Blog - Jayde Law PLLC

Estate Planning: An Overview

Wed, 15 Feb 2023 21:10:26 GMT

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

WHAT IS AN ESTATE?

With estate planning, individuals and families can protect their interests during incapacity or after death.

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.

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 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

Wed, 01 Feb 2023 21:23:11 GMT

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 of a Will Be a Beneficiary?

How Long Does the Executor Have to Pay the Beneficiaries?

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.

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..

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.

Overriding a Power of Attorney

Wed, 18 Jan 2023 21:32:54 GMT

A power of attorney is a legal agreement that gives a person (“attorney-in-fact” or “agent”) the ability to act on behalf of another person (“principal”). A common question asked about a power of attorney is under what circumstances one be overridden.

A power of attorney can be overridden. However, the “who” and “how” depends on whether the principal is of sound mind.

First and foremost, the principal can override a power of attorney at any time as long as they are of sound mind. The term “sound mind” refers to the state of mind and memory a person has at the time in question. So, as principal, you could override your power of attorney if you have sufficient mental capacity to understand what you are doing.

WHAT IS REVOCATION?

OVERRIDING A POWER OF ATTORNEY THROUGH A COURT

The act of overriding a power of attorney is called revocation. Every state’s laws specify how revocation can occur, but typically, it is required to be in writing and must clearly express the principal’s intention to revoke a specific power of attorney.

As the principal, you can revoke a power of attorney in many different ways, such as:

A second way a power of attorney can be overridden is through court intervention. For example, if you, as an agent, are no longer of sound mind, a court can remove you for acting improperly or acting in a manner that abuses your responsibilities as set forth in the power of attorney.

If family members or friends are concerned about this situation, they can seek to have you removed as well. They would have to file a formal request with the applicable court to remove an agent and replace them with a new one. This request is made pursuant to the applicable state’s law governing powers of attorney.

A third option is when a concerned party seeks guardianship or conservatorship of the principal through the local court system. If a guardian or conservator is subsequently appointed, they can then request the termination of a particular agent’s authority.

CAN YOUR AGENT REFUSE TO FULFILL THEIR DUTIES?

Executing a new power of attorney, which states that you are revoking a prior power of attorney;
Putting provisions in a power of attorney that state it will terminate or become ineffective under certain circumstances, such as your incapacity;
Sending a written notice of the revocation to the agent and any monitor, secondary agent, successor agent, and any other relevant parties; or
A power of attorney can also naturally terminate upon the conclusion of a specific event, such as in a situation where the principal had entered into a power of attorney solely to close a particular real estate transaction.

If you have questions about revoking a power of attorney or creating a new power of attorney that overrides a prior one, it is best to speak with a professional in your area. Each state’s laws are quite specific regarding the power of attorney process. A professional can help you understand how to comply with applicable requirements.

SEEK OUT A LOCAL PROFESSIONAL

An agent can in fact decline to fulfill their duties. When choosing an agent under a power of attorney, it is best to have discussed the responsibilities with of the role before appointing them so that you can do your best to avoid such a situation.

Even if your agent had agreed to act in this role, they can still resign after they have been appointed. This is one reason it may be a good idea to consider naming a successor agent.

Does Power of Attorney End at Death?

Wed, 04 Jan 2023 21:37:23 GMT

A power of attorney is a powerful planning document that enables you (the principal) to give another person (the agent or attorney-in-fact) the power to act for you while you are alive.

Because powers of attorney are often prepared in the context of estate planning, many believe they give their agents the power to continue acting after their death.

Although every state’s laws and forms vary, most power of attorney forms specify that the agency relationship created by a power of attorney ends upon a person’s death.

WHAT DOES A POWER OF ATTORNEY DO?

POWER OF ATTORNEY FORMS

A power of attorney (POA) can convey a significant range of power to the person you appoint. This includes the ability to do the following on your behalf:

Most POA forms allow you to choose how specific or broad you would like the powers you give to be so that you can tailor a power of attorney to suit your needs. An agent can also update a power of attorney over time as a principal’s needs change.

In many states, these powers, once delegated, remain in place even in the event of your incapacity. People frequently execute a power of attorney for this reason. They do not want to worry about what may happen should they become incapacitated or whether a loved one will have the ability to handle their affairs if they are no longer able to do so.

