How to Use Goals to Accomplish Your Estate Planning

You can’t put together an estate plan to accomplish your intentions if you don’t know what those intentions are. While it might be hard to think through those issues for the very first time, it’s an exercise that is well worth it.

The very first step in getting your estate plan in order is making the decision to move forward on this important project. It might not necessarily be completely easy or accomplished in one afternoon but it will be well worth the process of helping to support your loved ones.

Your goals do not need to be philosophical or complicated, but they must be created and carefully thought out before you contact an estate planning attorney in NH. For example, maybe you want to make sure that your kids are able to avoid the probate process, maybe you are concerned about unnecessary tax burdens, or maybe you want to ensure that your family receives a smooth transfer of wealth.

You might have very individualized concerns like how best to support a child with special needs. Regardless of the goals that you have, you will need to have these in the back of your mind before you sit down and discuss with a lawyer. A lawyer can help you connect your individual and family goals to the estate planning strategies and tools most recommended to accomplish those.

You do not have to go through the estate planning process alone. In fact, knowing more about the goals you intend to accomplish will help you go to the next level with your estate planning and get the peace of mind that your intentions have been reflected in your documents.

 

When Should I Update My Power of Attorney?

Many of the same events that would prompt you to update your estate planning documents like a will should cause you to reconsider whether or not your power of attorney still makes sense.

This can include recently having gotten married and wanting to designate your spouse as your agent, getting separated or divorced from your current spouse, a child or other family member who is grown in maturity and has shown they want the responsibility of serving in this role or there are updates in your state laws that impact your current POA document.

Another common reason to consider making changes to your power of attorney are problems with your agent. A person you appointed months or years ago might not be the most appropriate choice going forward. For example, if your appointed agent is deceased or otherwise incapable of handling the responsibility, is under investigation for a crime or is in jail, if you’ve had a falling out with your agent or if you no longer trust in your power of attorney agent’s abilities to handle your medical decisions or financial decisions, you will want to discuss with your estate planning lawyer who should instead be appointed in a power of attorney document.

These questions are not always easy to answer and require careful consideration from a thoughtful lawyer who has been there before and has helped many other clients navigate this situation. Set up a consultation today to discuss whether your existing power of attorney document accomplishes your goals.

If you need support with any aspect of Maine or NH estate planning, we’re here to guide you.

 

Does a Trust Take Care of Everything in My Estate Planning?

A trust is an important tool that makes a lot of sense in its various forms for the right person. However, it is a mistake to assume that an estate planning trust will accomplish each and every one of your estate planning goals.

Most sizeable estate planning strategies incorporate a revocable or an irrevocable trust in some format and it’s important to recognize what this process actually means for you as well as the asset.

When an asset is placed inside the control of an irrevocable trust, the ownership of the asset is handed over to the trust and the management of it is given to a trustee. The trustee must maintain a fiduciary responsibility to the beneficiaries of the trust which can create some forms of conflict for the trustee. This is most problematic if you put together a trust and hand over the role of trustee to a family member when other family members are beneficiaries.

This can put unnecessary strains on family relationships in the future and is often a good reason to use a third party like a professional or corporate fiduciary to play that role outside of your family and reduce the individual pressure.

Remember that a trust is only as good as it is aligned with your individual goals and has been properly funded. This is why the selection of the right kind of trust matters so much and why you should count on an attorney’s support as you navigate through that process.

For further information about the trust creation steps, meet with an estate planning attorney licensed in Maine and New Hampshire now.

 

 

What Do Opportunity Costs Have to Do with Your Financial Plan?

Every time you make a decision in life, you’re choosing to say “yes” to one thing and “no” to all the other options available to you. That’s known as opportunity cost. There’s an opportunity cost with how you structure your financial and estate plan, too! With limited resources, you have to make judgment calls about what you do and who gets what.

A comprehensive financial and estate plan includes many different components, including cash flow management, insurance, long term care considerations, retirement and investments. Unfortunately, there are many different concepts in this process that can get overlooked.

