Family Security Law Group, APC

Here’s Why You Need an Estate Plan

“No matter what line of work you are in, estate planning has facets that apply to everyone, and it comes down to documenting wishes and avoiding probate and unnecessary taxes. Too many people put it off, but, in general, the sooner you do it, the better.”

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or with special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently written, so the estate goes to the child when he reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for him by a trustee or executor until a set age, like 25 or 30.

Probate is the default process to administer an estate after someone’s death, when a will or other documents are presented in court and an executor is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced Thousand Oaks estate planning attorney at Family Security Law Group, APC about establishing a trust. A living trust can be amended or revoked at any time, if circumstances change.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

Even Young Adults Need Estate Planning

“Young adults can often feel like they’re immortal, but nobody really knows how long they’ve got left, and that’s why estate planning is key at any age.”

Those in their 20s and 30s are strongly encouraged to create an estate plan. A lot can be accomplished in a few simple steps, says Wealth Advisor in the recent article, “Estate Planning Isn’t Only for the Old and Wealthy.”

First, people can draft a will to provide directions regarding what happens to their assets, such as who will inherit both financial and personal items. Virtual assets like social media accounts should also be included. You should make a list of usernames and passwords for all your accounts and be sure that a trusted relative or friend has access to it.

Another important part of estate planning is to designate the beneficiaries for all company-sponsored life insurance and 401(k) plans to avoid probate issues. You can also set up a payable-on-death account from your bank.

As part of estate planning, you should also name a healthcare proxy and a general durable power of attorney. These two documents allow your trusted agent to make medical and financial decisions, in the event you’re incapacitated. If you want to give your proxy specific instructions, create an advance directive, known as a living will.

As you work through these actions with your Thousand Oaks estate planning attorney, you’ll see that estate planning is not just for the old and wealthy.

It can bring you peace of mind and provide clarity to your loved ones and family, if you should pass away unexpectedly.  

Make a point of sitting down with an experienced Thousand Oaks estate planning attorney at Family Security Law Group, APC and address your estate planning needs. Give us a call at (805) 496-4681 for your complimentary consultation.

Reference: Wealth Advisor (December 20, 2018) “Estate Planning Isn’t Only for the Old and Wealthy”

What’s the Latest with Aretha Franklin’s Estate?

“Trouble is brewing around the estate of Aretha Franklin, where police are investigating possible theft of her assets and an ex-husband is angling for money.”

Aretha Franklin, known as “The Queen of Soul,” died of pancreatic cancer in August of 2018 in her Detroit riverfront apartment at age 76.

Franklin did not have a will or trust. Therefore, processing the estate, which could be worth tens of millions of dollars, has been slow.

The Detroit Free Press reported in a recent article, “Aretha Franklin's ex-husband wants a cut of her music royalties,” that recently filed pleadings in Oakland County Probate Court detail some of the fighting.

"There is a dispute between the estate and Ms. Franklin's ex-husband, the father to one of the heirs, regarding music royalties," David Bennett, a lawyer for the estate, wrote in a pleading.

Aretha Franklin was twice divorced, and the record doesn't name the man, beyond saying that he's the father of one of her four sons. It looks like it’s her first husband, Ted White, who served for a time as Franklin's manager. Franklin and White have a son, Ted White Jr. Her second marriage to actor Glynn Turman didn't occur until 1978—eight years after her youngest son was born.

The recent court pleading was filed in response to a request from Edward Franklin, Aretha’s son, for more financial disclosure from the estate, as it's being processed. Prior to Christmas, a lawyer for Edward Franklin requested that Probate Judge Jennifer Callaghan order the disclosure of monthly financial statements and other records.

Edward wants "copies of all invoices and supporting documents regarding payments to friends and relatives of the personal representative, if any, for services performed for the estate."

The lawyer for the estate, Bennett, asked Judge Callaghan to deny the request for monthly financial updates, because it "would be an exceptional expense to the estate, is time-consuming and would interfere with the administration of the estate."

The IRS filed a claim in December of last year alleging the Franklin estate owed about $6.3 million in back taxes and penalties. An attorney for the estate told the Associated Press that at least $3 million in back taxes had been paid back to the IRS, since Franklin's death.

Reference: Detroit Free Press (January 11, 2019) “Aretha Franklin's ex-husband wants a cut of her music royalties”

Does TV Mogul Sumner Redstone Have the Mental Capacity to Change his Estate Plan?

“The ugly public legal battle over Sumner Redstone's estate plans has come to an end, as a Los Angeles judge on Wednesday ruled the 95-year-old mogul had the mental capacity necessary to amend his trust in 2015 and 2016.”