POWER OF ATTORNEY AFTER DEATH

Enter into real estate transactions;
Enter into leases and purchase personal property;
Buy bonds or other securities;
Engage in banking transactions;
Engage in business operating transactions;
Handle insurance transactions;
Engage in estate transactions;
Make decisions concerning any claims you have or in which you may be involved;
Make gifts or charitable donations;
Manage any benefits you receive or are entitled to;
Manage the financial aspects of your health care;
Manage your retirement accounts;
Handle your tax matters; and/or
Delegate any of the above responsibilities to a third party.

That being said, a power of attorney expires upon your death. So, if you have entrusted a particular person with carrying out certain functions on your behalf while you were alive, those abilities cease when you pass away.

If you wish for the same person to continue handling your affairs after you die, you would need to specify they serve as the executor or personal representative of your will or trustee of your trust.

If you are concerned about maintaining continuity or making sure a particular person oversees your affairs upon your passing, be sure speak with an estate planning attorney. Every person’s situation and needs are different, and state laws also vary.

ESTATE SALES

Wed, 21 Dec 2022 21:40:05 GMT

Following the death of a family member, you may find yourself needing to sort through many possessions accumulated over the deceased’s lifetime. An estate sale is one way to distribute those items that you do not want or need quickly and efficiently.

While selling someone’s furniture, jewelry, artwork, antiques, and other belongings yourself can mean a great deal of time and effort on your part, there are companies that help families sell items. An estate sale company will do all the work in exchange for a percentage of the proceeds—typically anywhere between 25% and 50%. The company usually handles organizing the inventory, staging the house, appraising the value of items and setting prices, promoting the sale to the public, and hiring workers to run the sale. You may need to pay a separate fee to the liquidator for cleaning up following the sale, including donating or disposing of any goods that do not sell.

Keep the following in mind when getting ready for an estate sale:

First ensure that you have the legal right to sell the property. There cannot be any unresolved estate issues. Companies may request legal documentation showing that you have the right to dispose of the property.
Remove from the house anything you want to keep before calling in the liquidators, but avoid throwing too much away.
There is no regulatory body that oversees the estimated 15,000 estate sale companies in the United States, so before hiring one of them, rely on a referral from a trusted friend or family member and do some research. You can search the website of the American Society of Estate Liquidators, a trade association that requires its members to meet certain requirements and abide by an ethics code.
Check your local Better Business Bureau and Yelp for complaints about companies you are considering, or attend a sale run by the company.
Make sure your liquidator carries insurance in case there are any accidents while buyers are at the estate sale.
Ensure the company offers a written contract.
Ask any prospective liquidating company how it handles security, what happens to goods that do not sell, and what type of clean-up is included.
Note that many companies discourage families from being present during the actual sale.

2023 Annual Gift and Estate Tax Exclusions

Wed, 07 Dec 2022 21:44:56 GMT

Although inflation is generally nothing to be pleased about, the IRS recently announced inflation-adjusted changes to the annual gift tax annual and estate tax exclusions for 2023.

If you are considering wealth transfer tax planning, these are welcome increases.

Gift Tax Annual Exclusion

Effective January 1, 2023, the gift tax annual exclusion will increase from $16,000 (2022 number) to $17,000 per recipient. This means you can gift this amount to as many people as you wish in 2023 without using up your lifetime gift and estate tax exemption or paying gift tax. Married couples who gift-split may gift a combined $34,000 per person in 2023 without making a taxable gift.

Combined Gift and Estate Tax Exemption

Another significant change, effective January 1, 2023, is the combined gift and estate tax exclusion increase. It is currently $12.06 million, increasing to $12.92 million ($25.84 million for a married couple). The combined gift and estate tax exemption is the total amount of gifts a person may make during their lifetime, including transfers made at death, before being on the hook for gift or estate tax.

Those who have used up their lifetime exclusions as of December 31, 2022, will now be able to gift another $860,000 tax-free starting January 1, 2023. Married couples in this situation may make additional gifts of $1.72 million.

