Celebrities Who Forgot to Include Unborn Children in Their Wills

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Having a complete estate plan that protects and provides for your loved ones is not only wise, it’s essential. Without an estate plan in place, your family or friends may not receive what you want them to receive. It is also just as important to remember to update your estate planning documents whenever something changes which would affect your intentions. Here are a couple of shining examples of celebrities who failed to keep their estate plans up to date:

Michael Crichton. Crichton was a best-selling author, producer, director, and screenwriter. He was most known for his work in science fiction including books such as Jurassic Park, Andromeda Strain, The Lost World, and many more.

Sadly, he died of cancer in 2008 at the age of 66, leaving behind a grown daughter from a prior marriage as well as his current wife, Sherri Alexander, who was pregnant with his son.  Even more unfortunately, Crichton never got around to updating his estate plan to provide for his unborn son.

When he passed, his net worth was approximately $175 million. Sherri Alexander filed a lawsuit against the estate to include her son in the will. However, Crichton's only other child, Taylor, aged 20 at the time, opposed the lawsuit and a long and drawn out court battle ensued. A judge ruled that the son would inherit, but it likely cost millions of dollars in attorneys’ fees and much stress before that decision was made. 

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Heath Ledger. Ledger, was an Australian director and actor and is most known for his role as the Joker in Dark Knight. Although only 28-years-old, his estate had a net worth of approximately $16 million. His will left his entire estate to his parents and three sisters.  He failed to update his will even after he had a child (Matilda) with Michelle Williams. Ledger died from an accidental overdose of prescription drugs in 2008. 

The ensuing family legal battles lasted for over five years. Similar to Crichton’s situation, Ledger’s daughter was able to inherit – but again, not without spending a lot of money on litigation.

No One Likes To Think About Death, But It’s Necessary

Most people don’t like to think about their own death and dealing with estate planning documents often forces us to do just that. However, as these situations show, it’s an important and necessary task to undertake, especially when a significant life event has occurred in your family. Find out how we can help you protect your loved ones whenever you’re facing a pregnancy, birth, marriage, divorce, or anything which can affect your estate.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

How to Choose a Successor Trustee

If you have a revocable living trust, you likely named yourself (and your spouse, if you have one) as trustee so you can continue to manage your own financial affairs. Eventually, however, someone will need to step in for you when you are no longer able to act due to incapacity or after your death. The Successor Trustee plays an important role in the effective execution of your estate plan.

The Key Takeaways:

●  Because successor trustees have a lot of responsibility, they should be chosen carefully.

●  Successor trustees can be your adult children, other relatives, a trusted friend, or a corporate or professional trustee.

Responsibilities of A Successor Trustee

At Incapacity: If you become incapacitated, your successor trustee will step in and take full control of your trust for you - making financial decisions involving trust assets, even selling or refinancing assets, and other tasks related to your trust’s assets. Since your trustee can only directly control assets that the trust owns, it’s vitally important that you fully fund your trust. Otherwise, the Trustee may need to use a Power of Attorney document to transfer those outside assets to your trust Your successor may also be involved in paying bills and helping to ensure you get the care you need.

After Death: After you die, your successor acts just like an executor of an estate would - takes an inventory of your assets, pays your final bills, sells assets if necessary, has your final tax returns prepared, and distributes your assets according to the instructions in your trust. Like incapacity, the successor trustee is limited to managing assets that are owned by the trust, so fully funding your trust is vitally important. If you fail to fund your trust completely at this point, probate may be needed.

Your successor trustee will be acting without court supervision, which is why your affairs can be handled privately and efficiently - and probably one of the reasons you have a living trust in the first place. But this also means it will be up to your successor trustee to get things started and keep them moving along. Choosing a successor who is organized, detail oriented, and has a personality to get things done efficiently is important and is discussed more fully below.

What You Need to Know: 

Your successor will be able to do anything you yourself could do with your trust assets, so long as it does not conflict with the instructions in your trust document and does not breach any fiduciary duty owed to the beneficiaries.

It isn't necessary for the successor trustee to know exactly what to do and when, because your attorney, CPA, and other advisors can help guide him or her, but it is important that you name someone who is responsible and conscientious.

Who Can Be Successor Trustees

Successor trustees can be your adult children, other relatives, a trusted friend and/or a professional or corporate trustee (bank trust department or trust company). If you choose an individual, you should name additional successor trustees in case your first choice is unable to act.

What You Need to Know: 

They should be people you know and trust, people whose judgment you respect and who will also respect your wishes. 

●  When choosing a successor, keep in mind the type and amount of assets in your trust and the complexity of the provisions in your trust document.

●  For example, if you plan to keep assets in your trust after you die for your beneficiaries, your successor would have more responsibilities for a longer period of time than if your assets will be distributed outright and all at once.

Consider the qualifications of your candidates, including personalities, financial or business experience, and time available due to their own family or career demands. Taking over as trustee for someone can take a substantial amount of time and requires a certain amount of business sense.

