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Estate Planning Blog

Serving Clients Throughout North Central Missouri

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What Does Actor Chadwick Boseman’s Estate Look Like?

Boseman passed away in late August after a four-year battle with colon cancer. He died without a will, and his estate is estimated at $938,500, according to papers filed in Los Angeles County probate court.

Boseman is best known for the movie “Black Panther,” as well as “42,” “Get on Up” and “Marshall.” He appeared earlier this year in Spike Lee’s “Da Five Bloods.”

USA Today’s recent article entitled “Chadwick Boseman’s wife seeks to administer estate of ‘Black Panther’ star, who died with no will” reports that in the court papers, Boseman’s wife, Simone Ledward (referred to in the documents by her legal name, Taylor Simone Ledward), asked to be appointed administrator with limited authority over the actor’s estate.

When there is no will to designate an executor, state law or a judge will make that determination. Most states say that the surviving spouse or registered domestic partner, if any, is the first choice. An adult child is then usually next on the list, followed by other family members.

If there’s no will, state law will direct what happens to property. If the deceased person was married, the surviving spouse typically gets the largest share.

Distant relatives inherit, only if there is no surviving spouse and if there are no children. If no relatives can be found, the state gets the assets.

In addition to Ledward, the actor is survived by his parents, Leroy and Carolyn Boseman, who are also named in the papers. Boseman’s family, including Ledward, were by his side when he died at his Los Angeles home.

According to People, Boseman and Ledward became engaged in 2019 and their last public appearance together was at the NBA All-Star Game in February in Chicago.

Boseman paid tribute to his wife during an acceptance speech at the 2019 NAACP Image Awards. “Simone, you’re with me every day. I have to acknowledge you right now. Love you.” Ledward blew him a kiss and mouthed back the words, “I love you.”

Reference: USA Today (Oct. 16, 2020) “Chadwick Boseman’s wife seeks to administer estate of ‘Black Panther’ star, who died with no will”

 

estate planning newsletter

What Do I Need to Do after the Death of My Spouse?

It probably is the last thing on your mind, but there are tasks that must be accomplished after the death of a spouse. You might want to ask for help and advice from a trusted family member, friend, or adviser to sort things out and provide you with emotional guidance.

Kiplinger’s recent article entitled “Checklist: Steps to Take after Your Spouse Dies” provides a checklist to help guide you through the most important tasks you need to complete:

Don’t make any big decisions. It’s not a good time to make any consequential financial decisions. You may wish to sell a home or other property that reminds you of your spouse, but you should wait. You should also refrain from making any additional investments or large purchases—especially if you weren’t actively involved in your family’s finances before the death.

Get certified copies of the death certificate. You’ll need certified copies of your spouse’s death certificate for any benefit claims or to switch over accounts into your name. Ask the funeral home for no fewer than 12 copies. You also may need certified marriage certificates to prove you were married to your late spouse.

Talk to your spouse’s employer. If your spouse was working when he or she passed, contact the employer to see if there are any benefits to which you are entitled, such as a 401(k) or employer-based insurance policy. If you and your dependents’ medical insurance was through your spouse’s job, find out how long the coverage will be in effect and begin making other arrangements.

Contact your spouse’s insurance company and file a claim. Get the documentation in order prior to contacting the insurance company and make certain that you understand the benefit options to claim a life insurance benefit.

Probate the estate. Get a hold of the will. Contact the attorney for help in settling the estate. If your spouse didn’t have a will, it will be more complicated. Reach out to an experienced estate planning attorney or elder law attorney for advice in this situation.

Collect all financial records. Begin collecting financial records, including bank records, bills, credit card statements, tax returns, insurance policies, mortgages, loans and retirement accounts. If your spouse wasn’t organized, this might take some time. You may be required to contact companies directly and provide proof of your spouse passing, before being able to gain access to the accounts.

Transfer accounts and cancel credit cards. If your spouse was the only name on an account, like a utility, change the name if you want to keep the service or close the account. Get a copy of your spouse’s credit reports, so you’ll know of any debts in your spouse’s name. Request to have a notification in the credit report that says “Deceased — do not issue credit.” That way new credit won’t be taken out in the spouse’s name.

Contact government offices. Have your spouse’s Social Security number available and call the Social Security Administration office to determine what’s required to get survivor benefits. Do this as soon as possible to avoid long delays before you get your next Social Security payment. You may also qualify for a one-time death benefit of $255. If your spouse served in the armed forces, you may be eligible for additional benefits from the Department of Veterans Affairs. Therefore, contact your local office.

Change your emergency contact information. Change any of your or your family members’ emergency contact info that had your spouse’s name or number listed as someone else’s primary point of contact.

This checklist is a good way to help with the pressing tasks. You can also contact an estate planning attorney or elder law attorney for help.

Reference: Kiplinger (Aug. 27, 2020) “Checklist: Steps to Take after Your Spouse Dies”

 

Is Estate Planning for Everyone?

What Is Estate Planning and Is It for Everyone?

