4 Quick Tips for Avoiding a Will or Trust Contest

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A will or trust contest can frustrate your final wishes and objectives, rapidly deplete your estate, and tear your loved ones apart.  With proper planning, however, you can help your family avoid a potentially devastating will or trust contest. 

If you are concerned about challenges to your estate plan, here are 4 tips to consider:

1.      Do not attempt “do it yourself” solutions.  If you are concerned about an heir or beneficiary contesting your estate plan, the last thing you want to do is attempt to write or update your will or trust on your own.  An experienced estate planning attorney can help you construct and maintain an estate plan that will discourage lawsuits.

2.      Let family members know about your plan.  When it comes to estate planning, secrecy breeds contempt.  While you don’t need to let your family members know all the intricate details of your estate plan, you should let them know that you have taken the time to create a plan that spells out your final wishes and who they should contact if you become incapacitated or die.

3.      Use discretionary trusts for problem beneficiaries.  You might think that you need to completely disinherit a beneficiary because of concerns that a potential beneficiary will squander their inheritance or use it in a manner against your beliefs.  However, there are options other than completely disinheriting someone. For example, you could require that the problem beneficiary’s share be held in a lifetime discretionary trust and name a third party, such as a bank or trust company, as trustee.  This will insure that the beneficiary will only be entitled to receive trust distributions under terms and conditions you have dictated.  You will also be able to control who will inherit the balance of the trust if the beneficiary dies before the funds are completely distributed.

4.      Keep your estate plan up to date.  Estate planning is not a one-time transaction – it is an ongoing process.  Therefore, as your circumstances change, you should update your estate plan.  An up to date estate plan shows that you have taken the time to review and revise your plan as your family or financial situations change.  This, in turn, will discourage challenges because your plan will encompass your current estate planning goals.

By following these four tips, your heirs and beneficiaries will be less likely to challenge your estate planning decisions and will be more inclined to fulfill your final wishes. If you are concerned about heirs contesting your will or trust, you should seek the professional advice of an attorney now. Contact our office today at (952) 658-6503 if you have questions about ensuring that your estate plan is less susceptible to challenges.

How to Choose the Right Agent for Your Incapacity Plan

Most people think that estate planning equates to death planning. While planning for death is certainly a critical factor, planning for what happens after you die is only one piece of the estate planning puzzle. It is equally important to plan for what happens if you become mentally incapacitated and are unable to handle your financial or health care decisions.

What Happens Without an Incapacity Plan? 

Without a comprehensive incapacity plan, your family may need to petition a court so that a judge can appoint an agent (known as a guardian or a conservator) to take control of your assets and make all personal and medical decisions for you under a court-supervised guardianship or conservatorship. The guardian or conservator must report all financial transactions to the court, usually on an annual basis.  The guardian or conservator is also typically required to obtain court permission before entering into certain types of financial transactions (such as mortgaging or selling your real estate) or making life-sustaining or life-ending medical decisions.  The court-supervised guardianship or conservatorship will then continue until you either regain capacity or die. As you can imagine, this can be a costly endeavor and is easily avoidable.

Who Should You Choose as Your Financial Agent and Health Care Agent?

As you can see from the above discussion, a guardian or conservator has an important and involved role if you become incapacitated.

Creating an incapacity plan can help you order to avoid a court-supervised guardianship or conservatorship. 

Rather than having a judge - who knows nothing about your family - decide, your incapacity plan will have you appoint one or more agents to carry out your wishes. There are two very important decisions you must make when putting together your plan:

  1. Who will oversee management of your finances if you become incapacitated (your financial agent); and
  2. Who will oversee making medical decisions on your behalf if you become incapacitated (your health care agent).

Factors to consider when deciding who to name as your financial agent and health care agent (who do not have to be the same people) include:

·  Where does the agent live?  With modern technology, the distance between you and your agent should not matter as much as it once did.  However, someone who lives nearby may be a better choice than someone who lives in another state or country.

·  How organized is the agent? The agent will need to be well organized to manage your health care needs, keep track of your assets, pay your bills, and balance your checkbook, in addition to being able to manage their own finances and family obligations.

·  How busy is the agent?  If the agent has a demanding job and works long hours, or travels frequently for work, then the agent may not have the time required to take care of your finances and medical needs.

·  Does the agent have expertise in finance or the health care field?  An agent with work experience in finances or medicine may be a better choice than an agent without it. Moreover, an agent with work experience in medicine may be better equipped emotionally to handle the sensitive issues that may arise when making healthcare-related decisions.