Be sure to ask the people you are considering if they would want this responsibility. Don't put them on the spot and just assume they want to do this. Conversely, don’t feel like you absolutely have to have a green light to name someone as successor. They may resign or choose not to serve as trustee if they don’t want to serve.

Trustees can and should be paid for their work; your trust document should provide for fair and reasonable compensation.

If you have questions about selecting, educating, or advising your successor trustees, please don’t hesitate to reach out for a consultation. Even if your estate plan has already been drafted, having a second opinion on your trustee lineup can save your family thousands of dollars by avoiding an improper selection. Give us a call today to schedule your free initial estate planning consultation.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

Finances Aren’t Everything in Estate Planning

 

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Money may be the most commonly discussed type of wealth contained within a person’s estate, but the riches of their experience and wisdom can mean even more to family members down the line. Reinforcement of family traditions can be built into an estate plan alongside your wishes regarding your money, property, and personal items. After all, what really makes a family a family is its values and traditions — not necessarily the money in the bank account.

One idea that has gained popularity is to hold a family meeting in which you discuss the sorts of things that matter to you most. In addition to the value of sharing your wisdom, you may also make it more likely that your heirs will handle their inheritance correctly if they understand the reasoning behind your choices. This is just one of many reasons to have a family discussion about your legacy and your estate plan.

How to tell your story through your estate plan

It is fulfilling to be able to hear your parent’s and grandparent’s stories of their fondest memories and adventures, as well as the struggles they overcame to get the family where it is today. This wisdom provides meaning for a financial legacy that otherwise might just be viewed as a windfall. As part of your estate and legacy planning, you can decide to record your own personal history. Here are a few ways:

Audio files: With the broad range of audio formats available today, you can record in the way that’s easiest for you - anything from a handheld cassette recorder (believe it or not – these do still exist – and I know attorneys who still dictate letters using them) to the Voice Memos app on your iPhone. There are some easy-to-use digitizing services that can compile your stories into audio files to make available to your family and descendants.

Video files: The same goes for home movies and other video recordings. Older film formats can be easily digitized and organized along with the videos from your phone. Today’s technology also makes it easier than ever to add narration (which may provide helpful context) to a video, making the story all the richer.

Photo albums: Many families have photo collections that catalog generations. It’s a disaster when something like this is lost in a fire or extreme weather event, or even misplaced in a move. Creating a digital database is a favor to your family in more ways than one: Not only will they have access to these memories at any time, they can also feel secure knowing that these family keepsakes won’t be lost anytime soon and that multiple copies can be made for the different branches of the family.

Letters and other writings: If you enjoy writing, you can also include handwritten or typed letters of stories to your family members in your legacy plan to be received and read at the time of your choosing. You may also wish to include past letters and postcards that have been tucked away in the attic. It’s not only personally fun to relive the memories of the past by reviewing your old letters and postcards, but it's also a great way for your children and grandchildren to have a window into your formative years.

Passing your values to the next generation

Most estate planning strategies blend your finances with your personal values. For example, we might have a discussion on some of your personal values. Whether you feel most passionate about the need for your beneficiaries to travel and gain worldly experience, continue a unique family tradition like sailing or astronomy, or support meaningful charitable or spiritual work, we can draft trusts that contain funds specifically set aside for these endeavors.

Educational trusts: If you value higher education, you might want to set up a trust to fund undergraduate and graduate degrees, medical school, or studies abroad for your family’s future generations. Because of sharp increases in educational costs within the U.S., your grandchildren will likely stand to benefit immensely from an educational trust.

Incentive trusts: Similar to the way educational trusts set aside wealth for the purpose of funding a beneficiary’s schooling, incentive trusts can also help steer the course of your descendants’ lives be encouraging some paths while discouraging others. For example, an incentive trust could contain instructions for disbursements to be released when the beneficiary is working a part or full-time job. Or if family vacations were an important part of your upbringing, you could set aside funds specifically for your grandchildren to experience the same wonderful tradition you enjoyed.

Charitable trusts or foundations: Charitable trusts or foundations establish a family legacy of supporting a cause, but they also have the added financial benefit of reducing income and estate taxes. They are an excellent way to help a charitable organization that’s central to your core values and make your name associated with that philanthropic effort for generations to come.

While there are many options available for estate planning these days, having an experienced estate planning attorney is one of the most important decisions you can make. Don’t use “do it yourself” estate planning. If you are you curious about exploring a few of these options in your estate plan, don’t hesitate to give us a call today.  We can schedule a free initial consultation to go over your many options for showcasing your memories and values in a long-lasting way that truly benefits your heirs.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Eagan, Burnsville, Apple Valley, Prior Lake, Lakeville and the Twin Cities South Metro. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

How to Deal With a Family Member's Addiction or Substance Abuse With Your Estate Plan

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Substance addiction is not uncommon in the United States, impacting as many as one in seven Americans. Because of its regularity, navigating a loved one’s addiction is actually a relatively common occurrence in everyday life. However, a loved one’s addiction or substance abuse problem should be considered when working on your estate planning. Whether the addiction is alcohol, illegal drugs, prescription drugs, or behavioral like gambling, most clients want their loved ones to be safe and experience a successful recovery if possible.  A properly created estate plan can help, rather than hinder that recovery.

