To Live a Happier life, Start Thinking About Death Now

November 6, 2018

Want to know a proven way to live a more fulfilling life? All you have to do is fully accept the fact that one day you’re going to die. “I am of the nature to die. There is no way to escape death.” -Upajjhatthana SuttaThe unavoidable nature of death is a basic tenet found in every religion. Indeed, the acceptance of death is so important in Buddhism that “impermanence,” or the fact that everything born eventually dies, is at the top of the Buddha’s list of the three universal characteristics of existence. Before religious practice, Tibetan Buddhists chant, “The whole world and its inhabitants are impermanent. The life of human beings is like a bubble. Death comes without warning; this body too will be a corpse.” Such teachings may seem morbid, but they’re actually designed to awaken you from denial and inspire you to fully appreciate life because you never know when it will end. “How sad it is that most of us only begin to appreciate our life when we are at the point of dying.” -Sogyal Rinpoche Numerous individuals have discovered that contemplating and accepting their own mortality is a powerful source of happiness. It may seem counterintuitive, but this isn’t something only found in religious teachings; it’s also been demonstrated by modern science. Countless healthcare professionals report that people facing terminal illness often experience an incredible sense of peace and fulfillment in the days and weeks before they die. Many of them describe the acceptance of death as a life-changing event, confessing they never knew what it meant to live until they knew they were going to die. The same is true for many who undergo a near-death experience (NDE). After staring death in the face, they report that their lives have much greater meaning. They frequently make dramatic life changes because they know without a doubt that any day, even today, might be their last. “It is only in the face of death that man’s self is born.” -St Augustine You’ve undoubtedly heard the key to happiness is to be fully present in each and every moment. This advice is also derived from acceptance of death. By accepting that death is inevitable, we’re inspired to embrace every second of our lives with more gratitude and joy because we know that our existence is so fleeting. If you’ve been avoiding thinking about and preparing for death, you may be missing out on an incredible opportunity. What all of these experiences show us is that death is an essential part of what makes life so sweet. One of the biggest steps in accepting death is to prepare for it with proper estate planning. And proper estate planning is needed, regardless of how big or small you think your estate is, because no matter what, your family is going to have to handle whatever you have when you’re gone. Indeed, facing life’s greatest fear head-on and using it as an opportunity to protect and provide for your family is one of the greatest gifts you can give yourself and those you love. If you’re ready to begin truly living […]

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Who Should Khloé Kardashian Choose as Legal Guardian For Her Child—One Instance Where ‘Keeping Up With the Kardashians’ Might Be A Good Idea

October 30, 2018

You might not be a big fan of their typical life choices, but the Kardashians recently demonstrated impressive wisdom in protecting their minor children using estate planning. During a recent episode of Keeping Up With The Kardashians, Khloé Kardashian was preparing to give birth to her first child, daughter True. Khloé was second-guessing her initial choice to name her sister Kourtney as the child’s legal guardian in the event something happened to her or the baby’s father, Tristan Thompson. During her pregnancy, Khloé spent lots of time with her other sister Kimberly and her family, daughters North, Chicago, son Saint, and husband Kanye West. Watching her interacting with her own kids, Khloé really connected with Kim’s mothering style and pondered if she might be a better choice as guardian. “I always thought Kourtney would be the godparent of my child, but lately I’ve been watching Kim, and she’s been someone I really gravitate to as a mom,” Khloé said. To make things more challenging, Kourtney always assumed she’d be named guardian and said as much. Over the years, Khloé had lots of fun times with Kourtney’s family—sons Mason, Reign, and daughter Penelope—and Kourtney thought her own passion for motherhood would make her the natural choice. For guidance, Khloé asked her mother, Kris Jenner, how she chose her kids’ guardians. Kris’ answer was to compare how her two sisters’ raised their own children. “You just have to think,” Kris told her. “‘Where would I want my child raised, in which environment? Who would I feel like my baby is going to be most comfortable and most loved?’” In the end, Khloé chose Kim over Kourtney. She explained her decision had nothing to do with her respect or love of Kourtney; it was merely about which style of parenting she felt most comfortable with. “Watching Kimberly be a mom, I really respect her parenting skills—not that I don’t respect Kourtney’s, I just relate to how Kim parents more,” said Khloé. “I just have to make the best decision for my daughter.” Lessons learned Khloé’s actions are admirable for several reasons. First off, far too many parents never get around to legally naming a guardian to care for their children in the event of their death or incapacity. Khloé not only made her choice, but she did so before the child was even born. Khloé also took the time to speak and spend time with her sisters beforehand, so the family understood the rationale behind her decision. Khloé was lucky her choices were close family members, so she had ample opportunity to experience both of their parenting styles. Depending on your life situation, you might not be able to spend that much time vetting your choice. But at the very least, you should sit down with each of your top candidates to openly and intimately discuss what you’d expect of them as your child’s new parents. Avoid conflict and court Furthermore, with multiple family members vying for the guardian role, Khloé’s quick action may have prevented a potential nightmare. If she’d delayed naming a guardian and something happened to her, Kourtney, Kim, and […]