·  Is the person trustworthy? This may go without saying, but the agent you select needs to be someone you trust completely without any hesitation. This is someone who could hold your financial life or your actual life in their hands. Read on for a cautionary tale in selecting a trustworthy individual as your attorney-in-fact.

What Should You Do?

The most common choices clients make for health care agents and attorneys-in-fact are (1) spouses; (2) adult children; or (3) siblings. At the end of the day, you want to sleep better knowing who you have chosen will handle things efficiently while keeping the best interests of your family in mind.

If you choose the wrong person to serve as your financial agent or health care agent, your incapacity plan is likely to fail and land you and your assets in a court-supervised guardianship or conservatorship.

Perhaps worse is the case where you choose the wrong attorney-in-fact and they abuse the power given to them. A prime example of this is famous hockey player Jack Johnson. He appointed his parents as agents on his power of attorney documents. They allegedly took out loans against his future earnings without his knowledge and ultimately landed him in bankruptcy. You can read more about that case here and here.   

In order to create an incapacity plan that will work the way you expect it to work, you need to carefully consider who to choose as your agent and then discuss your decision with that person to confirm that they will in fact be willing and able to serve.

Contact Minnesota estate planning attorney Zach Wiegand and Gold Leaf Estate Planning, LLC at (952) 658-6503 today to arrange an initial consultation to discuss the specifics of your situation and to ensure that you have the right incapacity agents selected for your estate plan.

3 Simple Ways to Avoid Probate Costs

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Here is the bad news: probated estates are subject to a variety of costs from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the particular probate's complexity, fees can run into tens of thousands of dollars. 

Here is the good news: probate costs can be reduced by avoiding probate. It is that simple.

Here are three simple ways to avoid probate costs by avoiding probate:

1.  Name a Beneficiary. The probate process determines who gets what when there is no beneficiary designation. So, naming a beneficiary is the easiest way to avoid probate. Common beneficiary designation assets include: 

·  Life insurance

·  Annuities

·  Retirement plans

·  Bank accounts with payable on death designations

2. Create and Fund a Revocable Living Trust.  A revocable trust owns your property, yet you remain in control of all legal decisions until your death. After your death, the trustee you’ve selected manages your assets – according to your wishes. A trust works well to avoid probate if properly created and funded by an experienced estate planning attorney.

3.  Own Property Jointly. Probate can also be avoided if the property you own is held jointly with a right of survivorship. Commonly, a married couple will own their home as joint tenants with a right of survivorship. When the first spouse dies, no probate is needed because the home will automatically pass to the surviving joint tenant spouse. If you are unsure of how your home is owned (joint tenancy, tenants in common, etc.) feel free to contact our office to discuss.

We Have the Tools to Help You

Contact our office today at (952) 658-6503 or by email at info@goldleafestateplan.com. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the most efficient way to do so.

Celebrity Estate Planning Blunders: Philip Seymour Hoffman’s Will

"Her life is in your hands, Dude."

"Her life is in your hands, Dude."

Oscar-winning actor Philip Seymour Hoffman who starred in such movies as Patch Adams, The Big Lebowski, and Along Came Polly, died from a drug overdose in February 2014. Unfortunately, he left behind three young children - and a fortune estimated to be worth $35 million. 

He was only 46. 

After his death, Mr. Hoffman’s Will was filed for probate.

·  The Will is 15 pages – and, it was signed on October 7, 2004, about a year and a half after the actor’s first child was born. 

·  The Will leaves his entire estate to Marianne “Mimi” O’Donnell, the mother of all three of Mr. Hoffman’s children. Mimi was a costume designer. 

·  The couple never married and separated in 2013, due allegedly to Mr. Hoffman’s drug problems. 

Estate Planning Mistake No. 1 – Using a Will

Shortly after Mr. Hoffman’s Will was filed, The New York Post published it online and his final wishes instantly became public information.

·  Interestingly, and despite having lived in Los Angeles, he requested to have his son (the only child living when the Will was signed) raised in Manhattan, Chicago, or San Francisco so that he "will be exposed to the culture, arts and architecture that such cities offer."  

·  There is another way – a private way – that Mr. Hoffman could have planned his estate.  A Revocable Living Trust would have kept Mr. Hoffman’s final wishes a private matter. As CNN reported however, Hoffman repeatedly rejected his attorney’s recommendation that trusts be created for his kids.

Estate Planning Mistake No. 2 – Failing to Update the Estate Plan

Mr. Hoffman signed his Will in October 2004.

·  Over the next decade, he had two daughters, won an Oscar for best actor for his performance in Capote, and amassed a great majority of his fortune. 

· Considering Hoffman's well-documented, long-term struggle with drug addiction as well as the significant changes in his life and net worth during those nine years, it is both surprising, and not surprising, that he failed to update his estate plan. 