The idea that money from a trust could end up fueling those addictive behaviors can be a particularly troubling one for most clients. Fortunately, it’s possible to frame your estate planning efforts in such a way that you’ll ensure your wealth has only a positive impact on your loved one during their difficult moments.

Funding for treatment

One of the ways your trust can have a positive influence on your loved one’s life is by helping fund their addiction treatment. If a family member is already struggling with addiction issues, you can explicitly designate your trust funds for use in his or her voluntary recovery efforts. In extreme cases where an intervention of some sort is required to keep the family member safe, you can provide your trustee with guidance to help other family members with the beneficiary’s best interest by encouraging involuntary treatment until the problem is stabilized and the loved one begins recovery.

Incentive trusts

Incentives can be included in your estate planning to help improve the behavior of the person. For example, the loved one who has an addiction can be required to maintain steady employment or voluntarily seek treatment in order to obtain additional benefits of the trust (such as money for a vacation or new car). Although this might seem controlling, this type of incentive structure can also help with treatment and recovery by giving a loved one something to work towards. This approach is probably best paired with funding for treatment as discussed above, so that there are resources to help with treatment and then benefits that can help to motivate a beneficiary.

Discretionary trusts

Giving your heirs their inheritance as a lump sum could end up enabling addiction or making successful treatment more difficult. There is another option. Lifetime discretionary trusts provide structure for an heir’s inheritance. If someone in your life is, or might eventually, struggle with addiction, you can rest easy when you know the inheritance you leave can’t be accessed early or make harmful addiction problems worse.

Of course, you want to balance this lifetime protection of the money with the ability of your loved one to actually obtain money out of the trust. That’s where the critical consideration of who to appoint as a trustee comes in. Your trustee would have discretion to give money directly to your beneficiary or pay on your loved one’s behalf (such as a payment directly to an inpatient treatment center or payment of an insurance premium). When dealing with addiction, your trustee will need to have a firm grasp of what appropriate usage of the trust’s funds looks like. Appointing a trustee is always an important task, but it’s made even more significant when that person will be responsible for keeping potentially harmful sums of money out of the addicted person’s hands. In some circumstances, it is better to appoint a corporate, or neutral third party, as trustee to avoid any familial influence or pressure the addicted beneficiary may attempt to wield over the appointed trustee.

Navigating a loved one’s addiction is more than enough stress without having to worry about further enablement through assets contained in your trust. Having a qualified estate planning attorney to take some of the burden off your shoulders by helping you build an estate plan that positively impacts your loved one and doesn’t contribute to the problem at hand will allow you to sleep easier at night. That way, you can go back to focusing your efforts on the solution. Call us today to see how we can help.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

Why the Holidays Are a Perfect Time to Discuss Your Estate Plan with Your Family

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Many of us work all of our lives to build up our assets so that our family will be comfortable when we pass on. There are few things more fulfilling than the thought of sharing wealth and legacy with our family.

It is impossible to plan for every eventuality, but careful planning can guard against two main risks:

a)    Your intentions regarding your estate weren’t made clear, resulting in the potential for costly, time-consuming conflict.

b)    Your family did not understand or share your wealth management vision, resulting in the possibility of foolhardy spending and indulgence.

The good news is both of these issues can be prevented through honest communication with your family now. While it’s not always easy to broach this topic, a family gathering at the holidays might be the best time to have a conversation with your children and loved ones about your estate plan.

Why it’s important to talk to your family

Passing along our wealth is one thing, but what about passing along the values of work ethic and generosity that enabled us to acquire and grow that wealth in the first place? Too many fortunes built by one generation are lost by the next, not due to bad luck or the IRS, but due to a lack of understanding of wealth management and preservation. Also, when your family doesn’t appreciate the rationale behind your estate planning choices like the use of lifetime trusts, this lack of understanding can lead to conflict and resentment among family members. In a worst case scenario, your heirs end up suing one another. No one relishes the idea of family being torn apart over antiques, heirlooms, or who gets the cabin up north. Nevertheless, it happens far more often than anyone cares to admit.

Should you tell your children about their inheritance?

The question of whether to tell children about their inheritance draws conflicting viewpoints. Many clients express concern that this information might reduce a child’s work ethic or make them feel otherwise entitled, killing their motivation to seek a career and a “normal” life. Depending on the child’s temperament, this might be a legitimate point. On the other hand, inexperience and lack of understanding about wealth can result in a quickly lost inheritance, only because your heir didn’t know what to do.

