Louisiana Estate Planning and Successions

Estate Planning and Divorce

Leanna Hammill, an estate planning attorney in Massachusetts has an excellent series of posts on how divorce affects your estate plan and what you should do about it. In summary, Leanna suggests (and I agree) that you should:

Before the divorce is final, meet with your estate planning attorney to:

• Examine any powers of attorney (POA) in which you have named your current spouse and revise them to designate someone else as your agent. Also, check to make sure any entity that has a copy of the old POA is notified of the change and is provided a copy of the new POA. This is very important because most couples draft the POA to be effective immediately, which means your now about-to-be-ex-spouse has access to your bank accounts and other assets, even if those assets are titled in your name only
• Likewise, examine any health care proxies or powers of attorney for health care. Revise them to name an alternate agent and make sure those who have copies are notified of the change and provided new copies
• Examine your current will and any trusts and design a new plan for distribution of your assets and protection of your children

When the divorce is final (as soon as possible), meet with your estate planner again to:

• Sign your new estate planning documents
• Review and revise all beneficiary designations on IRA accounts, investment accounts, life insurance policies, etc.

In addition to Leanna's suggestions, it's also important to advise your business partners of your pending divorce and review relevant provisions of your partnership or operating agreement. Most LLCs and partnerships have documents that address what happens to your interest upon divorce.

Consulting your estate planning attorney before the divorce is final can help you plan for your divorce and ensure that things you fight for in your divorce settlement are protected. If you are in the midst of a divorce or are thinking of filing for divorce and need help with your estate plan, feel free to contact my office to schedule a consultation.

Read Leanna's posts here and here.

Business Succession Planning, Estate Planning, Trusts

Pass on Your Real Wealth - Your Values

The Boston College Center on Wealth and Philanthropy estimates that $41 trillion will change hands by 2053. That's the largest intergenerational transfer of wealth in American history and increasing numbers of those transferring wealth are considering transferring their values as well as their dollars. In the past, most families avoided discussing death and inheritance, but now more and more families are doing so. As part of that discussion, families are discussing their values and purpose in life. In the article, Patricia Angus of Shelterwood Financial Services puts it this way:

"The definition is broadening to include not just financial capital but human, social and intellectual capital,” Ms. Angus said. “Professionals used to think it was just, How do I transfer my financial assets at the lowest tax costs? Now people are asking, What is the purpose and meaning of what I’m doing here, and how do I pass those down? It’s not about death. It’s about an experience in life, an opportunity to talk as a family about purpose and values that might not otherwise come up. For people who just write a document and put it in a drawer to be opened on their death, I don’t see that opportunity coming up."

I've discussed having a family meeting to discuss you estate plan here before. It's an excellent way to manage expectations, pass along your values and limit disagreements after you die.

Source for Post New York Times

Boston College Center on Wealth and Philanthropy

Business Succession Planning, Estate Planning, Trusts

Negative Inheritance?

Harry Margolis has an interesting post on this subject in his Elder Answers Blog.

What is a negative inheritance? According to Harry

The term (which was likely first used in the study of economics by Boston University Professor Laurence Kotlikoff) describes the situation when the costs to children of caring for aging relatives outstrip any gifts or bequests they might receive in return.

He also shares a typical example from his ElderLawAnswers.com discussion forum:

My parents are in their mid-eighties and continue to live at home. We sold our large home 2 years ago and moved in temporarily with my parents while awaiting the purchase of our new home. Alas I discovered how much they needed more care than just each other during our stay. My husband and I now stay at my parents home and we do not even visit our own home. I quit my job last summer to increase the level of care necessary for them. We pay all their bills except for food as well as our own bills. I am taking CNA classes so that I may continue to take care of them at home as opposed to the option of nursing home care. We are now dipping into our personal retirement savings to continue to care for them.

This example highlights the need to plan for caring for your parents. That planning may involve a special needs trust, long-term care insurance or other financing options. If you anticipate having to care financially or otherwise for your aging parents, it makes sense to consider that when drafting or revising your estate plan.

Technorati Tags: Elder Law, Estate Planning