Recognizing the value of opportunity costs and understanding how these factor into making your various decisions is extremely important. Every dollar that is not being effectively used in your individual financial plan could have been used in another way to advance progress in that respect. For example, a dollar that is not being put to effective use could have assisted with debt reduction.

These lost opportunities represent the opportunity cost of failing to maximize the impact of each individual component of your estate plan. There are areas within your estate and financial life that could be showing inefficiencies and this opportunity cost could end up making things more difficult for you in the future or for the beneficiaries that you wish to pass on your assets to. 

Scheduling a consultation with a trusted estate planning lawyer is often the first step in recognizing these opportunity costs and doing everything possible to redirect funds to the right place. For more information about aligning this with your individual estate plan, set up a time today to speak with a trusted attorney.     

 

 

October 19-25 is National Estate Planning Awareness Week

It is estimated that less than half of Americans have an estate plan. To increase awareness about the importance of estate planning, Congress adopted National Estate Planning Awareness Week in 2008, which is observed annually during the third full week of October.

Why is estate planning so important? On the most basic level, it allows you to take complete control of your affairs and protect your assets now and in the future. For example, proper planning ensures your hard-earned assets will go to the people you want, when you want, in the manner you want after you pass away. Estate planning can also ensure that people you trust have the authority to make financial and medical decisions on your behalf in the event of incapacity.

Depending on your particular needs and goals, estate planning can help you accomplish a great deal more, including:

  • Protect your assets against lawsuits, creditors, the high cost of long-term care, and other threats
  • Ensure your minor children are raised according to your wishes if something terrible happens to you and your spouse
  • Pass your values, work ethic, and sense of responsibility on to heirs
  • Reduce income, estate, gift, and other taxes
  • Keep your financial affairs and family information private
  • Protect the inheritances of your heirs
  • Leave an enduring legacy

Ultimately, estate planning gives you the peace of mind that comes from knowing you have a plan in place for whatever the future may hold.

In honor of National Estate Planning Awareness Week, we are offering free consultations throughout the month of October. You can meet with us in-person at our office or virtually via Zoom and other platforms. Let’s talk soon.  

Is Spending Too Much Jeopardizing Your Retirement Plan?

There are many different mistakes that you could make in the wake of saving for retirement and ensuring that you have protected your interest as you get closer to 65 or your anticipated retirement age.

As you get closer to retirement, it becomes very important to update your financial plan and ensure that you have a budget established to align with your income sources. As you get closer to your retirement, you’ll want to maximize your individual retirement account contribution in your 401(k) and decrease your spending and debt accordingly. This will help you get a better perspective of your overall financial picture.

Carefully look at anything that might have a double-digit interest rate and eliminate it. Ideally, you don’t want anything that you are paying significant interest on as you get closer to retirement. This could even include one of the biggest expenses in your budget, which is a home mortgage.

If your loan has an interest rate that is over 4.5% this might be an appropriate time to refinance so that you can maximize your budget during the course of retirement. The more you can save and have a plan in place for your own retirement and long term care needs, the easier it will be for you to pass on assets to your loved ones in the future with peace of mind. Schedule a conference to consult with a dedicated estate planning lawyer in your area to learn more about how your long term care plan, your estate plan and your retirement plan are all intertwined.

 

What Is a Specific Bequest?

There are many different questions that can come up during the estate planning process and one of them can involve whether or not to use specific bequests inside your will. Some people have the perception that leaving behind specific bequests sets your other beneficiaries up for potential conflict over the contents of the will.

Specific bequests refer to leaving a certain asset to an individual or multiple individuals. You might decide, for example, that a certain collection goes to one child and a vehicle goes to another.

Specific bequests, however, can also be used for liquid assets, such as your savings account or ownership of a particular stock being designated to one or more beneficiaries. It is a good idea to give serious thought as to which people should receive which property.

Don’t, however, try to use specific bequests inside your will as an effort to balance things out. When you create the plan, this might make sense but it’s important to remember that assets inside your estate don’t always stay the same value.

