New York Estate Planning Lawyer Blog

The importance of having a thorough and complete estate plan cannot be overstated. Not only does it protect your wishes, it also ensures that your loved ones are provided for after you are gone. However, the estate planning process is not a one-and-done deal. It is also important to update your estate planning documents to reflect any personal, familial, or financial changes that have occurred in your life. The estates of some famous actors illustrate why it is important to have an updated plan.

The actor Paul Walker, known mostly for his role in the high speed franchise, “The Fast and the Furious,” died tragically at the age of 40 in an automobile accident. At the time of his death, he was survived by his parents, his 15 year old daughter, and a girlfriend of seven years. Mr. Walker did have an estate plan in place with a pour-over will and trust set up for his daughter. Unfortunately, Mr. Walker set up his estate plan twelve years prior – the same year that his first hit franchise movie came out. Since then, his wealth had increased dramatically and he entered into a long-term relationship. Because his plans were never updated his daughter will be inheriting millions more than anticipated, his long-term girlfriend will get nothing, and the family does not have the direction to know what his true last wishes would have been.

Philip Seymour Hoffman provides another good example of why it is important to update your estate planning documents. Mr. Hoffman died at age 46 from a drug overdose earlier this year. At the time of his death he was survived by his companion of fourteen years and mother of his children as well as his three kids ages 10, 7, and 5. At the time of his death, Mr. Hoffman had an estate plan that was created in 2004. It provided for the eldest child who was the only one born at the time, and did not have any language that provided for the case of future children. His two pretermitted children, those born after the creation of the will, are now left in a precarious legal situation. In addition, since the creation of his estate plan Mr. Hoffman had gained significant wealth and acclaim from winning an Oscar and his successful movie career. He never updated his will to manage this new wealth, and as a result of the language of his will all of the assets that go to his longtime companion will be taxed once under his estate and again under her estate when she dies before it goes to their children.

According to 2010 U.S. Census data, 56.7 million Americans, or almost 20 percent of U.S. residents, have a disability. Within this demographic, over 5 million adults need assistance with self-care and independent living activities, including difficulty getting around inside the home, getting into/out of bed, bathing, dressing, eating, toileting, managing money, preparing meals, doing housework, taking prescription medications, and using the phone.

More than half of those with severe disabilities who are age 15 to 64 receive some form of public assistance. Approximately 33 percent receive Social Security benefits and approximately 20 percent receive Supplemental Security Income (SSI) benefits. Some also receive other forms of cash assistance such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) (formerly called food stamps), and public or subsidized housing.

Given the above statistics, many people who are making estate plans will be leaving money or property to someone with a disability who has a special needs situation. However, if the inheritance is not structured properly, the receipt of money or property can negatively impact a person with disabilities’ eligibility for some public assistance programs.

In the Information Age our digital presence and assets are just as important as our physical estate. Digital assets consist of all of our property that exists online. This can include brokerage accounts, bank accounts, PayPal, and online currency such as bitcoin. However, our digital presence extends far beyond that into other areas such as social media accounts, email addresses, online subscriptions, documents, photographs, and digital music libraries. Over 75% of all Americans have some kind of social media account or have an account on a social networking website. When creating an estate plan you need to consider what your wishes are for your digital assets as well as how you would like them to be handled.

The first step in creating a comprehensive digital estate plan is to identify and organize all of your digital assets. A simple way to track these assets is to create an Excel spreadsheet. You can break your digital property into categories in addition to having all pertinent user names, passwords, and other information necessary for access. Excel sheets can be password protected, so for those who are worried about other people gaining access to their online accounts a level of security can be added. Other people keep track of accounts and information in a small notebook or other non-digital means.

The next step is deciding who should be the “trustee” of these accounts. This is the person who would manage all of your wishes for your digital property. This person would distribute assets, delete or erase accounts, or continue to manage any digital accounts that you have. Typically, a family member or friend is named as trustee, but the digital assets could be broken into separate groups with a different trustee for each. The best person, or people, to choose are those who will handle the assets according to your wishes.

