The Biggest Mistakes Executors Make

The Biggest Mistakes Executors Make

Serving as an estate executor isn’t for the faint of heart.

It can seem like an honor, at first. When people make out their wills, they typically name a trusted person as their executor, who then has a legal responsibility to distribute their property according to the wishes of the deceased, and make sure all debts and creditors are paid.

But in addition to lots of paperwork and deadlines, the job often comes with a minefield of family issues. And worst of all, executors can be sued.

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Estate Planning for Blended Families

Estate Planning for Blended Families

You're at the annual family reunion and you notice that less than half the people there are related to each other—some are your husband's children from a previous marriage, or they're your children from a previous marriage. As for the parents at the reunion, they've remarried too. Your father passed away several years ago, and your mother recently remarried. As a result, your four new stepsiblings are in attendance as well.

If this sounds like your family, welcome to the new form of family life. Blended families now outnumber traditional families, according to the U.S. Census Bureau. Rising divorce rates aren't the only reason—our longer life spans mean that many more people are outliving their spouse and remarrying.

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Digital Legacy Issues

Digital Legacy Issues

Would you know your all of your loved one's log-ins and passwords for everything they did online?  A recent incident between a widow and Apple Computers once again highlighted the need for prior planning to protect your digital interests and to minimize problems for your family.

Apple's strict data protection policies sparked debate over so-called "digital legacy" issues this week, as the company refused to supply a recently widowed Canadian woman with her late husband's Apple ID password.

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What to Do After You Win Big

What to Do After You Win Big

In my 25 years of law practice, I have been called 3 times to assist a client who has won more than a million dollars in the lottery.  What I have found is that decisions made in the first couple of days after winning will determine just how lucky that winning ticket really was.  Even more frequently, we handle estate settlements where beneficiaries are, for the first time in their lives, put in the position of managing a large sum of money.  The same principles apply.

A panel of experts created this list of 20 steps to take should your number get called.

Step 1: Try to keep quiet. Don't tell anyone you have won until you actually have the money. However large the sum, your life is going to change pretty drastically, and it takes a while for your newly minted circumstances to sink in. So relax, take a deep breath, and don't blabber. You want to keep your privacy for as long as possible.

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Longevity Insurance

Longevity Insurance

Too many retirees are outliving their retirement accounts.  Consequently, the insurance industry has created a possible solution.  This product is called market called “longevity insurance” or, more accurately, a longevity annuity.  You see, this is really just a new name for an old concept, the deferred annuity.

Unlike most annuities, which are purchased with a lump sum and begin paying out soon afterward, these policies typically don’t begin paying anything until some 10 or 20 years after you buy them.  Sales of these annuities were up 35% last year from a year earlier.

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Make sure your loved ones can get your medical info

Make sure your loved ones can get your medical info

If you’re in the hospital, you probably want certain family members and trusted friends to be able to get information about your condition or prognosis. But to make sure this happens, you may need to plan ahead.

A federal law called HIPAA (the Health Insurance Portability and Accountability Act) is designed to protect your health care privacy, and says that medical personnel can’t disclose your health care information to unauthorized people. Only a small number of people are authorized under HIPAA … so if you want other people to know about your condition, you have to authorize them in advance.

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The ACA & Medicare

The ACA & Medicare

  • Most people who reach 65 are eligible for Medicare Part A at no cost
  • You must sign up right when eligible, or face a penalty
  • Your insurance company will not warn you, and will keep charging premiums

If you or someone you know has a marketplace health care plan under the Affordable Care Act (an “Obamacare” plan), and you’ve reached the age of 65 or are close to it, it’s important to look carefully at your options. Not making the right decision could be costly.

In the vast majority of cases, the smart approach is to terminate the Obamacare plan and sign up for Medicare.

But many people are unaware of this fact, because there’s no warning given to such consumers that they have an important decision to make.

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Making Estates "Equal"

Making Estates "Equal"

  • If you leave debt, the result can often impact your estate distribution
  • Debts can include taxes, a mortgage, credit card bills, personal loans, condo fees
  • A well written and funded trust can insure equal distribution

When you’re deciding how to divide your assets among multiple heirs, it’s very important to consider who will pay your estate’s debts out of their share. Two bequests that look equal in theory might be very different in practice once debts are taken into account.

Generally, when a person dies, his or her outstanding debts must be paid out of “probate assets.” This means the assets that pass to someone according to the person’s will. But many assets don’t pass via a will. For instance, a jointly held bank account, jointly owned real estate, an IRA, a 401(k), and a “transfer on death” brokerage account might all pass to someone outside of a will, and thus not count as probate assets.

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What you need to know about estate sales

What you need to know about estate sales

  • First, make sure you have the legal right to sell the property
  • One person’s idea of trash might be another person’s treasure
  • We can recommend several good estate sale businesses in our area

We accumulate a lot of things over a lifetime, and at some point – often because of the death of a loved one, or because a senior is downsizing and moving – we need to get rid of some or all of them. An estate sale is one way to dispose of possessions that you no longer want or need.

There are many companies that help families to sell furniture, jewelry, and other belongings. An estate sale company will take care of the entire process in exchange for a percentage of the proceeds – usually from 25 to 50 percent. The company will handle sorting the goods, staging the house, setting prices, promoting the sale, and hiring workers. There may be a separate fee for cleaning up. Goods that aren’t sold are usually donated to charity.

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If you pay relatives to provide care, you need to have a contract

If you pay relatives to provide care, you need to have a contract

  • If a family member provides care, you need a contract
  • The agreement can save a family tens of thousands of dollars
  • Eventual nursing home eligibility may depend on that agreement

A growing number of seniors are providing a salary or other form of reimbursement to their family members who provide them with personal care. If you’re thinking of doing so, it can be a very good idea to draw up a written contract. This can make it easier to qualify for Medicaid, and can help a family in other ways as well.

It might seem odd to sign a contract with your family. Many children feel awkward about asking for compensation, and many parents assume that the children should help them solely out of love. However, children often devote enormous time and resources to caring for an aging relative, and it’s not unreasonable for them to be compensated in some way. And if there are several siblings and one is more involved in providing care than the others, a contract can be a good way to reward the child who is doing the work without having to divide family assets unequally in a will.

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