Fong Law Group

The Right Documents for Estate Planning

“Make sure that you have the right documents in place to protect your family and yourself.”

Having a properly prepared estate plan, that includes all the important documents, including a will and power of attorney, is one of the most important ways to protect your family and yourself. Despite this fact, many adults still neglect to take care of this important task, reports Consumer Reports in its article “8 Essential Steps for Estate Planning.”

A survey from Caring.com showed that as many as 60% of adults don’t have estate planning documents. When they asked families with young children, fewer than one in ten have even designated a guardian to take care of their children, if both parents should die.

What happens when there’s no planning in place? Even the simplest things become more complicated, and complicated things become financial and legal nightmares. When there’s an emergency and decisions need to be made, the entire family is subjected to more stress and costs than would otherwise be necessary.

Here are the eight steps you need to take, right now, to protect your family:

1. Get the professional help you need. The change to the tax law may or may not impact your family and your estate plan, but you won’t know until you sit down with an estate planning attorney. Trying to do this online, may seem like a simpler way, but you will not have the same peace of mind as when you sit down with an experienced attorney—and one who knows your state’s laws.
2. Create a will. This is a legal document that explains how you want your assets to be distributed after you die. It names an executor to carry out your instructions. If you have minor children, this is an especially important document, since it is used to name their guardian. If you have no will when you die (called dying “intestate”), then the laws of your state determine how your assets are distributed and who rears your children. Depending on where you live, your spouse might not automatically inherit everything.
3. Discuss whether you need a Revocable Living Trust. In most states, when you pass away, your estate goes through a process called “probate.” The courts basically review your estate plan and determine whether everything looks right. The problem is that your will becomes a public document—and so does information about your assets. Some people prefer to keep their lives private by transferring assets to a revocable living trust, which distributes assets according to your instructions at your death. Titles to the assets must be changed, so they are “owned” by the trust. This is known as “funding” the trust. You still retain complete control of your assets, since you are the trustee. However, if you fail to retitle assets, the estate goes through probate. You will also still need a will to protect your minor children.
4. Review your beneficiaries. Whether you remember it or not, when you open many different kinds of accounts—banking, investment—you assign a beneficiary to receive the assets upon your death. Your will does not override the beneficiary designation. Therefore, if you haven’t changed your life insurance beneficiary, for instance, and your ex-wife is still named on the document, she’ll get the entire proceeds of the life insurance policy when you die. This is a very important task.
5. Have a Durable Power of Attorney (DPOA) created. This is something that protects you, while you are living. If you should become incapacitated, having a durable power of attorney in place will allow that person to manage your financial affairs. Make sure the institutions that have your accounts accept your attorneys’ POA form; you may need to get the one that the institution uses.
6. Don’t forget the Advance Directive. This is also known as a Living Will. It explains your wishes for medical procedures, if you are unable to communicate and explains what you want for end-of-life care. Make sure that your family members know that you have such a document and keep it accessible in case of an emergency.
7. Pick a Healthcare Proxy. The Healthcare Proxy, also known as the Durable Power of Attorney for Healthcare, names someone to convey your healthcare wishes. It should include a HIPAA release clause. This allows medical personnel to release your medical records and speak with the named person about your care.
8. Get it all organized. Think of this step as creating a user’s manual for yourself. All these plans won’t do any good, unless your loved ones know they exist and know where to locate them. Don’t put your estate planning documents and records in a bank safe deposit box, in case it is sealed on death. Your attorney will likely have an original, and you should have your original in a fire-proof safe in a secure location in your home.

Reference: Consumer Reports (Oct. 24, 2018) “8 Essential Steps for Estate Planning”

Be Cautious If You Receive an Inheritance 如果您要繼承遺產，請小心! (中英對照)

“My favorite aunt passed away last year, and I inherited $2,500,000 after her probate. The check came last week. It has been a nightmare! I am a pharmacist and know a lot about medicines but very little about managing money.”

The arrival of an enormous sum can be overwhelming to those who are not accustomed to handing money, even though it sounds like a problem we’d all love to have. The truth is, as discussed in “Take your time, plan wisely when you inherit” from Edmonds Beacon, when something like this happens it can be unnerving, like winning a huge lottery jackpot.