Generation-Skipping Transfer Tax Exemption

Another significant inflation-related change to be aware of: The generation-skipping transfer tax exemption is also going up. It will be $12.92 million, up from $10 million.

This may be useful for an individual who wishes to place assets in a trust for the benefit of future generations. In doing so, they may allocate their generation-skipping transfer tax exemption to this trust. The result is that these assets can remain in the trust for multiple generations without any gift, estate, or generation-skipping tax due on distributions or upon the trust’s termination.

Looking Ahead

However, readers should remember that these figures will revert to much lower amounts when the current Tax Cuts and Job Act expires on December 31, 2025, if Congress does not extend it or make it permanent. These exclusions will be reduced by approximately 50% to 2017 levels upon expiration, as adjusted for inflation.

There are a variety of planning strategies available to take advantage of these more significant exemption amounts before they are no longer available. If you have questions about how you can benefit from the increased tax exclusions, contact Jayde Law.

Required Minimum Distributions: What You Should Know

Wed, 23 Nov 2022 21:48:08 GMT

Required Minimum Distributions (RMDs) are the minimum amounts a retirement plan account owner must take out each year. RMDs begin when a person reaches either age 72, 70½ if they reached this age before January 1, 2020, or the year in which a person retires (if after age 72).

There are some exceptions. In the case of an IRA or where a person is a 5% owner of the business that sponsored a retirement plan, the RMDs start at age 72 (or 70½). There is no option to defer RMDs to a later age, even if the individual is still working.

It is the responsibility of each retiree to take out the correct RMD from their retirement account each year. If a retiree does not do so, they can face penalties. Furthermore, upon a person’s death, there are special rules regarding how the remaining funds must be distributed to beneficiaries. These death rules are currently in flux, as explained below.

RMD rules apply to all profit-sharing plans, 401(k) plans (including Roth 401(k) plans), 403(b) plans, 457(b) plans, traditional IRAs, SEP IRAs, SARSEPs, and SIMPLE IRAs. Roth IRAs are presently excluded from the RMD requirement while the account owner is still alive.

How RMD Rules May Affect You

As mentioned above, the onus is on you to ensure you take the correct RMD when you retire or reach a certain age. The amount of the RMD is calculated for each retirement account by dividing the account’s balance as of December 31 of the prior year by a life expectancy factor outlined in IRS tables .

Many retirement administrators or plan managers can help you with these calculations. Still, you should also try to understand on your own what you are required to withdraw, as you are ultimately responsible for any penalties or taxes that you may incur for incorrect withdrawals.

Unfortunately, you cannot keep amounts in your traditional retirement accounts indefinitely, even if you don’t need the income. If you take out less than the RMD for a particular year, you may be subject to a 50% excise tax on the amount you didn’t take out but were required to withdraw. However, in some circumstances, if you made an error in calculations but are in the process of taking corrective action, you may be able to request a waiver of the excise taxes.

Changes in RMD Rules

The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) changed the RMD rules regarding how quickly beneficiaries must receive retirement benefits upon the account owner’s death. These new rules will apply to persons who passed away after December 31, 2019. In addition, the SECURE Act increases the RMD beginning age from 70½ to 72.

Before the SECURE Act, RMD rules required distributions after a person’s death to be made in one of two ways. If the owner died before RMD rules applied to them, their interest had to be distributed as follows:

1. within five years of their death, or

2. over the life or life expectancy of the beneficiary, with distributions beginning no later than one year after the date of the owner’s death (subject to an exception for a surviving spouse).

If the owner died after the RMD applied to them, the beneficiary had to receive payments at least as quickly as the owner had been receiving them.

The SECURE Act has changed these RMD rules in several ways:

1. It lengthens the five-year rule to 10 years.

2. The new 10-year rule applies regardless of whether the owner dies before the required RMD beginning date.

3. The option to distribute the retirement funds over the life or life expectancy of the beneficiary applies only to specific qualifying persons.

4. For a beneficiary who is a minor at the date of death, the 10 years begin to run when that child reaches the age of majority.

5. For persons who paid excise taxes for insufficient RMDs for 2021 and 2022, they may be able to request a refund.

The IRS has also stated it will not assert that an excise tax is due for persons who did not take an RMD under the prior rules for 2021 and 2022. The IRS final regulations related to these changes will not apply sooner than 2023.

