Asset Protection

Why Probate & Estate Administration Is an Essential Aspect of Your Estate Plan

August 17, 2020Filed Under: Asset Protection, Elder Law, Estate Planning

Old Woman Pondering Life Decisions

Probate is the legal process that decides how a person’s assets will be distributed and their debts paid after his or her death. If your loved one owned his or her assets through a well-drafted and properly funded living trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased’s assets. The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court. Probate and estate administration can be overwhelming, especially if the estate includes large amounts of assets, one or more businesses, or property in multiple locations.

Each probate and estate administration case varies depending on the circumstances, but certain steps remain constant. I can help you through this process:

Filing of a petition with the proper probate court
Notice to heirs under the Will or to statutory heirs (if no Will exists)
Petition to appoint Executor (in the case of a Will) or Administrator for the estate
Inventory and appraisal of estate assets by Executor/Administrator
Payment of estate debt to rightful creditors
Sales of estate assets
Payment of estate taxes, if applicable
Final distribution of assets to heirs

Estate Planning Guide Essentials: Personal Property Memorandum

August 10, 2020Filed Under: Asset Protection, Elder Law, Estate Planning, Misc Advice, Senior Health and Wellness

Happy senior couple from behind looking at front of house and car

Family members often end up arguing over mom or dad’s favorite items when that parent dies. Arguments can take place over things like a coffee mug, a piece of jewelry or a painting. These types of arguments can be eliminated by filling out a personal property memorandum and keeping it with your will or trust.

A personal property memorandum is designed to cover who should receive items owned that don’t have an official title record. Personal property includes furniture, jewelry, art, and other collections, as well as household items like china and silverware. Personal property memoranda may not include real estate or business interests, money and bank accounts, stocks or bonds, copyrights, and IOUs.

When writing your memorandum, it is best to keep things simple. Personal property memoranda generally resemble a list of items with the attached names of the inheritors. It can be handwritten or typed but should always be signed and dated.

All items should contain sufficient detail so that argument and confusion can be avoided. Complete contact information including address, phone, email, and a backup contact if possible should be included. Do not include items that you have already explicitly left in your will or trust.

The beauty of a separate list of personal items and their planned distribution is that if you later decide to change who receives what, you simply update your current list, or replace the list altogether. You can destroy an old record or maintain signature and dates on each of your personal property memoranda so that it is easy to identify your most current set of wishes.

A personal property memorandum for your tangible personal effects is a simple way to address how you want your personal property to be distributed. We would be happy to help you create a legal personal property memorandum along with any other estate planning documents you may need.

Passing On Family Values As Part of Your Estate Plan

August 6, 2020Filed Under: Asset Protection, Estate Planning, Senior Health and Wellness

Multl generation family in autumn park having fun

Successfully addressing and legally formalizing inheritance of family values and assets can be challenging, especially if parents wait too long to begin instilling family values. Undoubtedly the best time to teach and empower your children as eventual inheritors of your family legacy is during childhood, then continuing throughout adulthood. Waiting until your later stages in life to discuss family values as a guide to handling inherited worth is often ill-received as grown adult children prefer not to feel parented anymore, particularly when they are raising children of their own.

There is value in the spiritual, intellectual, and human capital of rising generations, and it is incumbent upon older generations to embrace this notion and work with their heirs rather than dictating to them their ideas about how to facilitate better outcomes. While the directions taken by newer generations will likely differ and can sometimes be downright frightening than that of their elders, there can still be a deep sense of service and responsibility to family values and stewardship of inherited wealth. Allow your children to exert their influence over the family enterprise early on in life and make adjustments that create synergy, connection, and like-mindedness.

If this description of a somewhat ideal family system does not resemble yours, take heart. Most families do not conform to perfect standards of interaction. The more affluent a family is, the higher the failure rate to disperse assets without severe fallout. The Williams Group conducted a 20-year study and determined there is a 70 percent failure rate that includes rapid asset depletion and disintegration of family relationships during and after inheritance. Establishing inheritable trusts can provide real benefits. Benefits include avoiding probate, reducing time to handle estate matters, privacy protection, the elimination or reduction of the estate tax, and can be effective pre-nuptial planning. A parent who wants to control outcomes should focus on these benefits of the trust instead of trying to legislate their future adult children’s behavior.

