Remember that old joke: How do you eat an elephant?  Answer: One bite at a time.  At the heart of that gag is the truth about how you tackle any seemingly complex task, taking it one step at a time so as not to overwhelm yourself.

Many people neglect to create an estate plan because they see it as the proverbial elephant...too big, too complex.  But if you approach estate planning in a systematic fashion, it takes the complexity right out of it – especially with the help of a knowledgeable Personal Family Lawyer.

Here are some tips on how you can reduce the complexity in creating an estate plan, from a recent Fox Business article:

Add up your assets.  Take into account your retirement accounts, life insurance, potential inheritance, savings, property ownership, etc.

Consider trusts.  Trusts are simply vehicles for protecting your assets from creditors – yours or your heirs – and from potential future ex-spouses.  They are also a great mechanism for maintaining your privacy and allowing your assets to pass to your heirs without the expense and hassle of probate, which can tie up assets for a year or more.  And they also help you and your heirs avoid estate taxes. 

Think about whom you trust to act as your agent(s).  You will need to appoint a person or persons to act as your agent through a power of attorney in case you are unable to make those decisions yourself, in the case you become incapacitated or have a terminal illness.  This applies for health care decisions as well as financial oversight. 

Realize what a will can and cannot do for you.  A will is the cornerstone of your estate plan, giving you the legal power to pass along assets and property to heirs as well as name a guardian for minor children and appoint the people you need to carry out your wishes after you are gone – i.e., who will administer your estate and who will safeguard your assets for minor children.

If you would like to have a talk about estate planning, 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.  Contact Us today and mention this article.

Beyond the emotional impact that divorce can have on couples of any age that decide to split, it can have a potentially devastating effect on the retirement plans of those who divorce later in life.  Divorce after 50 usually results in a loss of income for both parties, which can mean working longer to fund a single retirement.

A recent article at Forbes.com pointed out common mistakes made by those over 50 who are divorcing that can ruin retirement plans:

Choosing the house over other assets.  For many people, choosing the family home in a divorce is more of an emotional than a rational choice.  If the housing bust of the last few years has taught us anything, it’s that you can’t count on a house as a nest egg.  Plus, a house is likely to cost you more as well in property taxes, maintenance and unexpected expenses like a roof or furnace replacement.    So don’t automatically sacrifice retirement assets for a house until you weigh the costs.

Forgetting to consider the tax implications of retirement assets.  If you decide to divvy up retirement savings by one of you taking the 401(k) and the other taking the Roth IRA, you need to realize that these are not equal distributions.  Withdrawals from a 401(k) or traditional IRA will be taxed during retirement, while withdrawals from a Roth IRA are not taxed during retirement.  Therefore, the payout from the Roth IRA will be larger over time.

Rolling over a spouse’s retirement account into an IRA after the divorce.  If you are under the age of 59 1/2 at the time of your divorce, you have a one-time opportunity to withdraw money from an  ex-spouse’s 401(k) or 403(b) without having to pay the 10 percent early withdrawal penalty as long as those funds have been allocated to you under a qualified domestic relations order (QDRO).  If you do a rollover and need to tap the account early, you will have to pay the tax penalty.  And while it may be tempting to dip into retirement savings now, remember that you are eroding the nest egg that needs to last you for 20-30 years in retirement.

If you would like to have a talk about retirement planning, 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. Contact us today and mention this article.

Contrary to popular belief, estate planning is not just about money or taxes.  Far from it. Today, it’s more about protecting your assets for yourself and your loved ones, achieving your financial goals and safeguarding your health care.  Money and taxes aside, here are 7 good reasons you need an estate plan:

1.  Your Health care.  Defining how your medical needs will be addressed in case you cannot make health care decisions for yourself is a primary objective of having an estate plan.  You also need to consider how you will meet the costs of long-term care.  You need to name someone to make decisions for you and tell them how you want them made.  This must be legally documented or the person you want caring for you, cannot.

2.  Probate.  Probate is an unnecessary, public and often expensive Court process that takes control out of your family’s hands and puts that control in the hands of a Judge who doesn’t know you or what’s important to you.  A main focus of estate planning is keeping your family out of Court. Period.

3.  Family feuds.  Family fights over how assets are divided and distributed are common when there is no estate plan and/or trusted advisor to guide family members.   Sadly enough, these fights happen even when amounts of money are small OR even when there is no money at stake.  Some of the biggest fights we’ve seen happen in storage units over sentimental items with no monetary value at all. If you don’t want your family to fight, you plan your estate.

4.  Beneficiary forms.  You likely have several assets that cannot be passed along in a will alone.   These include IRAs, life insurance, retirement plans and annuities, all of which are governed by beneficiary forms that specify who is to receive the assets upon the death of an account holder.  Completing these forms properly is estate planning

5.  Kids and parents.  If you are currently responsible for the care of minor children, elderly parents or a person who has special needs you need a plan for the continuation of that care after you are gone. 

6.  Managing assets.  Is your spouse or other family member capable of managing all your assets?  If not, you will need to name someone who is capable of doing this now so your assets will be managed wisely for the benefit of your family in the future.

7.  Business succession.  If you own a business, you will need a succession plan to govern what happens to your ownership shares if something should happen to you.

If you would like to have a talk about guiding your loved ones through estate planning, 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.

We are fairly certain the last thing your 18-year-old kid is thinking about is an estate plan.  And you are probably not thinking about one for them either, but you should be.  Here’s why:  once your child turns 18, you are no longer entitled to know about their medical records or make decisions about their medical treatment.

Can you imagine your child needing medical treatment in some college town and you are not able to help in any way without a court saying you can?  It can, and does, happen.

What you need to do is have your adult child fill out a health care proxy with a HIPAA release (HIPAA refers to the Health Information Portability and Accountability Act, the law that makes health records private for those over the age of 18).  On the form, your child can designate you as their agent, allowing you to have access to medical records and to make health care decisions for them in case they cannot do so themselves.

While you’re at it, have your child complete a Durable Power of Attorney as well, which will give you the right to oversee their finances in case of incapacitation.   

Hopefully you will never need to use these three documents, but having these necessary protections in place will give you both peace of mind.

Be one of the first two families to book a Family Wealth Planning Session this month and I’ll create these three legal documents for your child before going off to college as my gift to you plus waive the regular Planning Session fee.