The changes to these RMD rules are complex, and there are more details not fully covered by this article. If you have questions about RMDs and how they may affect you, contact Jayde Law PLLC.

3 Tips When Including Caregivers in Your Estate Planning

Wed, 09 Nov 2022 21:52:44 GMT

November is National Family Caregivers Month. You may have a caregiver in your life to whom you wish to bestow your gratitude by designating them as an heir in your estate plan. Whether your caregiver is your own child—or a niece, nephew, grandchild, godchild, stepchild, or even a caregiver who is not related to you—how can you ensure your wishes are fulfilled?

It is your prerogative to leave your property and assets to anyone you would like. Often, the best way to do this is through a will or estate planning. However, you should be aware that in many instances, money or assets left to a caregiver can be viewed with suspicion and potentially subject your planning to legal challenges. To avoid this, consider the following tips:

1. Make your family aware of your plans.

If you would like to leave a financial or other gift to a caregiver, inform your family of your wishes and reasons for your decision. This is especially important if your children or loved ones who don’t live close by cannot witness in person the impact a caregiver may have on your day-to-day life. Without this familiarity, they may be suspicious about a caretaker’s sway over you and believe that person improperly influenced your decisions.

In some states, there are laws that set forth that property exceeding a particular value left to a nonrelative caregiver is presumed to be fraudulent if a will or trust is challenged. If your family is unaware of your wishes, they may assume foul play. Your estate may be subject to an expensive and unnecessary will contest.

2. Don’t wait until the last minute to make changes to your will.

If you wish to give a financial gift to a caregiver who improved the quality of your life, it is best to make any changes or updates or prepare a will when you are not ill or in cognitive decline. Family members who may not be happy with your choice may try to object to your will and use these circumstances to argue you were not of sound mind or there was undue influence on your choices. The earlier in your estate planning journey you make any decisions regarding inheritance to caregivers, the better.

Another item to consider is getting a letter of competency from a physician that certifies you can make informed decisions about your health care, finances, and other matters. It is best to do so contemporaneously with the execution of a will, estate plan, or any revisions to existing documents.

3. Gift money or assets during your lifetime.

You may wish to consider gifting money or assets while you are alive if it would not negatively impact your needs or care. Currently, there is a federal gift and estate tax exclusion of $12.06 million ($24.12 million for married couples). A person can give away — during their lifetime or at death — up to this amount, tax-free. However, there are some items that you should consider before making any significant gifts.

One issue is that many states have their own gift tax rules. For example, New York does not have a gift tax, but it does have a three-year clawback rule. So, any gifts a person made three years before their passing could be “clawed back” and included in calculating the value of a person’s estate for purposes of estate taxes. This could financially affect heirs in your will.

Gifting or transferring assets may also affect your Medicaid eligibility for nursing home or at-home care. Some states allow certain assets to be transferred to caregivers who meet specific criteria without these transfers affecting eligibility. However, do not assume this is applicable in your state without consulting with an attorney.

If you are thinking about bestowing a gift or inheritance on a caregiver, give us a call at Jayde Law to ensure that your plan is completed properly.

What Not to Include in Your Will

Wed, 26 Oct 2022 21:55:08 GMT

If you are considering preparing a will, this is a great first step in planning for the future. After reflecting on the basics, such as whom you want to be in charge of administering your wishes, you may wonder if there’s anything you should not include in your will. The answer is yes. There are a few things that you should avoid.

Personal Preferences or Desires

Sometimes it is best not to state personal or specific feelings in your will. To simplify the administration of your will, you should not make very specific requests or engage in discussions about your feelings.

For example, you may wish for a certain religious ceremony to be performed at your funeral or you want a celebration of life event. However, it is best not to address this in your will.

A will goes through a public, court-supervised, probate process. This often occurs well after someone is laid to rest. An executor will not necessarily be able to implement these wishes after the fact.

A better option may be to provide your family with a letter of instruction containing these details or to include them in a medical directive. If you want your burial to be done in a particular way, you can pre-purchase a burial plot and, in some areas, prepay for specific arrangements. Alternatively, you can create a fund for any event you would like, with a payable-on-death designation to someone you trust.

