Posted by & filed under Living Trust, Retirement Planning, Trusts.

4 Common Mistakes People Make AFTER Signing Their Living Trust

Every estate plan has unique features, but after preparing living trusts and wills for the nearly thirty years, we have seen the same problems and mistakes often reoccur. Each of these common mistakes is avoidable as long as you take the care to make sure you been address them correctly. From wills to trusts and beyond, protect your loved ones by avoiding these four costly and common estate-planning mistakes.


1. Neglecting to Update Your Estate Plan

Many people become passive in the presence of an estate planning attorney. They rely on the attorney to make sure everything in the plan is what they need and is done properly. Part of the estate planner’s job is to be sure you understand the basics of how the plan works, what you need to do to implement or maintain the plan, and how it works for you and your beneficiaries. It is not your job to know all the legal angles and why certain language is used.

Often people make decisions after a discussion with their estate attorney but then later on details become hazy. Insist that your attorney simply explain your documents. You may wish to take notes about key decisions and why you made them. Each time the law or your family changes, you need to make it a part of your check-list to revisit your estate plan. These changes may require alterations in both new and old estate plans.

2. Not Updating Powers of Attorney

Every estate plan should include powers of attorney. You need at least two, one for financial matters and one for medical care, often called an Advance Heath Care Directive in California. Unfortunately, many people don’t have either of these documents, and others haven’t kept them up to date or given the details much thought.  Be sure you have these completed these documents and that they have been reviewed recently. Your financial power of attorney agents normally mimic your Executors and Successor Trustees.

3. Not Updating Beneficiary Designations

Failure to update beneficiary designations means an asset might go to your parents, siblings, or even an ex-spouse because of what the original form states. Your asset may be designated to a deceased person, or other unintended beneficiaries – we’ve seen it all. Other times someone is inadvertently excluded because they were born or married into the family after you completed the form. Review your beneficiary designations every couple of years and after every major life change in your family.

4. Not Updating Asset Ownership

You might own some assets in your own name and others in joint title with your spouse, adult child, or someone else. Some assets might be in your trust, limited partnerships, or other vehicles. When you have a living trust, the trust only protects assets that it owns. Normally all real estate, partnerships, brokerage accounts, stocks, bonds, mutual funds, notes, bank accounts and personal property will be owned by your trust. Life insurance policies will name your trust as beneficiary (except for special policies created to pay estate taxes). IRA, 401K and similar tax deferred retirement accounts cannot be owned by the trust – it is critical to name the right beneficiary on these accounts.

The Tax Cuts and Jobs Act made significant changes in income and estate taxes. If you have a trust or established estate plan created before 2012, you should have them reviewed to see if they are obsolete, or add unnecessary costs and complexity. To help your beneficiaries avoid unnecessary stress, ensure that you are distributing the right assets to the right people. You would be surprised what we find in old estate plans!

Are You Worried about Your Estate Plan?

If you are not properly prepared and with a well-planned will, then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

At The Law Offices of Joel A Harris located in Antioch, California (here is a convenient map), we have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

Sources

  1. https://www.nytimes.com/2017/08/25/realestate/estate-planning-home.html
  2. https://www.aarp.org/money/estate-planning/info-01-2011/4_costly_estate_planning_blunders.html
  3. https://www.forbes.com/sites/bobcarlson/2018/04/20/avoiding-7-deadly-estate-planning-mistakes/#4e0fbd936160

Posted by & filed under Asset Protection, Estate planning, Retirement Planning, Rich & Famous.


Estate Planning Mistakes Of The Rich & Famous You Can Learn From - Joel HarrisEveryone knows there are two things in this life that you can be sure of – Death and Taxes – even if you are a rich and famous celebrity. Over the nearly 30 years of being in practice I have witnessed countless horror stories of families fighting over the estate of the deceased, people stuck with millions due in taxes, and loved ones being left out of the will or trust. Many of the rich and famous – the most recent of which being Aretha Franklin – have had their estate planning failures go public.  This gives us an opportunity to learn from their mistakes. In this article we’ll look at the cases of some famous people who have had their outdated wills and improper estate planning become public so we can learn from their mistakes.