The decision on TV mogul Sumner Redstone's estate plans, follows the settlement of litigation with his former companion Manuela Herzer.

The Hollywood Reporter explains, in the article “Sumner Redstone Had Capacity to Change Estate Plan, Judge Rules,” that after Herzer was thrown out of Redstone's mansion and removed as the person in control of his health care directive in 2015, she sued and claimed he didn’t possess the mental capacity to make decisions for himself and his business.

The fight included allegations of elder abuse against Herzer and claims that his daughter Shari Redstone was manipulating her father, which have now been resolved. Herzer agreed to repay the $3.25 million she received in gifts and to state that she has no decision-making power concerning Redstone.

Los Angeles Superior Court Judge David Cowan formally concluded the fight over Redstone’s competence, by confirming the validity of Redstone's current estate plan.

"Mr. Redstone had sufficient capacity to execute the Fortieth Amendment to and Restatement of the Sumner M. Redstone 2003 Trust dated July 23, 2003, and the Forty-First Partial Amendment thereto on their respective dates of execution, October 16, 2015, and May 20, 2016," writes Cowan, adding the changes "were not the product of undue influence, fraud, duress or mistake."

Judge Cowan’s decision is no guarantee that there won't be further disputes over what happens to the billionaire's estate after he dies, but it does lend support to Redstone in weathering future challenges. This is particularly important, because a guardian ad litem was appointed by the court in December to ensure that the proceedings were in Redstone's best interest.

“After three years of litigation, Mr. Redstone is grateful for today’s court confirmation of his capacity to execute his estate plan, and of his free will in doing so," his lawyer Gabrielle Vidal said in a statement to The Hollywood Reporter.

Reference: The Hollywood Reporter (January 23, 2019) “Sumner Redstone Had Capacity to Change Estate Plan, Judge Rules”

Why Did a Rock Star Sign a Will Days Before He Drowned?

“Connecticut State Police investigating the suspicious death of All That Remains guitarist Oli Herbert have examined a will signed by the Longmeadow native a week before his death.”

All That Remains guitarist Oli Herbert signed a will at a Hartford, Connecticut car dealership on October 9, 2018. The will was notarized by an individual who was a friend of Herbert and his wife Elizabeth, according to The Hartford Courant.

Mass Live recently reported in the article “Police probe will signed by All That Remains guitarist Oli Herbert days before suspicious death” that there isn’t an attorney signature on the will. Herbert’s will was filed in probate court in late December 2018. There also is no indication the will was reviewed by any legal representatives.

The will designates Elizabeth Herbert as executor and sole benefactor, adding that under no circumstances should Oli Herbert's sister Cynthia Herbert become executor or receive anything from his estate.

Manchester attorney Anthony Spinella is representing Elizabeth Herbert. He told The Hartford Courant that his client initially cooperated with the state police and allowed them to search the couple's Stafford Springs home and answered questions. However, the attorney has now told police that any further requests should come through him.

Herbert's body was found on October 17 by a pond behind his house. The state medical examiner determined that Herbert drowned. However, they haven’t stated a manner of death.

Some of his fans have brought up various theories surrounding the metal guitarist's death. The Facebook page Justice for Oli Herbert has more than 11,000 followers.

Herbert began playing guitar at 14. His first paid gig was a Battle of the Bands on his final day of his senior year at Longmeadow High School.

Herbert started playing professionally in Massachusetts clubs with Netherworld, a thrash metal band he formed in 1991.

Herbert co-founded All That Remains with Phil Labonte in 1998.

Reference: Mass Live (January 14, 2019) “Police probe will signed by All That Remains guitarist Oli Herbert days before suspicious death”

How Can I Leverage Life Insurance in Estate Planning?

“According to a recent study commissioned by Bankers Life Center for a Secure Retirement, middle-income boomers have lowered their overall expectation for financial independence in retirement, since the onset of the financial crisis in 2007. Ten years later, fewer boomers expect they will retire debt free (34 percent today, down from 45 percent before the crisis) and fewer have paid off their mortgages (19 percent, down from 25 percent).”

If someone you care about is one of our country’s estimated 75 million baby boomers, there are a few things you should know. Insurance News Net’s article, “How To Use Life Insurance In Better Estate Planning” says that middle-income boomers are carrying more debt into retirement than ever before. That said, life insurance can help provide your surviving family with an income after you die and also be used to pay off debts. The proceeds from life insurance policies can be used to pay down your mortgage and debts. It can also be used to help pay for funerals and other final expenses.

