Don’t DIY Your Family’s Future
April 8, 2020

In today’s world, almost anything can be purchased online.  Many individuals turn to the internet to find tutorials that assist in their do-it-yourself (“DIY”) projects – a phrase that evokes images of venturing to a craft or hardware store to purchase supplies, and the feeling of satisfaction that comes from the completion of a project that was often long overdue.  However, even DIY proponents frequently remind us not to attempt certain projects that are best left to licensed experts.  A home improvement project is one thing, but you should never take a chance trying to DIY your estate plan.

In recent years, DIY providers have emerged in many fields, from income tax preparation to estate planning.  We have all encountered ads promoting estate planning at a fraction of the cost of working with an attorney.  For example, LegalZoom promotes “quick and easy wills” starting at $89.  Wills drafted by an experienced estate planning attorney will certainly cost more than $89, but why is this the case?  It is important to remember the adage, “if it seems too good to be true, it likely is.”  Any perceived savings gained from the use of an online DIY service for estate planning may be nullified, or even counteracted, by the inadequacy of the forms provided by the DIY service or by user error.  Unfortunately, by the time any issues arise, it may be too late.

Although we cannot cover every possible issue that may arise from DIY estate planning, let’s cover some of the most common.

Laws - Federal and State estate laws change over time.  Estate planning attorneys monitor changes in estate planning laws (and other laws that may be of consequence to an estate plan) and ensure that your estate planning documents reflect these changes appropriately.  Most estate planning attorneys draft documents with sufficient flexibility to endure changes in the law.  When major legal changes arise, a skilled attorney will assess the potential implications to your estate plan, communicate their findings, and discuss potential courses of action.  DIY services cannot guarantee this same attention to detail and personalized response.

In addition, most online DIY services do not take into account state-specific laws.  Only an attorney practicing law in your state can advise you regarding the various state-specific issues that may affect your estate planning decisions.  States have varying execution requirements; failure to meet such requirements can result in a will being deemed invalid.  If a will is invalid, the decedent is said to have died intestate.  When an individual dies intestate, the decedent’s property will be distributed in accordance with the intestacy laws of the state where he or she resided, which may lead to an undesired result.  An experienced estate planning attorney can ensure that your wishes and intentions are honored. 

Probate – A will must meet the requirements for probate (i.e. address payment of debts, taxes, and expenses; properly make dispositions of estate assets; and appoint fiduciaries to administer the estate).  When drafting your own will, you must keep in mind that the validity of the will will be determined after your death.  At that point, you can no longer communicate your intentions beyond what is included in your documents.  A typo or an incorrect word or clause can dramatically transform the meaning of the will, negating the very intent and purpose of its creation.

Trusts – Trusts are often used as a means of avoiding probate and/or as a tool to avoid or reduce estate taxes.  There are various types of trusts (i.e. revocable, irrevocable, marital, life insurance, special needs trusts, etc.) and only an experienced estate planning attorney has the understanding to advise you on the most appropriate and effective use of trusts to satisfy your particular needs and financial situation.  Most online DIY services are not equipped to provide you with such advice or to determine which type of trust is most advisable to meet your needs.

There are plenty of other potential issues with DIY estate planning tools. Such services cannot account for the plethora of related financial, tax, and personal issues that should be identified and thoroughly considered in an estate plan.

Wills and trusts are one of the few acts that survive your death.  One mistake can alter a document’s meaning and legality, which is why you should not attempt to draft your own estate planning documents and why you should work with a lawyer who specializes in this area of law.  Estate planning mistakes can be expensive to fix — assuming the specific mistake can be fixed at all.  Mistakes can lead to irreparable damage, impair familial relationships, leave family members confused and disappointed, and lead to hostile litigation causing financial and emotional stress to the very family you were looking to protect and provide for.