Because the will in this situation went through probate, the heir and the amount of money is public knowledge. The tension begins when people you don’t know—and some that you do—start calling with propositions. Sales calls come from shady operators, unknown and known financial advisors and long-lost cousins. The first thing you need is the financial and legal equivalent of a 10-foot-tall fence, complete with sentries.

Most big lottery winners are flat broke, several years after their big wins. Without the right help, it’s easy to go through this kind of money. Don’t rush and don’t be rushed into anything.

If you have children or grandchildren, they could benefit from this inheritance. Start by meeting with an experienced estate planning attorney. Your attorney will talk with you about the many tools, including trusts, that can be used to safeguard the inheritance for coming generations. You’ll also want to make sure your estate plan is up to date and that it includes having powers of attorney for financial and health matters.

You’ll also need a professional tax advisor, which is likely to be a CPA, and a financial advisor. Take your time in researching and checking references for these individuals and their firms. They should be working with your estate planning attorney as part of an integrated team. Having three advisors sounds like a lot. However, it actually works well: all three have knowledge in their fields and can serve as checks and balances on your behalf.

Draw up a roadmap for your life and action plan. Now that you don’t have to work for a living, do you want to continue working for other reasons, like satisfaction or service? Have you always dreamed of traveling? Is there a cause that matters to you?

And, don’t forget to deal with the tax side of this situation. Will there be earnings from the investments you make with the inheritance, and what will your tax liability be now? Should you pay off your existing mortgage or buy a new home?

If you are a recipient of Medicaid or SSI (Social Security Supplement Income), receiving an inheritance can immediately disqualify you for these important government benefits.  If you are a disabled person, being a beneficiary of an inheritance can also mean your government benefits will be terminated.  You will need to meet with an estate planning attorney to find out ways on how to preserve your government benefits. 

A sizable inheritance can be a blessing or a curse. Protect yourself and your inheritance by proceeding slowly, being skeptical of all the new well-wishers in your life and by making smart decisions.

Reference: Edmond’s Beacon (Oct. 10, 2018) “Take your time, plan wisely when you inherit”

“我最喜愛的姨媽去年去世了，遺囑認證後我繼承了2,500,000美元。支票上週來了。這是一場噩夢！我是一名藥劑師，對藥物瞭若指掌，但對理財卻一竅不通。“

對於那些不習慣理財的人來說，巨額資金的到來可會是不堪負荷的，儘管這聽起來像是我們夢寐以求的。事實是，正如“Take your time, plan wisely when you inherit” Edmonds Beacon所討論的那樣，當這樣的事情發生時，它可能令人不安，就像贏得巨額彩票一樣。

因為在這種情況下的遺囑需通過遺囑認證，繼承人和金額成了公開資料。當你不認識的人 - 以及一些你認識的人 - 開始有目的地致電給你時，你便會開始緊張起來。銷售電話來自不知名的經營者，未知的和認識的財務顧問以及久違的表親。你需要做的第一件事是建造一個財務和法律上的十尺圍牆並且有哨兵看守的。

大多數彩票得獎者都是在他們贏了的數年後才破產。沒有得到正確的幫助，這種錢很容易便會失掉了。不要焦急，不要匆匆忙忙做任何事。

如果你有子女或孫兒，他們可以從這種繼承中受益。首先要與經驗豐富的資產規劃律師會面。您的律師將與您討論該用什麼來保護你下一代的遺產，包括信託。您還需要確保您的資產計劃是最新的，並包括財務和醫療授權書。

您還需要一名專業的稅務顧問，可能是註冊會計師和財務顧問。花點時間研究和檢查這些個人及其公司的資料。他們應該與您的資產規劃律師合作，作為整個團隊的一部分。有三個顧問聽起來很多。然而，實際上這樣運作很好：這三個人都在他們的領域上有專業知識，可以相互監督。

為您的生活和行動計劃制定路線圖。既然您不必為生活而工作，您是否希望繼續工作以滿足其他原因，例如滿足感或服務？你一直夢想著旅行嗎？有什麼事情對你很重要？

並且，不要忘記處理這種情況的稅務。您繼承的資產會產生收益，您現在的納稅義務是什麼？您是否應該還清現有的貸款或購買新房？

如果您正接受醫療補助或SSI（社會安全生活補助金），收到遺產後這些重要的政府福利可能會立即被取消。 如果您是傷殘人士，作為遺產的受益人您的政府福利也有可能被終止。 您需要與資產規劃律師會面，以了解如何保障您的政府福利。

