Tempe Arizona Estate Planning

Blending Families? Be Mindful of Your Estate Plan

An estate plan is the perfect solution to making sure that your assets are passed on to your children from a prior marriage—if you make sure that is addressed in your estate plan. If you neglect to do this, you could disinherit your own children.

Here are some interesting statistics: the rate of remarriage has decreased over time for all age groups, except those who are 55 and older. In 1960, only 42% of those 55 and older remarried, and in 2013, that number jumped to 57%. About 17% of people who divorce, eventually remarry. If you are among those who take that leap of faith and marry for a second (or third) time, you’ll want to be sure to have an estate plan that protects your children from prior marriages, says CNBC in a recent article, “Remarried after having kids? Here are tips to avoid accidentally disinheriting them.”

Many people don’t have even a basic will. The risk can be higher, if you have no estate planning when you remarry—your children could unintentionally be disinherited.

The older you are when you remarry, the more apt you are to be bringing assets into the marriage, such as retirement savings, life insurance, brokerage accounts, real property and family heirlooms. Estate planning helps to avoid family conflict.

If you die without a will (intestate), Arizona state statutes who the heirs of your estate will be and how much each heir will recieve. Of course, everyone’s situation is different, and some estates can be more complex than others. However, here are some keys to consider, when thinking about how to make sure your heirs end up with the assets you want them to have.

Account beneficiaries. It’s easy to miss this when you remarry. Update the beneficiary designations on retirement accounts, life insurance policies and other accounts. This designation supersedes any intention stated in your will.

Your home. Remarriage frequently involves a jointly-owned home. Depending on state law and how the property is titled, your intention for your children to inherit your share of it could be thwarted.  If the house is deeded as "joint tenancy with right of survivorship" or "tenancy by the entirety," the property typically automatically belongs to the surviving spouse, regardless of what your will says. If you own the house in "tenancy in common," you can leave your share to a person other than your spouse, if you want.

Your personal property. If you want your children to get some particular items when you pass away, be as detailed as possible in your will, so there is no room for confusion.

Power of Attorney. Select someone to handle your finances, if you reach a stage where you can’t. A durable power of attorney for your finances allows your agents to be in charge of paying bills and filing tax returns. A durable power of attorney over health care permits the named person or persons to make important health-care decisions on your behalf, if you are unable to make your own decisions.

Living Will. A living will expresses your wishes if you’re placed on life support or suffer from a terminal condition. It helps guide your proxy's decision-making regarding life support and comfort care at the end of your life.

The process of updating your estate plan starts with a conversation with your spouse and your estate planning attorney. Make sure that your will reflects your wishes. Don’t leave it to chance, or hope that your kids will somehow work it out with your spouse or their step-siblings. Put it in writing, and make it legally enforceable with an estate planning attorney.  Contact the Soto Law Firm today for a free consultation to start the process to protect your family.

Reference: CNBC (January 17, 2019) “Remarried after having kids? Here are tips to avoid accidentally disinheriting them”

Top Five Estate Plan Epic Fails

The problem with mistakes to an estate plan, is that many are irreversible and cannot be fixed. Those that can be fixed are often expensive. It is best to do it right the first time.

Many of the top reasons for estate plans to fail, are a matter of maintenance. Just as your home or car needs ongoing care, so does your estate plan. The simple things often lead to the biggest problems.

Investopedia’s article, “5 Ways to Mess Up Estate Planning” gives us a list of these common issues.

Not Updating Beneficiary Designations. Be certain those to whom you intend to leave your assets are clearly named on the proper forms. Whenever there’s a life change, update your financial, retirement, and insurance accounts and policies, as well as your estate planning documents.

Forgetting Key Legal Documents. Revocable living trusts are the primary vehicle used to keep some assets from probate. However, having only trusts without a will can be a mistake—the will is the document where you designate the guardian of your minor children, if something should happen to you and/or your spouse.

 

Bad Record Keeping. Leaving a mess is a headache. Your family won’t like having to spend time and effort finding, organizing and locating your assets. Draft a letter of instruction that tells your executor or personal representative where everything is located, the names and contact information of your banker, broker, insurance agent, financial planner, attorney, etc. Make a list of the financial websites you use with their login information, so your accounts can be accessed.

