Category: Estate Planning/Wills and Trusts

Top 3-Estate Planning Docs. Can Devastate-Pt. 3

The Top 3 Reasons How Online Estate Planning Documents Can Devastate Your Family and Leave Them In Financial Ruin – Money Can Be A Curse!!

Reason 1: The Pitfalls of Not Getting Legal Advice from an Attorney Can Cause Your Estate Plan to be Defective Because of Wrong Heirs, Wasteful Spending, and Worthless Investments

Arguably one of the biggest reasons why online estate planning documents can devastate your family’s estate plan and leave them in financial ruin is because you don’t get legal advice with do-it-yourself documents.  What most people don’t realize is that the value of an estate plan isn’t just in the documents – it’s in the advice and counsel you get from your estate planning lawyer.  An estate planning lawyer can identify issues that are unique to your financial and personal life that will affect your estate plan.  Some of those issues might include: blended families, predeceased beneficiaries, family drug/alcohol problems, problems with the in-laws, careless spending, worthless investments, and Medicaid planning opportunities. Part I and Part II of this series addressed the concerns you might have if the wrong heirs inherited your estate, as well as with concerns you might have with wasteful spending and worthless investments.  This blog addresses how online documents miss planning opportunities for unforeseen circumstances in your life, such as nursing home care.

Part III.  Does your Estate Plan Address Unforeseen Circumstances? Don’t outlive your money!

If you’re a baby boomer, Social Security suggests that you will likely live between ages 83 and 90.  If you do live that long, you should be concerned that you might outlive your money.  The number one fear of baby boomers is outliving their money during retirement due to unforeseen circumstances.  Such unforeseen circumstances include rising medical costs and the costs of long-term care.  If you ultimately need nursing home care, be prepared to deplete your hard-earned assets before Medicaid will help pay for your care. If you are married and you need to enter the nursing home, the most you and your spouse can keep is between approximately $23,000 and $120,000 (excluding your home) depending on the size of your estate before you will qualify for Medicaid.  That figure drops to $1,500 if you’re single.  Medicaid also only lets you keep $50/month from your monthly income.  Do you think you can live comfortably off of $50 a month?

Unfortunately there is no crystal ball to predict if you or your spouse will need nursing home care.  All you can do is plan for the worst and expect the best.  Depending on your age, health, and wealth, it might be appropriate to consider advanced planning for Medicaid.  A good estate planning attorney can assess your situation and determine if Medicaid planning is appropriate for you.  Most people incorrectly assume that their assets are protected from Medicaid and the nursing home when their assets are placed in a simple revocable trust.  Such revocable trusts are typically the ones that online document providers provide.  Although these types of trusts may be sufficient for some estate plans, it may not work for yours.  Online estate planning documents cannot provide you with a customized plan that will properly carry out your wishes as well as safeguard your assets from rising nursing home costs.

In estate planning, one size does not fit all. Over the years, I have found that no two families are alike.  Each family has unique issues and online documents typically cannot address those issues.  If your issues are overlooked or ignored, your estate plan will probably not work the way you intended.  If you have concerns about outliving your money and unforeseen circumstances, an estate planning attorney can help you budget your retirement and mold your estate plan to fit your specific needs.

 

Bill Hesch is an attorney, CPA, and PFS (Personal Financial Specialist) who is licensed in Ohio and Kentucky and helps clients get peace of mind with their tax, financial, and estate planning.  He focuses his practice in the areas of elder law, corporate law, Medicaid planning, tax law, estate planning, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)

Reason 1 to Avoid Online Estate Planning Documents

The Top 3 Reasons How Online Estate Planning Documents Can Devastate Your Family and Leave Them In Financial Ruin

Reason 1: The Pitfalls of Not Getting Legal Advice from an Attorney Can Cause Your Estate Plan to be Defective Because of Wrong Heirs, Wasteful Spending, and Worthless Investments

In my last blog, I broadly identified the top 3 reasons how online estate planning documents can devastate your family and leave them in financial ruin. Over the next several blogs, I will discuss the first reason: the pitfalls of not getting legal advice from an attorney can cause your estate plan to be defective because of wrong heirs, wasteful spending, and worthless investments.