It is also probably best not to elaborate on personal feelings about others in your will, as this can set the tone for the administration of your estate. For example, your executor may feel some trepidation about being part of a situation where there appears to be hurt feelings or potential conflict from the outset.

Organ Donation

If you wish to be an organ donor, you should not use your will as a place to specify this wish. In most states, there are specific ways to document your desire, such as listing it on your driver’s license. Again, by the time your will is reviewed, it will be too late to do anything about your organ donation wishes.

Health Care or End-of-Life Decisions

Your will is not the right place to document what you would like to happen if you have suffered a substantial and irreversible loss of mental capacity or have an incurable or irreversible condition. You should do this in your medical directives (sometimes referred to as a “living will”).

You should also have a document that designates an agent to be able to speak with your doctors and make health care decisions on your behalf should you temporarily become unable to do so.

Be Careful About Leaving Inheritance to a Person With Special Needs

If you wish to provide for a person who has special needs upon your death, it is not a good idea to leave them an outright bequest in your will.

This may disqualify them from critical health and other benefits they need to manage their day-to-day life. It can also put them in a situation where they are forced to place your generous gift in a special needs trust that goes to the government upon their death if not used up. Instead, consider creating a first-party supplemental or special needs trust now or through your will.

Non-Probate Property

Another consideration of what not to include in your will is “non-probate” property. This can encompass many things, but some of the most common examples are:

Property held in a trust — The main point of placing property in a trust is often to avoid probate. If you have property in a trust, it doesn’t need to be in your will, as there is already a plan for handling it upon your death.
Property that already has beneficiary designations — For example, including things like your 401(k), IRA, or life insurance in your will can make things unnecessarily complicated or slow things down when it comes to your beneficiaries getting the funds. The best thing to do is to confirm your beneficiary designations are up to date and in line with whom you want to receive the funds.
Property that is jointly owned with right of survivorship — This property will pass naturally to the other person upon your death. An exception is where the other person is no longer living or has given up their rights to the property in a divorce or otherwise.

The above examples are not exhaustive. There may be more items pertaining to your situation that should not be in your will. Since every estate plan is unique, when you are prepare to begin the process of creating your will contact Jayde Law PLLC.

Alternatives to Traditional Funeral Arrangements

Wed, 12 Oct 2022 21:57:37 GMT

After losing a loved one, consider the best way to honor them and their life. Sometimes, a traditional funeral is not the best fit. Today, there are many alternatives to a traditional funeral service and burial.

If you are seeking to lay your loved one to rest in a nontraditional way, the following are some modern alternatives to traditional funeral arrangements:

Cremation

Perhaps the most recognizable alternative to a traditional funeral service is cremation. Cremation is a good option for families with loved ones in various areas across the country. Unlike traditional burial, cremation does not require the family to take immediate steps to embalm, clean, dress, and bury the body.

Cremation can also give family members who may not be local more time to plan gathering in honor of your deceased loved one.

Celebration of Life

If having a traditional funeral service for your loved one does not feel right, or if you do not want their memory honored by a funeral service, planning a celebration of life might be a good option for you.

A celebration of life is an alternative memorial service that sets a different tone than a funeral. Celebrations of life are usually less formal and are held at nontraditional locations, such as a park or banquet hall. The deceased’s loved ones may release balloons, play music or a photo slideshow, or participate in an activity that the deceased enjoyed.

Natural Burial

Natural burials are becoming more popular across the country. Loved ones place the deceased in a green burial site and mark the location with a plaque or another marker with their name. Some states don’t even require that a funeral director be involved in the natural burial process.

Alternatives That Do Not Involve a Ceremony

Sometimes a ceremony does not feel like the right way to honor your loved one. If that is the case, there are numerous nontraditional ways to honor them without a ceremony.

Share a Meal at Their Favorite Restaurant. Sharing a meal is a simple way to honor a loved one and get the deceased’s family and friends together to remember the person they lost. Having a nice dinner in the deceased’s honor allows people to share memories and talk about the one they lost with others who are feeling the same loss.
Have a Memorial on Their Birthday. Your family can choose to wait for a special day, such as the deceased loved one’s birthday, to honor the life they led. This option may give your friends and family time to process the loss without the pressure of planning a funeral.
Private Get-Together at Home. You may want an intimate gathering at home. Invite those closest to the loved one you lost to spend time together. A private at-home gathering provides a comfortable environment to mourn with others that cared for your loved one as much as you do.

