The Benefits of Planning

The loss of a loved one is difficult enough without having to plan and pay for a funeral. With a little foresight, you can save your loved ones from unnecessary stress. While death is an eventuality, few people seem to want to plan for it. Everyday 7,195 Americans die leaving family and loved ones to pick up the pieces. One of the easiest ways to reduce the stress on your loved ones is to provide funeral instructions.These instructions may include: how you would like your remains to be treated (cremation or traditional burial), how you would like your organs to be treated (medical donation, scientific donation or traditional burial), what type of memorial service you would like, and what type of grave marker you would like.

By planning now, you can help to reduce some of the pain and stress associated with the loss of a loved one. Your family will be able to mourn without having to worry about making important funeral plans.

No one wants to find themselves the occupant of a nursing home and yet that is where many people will end up in their autumn years of life. According to the Centers for Disease Control, more than 1.4 million people resided in nursing homes in 2014. A sadly common aspect of life in a nursing home is the possibility of elder abuse. Elder abuse is a topic that few people wish to discuss despite being an issue that merits discussion. Many nursing homes around the country have taken to arbitration agreements as an attempt to limit their liability when it comes to elder abuse. Here’s what you need to know before committing yourself or someone you love to a nursing home with an arbitration agreement.

No Universal Protections

Many states have laws in place to protect elderly residents of nursing homes, even including a right to attorneys’ fees for successful plaintiffs and a recovery for pain and suffering of nursing home clients that survives their death. Such an example of this is the Elder Abuse and Dependent Adult Civil Protection Act in California. The act is designed to protect its elderly citizens residing in nursing homes from physical and financial abuse, providing special legal remedies and damages for senior citizens in nursing homes.

Special needs trusts are helpful estate planning tools that allow family members to leave behind assets to loved ones with special needs without risking the beneficiary’s ability to receive Supplemental Security Income and Medicaid benefits. Without a special needs trust, any extra income that they receive such as an inheritance may inadvertently disqualify them from receiving public benefits or cause the inheritance to be seized to pay for those benefits. With a special needs trust, the beneficiary gets the best of both worlds, with the trust funds being used to pay for a wide range of necessities like clothing, education and medical bills.

However many special needs trusts may inadvertently, either due to poor wording or mismanagement, cause themselves to not be considered by the government to be special needs trusts. When this happens, the intent of the trust is frustrated and the assets of the trust may disqualify the beneficiary from public benefits under the United States government means test.

The primary issue that often arises with a special needs trust is that the trust is not recognized as a special needs trust and is instead labeled as a support trust. A support trust is similar to a special needs trust in that it gives support to the special needs beneficiary. However, when determining eligibility under the means tests, public agencies will consider the assets of a support trust to be attributable to the special needs beneficiary. This means that the support trust may disqualify the beneficiary from qualifying for the benefits they need.

It seems that Muhammad Ali’s estate is destined for trouble, similar to other celebrity estates that we have covered on this blog recently. It is unknown if the boxing legend died with a will, but even if he did, a will contest may be likely. Forbes reports that Mr. Ali died with an estate worth in between $50 and $80 million, had nine recognized children, four different marriages, and struggled with a debilitating disease that affects the mind. These are the circumstances that set the stage for a drawn out estate contest.

Troublesome Children

The large amount of children Mr. Ali had, as well as his four marriages, makes the number of people who may have an interest in contesting Mr. Ali’s estate quite high. One child in particular, Muhammad Ali Jr., has been estranged from his father since Mr. Ali’s fourth and final marriage in 1986 and has been cut off from the family fortune ever since. Ali Jr. in particular blames Mr. Ali’s fourth wife for driving him and his father apart.

A person planning their estate for the first time is confronted with a lot of uncomfortable questions that they most likely have never had to address. There are medical decisions to be made, executors and trustees to be chosen and appointed, burial instructions to spell out, and perhaps most importantly for some, deciding who will inherit from you when you pass on. This question can often be a prickly subject amongst families, with spouses disagreeing and children being angered by the ultimate decisions.

Someone Will Always Be Upset

There are many different strategies that testators, those preparing their will, employ in deciding who will inherit from their estate and how much they will be inheriting. Many parents are often uncomfortable with leaving their children unequal amounts of inheritance. Often testators believe that if they leave an unequal amount amongst the children that it may indicate that they loved or preferred one child over the others.