·  At the very least, your estate plan should be reviewed every two or three years to insure that it still accomplishes your goals and takes into consideration changes in your assets, your family, and the law.  

Estate Planning Mistake No. 3 – Ignoring a Trusted Advisor

In probate court documents, it was revealed that Mr. Hoffman’s accountant repeatedly advised him to protect his children with a trust.  But Hoffman ignored this advice. 

·  With the terms of the 2004 Will left unchanged, the estate will pass to Mr. Hoffman’s estranged girlfriend, outright and without any protections. 

·  Nothing will go directly to his children. If Ms. O’Donnell gets remarried and fails to plan properly, a large portion of Mr. Hoffman’s assets could go to Ms. O’Donnell’s new spouse, leaving Mr. Hoffman’s children with far less than he most likely would have wanted. 

· Had Mr. Hoffman listened to his advisors and worked with an estate planning attorney, he could have established a lasting legacy for his children, protecting them and their inheritances. 

With the counseling and advice of an experienced estate planning attorney, you can avoid mistakes like these. Contact our office today at (952) 658-6503 or info@goldleafestateplan.com to discuss your personal situation.

Zach Wiegand Named Minnesota Super Lawyer Rising Star

I am pleased to announce that I have been named a Minnesota Super Lawyer Rising Star for 2017 by Super Lawyers Magazine.

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Check out my profile here:

http://profiles.superlawyers.com/minnesota/burnsville/lawyer/zachary-wiegand/4c74ae63-ccdf-4eab-a8e4-a04e0a1a711d.html

 

 

According to Super Lawyers: Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The patented selection process includes independent research, peer nominations and peer evaluations. Learn more about Super Lawyers here:

http://www.superlawyers.com/about.html

Estate Planning Basics for Newlyweds – Preparing for the Unexpected

It’s the time of year for beautiful weddings, fun receptions, delicious cakes, special gifts, and romantic honeymoons.  While this is a joyous time for the families of newlyweds, it’s also time for you and your new spouse to plan for your future – for richer or for poorer, in sickness and in health. 

Why Newlyweds Need to Plan Their Estates

Why should newlyweds care about estate planning?  Because everyone – young or old, married or single – needs to protect themselves and those they love.

Many couples, however, spend more time planning their honeymoon than planning the best way to protect each other.   

What Happens Without an Estate Plan?

The fallout of becoming incapacitated or dying without an estate plan is serious, expensive, and painful.  It can cause financial ruin and family discord that may last for generations. 

Without an estate plan: 

·         You leave your spouse and the rest of your family in the dark. They won’t know what you would want to happen if you became incapacitated or died.  This often leads to family fights as each individual argues for what he or she thinks you would have wanted.

·         You’ll leave a heavy burden on your loved ones to make tough decisions about medical care and any withdrawal of life support.

·         The court or state law, not you, will decide who makes health care decisions if you are unable to make those decisions yourself.   

·         A judge, not you, will decide who raises your children.

·         The court can lock down your assets so even your spouse has to get court permission before making a financial move. 

·         Any assets you leave to loved ones can be taken by their divorcing spouses, bankruptcy creditors, medical creditors, predators, and frivolous lawsuits.

·         You may accidentally disinherit your spouse and your children.

·         Your pet could end up in a shelter or euthanized.   

What Should You Do?

We invite you and your new spouse to contact our office to set up a meeting.  We’ll walk you through how to protect each other and those you love; how to protect your pets; and how to protect your assets and make things easier for you and your families.  Call now; we look forward to hearing from you. 

 

Who Needs an Estate Plan?

If you’re reading this, you need an estate plan.  Why?  The short answer is -- everyone, age 18 and older needs an estate plan. It doesn’t matter if you are old or young, if you have built up considerable wealth or if you are just getting started -- you need a written plan to keep you in control and to protect yourself and those you love. 

The Key Takeaways

·  Every adult, regardless of age or wealth, needs both a lifetime plan and an after-death estate plan.

·  Planning for incapacity will keep you in control and let your trusted loved ones care for you without court interference - and without the loss of control and expense of a guardianship or conservatorship proceeding.

·  Every adult (meaning 18 years old or older) needs up-to-date health care directives.

·  You need to leave written instructions to make sure you are the one who selects who’s in charge of when and how your assets will be distributed.

·  We all need the counseling and assistance of an experienced estate planning attorney.

What is an Estate?

Your estate is comprised of the assets you own: your car, home, bank accounts, investments, life insurance, furniture and personal belongings. No matter how large or how small your estate, you can’t take it with you when you die, and you probably want certain people to have certain things you own.