Estate Planning: An Overview

February 15, 2023
Estate planning entails preparing your affairs for the future, including death and other life events. While older adults might give more thought to estate planning, it is an essential tool at any age. WHY IT’S IMPORTANT With estate planning, individuals and families can protect their interests during incapacity or after death. You can provide for a spouse, children, and dependent family members when you pass away. You can arrange your care and financial affairs should you suffer a severe accident or illness that renders you incapacitated. If you are a parent, you can appoint a guardian to care for and manage the inheritance of your minor children. If you own a business, you can prepare to transfer it to family members, colleagues, or other trusted individuals. You can make arrangements for your long-term care when you can no longer live on your own. You can also make funeral preparations, determine what happens to your body when you pass, and prepay for your funeral, all of which can help lessen the burden on your family members. WHAT IS AN ESTATE? Legacy planning entails passing on your estate. Your estate is everything you own, including: Savings and checking accounts Retirement accounts Investments Life insurance Annuities Houses and other real estate Cars Personal possessions, such as jewelry, furniture, and sentimental items When you die, your estate encompasses all your property upon death. If you sold or gave away property before death, it is no longer part of your estate, and you cannot transfer it upon death. Items you own with another person are also part of your estate. Depending on the type of asset, it might automatically pass to the other owner. For instance, if you own a home with your spouse as tenants by the entirety, it will pass to your spouse upon your death. WHAT IS AN ESTATE PLAN? An estate plan consists of legal documents and arrangements that determine the distribution of your assets when you die or outline your care if you become incapacitated. While a will can be a central component of an estate plan, a solid plan encompasses more than a will. It can also include legal tools that allow assets to pass outside of a will and probate (the process by which a court oversees the distribution of assets in a will). ESTATE PLANNING TOOLS In addition to your will, your estate plan could include the following: Purchasing jointly owned property or adding a joint owner to your property Designating a beneficiary on a pay-on-death bank account, retirement account, or annuity Buying life insurance to benefit your family should you pass away Creating a trust for a child Obtaining long-term care insurance to cover future nursing home or assisted living fees Executing power of attorney documents, naming health care and financial agents Making a living will, providing instructions for care should you become incapacitated Preparing a transfer on death instrument to pass ownership of your property to a beneficiary upon death WHAT IS AN ESTATE PLANNER? As professionals helping people make future arrangements, estate planners are attorneys who focus on end-of-life preparations. Estate planning attorneys assist people with drafting legal documents and understanding laws and taxes that could affect them and the loved ones they will leave behind. When creating estate plans, individuals may need to consult attorneys as well as other experts, including financial planners, accountants, life insurance advisors, bankers, and real estate brokers. WHAT DOES THE FINAL DISTRIBUTION OF ASSETS INVOLVE? The final distribution of assets is a conclusory step in the probate process before the court closes probate. When an estate goes through probate, the personal representative or executor must satisfy all debts, and the court must resolve all disputes before allowing the beneficiaries to receive the assets. At the end of the probate process, ownership of the assets of the estate is transferred to the beneficiaries. DO I NEED A LAWYER FOR ESTATE PLANNING? Although the law does not require that individuals secure legal representation to make estate plans, many find the support and guidance of estate planning attorneys invaluable. An estate planning attorney can help you identify the legal tools and strategies that suit your needs, as well as draft the necessary documents, such as wills, trusts, and powers of attorney. In addition to addressing tax concerns and drafting documents, these attorneys can help you avoid probate. Probate, the process by which the court oversees the distribution of assets in a will, can be expensive and time-consuming for surviving family members. It also opens the door for disgruntled people to challenge the validity of the testamentary document, further complicating asset distribution. An estate planning attorney could help you organize your assets to transfer outside of probate to make the transfers simpler, easier, and less vulnerable to challenges. When you are ready to create an estate plan, contact Jayde Law PLLC.

Three Things to Know About Being an Executor

February 1, 2023
An executor (or personal representative) is a person or entity you choose to carry out your last wishes outlined in your will. Your executor should be someone you trust is responsible enough to manage your estate after you pass away. Choosing an executor is a big decision when it comes to estate planning. So, what should you know about an executor? What should you consider before naming an executor? Here are answers to three common questions about executors. Can an Executor Decide Who Gets What? No. In most circumstances, an executor cannot decide who gets what property. Executors are responsible for carrying out the decedent’s wishes as outlined in the will. However, if the decedent did not distribute all their assets in their will, in some circumstances, the executor may be able to decide how to distribute the unassigned property. Can an Executor of a Will Be a Beneficiary? Yes. An executor can also be a beneficiary of the will. It is common for people to have their surviving spouse or children act as the executor of their estate. This choice can be cost-effective if you have a small or simple estate. Another benefit of having a family member act as the executor of your estate is they are familiar with your wishes. They know you, and they understand how you want your assets divided. If you forget to state where property goes in your will, an executor that knows you well is more likely to give those assets to the correct beneficiaries. How Long Does the Executor Have to Pay the Beneficiaries? The short answer is: It depends. The executor should work diligently to get each beneficiary paid as soon as possible. While the executor is responsible for ensuring beneficiaries receive the money or property they were left in the will, the probate process may delay beneficiaries from receiving a payout. Depending on the size of the estate and the debts and taxes the estate owes, it may take anywhere from six months to more than one year for a beneficiary to receive an inheritance. The probate process varies depending on the state, but the typical process goes like this: Submit the Will for Probate — Part of the executor’s responsibility to the estate is to file the will with the probate court. Filing the will begins the probate process. Once completed, the beneficiaries are one step closer to receiving their inheritance. The time executors have to file a will with the probate court varies by state. File an Inventory — An inventory of estate assets is required. As part of an inventory, the executor determines the total value of all estate property, money, and other assets. A completed inventory can then be used by the executor to determine whether federal or state taxes apply, or whether assets will be used to settle debts. Pay Taxes and Debts — Before the executor can distribute any assets to beneficiaries, estate debts and taxes must be paid. The executor is responsible for ensuring these payments are made. Creating a complete estate plan can be overwhelming. With the help of an experienced estate planning attorney, you can ease some of the anxieties you may be facing in thinking about estate planning. If you are ready to start the estate planning process give Jayde Law PLLC a call..