By Steve Worrall, Marietta elder lawyer
Based on what I am seeing as a Marietta, Georgia elder law attorney, more and more people are considering pre-planning and pre-paying for their own funeral. For years I have recommended that my clients include their wishes for their final arrangements in their estate plans, but more and more people are bringing it up proactively.
Some of the reasons that people want to take care of their own final arrangements include:
- Saving their loved ones the stress of dealing with this while they are grieving
- Making sure their wishes are carried out
- Setting aside funds and save their family the financial burden
The reasons mentioned above are very honorable, but it is important to do your homework before committing to any pre-paid program. Unfortunately, there have been a number of recent horror stories about pre-paid funerals as of lately.
A recent audit by the California Department of Consumers’ Affairs Cemetery and Funeral Bureau (http://www.dca.ca.gov/publications/press_releases/2010/0706_cfb.shtml) found that one of the state’s largest pre-paid trust programs had misspent at least $12.6 million. That is a lot of money taken from well-meaning, honest people who were just trying to care for their families. (If there is an example from your state, insert here as well).
In addition to worrying about whether the pre-paid funeral industry is using your funds as intended, there are several other pitfalls that need to be considered before investing your money in a pre-paid funeral plan.
For example, if you decide later that you need the money that you invested in the pre-paid funeral plan for reasons such as family emergencies, you can lose a substantial amount of that money in cancellation fees. Further, prepaying for your final arrangements with a life insurance plan can be even costlier. In fact, it is quite possible that you could end up paying a lot more money in monthly payments than your final arrangement will actually cost.
So, if you are trying to ease the burden for your family by planning and paying for your funeral, what are you to do?
That’s easy…talk to an experienced Atlanta area elder attorney!
An attorney can help you preplan and prepay for final arrangements in a way that will be the most cost-effective and ensure that your family won’t have to deal with the stress at a time when they should be dealing with their own grief.
Simply call 770-425-6060 to set up a Peace of Mind Planning Session at no-charge with me, your neighborhood Marietta GA elder lawyer. You’ll be glad you did!
By Steve Worrall, Cobb County GA Probate Lawyer
You finally got around to making a will, so now you can rest easy.
You went online, found the forms, filled them out and you’re done. If anything happens to you, your loved ones are taken care of.
One less thing to worry about, right?
I hate to cause you more sleepless nights, but I can say as a Cobb County GA probate lawyer that just having a will is not the “be all and end all” of planning your estate.
Let’s clear up a few misconceptions about what your will actually does and doesn’t do:
This is What A Sound Will Actually Does
Your will distributes property that you own at the time of your death. You can divide up your property any way you choose as long as your state doesn’t prevent you from disinheriting a spouse or children. If you intend to do either of those things, you need to talk to a Cobb County GA probate lawyer and make sure it’s even legal. If you have property that would legally pass outside your estate (things like joint property, life insurance, or retirement plans), you will does not provide for how those assets are distributed unless you’ve made them payable to your estate. Additional estate planning documents are required in order to do that.
Needless to say, there are various types of wills and they can be incredibly simple or terribly complex. A very simple will is called exactly that – a simple will. A will that establishes trusts is usually called a testamentary trust will. If your will leaves assets to a trust created during your lifetime, it is called a pour-over will. If you have either a testamentary trust will or a pour-over will, it should provide for property management and protection from creditors for your heirs and minimize their tax obligations on whatever property they inherit.
Aside from creating trusts and distributing property, you can also designate a guardian for your minor children. If your will is properly written and you’ve set up the right kind of trust and chosen the right trustee to handle your minor child’s estate, the need for court supervision will be limited or even eliminated. The same could hold true if you name an executor. Check with a Cobb County GA probate lawyer to ensure that you’re taking full advantage of the laws in your state and that these designations are made in accordance with those laws.
What Your Will Does Not Do
If you have any nonprobate property, such as real estate that would pass to a surviving owner, or an IRA or insurance policy payable to a named beneficiary, your will does not determine how those assets are passed on. These types of assets are governed by contract law. Just because you list them in your will does not ensure that they will be handled as you’ve requested. Always make sure that your beneficiary designations are up to date and in line with your intentions.
Other types of nonprobate property you will want to account for are any jointly owned property, trusts, annuities, and retirement benefits and life insurance, to name a few.
Makes filling out a form online and thinking you can sleep better at night a little less appealing, doesn’t it? A simple piece of paper will not necessarily ensure that everyone gets what you want them to have and that Uncle Sam doesn’t take more of what you’ve worked for than your loved ones receive.