To make sure that happens, you need to provide written instructions stating who you want to receive your assets and belongings, what you want them to receive, and when they are to receive it—that is the essence of an estate plan. If you have young children, you will need to name someone to raise them in your place and to manage their inheritance.

A properly prepared estate plan also will have instructions for your care (and the management of your assets) if you become incapacitated, even for a short time, due to illness or injury. Without the proper documents in place, your family will have to ask the court for permission to use your assets to take care of you and to oversee your care. That process is out of your control and it takes time and costs money, making an already difficult situation even more difficult for your family.

It might surprise you, but having a plan in place often means more to families with modest means because 1) they can least afford to pay unnecessary court costs and legal fees and 2) state laws, which take over in the absence of planning, often distribute assets in an undesirable way. Here’s an example:

Mark and Sally had two young children. Mark died in a car accident on his way to work. Because he had no estate plan, the laws in his state divided his estate into thirds: one third went to Sally and one third to each of his children. Sally, a stay-at-home mom, was forced to go back to work. The court set up guardianships for each child, which required ongoing court costs, including accounting, guardianship and attorney fees. By the time the children reached 18 and received their inheritances, there was not enough left for them to go to college.

What You Need to Know

Don’t try to do this yourself. You need the counseling and assistance of an experienced estate planning attorney who knows the laws in your state and has the expertise to guide you in making difficult decisions such as who will raise your children and who will look after your care at incapacity.  That attorney will also know how to carefully craft the appropriate estate planning documents, so that what you think will happen when you become incapacitated or die actually happens.

Actions to Consider

·  Call or email our office now to set up an estate planning consultation appointment.  We make tough topics manageable to discuss and talk about. 

·  Don’t worry about how life will unfold; the best practice is to have your plan prepared now based on your current situation.

 

What is an Estate Plan?

An estate plan typically includes either a will or a trust in conjunction with a power of attorney and a health care directive. A customized estate plan ensures that your property and possessions are distributed in accordance with your wishes upon your passing. In addition, a properly drafted estate plan will ensure that your family and your property are taken care of if you become incapacitated and are unable to make decisions for yourself.

Will

A Will is a document that disposes of your probate assets when you die. A Will does not avoid probate. A Will is actually a letter to the probate court with instructions regarding who gets your assets.

Other functions of a Will include naming a guardian for your minor children and naming a personal representative (executor) to administer your estate. If you die without a Will, the Minnesota Statutes will determine who is named as personal representative of your estate, who is named Guardian for your children, and also, who will receive your assets upon your death.

Revocable Trust

A Revocable Trust can be used to avoid probate. Think of it like a box that you put all of your assets in to. Once you create the trust, you “fund” the trust by titling your assets in the name of the trust. Upon your passing, the trust’s terms control the distribution of assets titled in the name of the trust. Common reasons for using a Revocable Trust are to maintain privacy, avoid probate, provide divorce and asset protection for children, avoid estate taxes, and to make it easier to manage one’s property in the event of incapacity. Revocable Trusts also provide a more efficient administration of your estate upon your passing as opposed to the time consuming probate process.

Power of Attorney

A Power of Attorney (POA) document allows you to name another person as your “Attorney-In-Fact”. Your Attorney-In-Fact will have the authority to manage your financial and property matters in the event you become incapacitated and are unable to make decisions regarding these matters for yourself. A POA can also be used simply to give another person authority to handle those affairs even if you are not incapacitated. The POA is commonly used to ensure that someone is able to pay your bills and expenses using your own funds if you become incapacitated.

Health Care Directive

Similar to a Power of Attorney, a Health Care Directive (sometimes referred to as a “Living Will” or a Health Care Power of Attorney), will allow you to name a person of your choice as your Health Care Agent. Your Health Care Agent will be able to make health care decisions for you if you are unable to make those decisions for yourself. In addition, a Health Care Directive will include a HIPAA waiver allowing your Health Care Agent the ability to review your medical records to make informed decisions regarding your health care in accordance with your wishes. The situation in which this document best serves its purpose is where family members are unable to agree on whether to prolong life support for an individual who is incapacitated with minimal hope of recovery.

What happens if I don’t have an estate plan?

Generally speaking, if you do not have an estate plan, the Minnesota Statutes will determine what happens to your property and your children should you pass away. If you become incapacitated without a Health Care Directive or Power of Attorney, your family may need to petition the Court for a Guardianship and/or Conservatorship in order to take care of your legal and financial affairs. As you might imagine, these proceedings can be quite costly and can usually be avoided by a simple estate plan. Guardianship, Conservatorship and Probate proceedings are all avoidable with proper planning.