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Questions and Answers About Personal Liability Umbrella Insurance

October 23, 2018

It’s no secret that we live in a litigious society. And though our right to a fair trial is one of the hallmarks of American democracy, it has also led to a lawsuit-crazy culture. In this atmosphere, you’re at near-constant risk for costly lawsuits, many times even when you’ve done nothing wrong. This is especially true if you have substantial wealth, but even those with relatively few assets can find themselves in court. If you’re sued, your traditional homeowner’s and/or auto insurance will likely offer you some liability coverage, but those policies only protect you up to certain limits before they max out. Given this, you should consider adding an extra layer of protection by investing in personal liability umbrella insurance. What is umbrella insurance? Umbrella insurance offers a secondary level of protection against lawsuits above and beyond what’s covered by your homeowners, auto, watercraft, and/or other personal insurance policies. For instance, if someone is injured in your home, they might sue you for their medical bills and lost wages. Your homeowner’s insurance will cover you up to a certain dollar amount, but you’re personally liable for anything beyond that limit. This is where umbrella insurance kicks in. Once your underlying insurance maxes out, the umbrella policy will help pay for the resulting damages and legal expenses if you lose the case. If you win, it can help cover your lawyer’s fees. Who should purchase it? Umbrella insurance is particularly important for those with a high net worth. But seeing that everyone has the potential to be sued, it’s a good idea even for those without substantial assets. Indeed, if you’re sued and lose, the judgment against you may exceed the value of your current assets. In such a case, the court can allow the plaintiff to go after your future earnings, potentially garnishing your wages for years. To this end, umbrella insurance not only protects your current assets, but your future ones as well. How much coverage do I need? Most people will be adequately covered with a $1 million umbrella policy. If you earn more than $100,00 a year or have more than $1 million in assets, you may want to invest in additional coverage. A good rule of thumb is to buy an umbrella policy with coverage limits that are at least equal to your net worth. How much does umbrella insurance cost? Umbrella insurance is fairly inexpensive. You can buy a $1 million umbrella liability policy for between $150 and $300 per year. An additional million in coverage will run you about $100, and roughly $50 for every million beyond that. Umbrella policies are inexpensive because they only go into effect after your underlying homeowners or auto policy is exhausted. In light of this, most insurers require you to have at least $250,000 in liability on your auto policy and $300,000 on your homeowners before they’ll sell you a $1 million umbrella policy. How can I purchase umbrella insurance? You can buy an umbrella policy from the same insurance company you use for your other policies. In fact, some companies require you to purchase all of […]

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What Happens to Your Facebook Account When You Die?

