Wills and Power of Attorney

Beyond your Will: A Letter of Instruction

Letter of Instruction

Many people view their will as the final document they need in life.  From a legal perspective, that’s true.  One of the most often overlooked things you can do and leave behind for your loved ones is a letter of instruction. 

The letter of Instruction

A letter of instruction is not a legally binding document.  It’s informal and meant to provide those you’ve left behind important information about any personal and financial matters that need to be addressed.  

The letter of instruction should be easy to change and update and address several common concerns of those left behind.  

Important documents and financial papers

First things first.  You need to tell everyone where you will is in the letter.  You’ll also want to disclose where your power of attorney documents, living wills and medical directives.  Also, leave birth certificates, info in SSI benefits, any marriage licenses that may be applicable and if necessary, divorce documents. 

Next,  you’ll want to list all of your assets and their locations.  If you have a financial advisor, they should have these items for your loved ones.  If not, leave bank account numbers, investment account numbers and locations, info on retirement accounts like 403b, IRA or 401k accounts. You’ll also want to list any health insurance plans you have, information on your business if you’re self employed, info on any life insurance or disability policies and if you’re a veteran, leave information pertaining to your service and any benefits that come in because of that service. 

Finally, list all of your liabilities, especially ones your family may not know about.  The last thing you want is for your family to get dragged into litigation or get hit with surprise bills. 

Final Arrangements 

The letter should also include details about your desired funeral arrangements.  How do you wish to have your body disposed of? Burial, cremation, composting (apparently that’s a thing), shot off in a rocket? Your family needs to know.  Also, what kind of service do you want? Who do you want to preside over it? Is there any special music you’d like played? Where do you even want the service to be?

Additionally, make a list of anyone you would want notified of your passing and include contact information if possible.  If you would rather people donate in your memory list that as well, along with those charities you’d prefer. 

Passwords and Digital Information

Almost everyone has an online presence now.  It’s important for your family to know where you have accounts and what you want done with them.  Leave user names, passwords and any other information you’ll likely need to access your online life.  Also, leave instructions for social media pages and how you wish for them to be handled after you’re gone.  

Personal items

One of the biggest points of contention that occur after someone’s death is the disposal of small personal items.  Do you want your niece to get your China set? What about your silver?  Do you want to leave your wedding ring to your daughter or son? What about other sentimental items that have little monetary value but mean the world to people?  Our recommendation is to always pass these items along before you pass, it allows you to see the person you love enjoy the item and it keeps quarrels down after you’ve gone.  However, should you choose not to pass it along before you pass, make sure to leave a mention as to who should get what when the time comes.  

Last but not least

A Letter of Instruction can offer you and your family peace and guidance during a difficult time.  It’s hard to write such a letter but your family will thank you if you do.  I know when my own grandmother passed, having this type of letter made dealing with the emotions of the time so much easier on everyone involved.  

Once you get started, you may find that the letter writes itself, but take the step and get started.  If you’re not sure about the status of your estate, give us a call and let us walk you through the process of creating an estate planning package.  Our estate planning package will give you and your family peace and comfort during difficult times and make your final wishes known. 

Responsibilities Abound, Choose Wisely

Procrastinators usually face problems.  The scramble to get things done in a timely manner. Often, they make less than optimal decisions.  This is especially true of people who procrastinate on the issue of estate planning.  

This type of procrastination generally can’t be turned in late because….well, you’re probably dead or incapacitated.  If you don’t take the time to plan properly now, it can cost your family big time in the future.  This is exceedingly true when it comes to choosing the right executor to handle your affairs after your passing. 

Responsibilities Abound

Most people think that being an executor is an easy job.  There truly isn’t much to it, or so they reason in their head.  In reality, it’s quite the opposite. 

Executors have numerous significant responsibilities.  They can collect from debtors, inventorying the assets of the estate and protecting them, filing estate tax returns and paying related taxes, dealing with creditors, handling investment decisions and liquidating and distributing assets and property to beneficiaries.  

So, who should you choose as your executor? Most people just assume a family member of a close friend will do it. However, that’s not always a safe assumption.  As this article from Kiplinger states, you need to talk to your potential executors and make sure they’re willing to take on the task AND they’re actually up to it.  

Things you should consider before naming an executor:

  • Will this person be too grief stricken at your passing to do the job effectively?
  • Does this person stand to gain from your will and if so, will that be a conflict of interest?
  • If the previous statement applies, do you think that it will lead to disputes between family members and/or other beneficiaries of the estate?
  • Is your potential executor a trustworthy person with a good knowledge of financial best practices?
  • If this person needs to hire professionals, will they be professionals you would trust?