相當大的繼承可以是祝福或詛咒。從長計議，對生活中所有新的祝福者持懷疑態度並做出明智的決定來保護自己和你的資產。

參考: Edmond’s Beacon (Oct. 10, 2018) “Take your time, plan wisely when you inherit”

Protect What Comes First and What Comes Last

“When my husband and I were in our 20s, we didn’t have what anyone would consider an ‘estate.’ We lived paycheck to paycheck and had a mortgage on a small house. We did, however, have two priceless assets that provided good reasons for us to make a will—our children.”

No one likes to consider the prospect of tragedy striking, especially when children are young, but according to this article in the Lodi News Sentinel, “Planning for what comes last,” estate planning is especially important for families just starting out. When the children grow up, estate planning is important to protect the children, making their lives easier, when the time comes to pass assets along.

Think of an estate plan as a gift for the next generation, as is making funeral plans in advance. You can’t assume that your adult children will know what you want for your funeral and you don’t want them to have to make decisions during a time of great sadness.

These are gifts, that parents who love their children can give: taking care of the business side of their lives and their deaths, so that a difficult time is less painful.

Once you have worked with an estate planning attorney to prepare all the necessary documents and made funeral plans, the next step is to share that information with your heirs.

It’s not an easy conversation to have. Most of us tend to keep that side of our lives private from our kids, no matter how old we become.  However, sharing this information can keep families from fighting in the future.

It is not easy to know how much different members of the family can handle and who can be trusted with what information while you are living. There are times when people who appear completely selfless, suddenly become greedy when an inheritance is being probated. It’s hard to anticipate this. However, there are several things that you can do now to make it easier for those you love.

• Have a will and if appropriate, a trust, created with an estate planning attorney. Don’t neglect a power of attorney for health and for finances.
• Make funeral plans and tell your family about those plans.
• Make an end-of-life plan. Don’t leave it to others to make these difficult decisions, if you know what you want to have done.
• Plan for your pets, in case they outlive you.
• Protect your digital assets by obtaining the correct information for all your social platforms, so your loved ones are empowered to access and close accounts after your death.

If you are among those who think “If I don’t make a plan for death, maybe I won’t die,”—you share that idea with many. However, the sad truth is if you don’t make a plan, your children will have to deal with an expensive and stressful situation.

Reference: Lodi News-Sentinel (July 1, 2018) “Planning for what comes last”

Life and Death Have Both Gotten More Complicated 生與死都變得更加複雜 (中英對照)

“Death isn’t what it used to be. Write a will, put stock certificates and the deed to your home and a few other pieces of paper in a safe deposit box and you were set for life for the hereafter.”

Estate planning must now include intangible assets that didn’t exist just a few years ago, as well as those that have been around since people started owning private property. Today, says Forbes in the article “Estate Planning for Crypto And Other Digital Assets: What You Need to Know,” there are new kinds of property and new laws that govern them.

Some of the old rules still apply and you need a will. One of the things in that will, needs to be naming an executor who will be in charge of ensuring that your assets are distributed, according to the wishes you state in your will. When it comes to digital assets, things get a little tricky.

The hardest part of digital assets for many people, is how to give access to your digital property. The law has changed. If you own cryptocurrency, you’ll need to list your “crypto keys,” so your executor and heirs can know what is in your estate and be able to access it.

You may need to educate them, so they understand what the assets are, the location of the keys and access control that you use for security. You probably know access control as PINS, passphrases, multisignature or timeclock requirements.

The challenge is, if you die and no one has access to your cryptocurrency keys, your heirs may never be able to access them. They’ll need to know what exchanges you use (Bitcoin, Ethereum, and others) and a list of the digital wallets you own for each.

Most heirs want to sell the crypto property quickly, since the currency is volatile. No one wants to be criticized for losing substantive value in the estate, because they didn’t move quickly enough.  They also don’t want to be brought to court, for failing to look out for the fiduciary interests of the estate.

You’ll need both the proper legal planning and technical planning.

Most states with laws about digital assets, have adopted a model that was written to include things that have not been invented yet.