2016 will not relent in claiming high profile celebrities. This week’s death was as tragic as it was needless. Anton Yelchin, aged only 28, an only child, was killed in his Hollywood home’s driveway when his Jeep rolled down a slope and pinned him between a brick wall and the car, possibly due to a known defect in the Jeep. Mr. Yelchin, most prominently known for his starring roles in Odd Thomas and Charlie Bartlett, will be deeply missed by all.

An Estate Unplanned

There is no information currently available about whether or not Mr. Yelchin had a will or an estate plan when he passed, but if he is like the majority of Americans, chances are that he did not even have a simple will. According to a survey by Rocket Lawyer, 51 percent of Americans age 55 to 64 do not have wills. Even worse, 62 percent of those ages 45 to 54 have never drafted a will. The lower the age, the higher the chance that that person does not have a will.

Who you name as a trustee is possibly the most important decision that a person who decides to create a trust will make. The trustee is responsible for distributing income and principal to the beneficiaries of the trust according to the terms of the trust. This typically involves extensive recordkeeping, managing investments and property and being in contact with beneficiaries and other professionals to help manage the assets. Traditionally many people have named trusted individuals such as friends or family to administer the trust, but these days many people turn to corporate trustees for managing trust assets. What are the benefits of a corporate trustee over a personal trustee?

Personal or Corporate

Typically, many settlors, the person who brings the trust into existence, will name themselves, a family member or a friend as the trustee. After all, being a trustee is a major responsibility and failure to administer a trust properly may result in liability being taken on by the trustee, which is why it makes sense to name someone that a settlor has a lot of trust and a strong relationship with.

No one likes discussing their own demise. The topic is generally considered taboo amongst most people and is possibly the most uncomfortable conversation topic. This is unfortunate for everyone though, because if a person is unable to discuss their own death, chances are they are unwilling to plan for it either. That is one of the worst cases possible for not just for the person who fails to plan but their family members and people who rely on them as well. Discussing death is the first step to engaging people to plan their estate and while it is a difficult topic to broach, there are certain steps that a person can take to help bring people closer to planning their estate.

  1. Do Not Put Estate Planning In Terms of Death

People looking to engage others about estate planning should not discuss death, rather they should focus on planning for incapacity. A good estate plan does not just encompass what happens when a person dies. It will also discuss plans for what happens when a person becomes incapacitated such as if they are in an accident and unable to communicate and are unconscious.

Dr. Martin Luther King Jr. left behind a legacy of peace and understanding, but he may have been surprised by the legacy that his estate is forging. Last Friday, a Fulton County Superior Court Judge declined to make a ruling in a dispute over two items left behind by Dr. Martin Luther King Jr, his Bible and his Nobel Peace Prize. Fox News reports that the case over these two items is likely to go to trial, with King’s estate, controlled by his two sons, against their sister, Bernice. This is only one of many lawsuits that have crept up in years past over the legacy of Dr. King.

Managing Estate Assets and Legacies

Dr. Martin Luther King Jr’s estate is not technically what many would consider an estate in the traditional sense. It is not a probate estate, with his assets being liquidated according to his will. Rather, Dr. King’s estate is the for-profit Martin Luther King Jr. Estate Inc. with his three surviving children being the sole shareholders and directors. As the sole shareholders and directors, his three children control Dr. King’s name, image, likeness and his possessions.

We’ve already discussed Prince’s passing previously here on the Estate Planning blog.  Prince, one of the most successful music artists of all time, passed away without leaving a will. This means that he died intestate, and the laws of the state he was domiciled in dictate who will inherit from his estate. That almost universally means that your closest living relatives, usually a spouse or child, will inherit in an intestate situation, but this can get tricky. In Prince’s case, siblings, nieces, nephews, cousins and now self-proclaimed children have come out of the woodwork to lay claim to the late singer’s vast fortune and catalogue of music. Prince has no acknowledged surviving children, who would be near the front of the line in an intestate situation. So how exactly do you go about proving you’re the son of a decedent?

Acknowledged Children, Have No Fear

New York intestacy law is very clear on who will inherit when the deceased is intestate. If there is a spouse but no children the spouse inherits everything. If there are children but no spouse, the children inherit everything. If there is a spouse and children, the spouse inherits the first $50,000 plus half of the balance of the estate, with the children splitting the rest.

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