If you have sufficient assets to pay your debt when you pass away, your creditors will receive their payments from your estate.  However, be aware that it matters if your home is your primary asset and if your spouse or another family member is a co-applicant or co-signer on an account, because your mortgage and other debts, such as credit card bills or car loans, could become their responsibility.

Carrying debt in retirement is very common today. Life insurance can help provide peace of mind knowing that provision has been made for the comfort and security of your family. Boomers should conduct an inventory of their finances and debt, weigh their options and find a life insurance policy that will help with any potential financial burdens upon death. Let’s look at some tips to help you decide, if purchasing life insurance is right for you:

1. What’s your need? Do people depend on you financially? Do you have sufficient funds to cover your final expenses? Consider life insurance to help protect your family's future. Your policy’s beneficiary can use the money for living expenses or to pay off debts.
2. Educate yourself on the different types of life insurance. There are three major types of life insurance coverage—term life, whole life and universal life. All three pay a death benefit, but each can differ in terms of coverage length, premium flexibility, cash value accumulation and distribution.
3. Determine the amount of life insurance you need. What amount of coverage would your family need, if something happened to you? What expenses would have to be covered or debts paid off? What amount is earmarked for savings? The answers will help you determine the type and amount of life insurance you'll need.

Reference: Insurance News Net (January 7, 2019) “How To Use Life Insurance In Better Estate Planning”

How Can I Prepare My Own Funeral?

“We all know our days are numbered and there is nothing that we can do to prevent it.”

Many of us recently watched the funeral of former President George H. W. Bush. There must have been considerable planning done ahead of time to make sure everything ran as smoothly as it did. The president’s funeral is a reminder that we will all eventually pass and how important it is to be prepared.

Hometown Life’s recent article, “Planning your funeral can help ease loved ones’ burden,” explains that the first issue when it comes to planning for when we’ll no longer be here, is to make certain we have an up-to-date estate plan. You may want a will or trust, and you should ask your estate planning attorney to help you decide and keep it current. Remember that a variety of family events can impact your estate plan. If you don’t have an estate plan, you need to get one!

When preparing your estate plan, you must address certain realities you may not want to deal with. However, just kicking the can down the road or doing nothing can create significant issues for your family.

Another issue to consider is whether to pre-plan your funeral. Death always occurs at the wrong time, and it’s always emotional and stressful for those left behind.

In many cases, it makes sense to do some planning for your funeral. Perhaps it’s nothing more than selecting the funeral home you’d like and also the casket. That can be a big help to your family, because in the midst of grieving and not wanting to look cheap, many families overpay for a funeral. If you pre-plan your funeral and choose the type of casket and other services you want ahead of time, you’re eliminating those decisions from your family and most likely saving your family a significant amount of money.

If you do ahead and pre-plan your funeral, here a few other issues you should consider:

• Do you want to be buried? If so, where?
• If you want to be cremated, what do you want to happen to your ashes?
• What type of service do you want (if any)?

If you do want to pre-plan your funeral, put your preferences in writing and give it to your family (funeral wishes typically aren’t put in the will and trust, but in a separate document).

If you do a bit of pre-planning, you’re making things much easier for your loved ones, which can be a real blessing and relief.

Reference: Hometown Life (December 12, 2018) “Planning your funeral can help ease loved ones’ burden“

What Are the Three Greatest Risks to Prepare For in Retirement?

“Instead of focusing on risks that we are aware of, we should be turning our focus to risks that we are oblivious to, Walter Updegrave writes in TIME.”

How can you navigate towards a successful retirement? It’s simple, says Wealth Advisor in the recent article, “The Three Risks To Prepare For In Retirement.”

The authors provide three risks you should protect against:

1. Complacency. Don't let yourself fall victim to complacency risk. This involves feeling smug or uncritical satisfaction with your own achievements. In this case, it’s thinking that you have your retirement plan all set and forgetting about it.

Instead, conduct a retirement inspection to protect against this risk of complacency. An easy way to review your retirement, is by using a retirement income calculator tool. You can input your information, including the amount that you’re saving annually, and the age you plan to retire. The calculator tool will give you a rough estimate of your likelihood of reaching your goal. You want to have a cushion for unforeseen expenses, like medical costs and long-term care. Therefore, if the results look “just okay,” dig deeper and figure out a way to save more.

2. Emotional. This type of risk has the tendency to be highest during periods of market extremes. If you let your emotions influence your investing strategy, it can really damage your retirement prospects.

However, with an asset-allocation strategy, you can manage this risk by setting it and putting it in writing. Many asset-allocation tools leverage financial experts to explain how to choose investments that align with your risk tolerance, time horizon and financial goals.

3. Longevity. Planning for retirement can be complex, and there are many components that must be considered. If you underestimate how long you might live, you might outlive your savings.

