance protection.

Transfer Some Now Instead of All Later.  Consider how you can begin to transfer assets to your children during your lifetime when you can influence how they use those assets and you can pass on your values right along with them, instead of waiting until you are gone to pass on everything you’ve worked so hard for.

Make Changes When Necessary.  Estate planning is an ongoing process, and when changes occur in your life – even if it’s the divorce of a child or a new grandchild – your plan needs to change as well.

Pass On More Than Just Your Money.  Most estate plans focus only on your tangible assets, but your most valuable assets are your values, insights, stories and experience. We have a unique process in our office for passing on these assets that are most often lost when someone dies. And, honestly, they are what will keep your family focused on what really matters after you are gone.

Choose the right advisor.  Developing a strong working relationship with a Personal Family Lawyer® that will allow you the freedom to frankly discuss your family dynamics, plan accordingly and keep the family involved every step of the way. 

If you would like to create or update your estate plan, call our office today to schedule a time for us to sit down and talk. 

It’s hard to believe that people who spend a lifetime working hard to accumulate wealth spend little or no time planning for what will happen to it after they pass, especially if children are in the picture.  Yet a recent Consumer Reports survey tells us that 86% of people have not reviewed or updated our estate documents in the past five years. 

A lot can happen in five years – your life, the law and your assets will change --  and your estate plan needs to reflect the changes in your life or those of your beneficiaries.  Here’s what needs to be evaluated at least once a year with the help of a Personal Family Lawyer®:

Title to your assets.  The most important part of your legal planning isn’t necessarily the legal documents your lawyer prepared (though they are important), it’s how your assets are titled.  If your assets are not titled right (and stay that way), your estate plan won’t work and the documents aren’t worth the paper they are written on. This must be reviewed every year.

Your will and trust(s).  These legal documents determine who gets your assets and who will take care of making sure that it happens the way you want. People marry, divorce and fall out with family members all the time.  Children are born and sometimes, tragically, die.  Property is bought and sold.  In other words, life changes and so should your will and trust, to reflect the changes in your life.

Your health care directive.  Your health care directive names someone to serve as your agent in case you are unable to make your own health care decisions.  Is the person you originally named still willing and able to serve?  If for some reason they were not able to serve when needed, have you named a back-up? 

Your financial power of attorney.  This is the person who will handle your finances in case you are unable to do so, and there should be a back-up named for this function as well.  If you are over the age of 65 and have a number of different bank and brokerage accounts, it may make sense to consolidate those accounts to make managing your finances easier.

Your guardian nominations.  As your children grow, the people you named to raise them may not continue to make sense.  And, you absolutely need to have named guardians for the immediate term, so your kids are never taken into protective custody by strangers, and those folks can change frequently as the people in your kids’ lives will likely change regularly.

If you would like to create or update your estate plan, call our office today to schedule time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

A will is one of the most basic North Carolina estate planning documents, and everyone should have one to make sure that there is no question about what would happen to your assets and kids if something happens to you.  But there are some cases when having a trust in addition to a will is imperative; here are six of them:

Avoiding probate or conservatorship.  A trust will bypass the probate process, saving the people you love time and money.  To carry out instructions in a will, a probate must be opened in the county court of residence and that means your family is stuck dealing with the Court if you get hospitalized or after you die.

Providing for a person with special needs.  If you have a child or another dependent with special needs, a trust commonly known as a Special Needs Trust can protect assets for a special needs person without jeopardizing their qualification for government benefits.  A will allows you to transfer assets to a special needs person, but will not protect those assets.

Privacy.  Since a will undergoes probate in North Carolina, it becomes public record.  A trust is private.

Blended families.  If you are part of a blended family, a trust can give you the flexibility you will want to make sure that children from prior marriages are provided for in the way you want.

Out-of-state property.  If you own property in another state besides {city/state}, you can more easily transfer ownership via a trust than a will.  Transferring out-of-state property in a will usually means additional legal expenses because you could have probate in multiple states and that is no fund for the people you love.

Asset protection.  If you want to protect the assets you leave your loved ones from creditors (including bankruptcy and divorce) a trust is the way to do it. It’s a gift you can give your loved ones that they could not easily (or at all) give themselves. 

If you would like to learn more about the use of trusts in North Carolina to pass on what you care about to the people you love, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

By now, the flood of floral commercials has already reminded us that Mother’s Day is Sunday, May 12.  But before you plunk down a good chunk of change on something that will wilt and die in a week or so, consider a gift that is truly priceless: a plan for your kids (or grandkids) that provides Mom with peace of mind that, if anything should happen to mom and dad, her children will always be in the care of the people she knows, loves and trusts.

We all hate to think that something could happen to us, but we know it happens to others like us every day.

We've all seen the news stories of moms and dads who leave their children with a babysitter, get into a terrible accident and don’t make it home.

The babysitter calls and calls, but there is no one to answer. The police are summoned and the children have to be placed with Child Protective Services. It's the thing every mother is most afraid of happening.

We've seen the stories of children placed in the care of people they barely know just because they are related by blood since there was no plan in place that dictated who would take on this incredible responsibility.

And we have seen the fall out of family fights created when mom and dad didn’t make a plan and the family couldn’t agree on what would happen.  Or in the worst case, what happens when there is no family available.

In all cases, it’s left up to a Judge decide when mom and dad don’t.

We know you don't want this for your children (or grandchildren, nieces or nephews).  And this is where a Kids Protection Plan® can ensure it never does. Not for your kids.

Developed by a nationally recognized attorney who is a mom herself, the Kids Protection Plan® provides Moms (and Dads) with the legal planning tools you need to make sure there is never a question about who will take care of your kids if you are in an accident.  The plan includes:

·         Legal documents to name short-term guardians who can be there immediately for your children so they'll never be taken into the arms of strangers or anyone you wouldn’t want. Not even for a moment.

·         Letters to the people you name as short-term guardians so the people you've named will know just what to do if called upon.

·         Instructions to everyone who takes care of your kids as to exactly what to do if you are in an accident … so there's never any question about who to call.

·         Legal documents to name long-term guardians who will raise your children just as you would so there is no family feuding over your children.

·         Letters to your long-term guardians letting them know what to do if called upon.

·         Instructions and guidelines for your long-term guardians on how you want your kids to be raised...make sure your kids are raised with your values, insights, stories and experience.

·         Medical powers of attorney for your minor children so the next time they travel without you or you travel without them, you know they'll get the medical care they need.

·         A custom, personalized I.D. card for your wallet stating that you have minor children at home and who should be contacted if you are in an accident.

As a Personal Family Lawyer®, I am one of the few lawyers in the world licensed to prepare a Kids Protection Plan® for your family and if you do not have one in place already for your children (or know a mom who doesn’t), this Mother’s Day is the perfect time to gift this plan to your family.

We include a Kids Protection Plan® with all the planning we do for the lucky families with children at home who plan with our office.  This month, in honor of Mother’s Day, we are not only waiving our standard Family Wealth Planning Session fee for the first 5 families to make appointments this month, but we’ll also name legal guardians for your children during the session, whether you create a comprehensive Kids Protection Plan® with us or not.