To avoid these risks, we always recommend that you examine your potential executors carefully before giving them these kinds of responsibilities.  If you believe that your potential executors lack the financial acuity or moral authority to handle your estate you may need to look elsewhere to find a good executor, even if you believe you may end up hurting some feelings.  

In the end, having a plan is the key ingredient to estate planning.  However, to hone your estate plan and ensure it is successful in distributing the assets in a way that puts you at peace, you need to put in the extra leg work to make sure you have a good executor or team of executors to handle your final wishes.

When you’re ready to get started with your estate plan, give us a call.  We’ve helped thousands of people put together a solid basic estate plan and we’re ready to do the same for you.  

An Estate Plan in 5 Easy Steps

Estate Plan

An effective estate plan is something that doesn’t just come together overnight.  It takes some planning on your part and you shouldn’t neglect these things.  In the uncertain world we live in, it never hurts to put in a little leg work now so that when the time comes, your family isn’t stressed out by having to tie up lots of loose ends or worry about their future.

Below is a list of 5 Steps we think are extremely important for each person to do, regardless of wealth. 

Make an Inventory

You have many things that you have accumulated over the course of your life both tangible and intangible. You may not think you have enough to worry about, but to be very frank, you would be surprised by what all you’ve got. 

Tangible assets like cars, boats, houses, jewelry and other real estate are all things you need to account for. If you own these things free and clear, that’s great, otherwise you’ll need to let your heirs know who holds mortgages or loans on the items in question. 

You also likely have intangible assets.  Things like 401(k)s or other retirement plans like pensions or IRAs.  You may also have life insurance, bank accounts, ownership in a business or stocks and bonds.  You’ll need to leave a detailed list of where each of these assets are and how you access them.  

You don’t want your heirs spending their precious time looking for things or for those things to ultimately end up where you don’t want them to go. 

Account for your family’s needs

If you’re married and/or you have children who depend on you, you’ll also want to make sure that you have something in place to take care of their needs until such time as they’re able to do that themselves.

If you have someone who depends on your income, you’ll want life insurance from a highly rated company. (I’ll link to the A.M. Best list of top life insurers here)  How much you need depends on your individual circumstance, but generally speaking for each million dollars you have in life insurance, you’ll be able to safely generate about $30,000-$50,000  per year in income if invested wisely.  

If you have children and you’re not married, you’ll also need to designate a guardian if the children are under 18 or have no other surviving parent.  Don’t take for granted that your children will end up with the relative you want them to live with.  Custody battles have torn extended families apart.  

Finally, if you have children, you’ll want to make sure that you document how you would want them raised.  Don’t assume a guardian would raise your children in the way you want them brought up if you don’t specifically express that in your directives.  Guardians should be named in a will or other binding legal document and you should discuss with your guardians how you want your children raised BEFORE you name them in your will. 

Establish your directives

A key tenant of any good estate plan is a medical care directive, also known as a living will, will give your family guidance in how you wish for your medical care to progress should you find yourself unable to make those decisions. 

There are also powers of attorney that exist that give people the ability to direct your financial life should you become incapacitated.  You need to be careful with these documents though and make sure you fully understand them before assigning those powers to just anyone.  

Finally, you’ll want to have a will in place. A will is a legal document that directs your executors (those you choose to carry out your final wishes and disperse the assets of your estate) in settling your final debts and dispersing any inheritances you wish to leave to people. It is the final LEGAL piece of any good estate plan. 

Review your beneficiaries

Many assets can pass to people you designate outside of the probate process.  Bank accounts, life insurance, retirement and pension accounts all have beneficiaries that can be listed as P.O.D. (pay upon death).  In this scenario, these assets can pass to someone outside the probate process.  The problem is that if you leave someone as a beneficiary, it will pass to them REGARDLESS of your wishes laid out in your will.  In other words, if you named an ex or someone else you don’t want to get the money as a beneficiary, it will go to them regardless.  It’s always a good idea to review beneficiaries periodically and especially after major life events like a birth, death, marriage or divorce.  

Plan to reassess

This may seem redundant, but you always need to be reassessing how you want your estate handled.  Your state in life may change, you may get married, divorced, have children, inherit from another relative or have any number of changes in fortune over the course of your life.  Keeping a good, updated plan in place is imperative to those you leave behind.  Not only because it ensures your wishes are carried out, but it also ensures that when your heirs are dealing with grief and/or other uncomfortable situations, they know and are reassured by your written wishes. 

While many of these steps can be taken without the help of an attorney, having wills, powers of attorney and medical directives drafted by a knowledgeable attorney can ensure that your final wishes are carried out and unlikely to be overturned. When you’re ready to take steps to ensure the future of your family and discuss your estate plan, give us a call.