The best path for most clients is a “happy medium,” sharing your plan in general terms with your heirs, without necessarily telling them the exact dollar values. You might even entrust some heirs with some responsibility for investment and entrepreneurial opportunities now before they inherit anything. That way, they begin to share your guiding values, you are able to impart your wisdom, and they are therefore better prepared to handle, manage and even grow their inheritance when they ultimately receive it.

Communication now prevents conflict later

You have put careful thought into which assets go to which beneficiaries and why. But, when the details of a plan are sprung on people, especially during a time of grief, differing opinions can create fighting. If your family unexpectedly discovers upon your death that there is a substantial amount of money to be distributed, and you haven’t shared your justification behind the decisions you’ve made, then you’ve set the stage for conflict and infighting – possibly even a costly and lengthy lawsuit.

To overcome these challenges, frame your estate planning around your guiding principles, communicate your intent thoroughly in the trust, and explain your vision clearly to your trustees and beneficiaries while you’re still around to explain things. By attaching your values to your estate planning and involving your family in the process, your estate plan now becomes a family plan, minimizing the risk of conflict.

What should you discuss at the family meeting?

Once you’ve committed to discussing your estate planning with your family, what should you share specifically? Should you detail the entire plan with them, or just an outline of it? Should you go into detail about who gets what?

The specifics of what should be discussed about your estate will depend on your family, your circumstances, and your overall level of comfort with how much knowledge they possess. You don’t necessarily have to give up your privacy, and there’s typically no need to reveal specific dollar amounts at this meeting. One caveat - if there’s anything in your plan that might stir controversy, concealing it now serves to invite conflict later. Thus, a good basic rule of thumb is to share as much as is necessary to get everyone on the same page.

Tips for a successful estate planning family meeting

When you hold your family meeting, a bit of awkwardness is to be expected at first—after all, no one in your family (presumably) is likely eager to discuss what will happen when you die. Likewise, you need to be prepared to talk through some of the choices you’ve made that are likely to generate some pushback. However, the end of the meeting is often more comfortable than the beginning. The following guidance can help you get there.

Plan the meeting after the holiday, if possible. If you’re gathering the family at a holiday like Thanksgiving or Christmas, try to arrange the actual meeting to take place after the holiday itself, so a potentially uncomfortable conversation doesn't spoil any planned festivities.

  Invite your financial advisor, estate planning attorney, or accountant to be in attendance. (More to this point momentarily.)

  Schedule the meeting in a quiet place that encourages candid conversation. A public place is probably not appropriate for this discussion. Your financial advisor or estate planning attorney might have access to space if you need it and prefer a “neutral” site over your living room.

  Arrange for child care. This meeting should be an adults-only gathering so everyone can participate without distractions from babies and children.

Set an agenda. Encourage open conversation, especially on any controversial points, but have a clear list of points to be covered, so you don’t forget anything in the midst of emotional moments.

Set a start and stop time. This step will help the meeting stay on track without meandering away from the main points. If something significant comes up, you can always continue the discussion later.

Strike an inclusive tone. While you should not suggest that your decisions are open to challenge or discussion (it is your estate plan after all), try to convey that you are inviting the family to share your vision and goals. If you can get them on board with you at the outset, the risk of disputes will be significantly reduced later.

Should you involve your financial advisor, attorney, and accountant?

Some people might have misgivings about having a third party advisor present at an otherwise private family gathering, and it’s certainly not a mandatory step. However, you might want to consider inviting your financial advisor, estate planning attorney, or accountant to the meeting for the following reasons:

The presence of your financial and legal team can add a sense of authority to the conversation, reinforcing that your choices have not been arrived at lightly.

With your permission, your team can review the structure of your estate plan with your family, highlight its benefits, and make the meeting easier for you to conduct.

In some cases, there might be questions from your family. Your team can, with your permission, answer questions, especially those of a technical nature.

Tailor the role of your financial advisor, attorney, and accountant in your family meeting to your specific needs. Whoever you include can give a brief presentation of your estate plan as part of the proceedings, or simply be on hand to clarify points. When appropriate, someone from your team can even act as a facilitator or moderator for the meeting itself.

We are here for you

In whatever way you choose to address this sensitive subject with your family, remember that we are here to help, from a full review of your estate plan to offering guidance on how to include your loved ones in a family vision for your estate. When you’re ready, call us for an appointment to discuss your needs.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

 

How Long Should You Keep Important Documents?

In a society flooded by paperwork, the question of how long to hold on to important documents has been puzzling for most people. We especially worry about documents of a financial or personally identifying nature. Worrying about losing something important sometimes leads us to hoard everything; conversely, those who worry about things like identity theft are sometimes too quick to shred documents. Most of us, however, lie somewhere between these two extremes: entirely confused about what to keep and how long to keep it.

You should save certain documents longer than others, and— for financial and estate planning purposes—these documents should be organized and easily located. Some documents should be kept indefinitely, others for shorter periods of time. Many documents aren’t important enough to hang on to. While it might seem like a good idea to keep everything, the resulting clutter might make it difficult to locate important papers amid all the unimportant ones. Even with digital documents and cloud storage, you can still run out of space.