There are many ways to honor the life of someone you love after they die. Today, you are not bound to the traditional funeral service. You can observe your loved one’s life in a way that is as unique and special as the individual you lost, creating a memory you can carry with you as long as you live.

Estate Planning Myths

Wed, 28 Sep 2022 22:05:07 GMT

There are many misconceptions about estate planning, and any one of them can result in costly mistakes. Understanding who needs an estate plan and what it should cover is key to creating a plan that is right for you.

A properly crafted estate plan allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs, and attorneys’ fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

The following are some common myths that people have about estate planning:

My estate isn’t big enough to need planning . It is true that if you have a small estate, you may not need a complicated will or trust, but even if you have only a few assets, your estate plan can direct where you want those assets to go. In addition, a will allows you to name a guardian for your young children. Estate planning is not just about the will, however. A thorough estate plan also includes a power of attorney and a medical directives, both of which protect you while you’re still alive. A power of attorney allows you to appoint someone to handle your finances in the event that you are ever unable to do so yourself. A medical directive allows for the appointment of someone you trust to make medical decisions for you in the event of your incapacity.
I’m too young for an estate plan . No one likes to think about death, but it is important to be prepared at any age. Unfortunately, accidents can happen to anyone. As described above, an estate plan not only allows you to dictate where your assets should go, it also allows you to name a guardian for young children and plan for incapacity.
My will takes care of everything . A will is a legally-binding statement directing who will receive your property at your death. It also appoints a legal representative to carry out your wishes. However, the will covers only probate property. (Probate is the court process by which a deceased person’s property is passed to his or her heirs and people named in the will.) Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds, and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate.
It is cheaper to create a will on my own . It is tempting to try to save money by using a do-it-yourself online will service or just writing something up yourself, but these poorly drafted documents may only cost additional money in the end. It is impossible to know, without a legal education and years of experience, what the right legal solution is to any particular situation and what planning opportunities are available. If there is anything about a family situation that’s not commonplace, using a DIY estate planning program means taking a large risk that can affect one’s family for generations to come. Without clear instructions, your assets may not go where you want and can lead to problems that drag out your estate administration, cost money, and create headaches for your heirs.
Once a plan is in place, I’m done . Once you have a plan in place, you need to review it every few years or whenever you have major life changes. Circumstances change over time and your estate plan needs to keep up with these changes. Major changes that may affect your plan include getting married or divorced, having children, or experiencing an increase or decrease in assets. Even if you don’t have any major changes, you should review your plan periodically to make sure it still expresses your wishes.

If you need help getting started on an estate plan. contact Jayde Law PLLC.

Parties to an Estate

Wed, 14 Sep 2022 22:07:40 GMT

When people pass away, typically, their assets go through probate — a legal process that distributes the person’s assets after death. The parties to an estate are the people involved in the probate process.

Although not technically a party to the estate, the deceased person — called the testator or decedent — is essential. When people make wills, they can choose beneficiaries, selecting people who have an interest in their estate. In the case of those who die without having made a will, state law often dictates who inherits the estate and determines the parties involved.

Parties to an estate include:

Beneficiaries. Beneficiaries are people named in a will. Testators — people making wills — can leave assets to specific beneficiaries, such as family members and friends. Anyone a testator chooses can be a beneficiary. When making wills, people can leave a beneficiary a portion of the total estate and make specific bequests to individuals, leaving them personal items of sentimental or monetary value.
Heirs-at-law. State law also provides a framework for who should inherit an estate if a person dies without a will. Heirs-at-law are the people who have a right to inherit if the decedent died intestate (without a will); these are typically the decedent’s closest living relatives.
Fiduciaries. The fiduciary is the person tasked with carrying out the estate plan. If the decedent had a will in place, the fiduciary is the executor or personal representative named in the will. An administrator will handle their affairs if a person dies without a will. Often, the administrator is a close family member, such as a surviving spouse or child.
Creditors. Creditors are also parties to an estate. When a person dies with outstanding debt, creditors can receive money from the decedent’s estate.