Not Funding Your Trust.  A Trust can be thought of as a legal container into which you fund your assets during your lifetime.  Your trust then controls your assets in the event of disability or death.  Just like a shiny new car, a new trust is a great thing to have, and just like a car that won't be going anywhere without gas in the tank, your assets are the fuel for your trust.  If you don't properly fund, coordinate, or re-title assets into the trust, it will be much more difficult to get where you want to go.   You should also keep up to date with funding as you sell or acquire new assets.  Keeping your trust properly funded is a moving target that needs to be constantly reviewed and kept up to date.

Not Creating a Plan. This last one is one of the most common. There are plenty of stories of extremely wealthy people who lose most, if not all, of their estate to court fees and legal costs, because they didn’t have an estate plan.

The solution is simple: make a recurring appointment with your estate planning attorney every two or three years, or when something big in your life changes. Follow through on the instructions, like funding a trust or talking with heirs about your thought processes for asset distribution.  Contact the Soto Law Firm today to make sure that your estate plan will be an epic success.

Reference: Investopedia (September 30, 2018) “5 Ways to Mess Up Estate Planning”

Everyone Needs an Estate Plan

Now that the holiday season is over, it’s time to get back to business—and that includes making sure you and your loved ones have your estate plans all set.

If you’ve got older parents or relatives, says Fox 5 NY in its article “Why estate planning is important regardless of your age or wealth,” you’ll need to start having conversations with them about their estate plan. Don’t neglect your own, because whether you’re rich or poor, everyone needs an estate plan.

How can you have a successful conversation, without making your family members feel uncomfortable? The key to a successful discussion depends upon the right approach.

Try to always make suggestions, rather than demands. One great way to start the conversation with family members, is to mention what you're doing. You might say something like, “I just took care of my own estate planning. Have you done anything? Maybe we should talk about it.” That might get the conversation rolling.

Many people believe that, as they get older, they need a will. However, that’s just one piece of the puzzle: core estate planning includes a will, power of attorney, health care power of attorney, and asset protection.

For most of us, the asset we most want to protect is our home. Many individuals choose to re-title their primary residence into their revocable trust, which would allow an incapacity trustee to sell the primary residence if the individual needed to be admitted to a nursing home for incapacity purposes.   Owning your home through your trust also avoids probate in the event of your passing, so that the house itself or the equity therein can pass to your beneficiary in a much more private and efficient manner.

You also need to find people you trust to help with finances and health care. A power of attorney is a legal document in which you grant a person the authority to handle finances on your behalf.  Similarly, a healthcare power of attorney is an individual who makes healthcare decisions, if you get sick or are in an accident and can't make decisions for yourself.  You can use one person to do both or separate individuals for each role. You can opt for a family member or a trusted friend. However, either way it should probably be a younger person, who won't be dealing with the same aging issues as you.

Some people think that a will is the only thing they need as it is usually more inexpensive than a trust, but what they don't realize is that a will can be more expensive in the long-run if their estate has to go through probate.  Probate is triggered when their are assets titled in the name of a deceased person, and costly filings must be made with the court in order to allow for the proper oversight of the probate process.   In addition to the time and expenses of a probate, probate is a public record and does not keep family affairs as private as some people would prefer.   A revocable trust created during your life time can help you avoid probate, avoids the public administration of your estate, is usually less expensive in the long-run, and can provide asset protection for the assets that you leave to your beneficiaries.  Though not a one-size-fits-all for every client, a trust provides many benefits that usually can't be obtained through just a will plan.

An estate planning attorney will be able to sort through all of your questions and concerns.  At the Soto Law Firm we offer free consultations to help clients understand more about the differences between wills and trusts, and we focus on education throughout our process so that our clients are well informed about their options and the plan they choose.  Contact us today to get the process started.

Reference: Fox 5 NY (December 12, 2018) “Why estate planning is important regardless of your age or wealth”

Get Your Financial and Legal Life Ready for a New Baby

Congratulations—there’s nothing like a new baby to bring excitement and joy to your family. However, now you’ve got some preparation to do, and it’s not just decorating the nursery.

Preparing for a new addition to the family includes a wide range of lifestyle and financial decisions, says a recent article from Prince William Living, “Baby on the Way? Here’s How You Can Prepare Financially.” These guidelines will get you started, as you begin this new chapter in your family’s life.