In order to dispel this confusion here are some guidelines on which documents should be kept, and for how long:

Keep These Documents for Three Months or Less:

·         ATM receipts

·         Credit card receipts

·         Receipts for small or everyday purchase

·         Utility bills

Unless you have a specific reason (such as company reimbursement or business deductions on your income tax return), after 1-3 months, these receipts become inconsequential and just add to the clutter in your home or office. Your bank statements will reflect ATM withdrawals, and your bank and credit card statements and/or cancelled checks can be proof of payment for utilities and other regular purchases.

Keep These Documents for One Year:

·         Monthly mortgage statements—Your annual tax statements will eventually make these unnecessary to retain.

·         Paycheck stubs—Once you’ve reconciled these stubs with your annual W-2, you should no longer need them.

·         Checkbook ledgers (if you use them)—Many people today keep ledgers online using an accounting software. If you do the old-fashioned handwritten check ledger, you won’t need it longer than a year.

·         Insurance statements and records—Once you receive a current policy renewal or statement, the old one becomes obsolete.

·         Investment account statements--In general, store these for at least one year. Include your monthly statements as well as any trade confirmations.

·         Undisputed medical bills and receipts—Keep these documents if you’re haggling with insurance or have a personal injury case in the works, keep these as evidence. Otherwise, you can get rid of them after a year.

 

Keep These Documents for at Least Seven Years:

·         W-2 and 1099 forms—These documents prove your income for loans and possible tax audits.

·         All tax-related receipts—These documents justify your tax deductions if the IRS wants proof of them.

·         Cancelled checks for tax, business, mortgage and home improvement purposes—Some people like to save all their cancelled checks, but if you want to minimize, go through these checks once a year and shred any that are irrelevant while keeping those that relate to your tax, business, mortgage, or home improvements.

·         Bank statements--Keep them for at least one year, either in printed form or saved in electronic form. They can be useful when identifying potential fraud, identity theft or other anomalies with your account. As with all financial or legal documents that have personally identifiable information, always shred paper copies before discarding.

·         Disability records and unemployment income stubs—It’s a good idea to keep paperwork related to income you receive directly from the government.

Keep These Documents Forever/Indefinitely:

·         Income tax returns—Some suggest your returns can be shredded after seven years along with your tax preparation documents, but we recommend holding onto the returns themselves.

·         Personal identification documents—These include birth certificates, Social Security cards, current and outdated passports, etc.

·         Legal documents—These include marriage and divorce certificates, lawsuit settlements, etc.

·         All receipts and documents related to your home or real estate holdings—These include mortgage documents, title/deeds, home improvement receipts and records related to buying and/or selling the property (including commissions and fees). Keep these documents for as long as you own the property, plus a minimum of six years after selling.

·         Vehicle titles and/or related loan documentation--Hold these for at least three years from the date the transaction is finalized. Many people keep them for 10 years or longer, however, because they can be helpful even long after the transaction is done if there are any questions.

·         Receipts for all major purchases—Keep these receipts for warranty purposes and to show value for possible insurance claims. You can shred these when you sell.

·         Annual investment and retirement account statements--Your quarterly statements should be held until the annual statement arrives. At that point, cross-check the quarterly statements with the annual one. If everything matches, you can shred the quarter statements. Keep the annual records until the account is closed.

·         Education records—These include high school and college transcripts, as well as diplomas and degrees.

·         All relevant financial and estate planning records—These documents include wills, living wills, trust documents, pension plan documents, power of attorney designation, medical and burial information, etc.

Electronic versus Physical Storage

In today’s digital age, many people choose to save important documents electronically by scanning them and saving them to a hard drive or into a cloud-based storage service, like Dropbox, Box, Google Drive, or iCloud. This strategy is an excellent one for saving space and reducing clutter. If you choose to do so, we recommend backing up these documents in several places with at least one backup offsite (for example, if you use a secure cloud-based storage, make sure you have a backup on a second service or use a hard drive stored in a safe deposit box). However, you should always keep a physical copy of the following items, preferably stored securely in a safe deposit box:

·  Birth certificates

·  Social Security cards

·  Passports and other legal IDs

·  Marriage license

·  Property deeds and related mortgage documents

·  Vehicle titles and related loan documents

·  Pension plan documentation

·  Insurance policies

·  Financial and estate planning documents

There may come a day when we can go 100% paper-free, but we’re not there yet.

Final Tips about Organization

When figuring out which documents to keep and which to shred—as well as how long to keep documents—a good organization system will help keep things from devolving into chaos and clutter. This system can be as simple as a filing system with folders labeled according to “expiration date” (i.e., 3 months, one year, etc.) or an online filing system with similar labels. Revisit your paperwork regularly to keep things up to date.