It is imperative not to allow your values and legacy to become weaponized within the family system. A sure-fire way to inspire conflict is via “dead hand control,” meaning trying to control lives from the grave. Most often, if you put excessive trust restraints on adult children, they will act accordingly to your perception that they are not adult enough to handle wealth. Instead, consider enrolling them in a few classes about managing wealth. Spark an interest in them to learn how you have created wealth, the mechanisms you used, and what their future endeavors may look like long after you are gone. Formally educate your children about finances, the earlier the better, and instead of talking about who gets what the conversation can shift to the mechanics of managing wealth. This tactic resets the context of the issue and aligns purpose and intended long term outcomes.

Estate planners try to encourage trust choices that lead to flexibility. If a beneficiary is genuinely incapable of making the right decisions, a trustee can be appointed to make distributions in the beneficiary’s best interest. This trustee discretionary power of money management can help a well-funded trust survive for generations.

You can also write a letter of wishes or provide a statement of intent to your children. Though these are not legally binding, it gives you a platform to remind them of family values and your desire for these values to be maintained for future family generations. This type of letter is an opportunity for you to convey your vision for how your wealth can bring growth and chance for fulfillment to beneficiaries.

Prosperity should positively shape lives. Family trust beneficiaries hopefully already have a self-driven life that includes purpose, responsible behavior, and a basic understanding of personal finance. If you worry your children may squander inheritable assets, create the opportunity for them to succeed through classes that teach them about managing legacy family values and wealth. Address your concerns legally and directly through a detailed trust that can help but not overly constrain them to achieve what you envision they can become. Start an honest conversation early on, but remember it is never too late to make good choices and create positive family value influences for the coming generations. A well-known Ann Landers quote sums it up neatly, “In the final analysis it is not what you do for your children but what you have taught them to do for themselves that will make them successful human beings” – a worthy goal of any family value system.

If you are interested in establishing a trust to pass wealth on to your children, we can help. We can also guide families on how to pass on family values in a meaningful way. We look forward to the opportunity to work with you.

GETTING MARRIED? YOU MAY WANT TO CONSIDER A PRENUP!

July 26, 2020Filed Under: Asset Protection, Dissolution, Divorce, Property Division

By Chris Diedling

If you are engaged and planning a wedding, this is supposed to be one of the happiest times in your life. You are soon to be married to the love of your life and your “happily ever after” is all that matters, right? The last thing you want to think about is what happens if you and your future spouse get divorced. However, as much as a marriage is the ultimate, intimate bond between two people who love each other, marriage is also a formal, civil contract between you, your partner, and the State. This civil contract comes with certain rights and legal obligations concerning assets, debts, and finances.

To put it simply, you are signing up for a lot more than “happily ever after” Marriage is a legal commitment involving sharing of property, debt, and the duty of support. The decision to enter into a prenuptial agreement is one that ought to be discussed by every soon-to-be-married couple. This discussion is a crucial planning tool for couples to get on the same page before any issues arise. Rapper Kayne West perhaps said it best about prenups, “It’s something that you need to have because when she leaves your a**, she’s gonna leave with half”

WHAT IS A PRENUP?
A prenuptial agreement, also known as a premarital agreement, antenuptial agreement, or colloquially referred to as a “prenup,” is a written contract entered into by a couple prior to a marriage. This contract establishes the property and financial rights of each spouse in the event of a divorce or separation. A prenuptial agreement determines at least three important questions to be answered in a future marriage termination: 1) How your assets & debts will be divided; 2) How your assets & debts will be categorized; 3) Whether either party will be paying support to the other.

WHY WOULD I NEED A PRENUP?
You may be reading this article with skepticism and have thoughts such as, “if my future spouse and I really love each other, we wouldn’t need a prenup” or that “prenups are only for couples who can’t fully trust each other.” This is a perfunctory and naïve way of thinking. It is so easy to be blinded by love and the idea of “happily ever after” to the point where you never stop to consider the reality of marriage.
Some other common misconceptions and falsehoods about prenups include: “prenups are only for wealthy people,” “I have zero assets going into the marriage, I don’t need a prenup” “a prenup automatically means no future spousal support or alimony,” “prenups show a lack of commitment or faith in the marriage.”