Examine your career. A new baby may cause you to think differently about your career goals—you may seek a promotion, a job with a higher salary or better benefits, or more education. Perhaps you or your spouse want to decrease your hours or become a stay-at-home parent. If you are thinking about changing your job status, examine the effect it may have on your take-home pay, retirement nest egg and benefits.

Lifestyle changes. Look at how your baby will affect your day-to-day activities. If your perfect lifestyle involves a new car or home, talk to a financial professional about whether to make the move now or in the future.

Childcare expenses. Nearly one-third of parents spend 20% or more of their income on childcare. In some states, the cost for a year of care can be more than one year of college!

Tuition. Private elementary or secondary school often costs money, and the price of a college education continues to rise at a pace faster than inflation. The 2017 tax reform expanded the use of 529 plans, so you can now withdraw up to $10,000 federal income tax-free per beneficiary, per year to pay for kindergarten through 12th grade tuition at a public, private or religious school.

Review your financial position. Unanticipated events can impact your finances at any time. Resolve to build or maintain an emergency fund that could cover three to six months of expenses. You should also prioritize your retirement savings. After your baby arrives, update your estate plan and insurance coverage as needed.

Consider family values. Consider how you want to teach your child about financial responsibility. Being intentional early, can help create clear expectations and ensure that you and your spouse are on the same page.

The family bucket list. Look at what activities matter to you and add them into your financial plan. Taking an annual vacation or having a vacation home are common goals for many families.

One last and very important thing: a growing family needs an estate plan that includes naming a guardian, should something unexpected happen to you and your spouse. If there is no will, or the will does not include a guardian, the court will decide, under your state’s laws, who should raise your children. An estate planning attorney can help you and your partner make sure that your family is protected.  Contact the Soto Law Firm today to sit down for a free consultation to discuss your family's estate plan.

Reference: Prince William Living (December 2018) “Baby on the Way? Here’s How You Can Prepare Financially”

 

Power of Attorney is More Than an Estate Plan Extra

Bold face names seem to attract estate problems, especially when there’s a lot of money involved. Many of these issues surround incapacity, providing why a Power of Attorney is so important.

Not having a will, like Prince or Aretha Franklin, creates one set of problems for the children of unmarried celebrities. However, this isn’t the only problem that plagues the rich and famous. Questionable decisions about a power of attorney (POA) and not planning for incapacity also lead to estate disasters, as explained in a recent article from Forbes, “Why Your Power Of Attorney Probably Is An Accident Waiting To Happen.”

You’ll probably recall the stories about radio personality Casey Kasem, Marvel Comics creator Stan Lee, and astronaut Buzz Aldrin. While the specifics may differ, the basic facts are similar. As a person ages and their cognitive function declines, someone has to assist in the management of their financial and personal affairs, as well as help with medical care and decisions.

The power of attorney might be the most important document in your estate plan. The POA determines who manages your affairs, when you unable to do so. It also ensures that your bills are paid, investments are managed, and other important financial tasks are performed. A POA is typically part of most estate plans, but as many celebrity cases show, the principals were careless about who was designated to manage their estates and other details.

Consider these actions to minimize the chances your estate will end up facing similar issues and in disarray.

Select your agent carefully. He or she will act on your behalf under the POA. This isn’t an appointment a person should receive just because he or she is the oldest child, or because they might be upset if someone else is named. This is a person you’re trusting to diligently, intelligently, and honestly handle your finances and other matters, when you aren’t able to. Remember not to designate a person without first discussing it with him or her to be certain they’re willing and able to take on the responsibility.

Think about appointing more than one person. One way to get an extra layer of protection and expertise, is to name more than one person to act jointly to handle your finances. It is important to understand that even this isn’t foolproof, since co-agents also can create headaches. The two individuals should live reasonably close to each other, so they can meet to discuss options and sign documents. They also have to agree on the actions to take on your behalf. Those actions might be delayed, until they can discuss and agree and then sign the appropriate forms.

Discuss POAs with your financial institutions. Many banks, brokers, and other financial firms have their own procedures for honoring POAs and they might have their own forms. You and your estate planning attorney need to work with the financial institutions to be certain of a smooth transition.