 

Is Your Will Outdated? Paul Walker’s Story

It is advisable to update one’s wills and trusts after every major life changing event. This means revising your will after things such as divorces or marriages, the birth of a child, or an accumulation of a large sum of money. As we learned from Paul Walker’s passing, an outdated will can have a massive effect on your family. Paul Walker, star of “The Fast and the Furious” movie franchise, made his will in 2001, the same year the first “Fast and the Furious” movie debuted. He died in 2014 in a tragic car crash, and a lot of things had changed in his life since the writing of his will. Because his will was not up-to-date, his teenage daughter was left out. If he would have kept his will up to date, then he would have had a chance to leave some of his estate to his daughter without the legal complications and fees she and her family experienced.

 

Has Your Estate Planning Been Properly Done? Lesson from James Gandolfini

Proper estate planning can save you and your family  money and stress. Unfortunately James Gandolfini, known for his role in “The Sopranos” was not as thorough with his estate planning as he could have been. Gandolfini’s will provided for his wife, daughter, and two sisters. However, he did not plan for taxes properly. Gandolfini’s estate ended up having to pay both federal and state estate taxes at 55%.  Another well known celebrity suffered from the same mistakes. Academy Award Winning actor Philip Seymour Hoffman was adamant about not turning his children into “Trust-Fund Kids”. Because of that, he ended up leaving everything to his children’s mother without any tax planning. By doing this his estate was subject to a massive estate tax bill. If he were to have met with an estate planning attorney, they would have found a way to achieve both his goal of not having “Trust-Fund Kids” and not losing so much money unnecessarily to taxes. If you want to familiarize yourself with estate taxes and need help planning your will and trust, visit The Law Offices of Joel A Harris for help. You’ll find all the resources you need to plan for the future.

 

Not Having a Will Can Cost a Lot – The Stories of Prince and Aretha Franklin

If you were to die without having a will you will have died “intestate,” which means the state will dictate how your assets will be distributed.  Sounds like a nightmare, right? Both Aretha Franklin and Prince, the singer most known for “Purple Rain” died without a will. In Prince’s case he did not have any known children so there were no obvious heirs to his estate. 45 people had tried to claim some part of his estate by saying they are his proper heirs! For the state to find rightful heirs and then divide his estate cost Prince’s estate a huge amount of legal fees.  In Aretha Franklin’s case, as of this writing five different people have filed papers with the court listing themselves as “interested parties” wishing access to her estate. The question of what happens to her sizable estate remains murky.

 

Are You Worried about Your Estate After Your Passing?

 

If you are not properly prepared with a well-planned living trust, then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

 

At The Law Offices of Joel A Harris located in Antioch, California, we have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

 

Sources

 

  1. https://www.thinkadvisor.com/2014/03/13/10-big-estate-planning-mistakes-of-the-rich-famou/?slreturn=20180911150626
  2. https://tickertape.tdameritrade.com/personal-finance/estate-planning-mistakes-celebrities-15232
  3. https://www.aarp.org/money/taxes/info-2016/celebrity-estate-mistakes-photo.html#slide1
  4. https://www.washingtonpost.com/business/2018/08/23/i-wasnt-surprised-that-aretha-franklin-didnt-have-will-you-probably-dont-either/?noredirect=on&utm_term=.c30880aecd1f
  5. https://www.cnn.com/2018/08/22/entertainment/aretha-franklin-will/index.html
  6. https://www.kiplinger.com/article/retirement/T021-C032-S014-estate-flops-michael-jackson-prince-whitney-housto.html

Posted by & filed under Elder Abuse, Retirement Planning.


How to Spot and Stop Financial Abuse of EldersA 2016 seniors study found that the average loss to elder financial abuse victims was $36,000. Financial exploitation of seniors has grown significantly over the past decade, spreading further and creating more and more financial adversity. This disastrous financial exploitation can be spotted and stopped if one can recognize the fraud and take steps to protect yourself and your loved ones. The effects of financial exploitation can be debilitating leading to a loss of trust in others, loss of security, depression, fear, inability to provide for long-term care needs, and even loss of primary residence.


 

Who is Susceptible?

Elder financial abuse is a crime that deprives older adults of their resources and ultimately their independence. Older Americans that may have disabilities or rely on others for help can be susceptible to scams and other fraud. These abuse cases are notoriously difficult to prosecute. In many instances, it may seem as though the senior is willingly (and knowingly) giving their assets away. One immediate red flag is when an older person who was previously engaged and sharp begins to demonstrate a significant lack of recall about important matters. It is important to understand how vulnerable your elderly loved one may be to abuse tactics such as trickery, intimidation, or coercion.