All of these notions are completely false. Many of these myths have caused reasonable, intelligent people to entirely dismiss the whole idea of a prenup when planning their wedding. Some have been lucky enough to never know the consequences of not having one; others wish they would have had a prenup.

I am not trying to rain on your joyous wedding parade in the least. By all means, there is absolutely nothing wrong with being ecstatic about your upcoming marriage! Love and happiness are both real and attainable and you should be thrilled on reaching that point with your soul mate! But, it is equally important to acknowledge reality and plan responsibly for the future. After all, responsible adults commonly plan for life events, both positive and negative, as everyday occurrences. We utilize insurance policies to plan for disasters such as floods, fires, and car accidents, etc. We use estate plans to distribute assets to our beneficiaries after we’re gone. We set up trusts and college funds for our children. We invest and save for the future. Why should a prenuptial agreement be any different? Forget the minimal, temporary discomfort in approaching the subject with your partner. The reality is, at least 50% of marriages end in divorce and that statistic could be increasing according to recent studies.

Wouldn’t you want to be prepared for any event that has at least a 50% chance of occurring?
A prenuptial agreement is not planning for a likely marital failure. Rather, it is a vital tool for couples who genuinely trust each other enough to reach a comfortable agreement on the terms of a separation in the event the marriage does fail. Instead of looking at a prenup as a lack of trust or commitment in a marriage, look at it as an indicator of common sense!
A top-notch family law attorney once told me, “never marry someone you couldn’t stand to get divorced from.” Valuable advice indeed. If you are able to discuss the issues covered by a prenuptial agreement with your future spouse, you are planning for success. After discussing these issues, you and your partner will have a better understanding of each other’s expectations and a lot of future conflict can be avoided.

WHAT DOES A PRENUP DO FOR YOU?
A prenup will serve as a roadmap for an amicable resolution in the context of separation and through all of strife that comes with it. A prenup can save a lot of time, expense, and emotional hardship should a divorce ever occur.
Identify and allocate separate and marital property/debt: The prenup can identify each spouse’s separate property and/or debt and how these assets/liabilities shall be treated if a divorce should occur. You can also decide how marital property will be divided rather than leaving it up to the court to decide through divorce proceedings.
Spousal support considerations: The prenup can be used to guarantee either spouse a minimum amount of spousal support in the event of divorce. A couple can agree on no spousal support, a fixed or sliding amount, payments for a finite period of time or until a triggering event (such as remarriage) occurs. Keep in mind that all prenuptial agreements are subject to a court’s review and if your agreement isn’t fair, the court could invalidate the provision.
Allow children from a prior marriage to inherit separate property: The prenup can ensure that children from a prior marriage inherit their share of your estate when you die. Without a prenup, the surviving spouse may have the right to claim a large portion of the deceased spouse’s property, leaving little to nothing for the children of the prior marriage.

WHAT DOES A WELL-DRAFTED PRENUP NEED?
The most essential factor for a successful and legally valid prenup is full and complete disclosure of each spouse’s assets and debts going into the marriage. Full disclosure ensures that the prenup process is both fair and equitable in the eyes of the court.
Additionally, every valid prenup must be in writing and voluntarily signed by the parties. The prenup must be fair and reasonable and both parties must understand and clearly indicate such understanding of the agreement. Both parties must have had adequate opportunity to consult with legal consul. It is highly recommended that both parties to a prenup obtain legal representation. You will want to contact and attorney to ensure your prenup is prepared and executed in compliance with the law.

HOW CAN I GET A PRENUP?

If you would like to contact Chris to discuss a prenuptial agreement, please call 513-771-2444 to schedule a free 30-minute consultation!

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Why Probate & Estate Administration Is an Essential Aspect of Your Estate Plan

Estate Planning Guide Essentials: Personal Property Memorandum

Passing On Family Values As Part of Your Estate Plan

GETTING MARRIED? YOU MAY WANT TO CONSIDER A PRENUP!

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