Determine when the POA is effective. A durable POA could take effect as soon as you sign it.  In that situation, your agent legally could use it and take actions in your name right away. An issue in some celebrity cases is that the principals believe they retain all or most of their cognitive abilities, while at least some of those around them think it’s time for others to make decisions.  A springing POA would only allow agents to act once the principal is deemed incapacitated.  Though more protective of the principal's decision making autonomy, a springing POA is more difficult to use as it requires additional documentation to prove to financial institutions that the principal is indeed incapacitated.

Here’s a better way to go about selecting the person to be your representative, if you should become incapacitated. Get them involved in your life long before you think you’ll need them. Over time, allow them to make decisions with you, and watch how they think and learn what their values are.  If they are always looking to somehow gain advantage over someone else, that response could just as easily be turned upon you or your loved ones. You’ll have a chance to judge them over time and make a change, if necessary.

Contact the Soto Law Firm today to schedule a free consultation to speak with an estate planning attorney to start the process of creating your power of attorney.

Reference: Forbes (August 24, 2018) “Why Your Power Of Attorney Probably Is An Accident Waiting To Happen”

 

Get These Documents in Order for Your College Student

Get These Documents in Order for Your College Student

By now, the dorms are filled, and a new winter semester is underway. However, you can still take care of these often-overlooked details for your college student.

If you were so busy focusing on the logistics of getting your student off to college, that you didn’t have time to get to the details below, now is the time to get it done. As listed in this article from nj.com, “Don't let your kid go to college without these 10 things,” these are important for your student and you to have in place.

1. Health Insurance Information. Most colleges offer some free health services to students. However, that might not be enough for most healthcare needs, especially for emergencies. Even if the student is on your plan, the coverage may not be enough, if the student goes to college in a different state. The possible need for out-of-network care could get very pricy. Ask your insurance company to calculate how the student’s bills would be covered. You should also take a look at any insurance offered by the school.
2. A Local Providers List. An out-of-state student can get an annual check-up when she’s home for the summer, but some medical needs may not conform to the times when they’re home. Before students get to campus, prepare a list of local care providers who take your insurance.
3. Durable Power of Attorney and Healthcare Power of Attorney. When your student was a minor child, as the parent, you had the right to receive information about his medical care, and you were authorized to make medical decisions on his behalf. Remember that, when your child reaches the age of majority, you lose those rights. That’s why it’s critical for your student to sign durable power of attorney and healthcare power of attorney documents. These two documents will authorize you to make financial and healthcare decisions for your student, and to get information about his care. Ask an estate planning attorney to create these documents for you.  It’s well worth the time and expense.
4. A Budget. Aside from how to pay tuition, students need to have a plan for other expenses, like textbooks, pizza, and toothpaste. Create an estimated budget with all possible expenses and examine discretionary costs.
5. A Money Back-Up Plan. You know that even with a great prepared budget, there may be times when your son calls home asking for money. A slick way to transfer funds to your student is to have a linked bank account. You can easily transfer money from your account to his.
6. A Credit Card. Credit cards in college take some discipline. Help your student find one credit card with a low available balance. She can use the card for a few regular expenses each month, which are accounted for in your budget. You should stress the importance of paying on time, every time. That will help to build a strong credit score. With a solid credit history, after graduation it will help her get an apartment or a car loan.
7. Renter's Insurance. Ask your homeowner’s insurance company about how and if your student’s possessions will be covered by your policy when she moves into a college dorm. Most policies will give coverage but be sure it’s not limited. If it’s not as comprehensive as you’d like, you should consider purchasing an additional renter’s policy, especially if the student is living in an apartment instead of a dorm.
8. An Emergency List. Create a shared online document that has all the student’s essential information, so you can both easily access it. It should include the student’s bank and credit card account numbers and how to contact the bank, if the cards are lost or stolen. You should also have college contact information, like a student ID number and account information for financial aid and student loans.
9. A Local Buddy. If your kid’s going to college far from home, see if you can find a friendly face for her near the college. It could be a Facebook friend from high school who lives near campus. Maybe your sister’s college roommate has a relative there. It’s reassuring to have another responsible adult as an emergency contact, particularly if the parents are many hours away from campus.  Introduce your student to this person, even if it’s only over email, and make sure they have each other’s numbers—just in case. Your student may even get a couple of free home-cooked dinners from it. You should also be sure that you have a phone number for your student's roommates or friends—just in case you urgently need to contact your student, but he is not answering your texts.
10. Absentee Ballot. When your student turns 18, she’s a prospective voter. Make sure your student applies for an absentee ballot and exercises her new right!