Keeping up with documentation can be a challenge, even for the most diligent families, and even with the most organized systems. For financial planning purposes, we can help you get connected with a financial advisor who can help you stay organized with your documentation. Contact our office today if you would like a recommendation.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

What Happens to Your Frequent Flier Miles When You Die?

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 If you are a frequent flier on domestic airlines, one of your many estate planning concerns might be what will happen to your accumulated miles once you have passed away. Depending on the number of miles, they could be worth thousands of dollars. In that case, you probably don’t want them to just vanish, but some airline policies say that’s exactly what will happen.

The law doesn’t generally consider airline miles personal property that can be bequeathed directly to heirs, but there are still some steps you can take to help ensure your miles live on. It all starts with examining the airline policies in question.

Airline Policies Regarding the Transfer of Frequent Flyer Miles

Some relevant policies include:

American Airlines AAdvantage: “Neither accrued mileage, nor award tickets, nor status, nor upgrades are transferable by the member (i) upon death…However, American Airlines, in its sole discretion, may credit accrued mileage to persons specifically identified in court approved divorce decrees and wills upon receipt of documentation satisfactory to American Airlines and upon payment of any applicable fees.”

Delta Airlines SkyMiles: “Except as specifically authorized in the Membership Guide and Program Rules or otherwise in writing by an officer of Delta, miles may not be . . . transferred under any circumstances, including…upon death…”

Southwest Airlines Rapid Rewards: “Points may not be transferred to a Member's estate or as part of a settlement, inheritance, or will. In the event of a Member’s death, his/her account will become inactive after 24 months from the last earning date (unless the account is requested to be closed) and points will be unavailable for use.”

United Airlines MileagePlus: “In the event of the death or divorce of a Member, United may, in its sole discretion, credit all or a portion of such Member’s accrued mileage to authorized persons upon receipt of documentation satisfactory to United and payment of applicable fees.”

It is clear that policy terms vary, and they may vary even when talking with different airline agents. Airfarewatchdog.com has found discrepancies between written policies and what customer service representatives told them over the phone. Here is the chart published by Airfare Watch Dog. You can see their excellent chart here.

 The New York Times also highlighted this issue with an article summarizing their findings here: New York Times - Airline Miles Afterlife.

How to Transfer Miles After Death

The key point is that even though airline policies may say they don’t permit miles transfers after death, employees often have the discretion to approve them. Despite this, there is no way to know whether your airline will work with your loved ones regarding the transfer of your miles after you are gone.

One way to better ensure your miles get transferred is to include a provision in your will or trust that makes your wishes clear. This step is especially important if your airline requires a copy of a will as documentation, but it can be helpful in any event.

Another option is to leave your account number, login and password to the person you would like to be able to use your miles. Some airlines permit such transfers and usage of miles after the account holder’s death.

In either scenario, you should talk to your loved ones about your intentions, so they know to pursue the issue in your absence.

Lastly, if you’re the one trying to claim miles of a deceased person, you should understand the airline’s policies before offering information about the account holder’s death, as the account could be cancelled immediately, leaving you with no recourse.

Final Thought on Frequent Flyer Miles: Use ‘Em or Lose ‘Em

Frequent flyer policies can change at the whim of the airlines even as you are living, so another idea to keep in mind is to use the miles now and create experiences with your loved ones rather than plan to pass the miles on later.

If you have any concerns about frequent flyer miles, contact our office, and always be sure to include all your assets, even your airline miles accounts, when discussing wills, trusts, and estate plans with your attorney.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

 

How to Include Grandkids in Your Estate Planning

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As wealth is accumulated, there is a natural desire to pass that financial stability to your family. With the grandkids, especially, there is often a special bond that makes people want to provide well for the grandkids’ future. However, that bond can actually turn into a weakness if proper precautions aren’t set in place. If you’re planning to include the grandchildren in your will or trust, here are six potential dangers to watch for, and ways you can avoid them.

1. Not including an age stipulation.

We have no idea how old the grandchildren will be when we pass on. If they are under 18, or if they are financially immature when you die, they could receive a large inheritance before they know how to handle it, and it could be easily wasted.

Avoid this pitfall: Create a long-term trust for your grandchildren that provides continued management of assets regardless of their age when you pass away.

2. Too much, too soon.

Even if your grandkids are legally old enough to receive an inheritance when you pass on, if they haven’t learned enough about handling large sums of money properly, the inheritance could still be squandered rapidly.

Avoid this pitfall: Outright or lump-sum distributions are generally not advisable. Luckily, there are many options available, from staggered distributions to leaving their inheritance in a lifetime, “beneficiary-controlled” trust. An experienced estate planning attorney can help you decide the best way to leave your assets.

3. Failing to communicate how you would like them to use the inheritance.

You might trust your grandchildren completely to handle their inheritance, but if you have specific intentions for what you want that inheritance to do for them (e.g., put them through college, buy them a house, help them start a business, or something else entirely), you can’t expect it to happen if you don’t communicate it to them in your will or trust.