If you would like an expert opinion on exactly how effective your current will is, or advice on actually drafting a will, call us at (770) 425-6060 to schedule your Peace of Mind Planning Session today. We can help ensure you take the right steps to take care of your loved ones if something happens to you.
Also, as part of our estate planning process, we will interview you about your specific wishes and what you want your family to know. We provide you with a copy of the interview so you can pass on the information you want your family to remember. We understand that it’s not just about the paper you leave behind, but the voice you leave behind. Our Peace of Mind Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article.
By Steve Worrall, Atlanta GA elder lawyer
As an Atlanta area elder lawyer, I help people plan for long-term care costs on a regular basis.
Long-term care can include any service that helps people who have a prolonged illness. The illness can be a physical disability or a cognitive impairment such as Alzheimer’s disease or Dementia. The services may include help with activities of daily living, home health care, adult day care, hospice care, nursing home care, or care in an assisted living facility. The level of assistance required can include physical therapy, administration of medication, and help with daily activities such as bathing, eating, and dressing.
Paying for long-term care can be financially devastating to families. Contrary to what many people believe, Medicare coverage will not pay for most of the long-term care they will need if they suffer from a long-term illness. According to the U.S. Department of Health and Human Services, the average costs in the U.S. (in 2009) are:
- $198/day for a semi-private room in a nursing home
- $219/day for a private room in a nursing home
- $3,131/month for care in an Assisted Living Facility (for a one-bedroom unit)
- $21/hour for a Home Health Aide
- $19/hour for a Homemaker services
- $67/day for care in an Adult Day Health Care Center
It’s easy to fall into the trap of thinking that because you are now young and healthy you don’t need to worry about long-term care, but consider this:
- Life expectancy after age 65 has now increased to 17.9 years, up from 1940 when life expectancy after 65 was only 13 extra years. The longer people live, the greater the chance they will need assistance due to chronic conditions.
- 44% of people reaching age 65 are expected to enter a nursing home at least once in their lifetime and 53% of them will stay for one year or longer.
So, the bottom line is that millions of us are going to need long-term care. It is important to put an estate plan in place that will protect your assets if you become disabled. I’ve seen too many instances where a family has waited until a crisis strikes to take action. Most of the time it’s then too late to save their assets and income from the hands of such a facility.
But instead, you can talk to an estate planning attorney now to ensure your bills will be covered in the long-run without losing your house, your assets or other income sources in the process. To get started, simply call me, your neighborhood Atlanta area elder law attorney at 770-425-6060 for a free Peace of Mind Planning Session.
Together we’ll walk through the complicated world of long-term care planning to ensure your family is protected when they need it the most.
By Steve Worrall, Cobb County GA probate lawyer
If you are reading this Atlanta area probate and estate planning blog right now, chances are you concerned about what would happen to your assets, investments and total inheritance when you die. I am sure like most people, you want to leave an inheritance to your children in a way that’s safe, secure and free from the red-tape of probate.
Yet what most well-intentioned parents fail to understand is that it is the way their inheritance gets passed down to family members that can have detrimental and life-altering consequences—which are far worse than having money tied up in the Georgia probate courts.
For that reason, I want to share some of my knowledge as an Georgia probate lawyer and give you a brief overview of the 4 ways your inheritance can be passed down to your children and how you can ultimately protect your inheritance from impulse spending, divorce, bankruptcy or poor decision making with proper education and a bit of planning:
- Outright Distribution: An outright distribution is just that, mom and dad die and the children receive their inheritance outright, in one lump sum. Simple, clean, but dangerous. Statistics show that an inheritance will be gone within 18 months of a child receiving it. And it does not matter how old the child is or how much the inheritance. If a child gets divorced or goes bankrupt, the inheritance could be lost.
- Convenience Trust: With this arrangement, the inheritance is distributed to a trust, but the child can withdraw the trust assets at any time and for any reason, just by requesting it. There may be an independent trustee managing the trust, or the child may be their own trustee or co-trustee. Since no one can force the child to withdraw the income and principal from the trust, the convenience trust offers some creditor protection, and perhaps a mental barrier to withdrawing the trust’s assets, but not much else. This also can act as a separate property trust, so that the child's spouse cannot access the inheritance.
- Step-Distribution: This method is a more commonly used way of leaving money to your heirs. It’s also known as the “speed-bump” approach. With this type of distribution, the inheritance flows into a trust, usually with an independent trustee, which is managed and controlled for the child. At certain intervals in the child’s life, a portion of the trust’s principal is released in a lump sum to the child. For example, one third of the principal is paid to the child at age 30, one third at 35 and the remainder at 40. They still have access to income and principal for health, education and other guidelines you structure, but you can leave your children a powerful message with this type of trust – “don’t blow the inheritance!” The idea is that if they blow it the first time, they may not get any future distributions. This may act as an incentive to the child to manage their money well, but it still adds little asset protection, and once the principal is gone, it’s out of the bloodline and gone forever.