October 16, 2018

If you’re active on social media, Facebook probably plays a prominent role in your life. And now the social media titan can even play a role in your afterlife. Today, estate planning encompasses not only your tangible assets—bank accounts and real estate—but your digital assets as well, such as cryptocurrency, websites, and social media accounts. Though social media may seem trivial compared to the rest of your personal property, a Facebook account functions as a virtual diary of your daily life, making it a key part of your legacy—and one you’ll likely want to protect. Because social media is so new, there are very few state laws governing how your Facebook account should be handled upon your death. In light of this, Facebook itself is in nearly total control of what happens to your profile after you die. And without proper planning, your post-mortem Facebook presence can haunt the loved ones you leave behind. Since roughly 8,000 Facebook users die every day, the company has created a few options for dealing with your account once you’re gone. While it’s possible for you to take care of this on your own, many people are working with legal professionals like us to incorporate these digital assets into their overall estate plan to ensure their legacy is properly preserved and protected. Here are three options for what you can do with your Facebook account when you die: 1. Do nothing Unless Facebook is notified of your death, it assumes you’re still alive, and your profile remains active indefinitely. While this might not seem like a big deal, your profile will continue to be included in Facebook searches, People You May Know suggestions, and birthday reminders. Your friends and family likely won’t want to be constantly reminded of your absence, and even worse, ex-friends and/or trolls will be able to post potentially hurtful messages on your timeline. To shield your loved ones from this kind of thing, you should go with one of the other options. Have the account deleted You can notify Facebook that you’d like to have your account permanently removed from its servers upon your passing. Alternatively, a friend, family member, or your executor can make the same request after your death. This will completely delete your profile and all of its associated content from Facebook for good. Additionally, one of these individuals can request that your account’s content be downloaded and saved before the profile is deleted. Content that’s eligible for download includes wall posts, photos, videos, profile info, events, and your friend list. However, Facebook will not allow any third-party to access or download your personal messages or login information. Memorialize the account In 2009, Facebook began allowing accounts of the deceased to be “memorialized” at the request of a friend or family member. Once an account has been memorialized, only confirmed friends can see the profile or find it in a search. Your memorialized profile will no longer appear in friend suggestions, nor will anyone receive birthday updates or other account notifications. When your account is memorialized, the word “Remembering” will be added next to your name on […]

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Don’t Transfer Ownership of Your House to Your Kids Before You Read This

October 9, 2018

With the cost of long-term care (LTC) skyrocketing, you may be concerned about your (or your elderly parents’) ability to pay for lengthy stays in assisted living and/or a nursing home. Such care can be massively expensive, with the potential to overwhelm even the well-off. Because neither traditional health insurance nor Medicare will pay for LTC, some people are looking to Medicaid to help cover this cost. To become eligible for Medicaid, however, you must first exhaust nearly every penny of your savings. Given this, you may have heard that if you transfer your house to your adult children, you can avoid selling the home if you need to qualify for Medicaid. You may think transferring ownership of the house will help your eligibility for benefits and that this strategy is easier and less expensive than handling your home (and other assets) through estate planning. However, this tactic is a big mistake on several levels. It can not only delay—or even disqualify—your Medicaid eligibility, it can also lead to numerous other problems. Medicaid Changes In February 2006, Congress passed the Deficit Reduction Act (DRA), which included a number of provisions aimed at reducing Medicaid abuse. One of these was a five-year “look-back” period for eligibility. This means that before you can qualify for Medicaid, your finances will be reviewed for any “uncompensated transfers” of your assets within the five years preceding your application. If such transfers are discovered, it can result in a penalty period that will delay your eligibility. For every $6,422 worth of uncompensated transfers made within this five-year window, your Medicaid benefits will be withheld for one month. Any transfers made beyond that five-year period will not be penalized. So, if you transfer your house to your children and then need LTC within five years, it may significantly delay your qualification for Medicaid benefits—and possibly prevent you from ever qualifying. Rather than taking such a risk, consult with us to discuss safer and more efficient options to help cover the rising cost of LTC such as long-term care insurance. A potentially huge tax burden Another drawback to transferring ownership of your home is the potential tax liability for your child. If you’re elderly, you’ve probably owned your house for a long time, and its value has dramatically increased, leading you to believe that by transferring your home to your child, he or she can make a windfall by selling it. Unfortunately, if you do that, she or he will have to pay capital gains tax on the difference between your home’s value when you purchased it and your home’s selling price at the time it’s sold by your child. Depending on the home’s value, these taxes can be astronomical. In contrast, by transferring your home at the time of your death, your child will receive what’s known as a “step-up in basis.” It’s one of the only benefits of death, and it allows your child to pay capital gains taxes when he or she sells your home, based only on the difference between the value of the home at the time of inheritance and its sales price, […]