In specific cases, there might be other parties to an estate:

Trustees. Trustees become involved when a person establishes a testamentary trust — a trust created in a will.
Guardians. A guardian may be a party to the estate when a person leaves behind minor children. Individuals can name guardians for underage children in their wills.

For more information or to create an estate plan, contact Jayde Law PLLC for a consultation.

Springing vs Non-Springing Power of Attorney

Wed, 31 Aug 2022 22:09:51 GMT

A power of attorney is a document that grants various powers and responsibilities to a trusted third party (typically referred to as an “attorney-in-fact” or “agent”) who can act on your behalf. This document usually only allows an agent to make non-medical decisions on your behalf. A power of attorney can be a valuable planning tool that lets you decide in advance who will manage your affairs should you become unable to do so. It can also be a way to avoid expensive guardianship or conservatorship proceedings if you become disabled or incapacitated.

The way a power of attorney is formalized varies from state to state. Some states have particular requirements and wording that must be in a power of attorney for it to be valid and accepted. You may have heard of the terms “springing” and “non-springing” power of attorney and wonder what they mean.

Springing Power of Attorney

A springing power of attorney is a document executed now, but that does not take effect until the occurrence of a specified event (e.g., incapacitation). This type of power of attorney is contingent on something specific happening before it comes into force. If the event or incapacity never occurs, an agent will not be empowered to act on behalf of the principal.

Many people want a springing power of attorney because they feel more comfortable knowing their agent can only exercise powers if a triggering event occurs. This can alleviate any concern that the agent may try to misuse a power of attorney.

A springing power of attorney is not always easy to use. Depending on your jurisdiction, it may be necessary to have a medical professional such as a doctor certify that a triggering condition has occurred.

Let’s say you become medically incapacitated. Where required, the professional will likely have to complete an affidavit attesting to your condition or that certain events occurred. Often, a medical professional will not be comfortable signing an affidavit or may require their own attorney to advise them on how to proceed. This can cause delays that can frustrate an agent’s ability to act, especially in time-sensitive situations.

Additionally, financial institutions may be reluctant to accept this type of power of attorney because it is difficult for them to judge whether you truly are incapacitated or if a triggering event has in fact occurred. A certain amount of caution on the part of financial institutions is understandable: When someone steps forward claiming to represent the account holder, the financial institution wants to verify that the individual indeed has the authority to act for the principal.

Non-Springing Power of Attorney

With a non-springing (also know as “immediately effective”) power of attorney, the agent has the powers granted in the document the moment it is signed by you and the agent(s) you designate. So, even if you are capable of signing for yourself or handling certain transactions, your agent could still sign for you without your involvement.

How Some States Approach Powers of Attorney

Many states have taken steps to address some of these problems. Some states have implemented statutory forms that, if filled out and executed correctly, financial and other institutions will be more likely to accept. In particular, many of these forms have a provision where the agent agrees to reimburse the third party for any claims that may arise against the third party because of reliance on a power of attorney.

To help limit the potential for abuse by an agent, some state statutory forms also allow a power of attorney to be narrowly tailored to a specific purpose.

The laws of each state will vary when it comes to powers of attorney. For guidance on a springing or non-springing power of attorney, contact Jayde Law PLLC for a consultation.

Estate Planning After Divorce

Wed, 17 Aug 2022 22:12:24 GMT

So, you’re officially divorced. In starting this new chapter of life, you should update your estate planning documents as soon as possible. You may no longer be legally married, but, depending on where you reside, divorce may not automatically remove your prior spouse from your will, trust, or beneficiary designations. Here are some items to consider updating:

Medical Directives

When you engage in estate planning, it is standard to complete forms such as a health care proxy or living will. Often, spouses will choose each other as their agents for making health care decisions if they become incapacitated. After a divorce, your ex may be the last person you want handling these matters. Change your documents to appoint someone you trust.

Power of Attorney

Another document you may have previously executed is a power of attorney. This can give another person a great deal of control over your assets and personal and financial affairs. If your current power of attorney names your prior spouse as your agent, you can revoke it and sign a new one choosing a different person to act as your agent.