Your student may want to wave away your concerns about these details, but if an emergency occurs you and your child will be better prepared. Yes, they will be home for spring break, but a lot can happen between now and then.

Reference: nj.com (August 13, 2018) “Don't let your kid go to college without these 10 things”

Planning for Life Insurance to Help Your Beneficiaries

What if you have $4 million in life insurance coverage, but no one in the family knows where the policies are or how to go about finding them?

Organizing your records and telling your family members about where important documents are, is a gift to your family. After you have passed, they’ll appreciate not having to go on a scavenger hunt to find out where your assets, including your life insurance policies, are located. This recent article from The New-Enterprise, “Relieve your loved ones of a huge burden by being proactive, and organized,” offers a great checklist that you can use to start getting organized.

Keep your insurance policies (and a record of them) in at least two places where they’re safe and easily accessible. That will reduce any delays in processing the life insurance. However you shouldn’t keep life insurance policies in a safe deposit box because it’s required to be sealed temporarily upon the death of the owner. Storing your life insurance policies in safe deposit box will create a delay in the settlement of the life insurance proceeds. Here’s a list of the information to keep. For every policy, list:

• The name of the issuing insurance company;
• The address of the issuing company;
• The name and U.S. headquarters of the group, if the issuing company is part of a group of companies;
• The policy number;
• The date the policy was issued;
• The amount of the death benefit;
• The contact info of the agent/broker who sold you the policy;
• The type of life insurance policy issued; and
• Where the original life insurance policy is located.

In addition, set out these directions on how to file a claim, when the time comes:

• Obtain multiple copies of the death certificate;
• Contact the insurance agent or the company to complete the necessary forms; and
• Submit the policy claim along with a certified copy of the death certificate.

It doesn’t usually take very long for the settlement to be issued once you’ve submitted the claim. You’ll normally be able to receive the distribution of life insurance proceeds in one of the following options:

• A lump sum;
• A specific income provision, which is payments of both principal and interest made on a predetermined schedule;
• A life income option, which is a guaranteed income for life (the amount depends on the death benefit, beneficiary’s gender and age at the time of the insured’s death); and
• An interest income option, where the insurance company holds the proceeds and only pays interest on them, with the death benefit going to a secondary beneficiary at your death.

It may not be the most fun way to spend a few hours, but by getting your insurance policies and other documents organized, you’ll spare your family stress and potential problems after you have passed. Don’t forget to do the same with your estate planning documents, and if you don’t have one in place, speak with an estate planning attorney to also take care of that detail.

One issue that many parents with minor children don’t realize is that life insurance proceeds will be given to their children at age 18.  If a parent passes away with minor children named as the beneficiaries, a conservator for that minor child will have to be appointed by the court.  To avoid the long drawn out process of a conservatorship, a much better option would be to name your revocable trust as the beneficiary of your life insurance policy, so that a successor trustee will invest and be in charge of those funds until your children reach a predetermined age.  This process not only avoids the time, hassle, and expenses of a conservatorship, but also protects your children from spending those funds unwisely.   Contact the Soto Law Firm today to discuss how you can protect the life insurance proceeds for your children’s long term benefit.

Reference: The (Elizabethtown, KY) New-Enterprise (September 22, 2018) “Relieve your loved ones of a huge burden by being proactive, and organized”

Understanding the Difference Between Alzheimer’s and Dementia

While Alzheimer’s is the most common form of dementia, accounting for an estimated 60-70% of all cases, there are other types of dementia. High blood pressure causes the second most common form, vascular dementia.

The words “dementia” and “Alzheimer’s disease” are often used interchangeably, but they are different types of dementia. There’s alcohol-related dementia, Parkinson’s dementia and frontotemporal dementia. Each has different causes, according to AARP in a recent article, ““Dementia vs. Alzheimer’s: Which Is It?” It is extremely important to be sure that the correct type of dementia is diagnosed, so that the correct treatment, medicines, and support for the individual and the family is given.

Correctly identifying Alzheimer’s instead of another type of dementia, may result in a prescription for a cognition-enhancing drug rather than an antidepressant. A patient may also be eligible to participate in a clinical trial for Alzheimer’s, if he or she has been specifically diagnosed with the disease.