 

Common Types of Fraud

Scams affect every part of life. The most common types of fraud fall under these categories: banking, bankruptcy, health, housing and mortgage, immigration, telemarketing, telephone, and direct mail marketing. The most popular scams include advance fee scams, chain letters, charity scams, IRS-related scams, Health product scams and tech support scams. With an immense collection of types of scams and frauds, it may be hard to figure out where to report each type. Unfortunately, scams are not limited to people you don’t know. Most of these egregious crimes are unreported and many of the them are committed by family members.

 

“The effects of financial exploitation can be debilitating with the individual frequently experiencing loss of trust in others, loss of security, depression, fear, inability to provide long term care needs, and loss of primary residence.”

 

Red Flags

Situations of financial exploitation commonly involve trusted persons in the life of the vulnerable adult such as caretakers, family members, neighbors, and even attorneys. Unfortunately, they look to gain power of attorney or conservatorship and abuse those powers. What are some of the red flags? Some signs include using conservatorship authority to transfer property for the conservator’s benefit, taking advantage of joint bank accounts, using or borrowing property without court authorization, refusing to obtain needed care and medical services for the victim in order to keep the person’s assets available for the abuser, and making unexplained decisions that are not in the best interest of the protected individual. The best approach for this kind of abuse is granting more than one person in a family the power of attorney. Visit an elder law specialist like The Law Offices of Joel A Harris for help. If you don’t have someone you absolutely trust, such as a spouse or child, you should consider co-agents in their power of attorney.

 

Stopping The Abuse

Interventions to address the financial abuse include closing joint bank accounts, having the victim revoke the power of attorney, and putting in a place a responsible person, a private fiduciary, or bank to assist with managing the victim’s funds. Other effective methods of addressing the financial abuse include working through multi-disciplinary teams which include law enforcement and working closely with banks to recognize, report, and investigate financial abuse.

 

One in nine seniors reported being abused, neglected or exploited in the past twelve months.”

 

One in nine seniors reported being abused, neglected or exploited in the past twelve months. The effects of financial exploitation can be debilitating with the individual frequently experiencing loss of trust in others, loss of security, depression, fear, inability to provide long term care needs, and loss of primary residence. If you notice any of the red flags mentioned, you need to take action to mitigate financial loss and even prevent it entirely. Bennet Blum, MD and a leader in the field, developed an effective model for gauging how susceptible someone may be to undue influence. His “IDEAL” model assess the factors: Isolation, Dependency, Emotional manipulation, Acquiescence, and Loss. The IDEAL model is an important approach to safeguarding clients from those who perpetrate elder abuse.

 

Report the abuse – contact the appropriate financial institutions based on the type of fraud to prevent unauthorized transactions. If the report is towards a close relative of the elder, confront the perpetrator and get the proper authorities involved. Theft should be reported to law enforcement officials, and Adult Protective Services in your state or your local police can help. You can also make reports to the Federal Trade Commission for more of the common scams and fraud. Engage an aging life care professional or geriatric care manager who can offer support, guidance, access to resources, and compassion. Choose your trusted advisors wisely and be sure to conduct due diligence for anyone who is counseling, or caring for, your elderly loved one. Lastly, confirm that your loved one’s accounts are protected by the appropriate safeguards so that their personal and financial information stays secure. Equifax, one of the three major credit reporting agencies in the U.S., offers a free credit monitoring service, TrustedIDPremier. With that you are able to monitor and report any suspicious activity on your credit report. Remember, never give your social security number, account numbers or personal financial information over the phone unless you initiated the call.

 

“Choose your trusted advisors wisely and be sure to conduct due diligence for anyone who is counseling, or caring for, your elderly loved one.”

 

Are You Worried about Your Assets After Your Passing?

 

If you are not properly protected you and your loved one’s life savings could be taken away through innumerable and intricate scams. Avoiding and putting a stop to elder abuse also requires planning for your future and protecting your assets. At The Law Offices of Joel A Harris located in Antioch, California, we have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation feel free to reach out to us at (925) 757-4605.

 

Sources

 

  1. https://www.livhome.com/blog/stop-financial-abuse-elders/
  2. https://www.usa.gov/stop-scams-frauds
  3. http://www.napsa-now.org/policy-advocacy/exploitation/
  4. https://www.forbes.com/sites/johnwasik/2018/03/30/5-ways-to-spot-and-stop-elder-financial-abuse/#3dd742706eff
  5. https://www.aarp.org/money/scams-fraud/info-2015/how-to-spot-early-warning-signs-of-elder-financial-abuse.html
  6. https://www.aba.com/Consumers/Pages/ProtectingTheElderly.aspx#