A key objective of estate planning is to make certain that your assets go to those you want, rather than distant family. It also can minimize taxes, so your beneficiaries can keep more of your wealth. Finally, sound estate planning can decrease family fighting and provide clear end-of-life directives, if you become incapacitated before you die.

Bankrate’s recent article entitled “What is estate planning?” gives us a look at estate planning and why you absolutely need it, regardless of how much wealth you have. Here are a few of the most common elements of an estate plan and what you should consider.

Beneficiary designations. When you open a financial account, checking, savings, brokerage, or insurance account, you’ll be asked to name a beneficiary for the account. This person will get any funds from the account at your death. You can have multiple beneficiaries and should also name contingent beneficiaries in case the primary beneficiaries are not living when you pass away. Naming a beneficiary supersedes any other declaration in your estate.

Will. This is another key document in the estate plan. When you die, it instructs where your assets will go. Property that’s owned jointly, such as with a spouse, passes directly to the surviving owner(s). An executor will be appointed to carry out the will and manage the distribution of assets.

Trusts. This is a legal vehicle that allows a third party (the trust) to hold assets for a beneficiary. They give you several estate planning options, including avoiding probate and privacy. Trusts also let you direct how your assets are distributed after your death. You can also name the trustee(s) to manage and direct the trust on your passing. Ask your experienced estate planning attorney to help you with your trust questions and to create one, if it is a good idea.

Living wills. In the event you become incapacitated, you should have a clear statement of your wishes. A living will states how you want to be treated during your end-of-life care, such as specific treatments to take or refrain from taking. A living will is often combined with a durable power of attorney, which can allow a surrogate to make decisions on behalf of the incapacitated individual.

Estate planning can help avoid many issues from arising, even if you don’t have a lot of money. By determining how you want to handle your estate before you die, you’ll save your loved ones a lot of effort, expense and stress concerning how your estate is distributed.

Reference: Bankrate (Aug. 3, 2020) “What is estate planning?”

 

Retirement Planning

The Biggest Social Security Blunders in Retirement

Fox News’ recent article entitled “These mistakes will take a huge bite out of your Social Security income” shares what we should and shouldn’t do.

  1. Not working a full 35 years. Your Social Security benefits are calculated based on your wages during your 35 highest-paid years of work. However, for each year you don’t have an income on record, you’ll have a $0 factored into your personal equation. That’s going to mean a lower monthly benefit. Therefore, to avoid this, be sure you put in a full 35 years in the workforce. It may actually help boost your benefit, by avoiding those dreaded $0 years. It will also potentially factor higher wages into your calculation.

Many people earn more money later in their careers. If your earnings are now at their highest, and you work another year to make it a full 35, you may be adding a salary that’s far more than what you earned 30 years before (even though your previous wages will be adjusted for inflation when determining what monthly benefit you get).

  1. Not delaying until your full retirement age to file. You won’t be entitled to collect all of your benefits until you reach full retirement age (FRA). Your FRA will depend on your year of birth, and if you were born in 1960 or later, it’s 67. Born in 1959 or before? It’s 66, or 66 and a number of months.

You can file for Social Security as early as age 62, but for each month you sign up prior to your FRA, your benefits are reduced on a permanent basis. That’s bad news if you don’t have a lot of money in retirement savings and need those benefits to ensure that you’re able to make ends meet in retirement.

  1. Delaying benefits beyond age 70. Just as you get the option to sign up for Social Security before FRA, you can also delay benefits past FRA and boost them by 8% a year in the process. But don’t postpone your filing too long! When you hit age 70, you stop accruing the delayed retirement credits that increase your benefits. Therefore, delaying beyond that point could mean missing out on income.
  2. Retire in a state that taxes your benefits. Social Security benefits may be taxed on the federal level, if your earnings exceed a certain threshold. However, some states also tax Social Security. These 13 states tax benefits to some degree: CO, CT. KS, MN, MO, MT, NE, NM, ND, RI, UT, VT, and WV. Some states have lower earner exemptions.

Don’t slash your Social Security income and struggle in retirement because of these mistakes.

Avoid these mistakes to be certain that you get as much money from Social Security as you’re entitled.

Reference: Fox News (Sep. 14, 2020) “These mistakes will take a huge bite out of your Social Security income’

 

Probate

What’s Involved in the Probate Process?

SWAAY’s recent article entitled “What is the Probate Process in Florida?” says that while every state has its own laws, the probate process can be fairly similar. Here are the basic steps in the probate process:

The family consults with an experienced probate attorney. Those mentioned in the decedent’s will should meet with a probate lawyer. During the meeting, all relevant documentation like the list of debts, life insurance policies, financial statements, real estate title deeds, and the will should be available.

Filing the petition. The process would be in initiated by the executor or personal representative named in the will. He or she is in charge of distributing the estate’s assets. If there’s no will, you can ask an estate planning attorney to petition a court to appoint an executor. When the court approves the estate representative, the Letters of Administration are issued as evidence of legal authority to act as the executor. The executor will pay state taxes, funeral costs, and creditor claims on behalf of the decedent. He or she will also notice creditors and beneficiaries, coordinate the asset distribution and then close the probate estate.