For those who are single or childless, estate planning options are vast and often complicated. It is estimated that over 17 million people who are retirement age are unmarried or childless facing this very dilemma. However, a new wave of estate planners are now facing the same issues of those retirees – the young, wealthy, and childless.

Since the tech boom in the 1990s, a considerable number of young entrepreneurs are becoming millionaires and billionaires. Due to their financial circumstances, these people are considering financial and estate planning at a much younger age. The vast majority of this younger generation is childless, some are unmarried, and all are considering what will happen to their wealth when they are gone. Because of this shift in wealth, estate planning attorneys are now stressing income, instead of age, as a more reliable metric for when you should be drafting a plan for your estate.

The most important thing to this new generation of estate planners is flexibility. When planning for the future at this age, there is a higher chance of changing circumstances both personally and financially. The probability of starting a family or having swings in finances is much greater in a person’s 20s and 30s than at the typical retirement age. Estate planning attorneys are now coming up with new and flexible options for this generation of young, wealthy, and childless clients.

Estate planning is meant to provide direction and security for loved ones when we pass away, but complications can arise in the estate planning process when structuring a plan as a married couple. Each person in the marriage has individual estate planning goals, tax-related objectives, and ideas for the future. However, upon probing deeper through the individual wants and needs of the spouses common goals run through the estate planning process of almost all married couples:

· Providing for family and loved ones

This is typically the top priority for all married couples. They want to know that their surviving spouse, children, grandchildren, extended family and friends are all provided for after they are gone. Even pets can be provided for if an estate plan is structured correctly.

As discussed in a prior post, the estate planning process is not a do-it-yourself project. An experienced estate planning attorney is necessary to ensure that all of your wishes are met and that your loved ones are provided for after you pass away. However, after the estate plan has been created, what do you do with it? And what about all of the other, smaller details that come with incapacitation or passing?

New companies are springing up that deal with these specific issues. Instead of sticking the will in a manila envelope in a security deposit box or in the back of a filing cabinet, these companies store all of your estate planning documents online. Some companies allow you to do more than store your estate planning documents online. It helps you make all of the smaller decisions or even send out invitations to your memorial after you pass. These websites also provide for an executor or deputy to also have access to your plans so that they can be carried out once you have passed. These companies are also planning for their own demise – for example, Everplans has already enacted a plan that will allow users to access their estate planning materials up to fifty years after the company has been sold or dissolved.

For those who have already made all of the decisions about memorials, funerals, and smaller details there are still options for storing your estate documents securely online. Dropbox and SecureSafe are cloud storage options where you can upload your documents, and your executor or beneficiaries can access it from anywhere if they know the password. These options give you the benefits of online storage without needing to decide all of the extraneous options.

The current generation of older Americans make up the wealthiest generation this country has ever seen. As the number Baby Boomers (people born between 1946 and 1964) retire or pass on, the United States is expected to see an “inheritance boom” unlike any other in history. At the same time, the generation that stands to inherit this money generally lacks the money management skills to handle these inheritances. But there are some things that the older generation can do to help the younger generation “grow into” its money.

Provide Children And Grandchildren With A Financial Education

Young adults often are launched into adulthood with little or no financial education. In the United States, only four states require students to take a personal finance class in high school. Worse yet, a 2009 study by the University of Arizona and the National Endowment for Financial Education gave students an “F” grade for money management skills. When the study was repeated two and a half years later, students’ money management had declined by an additional 7 percent.

Recent economic times caused many people to take on a lot of home projects that they otherwise would have hired out to a handyman. While some do-it-yourself (DIY) projects turned out alright, people often found that seemingly easy projects were significantly more complicated than they had anticipated. Worse yet, sometimes these DIY projects even end with disastrous consequences, requiring calling in professionals to fix the job at greater hassle and cost than would have originally been incurred if the professional had been called in the first place.

The same can be said for estate planning.

DIY Estate Planning “Kits” And Pre-Packaged Computer Software Are Not The Answer