One important clarification comes from Constantine George Lyketsos, M.D., director of the Johns Hopkins Memory and Alzheimer’s Treatment Center in Baltimore, who said “To be called dementia, the disorder must be severe enough to interfere with your daily life.”

Dementia is a nonreversible decline in mental function. It’s a catchall phrase that encompasses several disorders that cause chronic memory loss, personality changes, or impaired reasoning. Alzheimer’s disease is just one of them.

Alzheimer's is a specific disease that slowly and irreversibly destroys memory and thinking skills. There’s no cure.  However, researchers have identified biological evidence of the disease: amyloid plaques and tangles in the brain. They can be seen microscopically, or more recently, using a PET scan that employs a newly discovered tracer that binds to the proteins. The presence of these proteins can also be detected in cerebral spinal fluid, but this method isn’t used often in the U.S.

Dementia is diagnosed by a doctor who must find that you have two or three cognitive areas in decline. These areas include disorientation, disorganization, language impairment, and memory loss. To make that diagnosis, a doctor or neurologist will administer several mental-skill challenges.

Despite many advances in research, there is still no definitive objective test for Alzheimer’s disease. Doctors rely on observation and ruling out any other possibilities for their diagnosis. The use of the new PET scan is said to be 95% accurate, but it’s usually recommended only for patients with unusual symptoms.

Many people don’t realize the impact that such a diagnosis can have on their finances and control of their assets.  Usually people with an Alzheimer’s or dementia diagnosis  no longer have the capacity to sign power of attorney or testamentary documents, or if they try to do so, they open their estate up to future litigation regarding their capacity at the time and the effect that those documents have on who inherits their assets.  Many people don’t complete proper estate planning early enough to avoid the financial hardships associated with Alzheimer’s disease and dimension.  Having an estate plan, including a revocable trust in place can avoid the need for a costly and time-consuming conservatorship that is usually required to take control of an affected person’s finances, as well as future estate litigation. 

If a family member gets a diagnosis of Alzheimer’s or dementia, make sure that their estate plan is in place and up to date. There are likely to be many issues that need to be addressed.  Contact the Soto Law firm today to learn more about the ways you can protect your loved ones during mental incapacity.

Reference: AARP (June 25, 2018) “Dementia vs. Alzheimer’s: Which Is It?”

Would a Joint Bank Account Work for You and Your Parents?

After a few months of buying Mom and Dad’s groceries and transferring money between accounts, it seems like it would be easier just to create a joint checking account. Not so fast!

Like any other financial move that seems to make sense at first, a joint bank account could actually create more issues than it solves, warns NextAvenue in the article, “Should You Have a Joint Bank Account With Your Parent?”

A joint bank account can be a quick and easy way to help your parents pay bills and monitor their spending. With you monitoring their account, it’s also easier for you to see potential fraud. It allows an adult child to watch for unauthorized purchases or other issues with the account, like late fees or overdrafts. Another benefit is that in the event of your parents’ deaths, you will have immediate access to the account funds without the need to go through the probate process. This can be helpful when paying burial and other final expenses.

However, there’s plenty that can go wrong if you have a joint bank account with your parents.

First, your parents’ money won’t be safe from your own debts or liabilities. If something happens to you, like an accident, divorce, or bankruptcy, you’ll be putting your parents’ money at risk. Depending on the rights of survivorship on the account, all the money in the account could go directly to you when the last of your parents dies. That would disinherit any siblings you might have.

If you make deposits to the account yourself, it may impact your parents’ eligibility for government benefits, like Medicaid. A joint account may also play a role in your child’s student financial aid eligibility because government and financial institutions can designate all the money in the joint account as your money—even if half of it is yours and half belongs to your parents.

There can also be tax implications to having a joint account. The IRS could deem this to be a gift, triggering a gift tax return, if the account is valued above $15,000 (from each parent for 2018). Likewise, if the parents and adult child open a new account together, and the parents deposit a large amount of money which the adult child later withdraws, it could arguably be seen as a gift.