Electronic signatures on wills, is another digital issue entering the estate planning arena. Most estate planning attorneys are not enthusiastic about this.  However, the change is coming, says an attorney on the drafting committee of the Uniform Law Commission.

National College of Probate Judges President Tamara Curry says she expects that judges are going to have to get up to speed on crypto assets in the next three to five years, since courts will become inundated with estates that include crypto currency and other digital assets.

If you have digital assets, make sure you include them in your estate plan.  Consult an estate planning attorney on how best to incorporate your digital assets into your estate plan. 

Resource: Forbes (Aug. 14, 2018) “Estate Planning for Crypto And Other Digital Assets: What You Need to Know”

“死亡不再像以前那樣。寫一份遺囑，將證券和契約存放在您家中，並將一些其他紙張放入保險箱中，然後你便可安枕無憂。”

資產規劃現在包括幾年前不存在的無形資產，以及自從人開始擁有私有財產以來一直存在的資產。今天福布斯在文章中說“Estate Planning for Crypto And Other Digital Assets: What You Need to Know” (加密和其他數碼資產的資產規劃：你需要了解的內容) 有新的資產和新的法律來管理他們。

一些舊規則仍然適用，並且你需要遺囑。其中一件事，需要根據您在遺囑中表達的意願，命名一名執行人，負責確保您的資產分配。當談到數碼資產時，事情變得有點棘手。

對於許多人來說，數碼資產最麻煩的部分是如何登入你的數碼資產。法律已改變。如果你擁有加密貨幣，則需要列出你的“加密密鑰”，以便你的執行人和繼承人可以知道你遺產中的內容並能夠登入它。

你可能需要對它們解釋，以便了解資產的內容，密鑰的位置以及為了安全要求的登入權限控制。你可能知道登入的資料例如密碼，多重簽名或時鐘要求。

挑戰在於，如果你死亡後並且沒有人可以登入你的加密貨幣密鑰，你的繼承人可能永遠無法登入。他們需要知道你使用的交易所名字（比特幣，以太坊和其他交易所）以及您擁有的數碼錢列表。

由於貨幣波動很大，大多數繼承人都想快速出售加密財產。沒有人願意因為他們的行動不夠迅速，於是因為失去財產的實質價值而受到批評。他們也不想因為他們沒有注意到遺產的信託利益，而被告上法庭。

你需要適當的法律規劃和技術規劃。

大多數擁有數碼資產法律的州都採用了一種模式用來包括尚未發明的東西。

遺囑上的電子簽名是資產規劃領域的另一個數碼問題。大多數資產規劃律師對此並不熱衷。

但是，這一變化即將到來，一位法律委員會起草委員會的律師說。

國家遺囑認證學院院長塔瑪拉庫裡說，她預計法官將在未來三到五年內加快處理加密資產的速度，因為法院將窮於應付包括加密貨幣和其他數碼資產在內的遺產案件。

如果您有數碼資產，請確保將其包含 在您的資產計劃中。諮詢資產規劃律師，了解如何最好地將您的數碼資產納入您的資產計劃。

參考: Forbes (Aug. 14, 2018) “Estate Planning for Crypto And Other Digital Assets: What You Need to Know”

Aretha Franklin’s Lack of a Will Could Cause Huge Problems

According to court documents, legendary singer Aretha Franklin did not have a will when she died, opening up her estate to public scrutiny and potential problems. Failing to create an estate plan can cause lots of headaches for heirs, in addition to unnecessary costs.

Franklin, who died August 16, 2018, at age 76, left behind four sons, but no guidance on how to distribute her reported $80 million estate. According to The New York Times, her sons filed paperwork in Oakland County, Michigan, indicating that she died intestate -- that is, without a will. The sons nominated Franklin’s niece to serve as the personal representative of the estate. When someone dies without a will, the estate is divided according to state law. Under Michigan law, an unmarried decedent's estate is distributed to his or her children. (Franklin had been married twice but long since divorced.)