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Aretha Franklin Dies Without a Will and Leaves Her Family to Deal With Court and Conflict

October 2, 2018

Aretha Franklin, heralded as the “Queen of Soul,” died from pancreatic cancer at age 76 on August 16th at her home in Detroit. Like Prince, who died in 2016, Franklin was one of the greatest musicians of our time. Also like Prince, however, she died without a will or trust to pass on her multimillion-dollar estate. Franklin’s lack of estate planning was a huge mistake that will undoubtedly lead to lengthy court battles and major expenses for her family. What’s especially unfortunate is that all of this trouble could have been easily prevented. A common mistake Such lack of estate planning is common. A 2017 poll by the senior-care referral service, Caring.com, revealed that more than 60 percent of U.S. adults currently do not have a will or trust in place. The most common excuse given for not creating these documents was simply “not getting around to it.” Whether or not Franklin’s case involved similar procrastination is unclear, but what is clear is that her estimated $80-million estate will now have to go through the often lengthy court process known as probate, her assets will be made public, and there could be a big battle brewing for her family. Probate problems Because Franklin was unmarried and died without a will, Michigan law stipulates that her assets are to be equally divided among her four adult children, one of whom has special needs and will need financial support for the rest of his life. It’s likely that caregivers for her son will need to decide whether to accept the inheritance coming to him and lose all governmental support he may’ve been able to receive, or they may have to disclaim all of the inheritance from his mother’s estate. It’s also possible that probate proceedings could last for years due to the size of her estate. And all court proceedings will be public, including any disputes that arise along the way. Such contentious court disputes are common with famous musicians. In Prince’s case, his estate has been subject to numerous family disputes since he died two years ago, and that even led to the revocation of a multimillion-dollar music contract. The same thing could happen to Franklin’s estate, as high-profile performers often have complex assets, like music rights. Because these court battles will be public, not only will the contents of Franklin’s estate be available for everyone to see, but her family’s potential squabbles will likely be the subject of news headlines. All of these things could’ve been prevented with a well-drafted and counseled estate plan. Learn from Franklin’s mistakes Although Franklin’s situation is unfortunate, you can learn from her mistakes by beginning the estate planning process now. It would’ve been ideal if Franklin had a will, but even with a will, her estate would still be subject to probate and open to the public. To keep everything private and out of court altogether, Franklin could’ve created a will and a trust. And, within a trust, she could have created a Special Needs Trust for her child who has special needs, thereby giving him full access to governmental support, plus supplemental support […]

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How to Talk to a Loved One About Estate Planning

September 25, 2018

Estate planning rarely comes up in the course of regular conversation and if it does, it is usually involves what has happened to a celebrity’s fortune after his or her death.  The distance is safe, so the conversation can take place. But what if you need to discuss estate planning with a loved one – either your own estate plan or the one they have (or should have)?  Because no one likes to talk about the death of someone close to them, we rarely have this critical conversation.  But we all should. So how do you talk to a loved one about estate planning?  A this article provides some good tips: Pick the right time.  If it is too difficult to schedule a time for this conversation, have it when you’re doing something else, like taking a walk. Start with a story.  Use a story as an opener to the conversation, like the death of a celebrity and the havoc that failure to plan is wreaking on his or her estate or how you created your own estate plan. Talk separately.  It may be easier for parents with more than one child to have separate conversations with each child rather than talking to a group. Use a team approach.  If you are having difficulty getting your spouse to focus on estate planning issues, communicate your concerns as a couple.  Talk about how aging means making mature decisions and how you need to protect children with estate planning. Ask for feedback.  After discussing your estate plan with your children, ask them individually how they feel about what you have explained.  It may not change what you are doing, but it will let them feel they have a voice. Explain why.  Explain to your children the principles that guided your decision about how your estate is being divided.  This lessens the chance of conflict among siblings. If you’d like to learn more about estate planning strategies for your family, 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.