What is a beneficiary in a will?

A beneficiary is a person you designate to receive property from your estate after your death.  You can name specific beneficiaries to inherit specific things (like a car, real estate or jewelry) or you can leave them everything in one fell swoop. 

Types of beneficiaries

In your will, you can leave specific instructions about the order you want people to inherit your assets.  There’s three different types of beneficiaries you can specify.

  • Primary beneficiary: this is the person or organization you want to receive your assets first. 
  • Secondary (Contingent) beneficiary: for lack of a better term, this is the backup beneficiary.  This person or organization would receive the assets of your estate if your primary beneficiary can’t.  This could be because the primary beneficiary predeceased you or they chose not to receive that assets you left. 
  • Residual beneficiary: This person will receive any assets in your estate left over after all other benefits have been distributed.  You can leave multiple residual beneficiaries and designate the percentage of your estate that each of them should receive. 

 

Who can be a beneficiary?

The long and short of it is, you have options.  

Your beneficiary can be any of the following:

  • Any person, including a husband or wife, partner, children, extended family members or just a friend you met last week.  Basically, it’s your stuff you can leave it to whoever you want. 
  • A charity or nonprofit: you can donate any or all of your estate to a charity or nonprofit like a church, a college or school, a charity like St. Jude or the ASPCA or even your own foundation if you have one.  The options are almost limitless. 
  • A trust. If you have a trust, you’ll likely want it to be the beneficiary of your will, otherwise, what was the point.  

When you do choose a beneficiary, remember, minor children (people under 18) generally can’t own property.  In other words, if you have or wish to leave property to minor children, you’ll probably want to name a financial guardian to watch over them and manage their inheritance until they are of age.  If you plan on passing along a substantial amount of money, you may want to consider setting up trusts to manage the money until children reach an age that you deem “mature.”

Finally, if you’re married at the time of your death, almost all states have laws that mean your spouse should inherit a minimum amount of your estate.  If you want to give a larger part to someone other than your spouse, you’ll need to discuss that with an attorney that specifically handles large estates.  

Having a will is extremely important in Georgia. You’re ready to make the first step on your estate planning journey, give us a call today. 

Estate Planning Just Can’t Wait

We get it, Estate Planning is scary. Creating what is known as an estate plan is a very important aspect of everyone’s life that they will need to undertake at some point.  Not only will it give you peace of mind, it will allow those you leave behind to know for sure what your final wishes are so they aren’t left guessing in a time of grief and heartache.  Beyond knowing your final wishes, it will also allow your assets to be distributed according to your wishes upon your death. Regardless of how important this process is, significant numbers of people do not have an estate plan, often making excuses about why they don’t need thinks like a will, a power of attorney and a healthcare directive.

One of the biggest excuses people have for not having a plan in place is thinking that they don’t have enough money, assets and prized personal belongings to warrant that kind of planning.  Even if you all you have is the roof over your head and the clothes on your back, you still need a power of attorney or health care directive so that your loved ones are able to make the kinds of healthcare and financial decisions you would want in the event you are unable to do so yourself.

Another excuse people make is the belief that having a joint bank account with your children or others is a good means of transferring that particular asset upon your passing.  The cold hard truth of that is, unless you only have one child you will have a very difficult time separating accounts equally for your children. This can leave hurt feelings amongst your heirs and even more trouble in life if you are incapacitated and unable to manage your finances.

Another reason people don’t have an estate plan is that they believe that it simply costs too much.  The truth of the matter is, nothing is potentially more expensive than dying without a will.  The attorneys at Harmon and Gorove offer a free, no pressure consultation to help clients understand how important and how easy it is to implement a proper estate plan.  Our fees are among the most competitive, at times, even less expensive than online tools you pay for. Furthermore, the filing fees at probate courts are usually minimal and only enough to keep the programs running in the future.  

Finally, most people simply state that they just haven’t gotten around to is and one day they will get it done.  Believe me, we understand. One our own attorneys put off proper estate planning until the death of a loved one prompted them to take action.  It NEVER pays to wait around, especially with something as important as your estate planning. Your estate plan allows loved ones to make decisions with peace of mind, knowing your wishes and desires. It also allows you to distribute your assets in ways that you deem fit, making sure that only those you deem worth inherit your most prized possessions.

Considering the consequences of not having an estate plan for our loved ones should we pass before making these plans should provide more than enough motivation to take the first steps of implementing an effective and meaningful plan. The attorneys at Harmon and Gorove understand how hard it is to make that first step.  We want you to feel comfortable and understand what your options are. Contact us today to schedule a free consultation where we can discuss your estate planning goals.