Even if the "Queen of Soul" had wanted her estate to go solely to her children, by not having a will or trust, her estate will have to go through a long public probate process, which will likely cost her estate considerable money. If Franklin, who was quite private in life, had created an estate plan that included a will and a trust, she could have avoided probate and kept the details of her financial circumstances private.  Her eldest son reportedly has special needs, which presents other potential complications.  In addition, by not having a will, Franklin has opened her estate up to potential challenges that could drag out the probate process. Without a will to clearly state the decedent's intent, litigation resulting from family conflicts often eats into estates.

Also, because Franklin did not plan her estate, the estate will be subject to unnecessary estate taxation. Although she may not have been able to avoid estate tax entirely, there are steps she could have taken to reduce the amount her estate will have to pay.

"I was after her for a number of years to do a trust," attorney Don Wilson, who represented Franklin in entertainment matters for the past 28 years, told the Detroit Free Press. "It would have expedited things and kept them out of probate, and kept things private."

Estate planning is important even if you don't have Aretha Franklin's assets. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs, and attorneys' fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

Contact your attorney to begin working on your estate plan now.

Working on Your Bucket List? First, Finish Your Estate Plan

“Many seniors may be more focused on their bucket lists, than worrying about having their financial affairs in order.”

Seniors should be having some heart-to-heart discussions with their spouses and loved ones about their wishes concerning their assets and their final days, according to Intermountain Catholic in “Retirees Have Several Financial Issues to Consider.” After a loved one dies, family members are often left dealing with the expenses of their medical care and funeral. To be left to deal with these issues while grieving, adds another layer of heartbreak. It doesn’t have to be this way.

Many people put off making a will.  This means that their property won’t be distributed as they would want. If you don’t already have a will, contact an estate planning attorney and get started right away. Without a will, your estate will be distributed according to the laws of your state.

Ask your estate planning attorney if a “pour-over trust” is appropriate for your situation.  It puts the property that you own at the time of death into an already-prepared trust, so your trusted heir can succeed you as a trustee and then divide the estate, according to your wishes.

Don’t put your 401(k) or IRA savings accounts into trusts. The IRS will see that as a 100% withdrawal and you’ll be charged the taxes on it for the year the withdrawal was made. That one mistake could, and has, decimated lifetimes of savings.

You’ll want to grant a trusted family member or friend the power of attorney and medical power of attorney, so your affairs can be handled, if you should become unable to do so. If you do not want “heroic measures”—CPR and other medical procedures done to bring someone back to life, if they are unresponsive—then you’ll want a Do Not Resuscitate (DNR) form. That form will need to be with you and you should tell others about it, so they can instruct medical personnel accordingly. Otherwise, EMTs and doctors are required by law to take whatever measures they deem necessary to keep you alive.

If you haven’t already applied for Social Security, you may wish to go to your local Social Security office to discuss what benefits are available to you and how to collect them.

Most seniors qualify for Medicare, but there are many different plans. It is also likely that you’ll need supplemental plans to cover costs, including prescriptions.

Your best bet: sit down with an experienced estate planning attorney who can help you create an estate plan that is best for you and your family.  You should also have conversations with your family members about tough topics, so when the time comes for them to act on your behalf, they’ll be ready.

Reference: Intermountain Catholic “Retirees Have Several Financial Issues to Consider”

How Do I Know if I Need a Will or a Revocable Trust? 我怎麼知道我是否需要遺囑或生前信託？ (中英對照)

Many people assume that Revocable Living Trusts are just for wealthy people.  However, the benefits that they can offer to someone with even minimal wealth are significant.

One of the more common questions for estate planning attorneys is asked and addressed in an article from thebalance.com, “Will or Revocable Living Trust—Which Do You Need?” It’s a good question because many people don’t understand how important having a will is, even if you don’t have a large amount of property. The following are some factors to consider, when speaking with your estate planning attorney about wills and different types of trusts.

Mental Disability Planning. Regardless of the size of your net worth, you might want to consider a Revocable Living Trust for mental health planning. A properly drafted Revocable Living Trust, which should be prepared by an experienced estate planning attorney, will have provisions to determine mental capacity outside of a court proceeding. It will also state your wishes about taking care of you and your finances, in case you do become mentally incapacitated. It is likely that such a document could keep your family out of a court-supervised guardianship.