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Avoid This Major Mistake When Adding an IRA to Your Estate Plan

September 18, 2018

Some people assume that because they’ve named a specific heir as the beneficiary of their IRA in their will or trust that there’s no need to list the same person again as beneficiary in their IRA paperwork. Because of this, they often leave the IRA beneficiary form blank or list “my estate” as the beneficiary. But this is a major mistake—and one that can lead to serious complications and expense. IRAs aren’t like other estate assets First off, your IRA is treated differently than other assets, such as a car or house, in that the person you name on your IRA’s beneficiary form is the one who will inherit the account’s funds, even if a different person is named in your will or in a trust. Your IRA beneficiary designation controls who gets the funds, no matter what you may indicate elsewhere. Given this, you must ensure your IRA’s beneficiary designation form is up to date and lists either the name of the person you want to inherit your IRA, or the name of the trustee of your trust, if you want it to go to a revocable living trust or special IRA trust you’ve prepared. For example, if you listed an ex-spouse as the beneficiary of your IRA and forget to change it to your current spouse, your ex will get the funds when you die, even if your current spouse is listed as the beneficiary in your will. Probate problems Moreover, not naming a beneficiary, or naming your “estate” in the IRA’s beneficiary designation form, means your IRA account will be subject to the court process called probate. Probate costs unnecessary time and money and guarantees your family will get stuck in court. When you name your desired heir on the IRA beneficiary form, those funds will be available almost immediately to the named beneficiary following your death, and the money will be protected from creditors. But if your beneficiary has to go through probate to claim the funds, he or she might have to wait months, or even years, for probate to be finalized. Plus, your heir may also be on the hook for attorney and executor fees, as well as potential liabilities from creditor claims, associated with probate, thereby reducing the IRA’s total value. Reduced growth and tax savings Another big problem caused by naming your estate in the IRA beneficiary designation or forgetting to name anyone at all is that your heir will lose out on an important opportunity for tax savings and growth of the funds. This is because the IRS calculates how the IRA’s funds will be dispersed and taxed based on the owner’s life expectancy. Since your estate is not a human, it’s ineligible for a valuable tax-savings option known as the “stretch provision” that would be available had you named the appropriate beneficiary. Typically, when an individual is named as the IRA’s beneficiary, he or she can choose to take only the required minimum distributions over the course of his or her life expectancy. “Stretching” out the payments in this way allows for much more tax-deferred growth of the IRA’s invested […]

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Caregivers

Do Your Homework to Ensure Your Kids Are Properly Cared For No Matter What Happens