Look at these options that might work better for you and your family instead of a joint bank account:

1. With signature authority on an account, you can pay your parents’ bills. However, you won’t be authorized to use the money in ways that aren’t for their benefit, and the money will be protected from your creditors.
2. With power of attorney, an adult child can make financial decisions on the accounts that are titled in the parents’ names. The POA should be durable, so that it will still be effective even if the parents become incapacitated.
3. Your parents can create a revocable living trust, appoint you as co-trustee and open a bank account in the name of the trust with two or more signers. Talk with an estate planning to see if this makes sense in your situation.
4. If you’re worried about your mom or dad’s mental capacity, you could petition the court to be appointed as your parent’s conservator, which will let you to manage his or her finances. The conservator doesn’t own the funds, and the money can’t be garnished or seized to settle a conservator’s debt. However, it’s a difficult and complicated process. All concerned may be better served to have a durable power of attorney in place, before a parent becomes incapacitated.
5. What if your larger concern is that funds will not be available after your parents die, because they’ll be part of probate? One way to address is by adding a ““Payable on Death,” “Pay on Death,” or “Transfer on Death” provision to their bank account. The funds will be paid directly to the account’s named beneficiary(ies). A word of caution: speak with an estate planning attorney to be sure that this will not have an impact on any estate planning already in place.

If you have questions regarding how best to address your family’s assets to pass them on to the next generation as efficiently as possible, contact the Soto Law Firm today for a free estate planning consulation.

Reference: NextAvenue (July 17, 2018) “Should You Have a Joint Bank Account With Your Parent?”

Can You Protect Your Family from the Impact of a Sudden Death?

Family finances can take a huge hit from the unexpected death of the main breadwinner. Advance planning, even when death seems like a remote possibility, can help.

Several national conversations were launched when two bold-name celebrities— Kate Spade and Anthony Bourdain—took their lives. One was about suicide, the other about what happens to families in the face of an unexpected death, from a financial and estate planning perspective.

CNBC’s article, “Sudden deaths like those of Kate Spade and Anthony Bourdain can devastate family finances,” explains that a number of the leading causes of death in the US are events that happen without warning. These are things like heart disease, accidents, stroke, and suicide, which are among the leading causes of death across the country, according to data from the Centers for Disease Control and Prevention.

An unexpected death has a tremendous impact on a family—mentally, emotionally and physically. In addition, it can also affect family finances, depending on the amount of planning the deceased had in place. Think about the following items following the unexpected death of someone you know:

1. Get organized. You should secure all of the deceased’s financial and legal documents, along with his or her keys, wallet, and phone. Next, find the will, if there is one. If an executor or personal representative is named, make sure he or she takes on their responsibility to lead going forward. If you are the personal representative of the estate, you should change locks on their residence, cancel or rearrange home deliveries, coordinate the care of any pets, have their mail forwarded to the authorized person, and arrange for the care or disposal of perishable food items.  There are many other issues that you will need to discuss with an experienced attorney to help you complete your fiduciary duties as the personal representative of the estate.
2. Look to your own mental and financial health. It’s critical to get the support and help that you need, as you grieve. The death of a loved once can take time to properly process and understand how it will affect your future life.
3. Delay major financial decisions for at least a year. Some folks want to make big life changes right away, but experts say to wait. You're grieving and may not be thinking clearly. You may make a decision that you will regret later. If you do need to make a significant financial decision, talk with an attorney first.

Everyone should create their own estate plan, no only to help your loved ones or persona representative avoid the headaches of probate, but also to achieve peace of mind know that can come from having an estate plan in writing.  Work with an attorney to draft the basic estate planning documents, like a will, power of attorney, and health care power of attorney.  Many estate administration problems and headaches can be avoided through the implementation of a living trust.

When you work with an experienced estate planning attorney to draw up these documents, be sure to communicate both the name of your attorney who drafted the documents and your wishes to your loved ones.

To make sure that your plan continues to stay up to date, review estate planning documents on a regular basis—your estate planning attorney will be able to tell you if you need any minor adjustments, or if larger revisions are necessary. Changes in the law often necessitate a review. The same goes for any major life event, like marriage, separation, divorce, birth, death, adoption, etc.   Contact the Soto Law Firm today to schedule a free consultation with an attorney to discuss how an estate plan can help you and your family achieve the peace of mind you seek.

Reference: CNBC (June 8, 2018) “Sudden deaths like those of Kate Spade and Anthony Bourdain can devastate family finances”