A bank account gifted to one child today could decrease in value over time whereas real estate gifted to another child for the purposes of balancing things out could increase in value. This can actually make things much worse between your beneficiaries in the long run. You can always use specific bequests in the right situation to achieve your goals but it’s good to talk this over with your estate planning lawyer to make sure it’s truly accomplishing what you intend.

 

Four Important Terms Related to Powers of Attorney

A power of attorney can be specially crafted to align with your individual needs and expectations. It is very important to familiarize yourself with some of the different aspects of different power of attorney forms to ensure that you have selected the right type of power of attorney based on your individual circumstances and the person you intend to appoint.

A power of attorney allows you to name an individual referred to as an agent or an attorney in fact who will act in your place in the event that you become incapacitated and are unable to act on your own. There are four primary types of powers of attorney:

  • A general power of attorney gives your agent all of the powers and rights that you have yourself, such as signing documents or making financial transactions and more. This is often used by people who are not incapacitated but need additional support with their financial management.
  • A limited power of attorney names explicit rights to a power of attorney agent has when it comes to acting in your stead.
  • A springing power of attorney enables your attorney in fact to step in and make decisions on your behalf if you become incapacitated but it’s not effective till you do become incapacitated. When using a springing power of attorney, it is very important that the standards for determining that you are incapacitated and triggering the action in the power of attorney are clearly laid out.
  • A durable power of attorney can be limited or general in scope but stays in effect after you have become incapacitated. No one can represent you if you have become incapacitated without a power of attorney unless a court appoints a guardian or a conservator. Your durable power of attorney is a key document and a component of your estate plan that will remain in effect until you pass away unless you rescind it while you are not currently incapacitated.

For further information about creating your own power of attorney document, set up a time to speak with an estate planning law firm today.

 

 

Adding and Removing a Power of Attorney

You can find many different power of attorney forms online. However, this is gamble because what seems like minor mistakes in these templates or forms could prove very problematic in the very circumstances you need someone to use a power of attorney. It is very helpful to instead talk with an estate planning lawyer about your specific needs so that they can recommend the documents and language that would work the best for your individual situation.

If you currently hold the power of attorney for another person when you are communicating with health care providers or others on their behalf as you conduct business, it’s a good idea to keep a certified copy of this document with you. Always use your name and indicate that you are signing as a power of attorney if you are signing a document as someone else’s attorney in fact.

You will also want to ask questions about the preferred format in which you might need to provide documentation prior to signing. If you currently are creating a power of attorney to enable someone else to serve as your attorney in fact, you can revoke it at any time so long as you are mentally competent to do so. It is strongly recommended that you revoke any existing power of attorney in writing and notify any businesses or financial institutions that your attorney in fact might have previously dealt with when this document was active.

The question of who is eligible to override an existing power of attorney for a loved one is much more complicated. If you suspect that another person is currently abusing their role as power of attorney, you may be able to use legal action to have them removed. An attorney who has experience with elder law and estate planning can be an instrumental component of this process. Schedule a consultation with a lawyer today if you have further questions about what you want to do.

 

What You Should Know About Testamentary Trusts

There are many different components to a comprehensive estate plan and one of these could be a testamentary trust. This legal document is usually drafted inside of your will and becomes effective at the time of your death as part of your estate planning strategy in NH.

Benefactors are able to exert some control over the distribution of how their assets are passed on to loved ones by using a testamentary trust. This is in fact one of the most common reasons to sit down with an estate planning attorney and craft a testamentary trust. If your goal is to provide for your children after your death, you could have the ability within your testamentary trust to design how those assets are paid out, such as at certain ages.

The testamentary trust will remove the property from your personal ownership and place it inside the trust for your heirs’ benefit. The trust comes into effect when a few different criteria have been met. First of all, the one who created the trust must have passed away, the will has gone through the probate process and the terms of the trust remain relevant, such as in cases in which the heirs named in the testamentary trust are still younger than the ages outlined in the document.

A testamentary trust is different from a living trust. This is because a living trust goes into effect during the grantor’s life. If you are not sure which type of trust is most beneficial for your unique situation, you will want to discuss this with a knowledgeable estate planning lawyer in New Hampshire.