• Procrastination – This is a fundamental error. The drawbacks that procrastination presents are often severe and sometimes unrecoverable. Heirs can incur unnecessary taxes and lose significant percentages of wealth. A business owner may unknowingly create discord with existing partners and vendor relationships. A simple Will may not be enough to address a more complex estate. If you haven’t already, it is time to take the first step and meet with an estate planning attorney to create your unique plan. During this process, you will identify which additional professional services can best benefit your planning.
• Traditional gender roles – While gender roles continue to evolve, more women, particularly the younger generations, are taking the reins of financial discussion and decision-making. However, many in the baby boomer generation (and older) occupy a space of traditional male-female roles. On average, women will outlive men. This statistic implies that inheritable assets between spouses will pass from a man to a woman most of the time. Therefore, the female’s estate plan more often than not controls the ultimate disposition of family wealth, and it is imperative to plan according to this likelihood. The involvement of both spouses is crucial for smooth transitions — a spouse of whichever gender may need more information to understand estate planning. Both spouses need to know their estate planning attorney, CPA, and other relevant planners.
• Older estate planning documents requiring review – Just because you already created your estate plan does not mean that changes in your life and your family do not affect what is in writing. A periodic review of your estate plan with your attorney and accountant can catch minor errors that may otherwise lead to catastrophic problems. Wills, trusts, divorce settlements, pension, insurance, and stock statements can be missing a critical step that may render the document invalid or not in full force. A missing signature, or an incomplete document can implode your estate plan. An unfinished divorce decree can derail your plans to pass wealth to your children, especially in the complex situations where remarriages occur and there are other competing interests in your property.

Change is a constant in life. A key player such as a named executor may be in failing health and no longer a viable solution in your estate plan. You may need to remove this person or add a contingent executor. If you have made significant structural changes to your finances, it will affect your estate plan. Some named inheritors may predecease you. It is essential to dial into the details with your attorney and accountant regularly with your documents and ensure they represent your most current situation and desires.

• A Will or Trust assumes that “fair” and “equal” are the same thing. Even if you have a simple estate plan, documents that divide your assets equally among heirs can have devastating consequences within a family system. If, for example, there are two adult children and one is involved in a family business, a parent may still want to divide the business asset fifty-fifty. On the face of it, this distribution seems equal however the child without involvement in the business will typically be pursuing their own professional goals leaving the family business interests protected solely by the family business involved inheritor.

Your estate planning attorney may suggest a buy-sell agreement allowing one child to take control of the business. The other child may receive a life insurance policy payout as compensation, creating an equal distribution of assets moving forward. This life insurance asset is generally tax-free to the beneficiary; therefore, the more independent child receives an asset without burdening the business’s financial and tax obligations. This decision may create a new imbalance; another life insurance policy can again equalize the asset value inherited by the child remaining in the family business. As the complexity of remaining equal increases, the services of a corporate attorney and an insurance specialist may become a requirement.

Other assets with changing value conditions like raw land, fine art, jewelry, and stocks, are factors to consider as the IRS will establish a value for your estate at the time of your death. Professional reappraisals of these assets, like estate document review, can help you keep your asset distribution as equal as possible under changing conditions.

Estate planning can be complex, and there is a constant potential for mistakes because of life changes, lack of coordination, and even oversights. Assembling the right group of professionals will get you to the estate plan you need for your legacy aspirations.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

The post To Avoid Estate Planning Mistakes, Use a Blend of Professionals appeared first on Seif & McNamee.

What are the different forms of a Power of Attorney?

A “power of attorney” and “limited power of attorney” may manage your affairs until you are legally considered incapacitated or incompetent. The word “limited” narrows a power of attorney’s authority to transact business only to a specific property or with an agent’s limited access to funds. A “durable power of attorney” remains in effect until the principal revokes the document or upon their death. A “springing” durable power of attorney will not go into effect until a doctor certifies the principal incapacitated, allowing you to keep control over your affairs until you are unable. A “medical power of attorney” is always durable and permits healthcare decisions on behalf of the principal. The document includes sections similar to a living will, guiding the agent and doctors’ medical decisions to the principal’s wishes.

Like your will, durable power of attorney documents requires drafting according to the state laws you live in and some forethought of your selection of agents. Every state has laws governing the creation and use of valid power of attorney documents. Does your state abide by The Uniform Power of Attorney Act of 2006? This Act intends to standardize the approach, provide safeguards for the principal, and eliminate differences between state laws. As of 2019, twenty-six US states abide by The Uniform Power of Attorney Act. Residents of multiple states and snowbirds who routinely travel and transact business in other states may benefit from creating a valid durable power of attorney documents in both states.

Take note that if your spouse is your power of attorney, this designation does not automatically end when you finalize a divorce between you unless you live in these twelve states: Alabama, California, Colorado, Illinois, Indiana, Kansas, Minnesota, Missouri, Ohio, Pennsylvania, Texas, Washington, or Wisconsin.

What to Consider When Appointing a Power of Attorney

When appointing a power of attorney, the agent you select is a personal decision. There are things to consider, such as if your adult children are trustworthy and mature in handling finances and medical decisions on your behalf. Some adult children move away or lose touch and are not necessarily suitable candidates simply because they are your children. You may select a contemporary friend who becomes disabled themselves or pre-deceases you, so you must have a backup agent in the documentation. Always make the decisions regarding your power of attorney selection while you are in good mental and physical health.

What Role Does Your Financial Power of Attorney Play?

A financial power of attorney can have the authority to perform some or all of these tasks:

• Pay everyday expenses for you and your family with your assets
• Maintain, pay taxes on, sell, buy, and mortgage real estate and other property
• Collect government benefits including Medicare, Social Security, Disability, and more
• Invest your money in mutual funds, stocks, and bonds
• Transact with banks and other financial institutions
• Buy and sell annuities and insurance policies on your behalf
• File and pay your taxes
• Operate your small business
• Claim inheritance or other property to which you are entitled
• Transfer property to a trust you created
• Hire someone to represent you in court
• Manage your retirement accounts

There may be other actions necessary to perform; however, the above list constitutes significant duties. Your agent must act in your best interest, keeping accurate records and avoiding conflicts of interest.

What Role Does Your Medical Power of Attorney Play?

Your medical power of attorney is one type of healthcare directive that outlines your healthcare preferences if you are too ill or injured to do so. The agent you select must be trustworthy and mature in overseeing your medical care and healthcare decision-making. Your healthcare agent will coordinate with doctors and other healthcare providers, ensuring you receive the medical care you prefer. To make these preferences clear, you may choose to use the second type of healthcare directive known as a “living will” or “healthcare declaration.” In this document, you can make clear your healthcare preferences. In some states, medical power of attorney and healthcare declaration combine into one form known as an “advance health care directive.” With this information, your agent is legally bound to comply with your treatment preferences to ensure they are made aware in the documentation.

Choosing your agent well, appointing backup agents, and tailoring your documents to your needs and specifications can take away a lot of worry about your future care and well-being. Having valid power of attorney documents avoids guardianship issues, which are time-consuming, expensive, and limit freedoms. An elder law attorney can address any questions or concerns you may have about establishing power of attorney documents for your particular needs.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

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