However, you can be more precise with an actuaries longevity illustrator. This tool is designed to provide you with perspectives on your longevity risk—the uncertainty of how long you and your spouse/partner might live. It will let you appreciate the risks of outliving your economic resources.

Don’t forget to take the time this year to meet with one of our Thousand Oaks estate planning attorneys and either update your existing estate plan or, if you don’t have a will, Power of Attorney and other necessary items, get yourself an estate plan. This will create a plan for your future and give your loved ones the needed guidance for your possessions and your wishes.

Reference: Wealth Advisor (December 20, 2018) “The Three Risks To Prepare For In Retirement”

Am I Too Young to Start Thinking About Estate Planning?

“After taking inventory of your possessions, including your home, vehicle, stocks, life insurance policies, etc., there are many steps you will need to take to protect these assets -- and yourself. There are many steps and documents that advisors will suggest you put into place immediately for your protection.”

Many people believe they’re too young to begin thinking about estate planning. Others say they don’t have significant enough assets to make the process of planning worthwhile.

However, the truth is that everyone needs estate planning. If you have any assets, and you intend to give those assets to a loved one, you need to have a plan.

Forbes’s article, “Reviewing Your Financial And Estate Planning Checklist,” examines some important topics in estate planning.

The first of topic is a durable power of attorney for property, finances and health care. This document allows you to designate a trusted individual to make decisions and take action on your behalf with matters relating to each of the three areas above.

In addition to the importance of having all powers of attorney readily available, in case you become incapable of making decisions, beneficiary designations should also be looked at frequently to update any changes to family situations, like a birth or adoption, death, marriage or divorce.

Another topic to address is a living trust. A trust will give direction regarding where and how the assets are dispersed when you die. A great reason to use a living trust is that the assets in a trust do not pass through probate court, which can be an expensive and time-consuming process.

Another area is digital assets. It’s critical for your heirs to have access to digital files, passwords and documents. This can be easy to overlook. Create a list of your digital assets, including social media accounts, online banking accounts and home utilities you manage online. Include all email and communications accounts, shopping accounts, photo and video sharing accounts, video gaming accounts, online storage accounts, and websites and blogs that you manage. This list should be clear and updated for your heirs to access.

If you fail to plan for these matters, the outcome will be stressful and expensive for your family. 

Reference: Forbes (January 4, 2019) “Reviewing Your Financial And Estate Planning Checklist”

What Should I Be Doing 10 Years Before Retirement?

“Here are five things you should be doing for success, as you enter the retirement red zone.”

Investopedia’s recent article, “5 Things to Do 10 Years from Retirement,” explains that there's a red zone both in football and retirement planning. In many instances, that zone is where the game is won or lost. In football, the red zone is 20 yards from the goal line. For retirement, it's 10 years from your target retirement date. As you move towards your goal, you may need to “huddle up” and look at your game plan.

1. Figure Out What Retirement Means to You. Before you start making financial plans, be clear on what retirement means to you. It may mean working 40 hours instead of 60 or never working another day for the rest of your life. Whatever you like, it's important to have some idea of what you want to do every day. From there, you can start to shape a financial plan to support your retirement vision.
2. Determine How Much Money You’ll Spend Every Month. Once you've defined what your retirement will look like, you can begin planning for it financially. First, determine how much you'll be spending every month on your retirement budget. Many pre-retirees just don’t know how much they need to live on a monthly basis. An accurate retirement plan will be based on your monthly household expenses.
3. Examine Your Sources of Income in Retirement. While looking at your spending, be aware of all the types of income you'll have during retirement, such as Social Security, a pension, a 401(k) or an IRA. There are choices that will have to be made, if you have a pension. The timing for collecting Social Security payments is also important.
4. Rework Your Investment Strategy. The way you’ve been investing for the past 30 years, is not how you should invest for the next 30. Younger people focus on accumulation, but when you’re in or nearing retirement, you need to concentrate on income and keeping pace with inflation. Diversification is important, but what's more powerful than diversification is asset allocation.
5. Consider Hiring a Financial Professional. You can do-it-yourself, since there are many inexpensive funds and research information available. However, there's much more that goes into creating a comprehensive retirement plan than just investments. Your retirement plan should address your need for income, estate planning, survivorship planning, insurance needs, business continuation, inflation, and other points.

As in football, the team that wins the game, is often the team who played well in the red zone. Don’t fumble the ball at the goal line or settle for a field goal. Score a touchdown with smart retirement planning.

Reference: Investopedia (September 7, 2018) “5 Things to Do 10 Years from Retirement”