- Lifetime Trust: This type of trust holds and manages the child’s inheritance for the life of the child. An independent trustee is usually chosen to manage the trust and many times the child can serve as co-trustee. Principal and income may be distributed according to various guidelines and incentives that the parent provides in the trust document. These guidelines act as a spigot or faucet: adhere to the guidelines and philosophies of the trust and assets will flow; get into trouble and the trustee can turn the spigot off.
Once the child dies, any remaining assets in the trust can pass to the child’s heirs or other individuals or entities. The lifetime trust provides the most flexible vehicle for values-based legacy planning. It also provides the greatest degree of asset protection, including protections against divorce, bankruptcy and lawsuits such as malpractice or personal injury. This is by far the most popular choice of trust arrangements among my clients, as it provides the greatest amount of asset protection and guidance for beneficiaries throughout their lives.
So now that you have read the 4 most common ways to pass an inheritance on to family members, I encourage YOU today to get clear on how you would like your inheritance distributed when you die. Do you understand the potential consequences of turning your inheritance over to a child not ready for the responsibility? Are you concerned that your money or assets may one day be lost in a messy divorce or bankruptcy proceeding? Are you simply unsure of the best way to protect your money—and your children—when you die?
If so, I would like to extend the opportunity for you to schedule a Peace of Mind Planning Session ($750 value) at no-charge with our office. Here a Marietta GA probate lawyer will help you work through such hard questions and ultimately create a rock-solid plan for distributing your assets in a way that aligns with your core values, but also meets your children’s long-term financial needs.
However, we only have 8 such Sessions available each month, so call (770-425-6060) to immediately schedule an appointment with Marietta GA probate lawyer, Steve Worrall before they are all gone!
If you are a middle-aged adult, you probably think of estate planning as a smart way to protect your children and your assets should the unthinkable happen to you.
And while that is 100% true, have you thought about estate planning as it relates to your parents? Have you considered the responsibilities that will fall on you—the child, when mom or dad becomes incapacitated or passes away?
Many of us don’t think about our parent’s estate plan because we assume they’ve gone ahead and taken care of everything…. the way you are doing now for your own children.
Yet as I send my clients home to go talk with their OWN parents about estate planning, they learn nothing could be further from the truth.
So to help you get a few steps ahead and avoid an absolute financial and emotional nightmare should your parents pass away without a plan in place, here are a few questions you’ll want to address TODAY with mom or dad:
1. Do you have a will or trust in place? Not only do you want to find out if they have one, but you want to know if it’s been updated through the years. Most estate planning attorneys do not inform their clients of the need to update their plan every three years…which is exactly why most plans fail when families need them the most. So if your parent’s plan looks a little out of date (especially as it relates to their medical directives and HIPAA provisions!), I recommend getting them back into an attorney’s office ASAP for a checkup.
2. Have I been named in any ‘legal helper‘ roles? If you have been named as your parent’s power of attorney, executor, etc. you need to know where the documents giving you such legal permission are—and what to do if called upon in an emergency! This is especially true if you have been named the successor trustee of their trust, as you could be forced to pay out of your own pocket if any serious mistakes are made when distributing their cash.
3. If you don’t have a plan in place, why not? Do your parents fully understand that without planning, they will either lose their assets or pay a fortune if they ever require nursing home care? Do they understand that when the estate tax comes back in 2011, over HALF of their entire estate may automatically go to Uncle Sam if they own more than $1 Million in assets (which when you add up the value of their property, life insurance, cars, investments, etc. it’s really easy to hit $1 Million in assets these days!). Do they understand that no one will have permission to make financial or medical decisions for them if they were incapacitated on a short or long-term basis? And most importantly, do they understand that YOU will be left with a huge mess on your hands at a time of great loss and grieving for your family?
Of course as an attorney and a SON myself, I understanding having these tough conversations and getting to the bottom of your parents affairs can be easier said than done.
For that reason, I want invite you to schedule a PEACE OF MIND PLANNING SESSION with me ($750 value) where I will personally sit down with you and your parents to help get these tough questions answered and ultimately help your parents begin setting their legal/financial house in order. We’ll also talk about the next steps in protecting your parent’s assets and safeguarding their wishes should they ever require nursing home or other end-of-life care.
Simply call 770-425-6060 to schedule your appointment. However, this offer is limited to schedule your appointment. However, this offer is limited to the first 10 people who call, so lock in your free planning session today!