Minor Beneficiaries.  This is what happens all too often: young parents have a life insurance policy or a retirement account through work. They divorce and one of the parents decides to name a minor child as a beneficiary. It is also possible that both parents could die, while the children are still minors. What happens to these assets? They are placed in a court-supervised guardianship for the benefit of the minor, until the child reaches 18. Parents can instead set up a Revocable Living Trust, naming the trust as the primary or contingent beneficiary of the life insurance or retirement account. They must then name a trustee to accept and manage the funds, instead of a court-appointed guardian.  The judge does not know your child as well as you do and may not be able to nominate the most suitable person to be your child’s guardian.   Children who are 18 years of age, are usually not ready to deal with large sums of money. With a Revocable Living Trust, the parents can dictate how old the children will be when they receive their inheritance. Some kids are ready at age 21, while others are not ready until they are 30 or ever.

Singles Need to Plan Also. If you have assets titled in your name and no legal partner, you could use a Revocable Living Trust to keep you and your assets out of a court-supervised guardianship and allow beneficiaries to avoid the cost of probate.

Planning for Second Marriages. If you and your spouse have children from prior marriages, you may have different beneficiaries. A Revocable Living Trust can ensure that each of your estate assets will be distributed where you want, outside of probate.

Don’t Forget to Fund. This last step gets forgotten all too often. If you create any kind of a trust, don’t forget to fund it and update your beneficiary designations.  Otherwise, it won’t accomplish what you want.

If you want know whether a will or a trust is more suitable for you, contact an estate planning attorney today. 

Reference: thebalance.com (June 29, 2018) “Will or Revocable Living Trust—Which Do You Need?”

我怎麼知道我是否需要遺囑或生前信託？

許多人認為生前信託僅適用於富人。然而，他們可以為財富最少的人帶來的好處是顯著的。

在thebalance.com的一篇文章中提出並解決了資產規劃律師的一個常見問題，“Will or Revocable Living Trust—Which Do You Need?” (遺囑或生前信託 - 你需要哪一個) 這是一個很好的問題，因為即使你沒有大量財產，很多人也不明白有遺囑的重要性。在與你的資產規劃律師討論遺囑和不同類型的信託時，需要考慮以下因素。

精神疾病計劃。無論你的資產規模如何，你都可以考慮使用生前信托進行精神健康規劃。

一份由資深的資產規劃律師準備的生前信託，會有條文決定委托人是否有精神能力，而無需法院的介入。它也會表明關於照顧你和你的財務狀況的意願。這文件很可能會讓你的家人不受法院監管。

未成年受益人。這種情況經常發生：年輕父母有人壽保險單或退休賬戶。他們離婚後，其中一位父母決定將未成年子女定為受益人。如果父母雙方都過世時，孩子仍然是未成年人。這些資產會如何？在這種情況下，法院會委托監護人為未成年的受益人管理財產，直到孩子滿18歲。另外的做法是父母可以設立生前信託，將信託指定為人壽保險或退休賬戶的主要或次受益人。然後，他們必須指定受託人去接受和管理資金。這個做法的好處是由你指定的受託人。因法官不會像你一樣了解你的孩子，也可能無法指定最適合你孩子的監護人。18歲的孩子通常還沒准備好去處理大筆金錢。通過生前信託，父母可以決定孩子在什麼年齡時繼承遺產。

單身也需要計劃。如果你擁有資產在你名義之下且沒有配偶，你可以使用生前信託來保護你和你的資產不受法院監管的監護，並允許受益人避免遺囑認證的費用。

計劃第二次婚姻。如果你和你的配偶有從第一次婚姻的子女，你們可能有不同的受益人。生前信託可以確保你的資產將按照你的意願分配，而無需法院的介入。

不要忘記資助。這最後一步經常被遺忘。如果你創建任何類型的信託，不要忘記資助它並更新您的受益人名稱。否則，它將無法實現您想要的效果。

如果你想知道遺囑或信託是否更適合您，請立即聯繫資產規劃律師。

參考: thebalance.com (June 29, 2018) “Will or Revocable Living Trust—Which Do You Need?”

Probate and the Problem with Cryptocurrency

The death of Matthew Mellon shows how a lack of planning can cause problems for an estate that contains a lot of cryptocurrency.

At the age of 21 Matthew Mellon, a member of the famous family of bankers, inherited $25 million through a trust that was created for him. Illustrating the dangers of giving that much money to someone so young, Mellon was not cautious with the money and developed a costly habit.