Will and/or Trust

Many couples designate their partner as the executor or personal representative of their estate under their will. Your ex-spouse may also be listed as a beneficiary of your estate. If you do not want your former spouse to have a say over how your assets are handled or to receive any inheritance, it is important to review and amend your will now to remove them. The same goes for any trust you may have created where your ex is the trustee or a beneficiary.

Guardianship of Your Minor Children

If you have concerns about your prior spouse’s ability to be a guardian to your minor children, there may be steps you can take to mitigate any instability a divorce may have brought to the situation.

One option is to set up a trust for your children that will protect assets from being irresponsibly depleted. Life insurance amounts or other assets placed in a trust will be managed by a person whom you can name as trustee. This will prevent the other parent, who could otherwise be in control of minor children’s finances, from accessing certain funds.

Be Aware of What Insurance You Are Required to Maintain

Many divorce settlements set forth that one spouse maintains life insurance and specifies who shall be a beneficiary of the policy. You should ensure your current life insurance policies not only comply with your divorce agreement, but also are not in danger of lapsing.

The same goes for medical insurance. If you are required to maintain medical insurance in a certain manner, review your plan to ensure the correct parties are covered and that it is in good standing.

Failure to comply with your divorce agreement can cause you to wind up back in court.

Beneficiary Designations

If you are not required to maintain your ex-spouse as a beneficiary on your life insurance or retirement accounts, now is the time to update your designations. You should contact your insurance company or retirement administrator to make these changes. Upon your passing, the funds will go to whomever is listed as a beneficiary, regardless of a divorce proceeding.

Consult a New Estate Planner

The best thing you can do after your divorce is work with an estate planner to review your current documents and update them appropriately. Ideally, this person should have no connection to your prior spouse. Keep a copy of your divorce decree and settlement agreement handy. An estate planner will need to review it to evaluate what you need going forward.

To understand the consequences of a divorce on your estate plan and/or if you are recently divorced and looking to update your estate plan, contact Jayde Law PLLC for a consultation.

Portability of the Estate Tax Exemption

Wed, 03 Aug 2022 22:14:27 GMT

On July 8, 2022, the Internal Revenue Service (“IRS”) issued new guidance that allows a deceased person’s estate to elect “portability” of their unused gift and estate tax exemption for up to five years after their death. If your spouse passed away less than five years ago, you may be able to file an estate tax return to transfer their unused estate tax exclusion to yourself.

What Is Portability, and How Does One Get It?

Portability is a way of transferring the amount of the gift and estate tax exemption that a deceased spouse did not use to the surviving spouse. It is only available to married couples.

To get the benefit of portability, the executor of an estate must file a federal estate tax return. Previously, this return had to be filed within two years of a person’s date of death, assuming an estate tax return was not required sooner. Because so many estates kept missing this window, the IRS decided to extend it to five years.

Example: your spouse has passed away, and you are the executor of their estate. If the total value of your spouse’s assets in their estate is below the threshold for federal estate taxation, you may assume that no estate tax return needs to be filed. While this is technically correct, if you do not file an estate tax return, there is no way to transfer your spouse’s unused estate tax exclusion to yourself.

The federal gift and estate tax exclusion as of 2022 is $12.06 million per person ($24.12 million for married couples). A person can give away — either during their lifetime or at death — up to this amount, tax-free.

In the above example, if your spouse’s estate were worth $2 million, that would leave an unused exemption of $10.06 million, which you could add to your own $12.06 million exemption, should you ever need it. But you must file an estate tax return for your spouse and complete the section of Form 706 currently entitled “portability of deceased spousal unused exclusion.”

Now Is a Good Time to Consider If You Could Benefit From Portability

The current federal gift and estate tax exemption will be reduced by half in 2026. If you have a spouse who died in the past five years, you should consider whether electing portability makes sense.

To be eligible, the deceased spouse must have been a U.S. citizen or permanent resident on the date of their death, and the executor must not have been otherwise required to file an estate tax return based on the value of the total estate and any taxable gifts. If an estate tax return was filed within nine months after the spouse’s death or an extended filing deadline, the portability option may also not be available.