Avoid this pitfall: Stipulate specific things or activities that the money should be used for in your estate plan. Clarify your intentions and wishes.

4. Being ambiguous in your language.

Money can make people act in strange ways. If there is any ambiguity in your will or trust as to how much you’re leaving each grandchild, and in what capacity, the door could be opened for greedy relatives to contest your plan.

Avoid this pitfall: Be abundantly clear in every detail concerning your grandchildren’s inheritance. An experienced estate planning attorney can help you clarify any ambiguous points in your will or trust.

5. Using your retirement.

Many misguided grandparents make the mistake of forfeiting some or all of their retirement money to the kids or grandkids, especially when a family member is going through some sort of financial crisis. Trying to get the money back when you need it might be difficult or impossible.

Avoid this pitfall: Resist the temptation to jeopardize your future by trying to “fix it” for your grandchildren. If you want to help them now, consider giving them part of their inheritance in advance, or setting up a trust for them. But, always make sure any lifetime giving you make doesn’t leave you high and dry. Also, advancements can, and often should, be accounted for in your estate planning. If you give assets during your life to one grandchild but not another, and you fail to account for it in your plan, the grandchild who did not receive a lifetime gift may contest your plan. Again, speaking with an experienced estate planning attorney can help you navigate these treacherous waters.

6. Failing to Protect Your Children's Inheritance from Divorce and Other Creditors.

Often times, grandparents hope that the inheritance left to their children will trickle down to the grandkids. In our society, where divorce is commonplace, all too often inheritances are lost to divorce settlements because beneficiaries commingle their inheritance with "marital" assets. It is also not uncommon for inheritances to be lost to that beneficiary's creditors or judgments.

Avoid this pitfall: An experienced estate planning attorney can devise strategies to protect your beneficiaries' inheritance from divorce, creditors, bankruptcy, and other law suits and judgments by using spendthrift clauses and other provisions in trusts set up for your children. Doing so will result in a higher probability that your assets trickle down to the grandchildren eventually.

If you’re planning to put your grandchildren in your will or trust, we’re here to help with every detail you need to consider. Contact us to explore your options and protect your family.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

The Positive and Negative Aspects of Probate

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In the estate planning world, the word “probate” often comes with a harshly negative undertone. Indeed, for many people — especially those with larger estates — financial planners and estate planners recommend trying to keep property out of probate whenever possible. That being said, the probate system was actually established to protect the property of the decedent and his/her heirs, and in a few cases it may even work to an advantage. In this article, we will look briefly at the pros and cons of going through probate.

The Pros of Probate

For some estates, especially those in which no will was left, the system works to make sure all assets are distributed according to state law. Here are some potential advantages of probating an estate:

●     It provides a trustworthy procedure (and Court oversight) for redistributing the property of the decedent if no will was left.

●     It validates and enforces the intentions of the decedent if a will exists.

●     It ensures taxes and valid claimed debts are paid on the estate, so there’s a finality to the decedent’s affairs, rather than an uncertain, lingering feeling for the beneficiaries.

●     If the decedent was in debt, probate gives only a brief window (4 months in Minnesota) for creditors to file a claim, which can result in more debt forgiveness.

●     Probate can be advantageous for distributing smaller estates in which estate planning was unaffordable or impractical.

The Cons of Probate

While probate is intended to work fairly to facilitate the transfer of property after someone dies, consider trying to avoid probate for these reasons:

●     Probate is a matter of public record, which means personal family and financial information become public knowledge.

●     There may be considerable costs, including court, attorney, and executor fees, all of which get deducted from the value of the estate. This means less money goes to your family and more money goes to those individuals listed above.

●     Probate can be time-consuming, holding up distribution of the assets for months, and sometimes, years. In Minnesota, I tell clients to expect a minimum of 8 months, including 4 months of simply waiting for the creditor claims period to expire. You also have to wait 2 weeks while notice of the probate hearing is published in the local newspaper.

●     Probate can be complicated and stressful for your executor and your beneficiaries.

●     Because probate is a court proceeding, it can lead to a more convenient avenue for a disgruntled beneficiary to object to the decedent’s wishes in his or her will.

Bottom line: While probate is a default mechanism that ultimately works to enforce fair distribution of even small estates, it can create undue costs, delays and can invite disputes among heirs. For that reason, many people prefer to use strategies to keep their property out of probate when they die.

A skilled estate planning attorney can develop a strategy to help you avoid probate and make life easier for the next generation. For more information about your options, contact us today to schedule a consultation.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.

What To Do When a Loved One Dies

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If you've been appointed as personal representative (formerly known as an executor) of a loved one's estate, or a successor trustee, and that person dies, your heartache – not to mention your to-do list, including tasks ranging from planning the funeral service, coordinating relatives coming in from out of town and eventually meeting with a trust administration or probate lawyer – can be quite overwhelming. First and foremost, you need to take care of yourself during this emotional time.

