Which Of These Powerful Secrets Could You Use To Build Your Ideal Estate Planning Legal Program
- Keep your estate settlement simple;
- Avoid the court-supervised Probate process when you die;
The internet has turned the paper trail of one’s life into virtual confetti of online accounts. Sure, it’s not hard to find someone’s Facebook, LinkedIn and Twitter accounts. You might even be able to guess a password or two. But you won’t guess them all, and even if you could you might be breaking the law; in many places, accounts can’t be legally accessed by anyone other than the holder.
All that gray area creates the potential for Twitter, Facebook, email and other accounts to sit stranded online in a state of suspended animation. At best, they’ll be creepy reminders every time they prompt friends and family to wish a happy birthday to the departed. At worst, they’ll keep important assets, like bank balances, locked away.
There are currently federal and state laws that may make it a criminal offense for anyone other than the account owner to access an account. This is true even if the owner gives another person permission to do so. By the end of 2017, it is expected that almost every state will have enacted some form of the Revised Uniform Fiduciary Access to Digital Assets Act. RUFADAA will allow for users to request a service provider to give a fiduciary access either by opting in on an online tool furnished by the service provider or through one’s estate planning documents.
The biggest challenge facing your estate may be finding digital assets after a death. If your family or named fiduciary isn’t aware that you have a Dropbox account, no one may ever look for it.
We recently partnered with Directive Communication Systems which provides personal representatives with a powerful solution for managing personal accounts. When the time comes, DCS works with accounts to implement an estate’s final wishes which may include deletion, transference, memorialization or other instruction. Even a financial institution can be contacted to initiate next steps for the attorney. With DCS, you can be assured that accounts will be managed securely and estate administration will be handled smoothly saving both time and anxiety. Continue reading
We’ve talked to many Wisconsin families about things that they had done in an effort to protect their money from all being sucked up by the nursing home costs which can exceed $100,000 annually. Lots of mistakes are being made by people who don’t truly understand the intricacies of the Wisconsin Long Term Care Medicaid law and regulations. While you won’t get all the answers in this post, you’ll learn what some of the common mistakes are. So… here are options that just don’t work. Continue reading
Many people don’t like to talk about death but they will if it has anything to do with protecting their assets – including digital assets. Digital assets are your online accounts, digital currencies, online accounts, passwords, digital files, user names, and any Terms of Service Agreements (TOSA) that you signed. With the growth of digital technology and use, these assets are expected to be worth over US$5 billion by year 2020. You will need and should have a will drawn up to protect these assets either after death or in case of incapacity to ensure that your loved ones gain legal access to these assets.
The First Step: Assigning Assets
Before anything else, you will have to list down all your digital and traditional assets since your will or estate documents will incorporate all assets. You will need a fiduciary, an executor for your traditional assets, a personal agent with power of attorney in case of incapacity to make decisions, and a trustee. These are the individuals chosen by you to manage all your assets according to your wishes so it is important to select them wisely.
The main issue facing digital assets is the fact that they are not tangible assets and exist primarily on the Internet. The individual tasked to manage your digital assets will have to deal with extenuating circumstances far different because these digital assets may or may not have monetary value. In fact, they are valuable to you because they represent something sentimental to you like a memory or a milestone.
The Second Step: Understanding the Laws on Digital Assets
According to the US Government Administration on Aging, “70% of the people who turn 65 can expect to use some form of long-term care during their lifetimes.” Also, according to the Administration on Aging, “one-third of today’s 65 year-olds may never need support, but 20 percent will need it for longer than 5 years.”
So, based upon the skyrocketing costs of long-term care, and the odds that two-thirds of us may someday need long- term care, should we plan ahead? The answer is YES.
In 2009, approximately 42 million people in the United Stated regularly provided care to an adult who required assistance with daily activities. Another 61.6 million provided care at some point during the year. As the nation’s population ages, more Americans will likely be required to assist aging or disabled parents and other loved ones. Unfortunately, caregivers are not always authorized to make medical decisions for the people they provide assistance to.
One of the easiest and most important steps an individual can take is to create an advance care directive. An advance care directive will generally include a durable power of attorney, a living will, and name a health care proxy. A durable power of attorney will designate an individual to make financial decisions for an incapacitated person. A living will provides instructions for care at the end of a person’s life and will normally specify whether artificial measures such as life support should be used. A health care proxy is similar to a power of attorney except it designates someone to make medical treatment decisions for a person who is no longer able to make such decisions or communicate with doctors.
Understandably, discussing an aging parent’s medical wishes is not always easy. By creating an advance care directive, an individual may be able to alleviate some of the decision-making burden often placed on family members such as children. Oftentimes, loved ones may disagree with one another regarding an individual’s care, or children may have a difficult time making tough medical decisions for a parent. An advance care directive can eliminate emotional obstacles and prevent a caregiver from being required to petition a court for decision-making authority through a guardianship or conservatorship.
Because Wisconsin residents are living longer, their chances for becoming incapacitated before they die have increased dramatically in recent years. Recognizing the potential for incapacitation as part of your Wisconsin estate plan is important in order to avoid unnecessary legal battles and guardianship proceedings (sometimes called “living probate”).
If the capacity of an individual was unclear at the time their estate plan was created, the documents may be questioned either by those who seek to inherit, or by a probate court. Luckily, demonstrating the capacity to create a will or other planning document in is fairly easy and according to now codified Wisconsin case law, anyone who objects to a decedent’s testamentary capacity must do so “by clear, convincing, and satisfactory evidence.” Still, it is important to create your estate plan before an unexpected illness or incapacitation arises.
Today, most estate plans in Wisconsin will include a revocable living trust, a will, a power of attorney for both healthcare and finances, and a living will. A revocable living trust, financial power of attorney, and health care power of attorney will normally name someone else to take over decision-making in the event of the creator’s incapacity. In this way, a comprehensive estate plan preemptively provides for any potential impairment. Additionally, a thorough estate plan may spare your loved ones from going through the process of living probate.
As you begin planning for retirement and doing general estate planning, do not overlook the importance of end of life health care planning.
With people living longer than ever before, the reality is that you may not be in a position to communicate what your wishes and desires are for health care as you near the end of your life. It’s important that these are set up ahead of time utilizing something like an advanced healthcare directive.
An advance health care directive is simply a written document that appoints another person to make health care decisions on your behalf when you are unable to. In many cases, this directive will spell out specific situations and how you want them handled, such as do not resuscitate orders.
IRA’s can be complex and confusing sometimes. There are so many rules and laws that must be followed to avoid penalties. One common area of confusion surrounds the required minimum distribution (RMD). The RMD is simply the minimum amount that an IRA holder must withdraw from their account once they hit the mandatory age to avoid being hit with penalties. This mandatory age varies from state to state but is typically age 70 ½ in most states.
When dealing with any aspects of your financial life, especially your IRA’s, it is always best to consult a financial planner that has experience in IRAs and tax laws.
Required minimum distributions seem to create the most questions when it comes to traditional IRAs. One of the most common questions pertains to taxes. Will the RMD be taxed? This depends on how your IRA is set up. If your IRA contributions are done pre-tax, then the answer to that is yes. You will pay taxes on the RMD. If you had your contributions taxed at the time of the contribution (which is not the typical scenario) you will not have your distribution taxed. Just remember that at some point taxes will have to be paid on this money. If you didn’t pay taxes when you made the contribution you will pay taxes at distribution.