Noticing beneficiaries and creditors. The executor must notify all beneficiaries of trust estates, the surviving spouse and all parties that have the rights of inheritance. Creditors of the deceased will also want to be paid and will make a claim on the estate.

Obtaining the letters of administration (letters testamentary) obtained from the probate court. After the executor obtains the letter, he or she will open the estate account at a bank. Statements and assets that were in the deceased name will be liquidated and sold, if there’s a need. Proceeds obtained from the sale of property are kept in the estate account and are later distributed.

Settling all expenses, taxes, and estate debts. By law, the decedent’s debts must typically be settled prior to any distributions to the heirs. The executor will also prepare a final income tax return for the estate. Note that life insurance policies and retirement savings are distributed to heirs despite the debts owed, as they transfer by beneficiary designation outside of the will and probate.

Conducting an inventory of the estate. The executor will have conducted a final account of the remaining estate. This accounting will include the fees paid to the executor, probate expenses, cost of assets and the charges incurred when settling debts.

Distributing the assets. After the creditor claims have been settled, the executor will ask the court to transfer all assets to successors in compliance with state law or the provisions of the will. The court will issue an order to move the assets. If there’s no will, the state probate succession laws will decide who is entitled to receive a share of the property.

Finalizing the probate estate. The last step is for the executor to formally close the estate. The includes payment to creditors and distribution of assets, preparing a final distribution document and a closing affidavit that states that the assets were adequately distributed to all heirs.

Reference: SWAAY (Aug. 24, 2020) “What is the Probate Process in Florida?”

 

personal injury

Can an Inheritance Lead to Trouble for Marriages?

Is an inheritance a blessing, or a curse? That’s the question from the recent article “When One Spouse Gets an Inheritance It Can Be Hard on a Marriage” posed by The Wall Street Journal. The emotional high of receiving an inheritance is often paired with legal issues. Emotional and life changing decisions can take a toll on the best of partnerships. Spouses may disagree with how assets should be used, or if an inheritance should be set aside for children from a prior marriage. The question of what happens to the inheritance in the case of death or divorce also needs to be addressed.

Couples are advised to start exploring these issues, with the help of an experienced estate planning attorney as soon as they know an inheritance is in their future. For starters, couples should learn about the legal issues surrounding inheritances. Most states recognize inheritances as separate property. However, if funds are co-mingled in a joint account, or the deed for an inherited house is in both names, it becomes more complicated to separate out, if necessary.

Couples who decide to use an inheritance for a large purchase need to be mindful of how the purchase is structured and recorded. Writing a check directly from an account dedicated to the inherited funds and keeping records to show the withdrawal is recommended. If a check needs to be drawn from a joint or single account, the inherited funds should only be placed in the account for a short period, preferably close to the time of purchase, so it is clear the funds were transferred solely for the purpose of the particular transaction.

It would be wise to obtain a written agreement between spouses, making it clear the money was contributed with the understanding if there is a sale of the property or a divorce, inherited funds and any appreciation would be credited back to the contributing spouse.

For one couple, a $100,000 inheritance received by a man in his mid-50s with adult children and a second spouse created friction. The man wanted to set the funds aside for his children from a prior marriage, and his wife felt hurt, because she had every intention of giving the money to his children in the event of her husband’s death. She didn’t see the need to keep things separate. However, when advisors ran a series of projections showing the wife would be well cared for in the event of his death, since most of his own $1 million estate was earmarked for her, she relented. They also helped her understand if she racked up big medical bills later in her own life or creditors went after the estate, the money would be better protected by keeping it separate.

Risks come with co-mingling inheritances. It is important for couples understand how this works. Another example: a couple who expected to receive a sizable inheritance and did not save for their own retirement. Instead, they used up the wife’s inheritance for their children’s college educations. When the husband filed for divorce, the wife was left with no access to her ex-husband’s expected large inheritance and had no retirement savings.

These are not easy conversations to have. However, couples need to look past the emotions and make business-like decisions about how to preserve and protect inheritances. It’s far easier to do so while the marriage is intact, then when a divorce or other unexpected life event shifts the financial event horizon.

Reference: The Wall Street Journal (Sep. 13, 2020) “When One Spouse Gets an Inheritance It Can Be Hard on a Marriage”

Moberly, MO

Here’s Why You Need an Estate Plan

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or with special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently written, so the estate goes to the child when he reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for him by a trustee or executor until a set age, like 25 or 30.

Probate is the default process to administer an estate after someone’s death, when a will or other documents are presented in court and an executor is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. Farmers can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.

The title of the farm is transferred to the trust with the farm’s former owner as trustee. With a trust, it makes it easier to avoid probate because nothing’s in his name, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid conservatorship (guardianship of an adult who loses capacity). It can also help to decrease capital gains taxes, since the property transfers before their death.

If you have several children, but only two work with you on the farm, an attorney can help you with how to divide an estate that is land rich and cash poor.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

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