September 11, 2018

It’s back-to-school time again, and when it comes to estate planning you may have homework to do. As a parent, your most critical—and often overlooked—task is to select and legally document guardians for your minor children. Guardians are people legally named to care for your children in the event of your death or incapacity. If you haven’t done that yet, you should immediately do so using our easy-to-use (and absolutely free) website, where you can create legal documents naming the long-term guardians you’d want to care for your children if you could not: www.protectmykidsma.com Don’t think just because you’ve named godparents or have grandparents living nearby that’s enough. You must name guardians in a legal document, or risk creating conflict and a long, expensive court process for your loved ones—and this can be so easily avoided. Covering all your bases However, naming permanent guardians is just one step in protecting your kids. It’s equally important to have someone (plus backups) with documented authority, who can stay with your children until the long-term guardians can be located and formally named by the court, which can take months. The last thing you want is for police to show up at your home and find your children with a caregiver, who doesn’t have documented or legal authority to stay with them and doesn’t have any idea how to contact someone with such authority. In such a case, police would have no choice but to call Child Protective Services. Closing the gap This is a major hole in many parent’s estate plans, as we know you’d never want your kids in the care of strangers, even for a short time. To fix this, we’ve created a comprehensive system called the Kids Protection Plan®, which lets you name temporary guardians who have immediate documented authority to care for your children until the long-term guardians you ‘ve appointed can be notified and get to your children. The Kids Protection Plan® also includes specific instructions that are given to everyone entrusted with your children’s care, explaining how to contact your short and long-term guardians. The plan also ensures everyone named by you has the legal documents they’d need on hand and knows exactly what to do if called upon. We even provide you with an ID card for your wallet and emergency instructions to post on your refrigerator, so the contacts and process are prominently available in case something happens to you. A foolproof plan With the Kids Protection Plan®, you’ll name one permanent guardian and one temporary guardian, along with two or more backups, in case the primary isn’t available or cannot serve. And we instruct caregivers to NEVER CALL POLICE IF YOU CANNOT BE REACHED UNTIL ONE OF THE NAMED GUARDIANS ARRIVES AND IS PRESENT WITH YOUR CHILDREN. Finally, if there’s anyone you’d never want raising your children, we confidentially document that in the plan, preventing them from wasting the time, energy, and assets of the people you do want caring for your children. With us as your Personal Family Lawyer®, you have access to the entire Kids Protection Plan® system to ensure the well-being […]

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Filing Claim for Life Insurance Policy

The Ins and Outs of Collecting Life Insurance Policy Proceeds

September 4, 2018

Unlike many estate assets, if you’re looking to collect the proceeds of a life insurance policy, the process is fairly simple provided you’re named as the beneficiary. That said, following a loved one’s death, the whole world can feel like it’s falling apart, and it’s helpful to know exactly what steps need to be taken to access the insurance funds as quickly and easily as possible during this trying time. And if you’ve been dependent on the deceased for regular financial support and/or are responsible for paying funeral expenses, the need to access insurance proceeds can sometimes be downright urgent. Here, we’ve outlined the typical procedure for claiming and collecting life insurance proceeds, along with discussing how beneficiaries can deal with common hiccups in the process. However, because all life insurance policies are different and some involve more complexities than others, it’s always a good idea to consult with a Personal Family Lawyer® if you need extra help or guidance. Filing a claim To start the life insurance claims process, you first need to identify who the beneficiary of the life insurance policy is—are you the beneficiary, or is a trust set up to handle the claim for you? We often recommend that life insurance proceeds be paid to a trust, not outright to a beneficiary. This way, the life insurance proceeds can be used by the beneficiary, but the funds are protected from lawsuits and/or creditors that the beneficiary may be involved with—even a future divorce. In the event that a trust is the beneficiary, contact us so that we can create a certificate of trust that you (or the trustee, if the trustee is someone other than you) can send to the life insurance company, along with a death certificate when one is available. In any case, you (or the trustee) will notify the insurance company of the policyholder’s death, either by contacting a local agent or by following the instructions on the company’s website. If the policy was provided through an employer, you may need to contact their workplace first, and someone there will put you in touch with the appropriate representative. Many insurance companies allow you to report the death over the phone or by sending in a simple form and not require the actual death certificate at this stage. Depending on the cause of death, it can sometimes take weeks for the death certificate to be available, so this simplified reporting speeds up the process. From there, the insurance company typically sends the beneficiary (or the trustee of the trust named as beneficiary) more in-depth forms to fill out, along with further instructions about how to proceed. Some of the information you’re likely to be asked to provide during the claims process include the deceased’s date of birth, date and place of death, their Social Security number, marital status, address, as well as other personal data. Your state’s vital records office creates the death certificate, and it will either send the certificate directly to you or route it through your funeral/mortuary provider. Once you’ve received a certified copy of the death certificate, you’ll send it […]

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