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Family Vacation Planning-Add an Estate Plan to Your To-Do List

If you are going on a family vacation this summer, you probably have a to-do list that needs to be completed before you leave. Your list might include: packing your bags, confirming hotel rooms, and paying a friend to watch your house and water your plants. However, there is one task that is arguably more important than all the others, and it is typically the most overlooked. That task is to review and update your estate plan with your CPA, estate planning attorney, and financial advisor.

If you listen to the radio or watch the news, you know that traffic accidents occur every day in the Cincinnati and Northern Kentucky area and often someone dies or is seriously injured.

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James Gandolfini Lessons

In June 2013, The Sopranos star, James Gandolfini, died from a sudden heart attack while vacationing in Italy. Gandolfini was survived by his wife, infant daughter, son from a previous marriage, and two sisters. At the time of his death, his estate was valued at an estimated $70 million. Although Gandolfini had a large estate, he did not develop an effective estate plan to safeguard his assets. Although it is very unfortunate to see someone pass away at such a young age (Gandolfini was 51), his death can be used as a lesson for everyone of the importance of having an estate plan that protects their assets for their loved ones.

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Frequent Flyer Obstacles | Hesch Law

Overcoming Obstacles

Frequent flyer miles can be very beneficial if you love to vacation or need to regularly travel for work. If you have spent countless dollars building up your frequent flyer miles, you would probably want unused miles to become a part of your estate in the event of your death. However, there are many obstacles that need to be considered before your heirs and beneficiaries can take your miles outright.

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Proper Estate Planning

Top 10 Mistakes that may devastate your family and their financial security without proper estate planning

1. Failure to make sure you have enough life/disability insurance to provide for your family.

2. Failure to execute a Health Care Power of Attorney, a Living Will, and a Financial Power of Attorney, resulting in your family needing to go through probate court to be appointed your guardian in order to avoid what Terry Schiavo had to do for 10 years – being kept alive on life support with a feeding tube.

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Virtual Assets

Estate planning typically involves implementing a strategy of how you will dispose of your physical assets upon your death. Physical assets can include a home, jewelry, furniture, and automobiles.

However, in today’s high-tech world, some of your assets probably cannot be physically accounted for. These assets can exist online, such as if you have an internet business, a blog that generates income from ads, frequent flyer miles, or a cloud depository for precious family photos. Such assets may continue to accrue untouched income for years or disappear altogether, simply because your heirs and beneficiaries don’t know they exist or don’t know where to access them.

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Document Assistant Danger

The Dangers of Document Assistants

The use of online estate planning documents (i.e. LegalZoom.com) have become widely popular over the last decade. These documents are designed to make estate planning cheaper, faster, and easier. However, if you rely on online documents to plan your estate, you are faced with severe risks that could ultimately make your estate more expensive, more time consuming, and much more difficult for your family. Your family could end up paying more in estate taxes than it would have cost to hire an attorney in the first place, or certain intended beneficiaries of your estate might not take anything.

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Health Care POA

A health care power of attorney is a document that gives specific privileges to an agent for the purpose of making health care decisions for you in the event you become incapacitated or unconscious and are unable to make your own health care decisions. Who you appoint to be that agent, however, can be a difficult choice. Your agent should ideally be someone who knows you well, has an ability to make sound judgments, and knows what decisions you would want to be made in certain situations.

But which agents should you avoid? And what about alternate agents?
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Marital Benefits Future-Same Sex Marriage

If you are in a same-sex marriage, you may have disregarded any Social Security or other federal benefits from your estate plan. That’s because the Defense of Marriage Act (DOMA) made sure that neither spouse in a same-sex marriage got a penny of the other’s federal benefits if the other died first, regardless that you and your loved one contributed the same amount to the programs as every other taxpayer.

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