He recently passed away on the way to rehab, at the age of 54. If that was the entire story Mellon would be a good cautionary tale about why it is important to carefully structure large inheritances.  However, there is more to the story as the Wills, Trusts & Estates Prof Blog discusses in "Matthew Mellon's Cryptocurrency is Being Held in Probate."

At some point, Mellon became heavily invested in cryptocurrency, which eventually made him a billionaire. At the time of his passing, his cryptocurrency holdings are believed to be worth around $100 million. However, the problem is that cryptocurrency can be extremely volatile.

Since his passing, Mellon's holdings have already fluctuated more than 30% in value. To get the holdings, however, his estate first has to go through probate.  This would ordinarily take a long time in this case. The estate is seeking permission to sell the cryptocurrency now, in case the value of the holdings crashes.

Mellon presents another cautionary tale as well. If you have a lot of cryptocurrency, you should make estate plans that do not require cryptocurrency to go through probate.

If you want your cryptocurency to avoid going through probate, you should set up a trust.   Digital assets have become an increasingly important component of people’s estate.  Your estate plan should take into consideration of your digital assets.  Consult an estate planning attorney on how to properly structure your estate plan. 

Reference: Wills, Trusts & Estates Prof Blog (May 20, 2018) "Matthew Mellon's Cryptocurrency is Being Held in Probate."

Reports of Estate Planning's Demise Premature

Now that the estate tax exemption has been doubled, some people are saying there is no longer a need for estate planning. However, estate plans have never been mostly about avoiding the estate tax.

For people who do not want to take the time to plan for their own estates, it might seem like 2018 has started out to be a good year. It has been so good that some people are talking about the death of estate planning itself, because the federal estate and gift tax exemptions have been doubled. They also think that there is no need to have plans to avoid those taxes.

However, most people who planned for their estates before this year were not subject to the federal estate tax anyway, because there have always been other reasons to make an estate plan. Those other reasons still exist.

Recently, Kiplinger discussed some of those reasons in "Is Estate Planning Now Dead?" including:

• A few states still have estate and inheritance taxes of their own. Some of them have lower thresholds than the federal exemption limit. People in those states might need to plan around those taxes.
• In many states, probate is a very expensive and time-consuming process, giving people good reasons to get an estate plan that avoids probate completely.
• Estate planning is also a good way to avoid any particular issues that might come up with an unplanned estate. For example, if any heirs have potential problems, like financial or drug issues, estate planning can help make sure that any inheritance is not wasted.
• Estate planning is also the best way to avoid fights between family members over who should get what from the estate.

Contact a qualified estate planning attorney to get your affairs in order without delay.

Reference: Kiplinger (May 1, 2018) "Is Estate Planning Now Dead?"

 

Estate Planning Mistakes to Avoid

When it comes to estate planning, there are several mistakes that people can make in setting up specific legal instruments. However, most mistakes people make are far more basic.

People who are looking to plan their estates, often have a lot of questions about what they should do. However, answering those questions can be like putting the cart before the horse.

Most estate planning mistakes can be avoided, if people would ask what they should not do instead. A large percentage of messy estate administration cases in probate courts would go away, if people would do that.

Market Watch recently discussed some of the things not to do in "7 common estate planning disasters and how to avoid them," including:

• Do not pass away without a will or a trust. It should be obvious. If you have no estate plan at all, you have made an estate planning mistake. However, this is a common mistake because people think they will live longer than they do and will have time to make plans later.
• Do not forget to plan for incapacity. A good estate plan will include documents planning for a time when you can no longer take care of things by yourself.
• Do not think you can get a good estate plan by purchasing a form and filling it out. Mistakes made when people do this are costly and time-consuming to fix.
• Do not make beneficiary designations on your financial accounts, without considering how those designations fit into your other estate plans.
• Do not forget to review your estate plan from time to time to make sure it is still appropriate for your family.
• Do not neglect to get a new estate plan, if you get remarried. This is especially important, if you have children from a previous relationship.
• Do not keep any secrets from your estate planning attorney. Your attorney cannot make proper plans, if all relevant information is not disclosed. It can lead to problems in administering your estate.

Reference: Market Watch (April 26, 2018) "7 common estate planning disasters and how to avoid them."