To help you with the “business” side of things, here’s a quick checklist of crucial details that will make the trip to our office to handle the legal affairs easier. We know it can be difficult, but some of these things have a deadline, so make sure that you reach out sooner rather than later:

●     Secure the decedent's personal property (vehicle, home, business, etc.).

●     Notify the post office.

●     Get copies of the death certificate. You'll need them for some upcoming tasks.

●     Notify the Social Security office.

●     Take care of any Medicare details that need attention.

●     Contact the decedent's employer to find out about benefits dispensation.

●     Stop health insurance and notify relevant insurance companies. Terminate any policies no longer necessary. You may need to wait to actually cancel the policies until after you’ve “formally” taken over the estate, but you can often get the necessary paperwork started before that time.

●     Get ready to meet with a qualified probate and trust administration attorney. Depending on the circumstances, a probate may be necessary. In Minnesota, probate is necessary if the decedent owned real estate in his/her name alone OR if the decedent owned assets in his/her name alone that total more than $75,000.

●     Even if a probate is not needed, there is work that needs to be done to administer the trust properly. Here’s what you need to gather:

1.    The decedent’s will and trust. If the original of the deceased’s will or trust can’t be located, contact us as soon as possible and bring any copies you do have.

2.    A list of the decedent’s bills and debts. It’s often easier to bring the statements or the actual credit cards into the office rather than try to write out a list, but do whatever is easiest for you.

3.    A list of the decedent’s financial advisors, insurance agent, tax professional, and other professional advisors.

4.    A list of the decedent’s surviving family members, including their contact information when available. Even if they’re not named in the trust, the attorney will need to know about everyone in the family.

●     Cancel your loved one's driver's license, passport, voter's registration, and club memberships.

●     Close out email and social media accounts, and shut down websites no longer needed. Depending on circumstances, to take these steps, you may need to wait until you’ve “formally” taken over the estate, but you can often learn the procedures and be ready to take action.

●     Contact your tax preparer.

You may be thinking about handling all the paperwork yourself. It’s a tempting thought – why not keep things as simple as possible? – but a “DIY” approach to this process might cost you and your family dearly. Read on to understand why.

Consequences of Mishandling an Estate: Examples from Real Life

Example #1: Failing to disclose assets to the IRS. Lacy Doyle, a prominent art consultant in New York City, inherited a large estate when her father passed away in 2003. He allegedly left her $4 million, but she only disclosed fewer than $1 million in assets when she filed the court documents for the estate. Per the New York Daily News: “She opened an ‘undeclared Swiss bank account for the purpose of depositing the secret inheritance from her father’ in 2006 — using a fake foreign foundation name to conceal her identity… [she also] didn't report her interest in the hidden accounts — nor the income they generated — from 2004 to 2009.” As a result of these alleged mischiefs and Doyle’s failure to report the accounts to the IRS, she was arrested, and she now faces a six-year prison sentence.

Example #2: Mishandling an estate during life using a power of attorney. Another famous case of an improperly handled estate involved the son of famous New York philanthropist and writer, Brooke Astor. Her son, Anthony Marshall, was convicted of misusing his power of attorney and other crimes. According to a Washington Post obituary: “In 2009, Mr. Marshall was convicted of grand larceny and other charges related to the attempted looting of his mother’s assets while she suffered from Alzheimer’s disease. He received a sentence of one to three years in prison but, afflicted by congestive heart failure and Parkinson’s disease, was medically paroled in August 2013 after serving eight weeks.”

Example #3: Naming Your Butler as Personal Representative. Doris Duke was the heiress to a 1.3 billion dollar tobacco fortune. When she died in 1993, she left a great majority of her estate to her charitable foundation established through her will and trust. Rather than naming a qualified professional to handle her foundation, she named her butler, Bernard Lafferty, as the executor. Lafferty was an alcoholic and an improvident spender and he routinely commingled his own personal assets with the assets of the estate despite being entitled to a $500,000 per year annual payment from the estate. The legal challenges came flooding in and the estate paid over $10 million dollars in legal fees following an eventual settlement with Lafferty agreeing to step down as executor. You can read more here.

Keys for Handling a Probate

1.    Seek professional advice from a probate attorney to avoid even the appearance of impropriety when handling an estate.

2.    Errors of omission or accident can be costly – even if your intent was good. An executor who makes distributions from an estate too soon can get into serious trouble, for instance. An executor’s personal assets can wind up in jeopardy if his or her actions cause an estate to become insolvent.

3.    Even if you’re well organized and knowledgeable about probate law, it’s difficult to anticipate what can go wrong. There are many ways to end up in hot water when you’re handling the estate or trust of a loved one.

We are here to help you steer clear of the obstacles and free you to focus on yourself and your family during this difficult time. Contact us for assistance. We can help you manage estate and trust related concerns as well as point you towards other useful resources like our free e-guide: Checklist After Death - What to Do Following the Death of a Loved One. Contact our office today at (952) 658-6503 for assistance with administering an estate of a loved one.

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.