Have You Had a Change in Your Life Recently?

If so, you may want to revise your estate planning documents to reflect these changes. Here are some situations when your Living Trust and Will should be updated.

You get married. Jointly held property will pass to your spouse automatically upon your death. You should update your Will and Trust to pass your separate property as you intend.

You get divorced. You should update your living trust and will after a divorce so your assets are distributed to your intended beneficiaries. And don’t forget to check other documents for beneficiary designations, such as IRAs, life insurance, and 401K accounts.

You acquire or dispose of assets such as real estate or stock. If you obtain new assets and you want to leave them to someone specific, or if you’ve sold or gifted certain assets, you may need to update your will and living trust to reflect this.

You’re single, but have a significant other. Without a will or living trust, your partner generally won’t inherit any of your assets.

You have a baby. You need to name a personal guardian and trustee in your legal documents – someone to raise the child and manage the money in the event something happens to you and your spouse. The guardian and trustee can be the same person or different people.

You have new stepchildren and you want them to inherit assets. Blended families often require extra thought when it comes to legal documents, and unless you legally adopt your stepchildren, they have no right to your inheritance. If you want to leave them a share of your assets, you need to update your will and living trust to reflect your wishes.

Don’t forget Durable Powers of Attorney and Patient Advocate Designations. If you get married, divorced, have a significant other or the person(s) you have named as your agents for financial or health care decisions are deceased, you will need to update these documents as well.

Excerpts taken from Article from EHTC Newsletter dated December 13, 2017.

If you have any questions on estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900. For more information, please see my website, www.customestateplans.com.

 

Keep Tabs on Your Living Trust When Refinancing Your Home

Refinancing your home? Don’t forget to examine the implications on your living trust. One homeowner recently took advantage of low interest rates to refinance his home and reduce monthly payments. Unfortunately, he didn’t realize that his lender required that the home be transferred back to the owners’ individual names before processing the loan. If he hadn’t caught the glitch, he could have been faced with probate later – a situation he was trying to avoid with the living trust in the first place.

Revocable living trusts, which allow heirs to avoid expensive and time-consuming probate court proceedings, have become increasingly popular in recent years. But unlike a will, a living trust cannot simply be signed and filed away. Any change in assets, finances or family members may require an update to the living trust or will.

Over the past few years, this problem has become more and more prevalent as interest rates have remained relatively low and homeowners across the country have refinanced their homes. After the new loan is processed and the new deed of trust is recorded, the homeowners are free to transfer the home back into the living trust, but lenders rarely assist with this final step (and some homeowners don’t even know their home was removed from the trust, since they may have signed many documents at once).

The end result is probate. Sometimes it’s possible to obtain court approval to confirm trust ownership of a home that was never formally transferred to the trust. However, it’s unlikely that a court would confirm trust ownership if the last document signed was a deed transferring the property out of the trust.

The bottom line? If you have a living trust and you’ve refinanced your home in the past few years, review the documents to ensure that the home is currently held in the trust. If it isn’t, consult with your estate planning adviser to prepare and record a new deed returning the property into the trust.

Excerpts taken from Article from EHTC Newsletter dated December 13, 2017.

If you have any questions on estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900. For more information, please see my website, www.customestateplans.com.

17 Fascinating Things You Never Knew About Thanksgiving

Macy's parade
Macy’s Thanksgiving Day Parade, 1929

1. The first Thanksgiving was actually a three-day celebration.

Today, Thanksgiving is one day — maybe two if you count Black Friday. But apparently the Pilgrims wanted to party even harder. Governor William Bradford organized the feast, inviting the Plymouth colonists’ Native American allies. But it was only until the Wampanoag Indian guests came and joined the Pilgrims that they decided to extend the affair.

2. It’s unclear if colonists and Native Americans ate turkey at their feast.

There is truly no definitive proof that the bird we wait all year to eat was even offered to guests back in 1621. However, they did indulge in other interesting foods like lobster, seal and swan.

3. Today, a special part of Plymouth, Massachusetts, looks just as it did in the 17th century.

Modeled after an English village and a Wampanoag home site, the historic attraction Plimoth Plantation stays true to its roots. You can order tickets as early as June to attend a Thanksgiving dinner complete with numerous authentic courses, tales of colonial life and centuries-old songs.

4. The woman behind “Mary Had a Little Lamb” is also responsible for Thanksgiving’s recognition as a national holiday.

In 1863, writer and editor Sarah Josepha Hale convinced President Abraham Lincoln to officially declare Thanksgiving a national holiday. She wrote countless articles and letters to persuade the president — and the rest is history!

5. The first Macy’s Thanksgiving Day Parade didn’t feature any balloons.

But when the parade made its big debut in 1924, it did have something that might be even cooler than balloons: animals from the Central Park Zoo.

6. But we have a Good Housekeeping illustrator to thank for the parade’s first balloons.

German American illustrator Tony Starg, who completed illustrations for Good Housekeeping, also had a passion for puppetry, which he used make the amazing floats come to life in 1927.

7. In 1939, Thanksgiving was celebrated on the third Thursday in November — not the fourth.

You might think President Roosevelt could predict the future, as he channeled a “Black Friday” mindset in making this decision. Even though the holiday had been celebrated on the fourth Thursday since its official recognition decades before, Roosevelt bumped it up a week — offering seven more shopping days to the holiday season. Americans, to say the least, didn’t love the change, so it was officially (and legally) switched back in 1942.

8. A Thanksgiving mix-up inspired the first TV dinners.

In 1953, a Swanson employee accidentally ordered a colossal shipment of Thanksgiving turkeys (260 tons, to be exact). To get rid of them all, salesman Gerry Thomas came up with the idea of filling 5,000 aluminum trays with the turkey – along with cornbread dressing, gravy, peas and sweet potatoes. They were sold for 98 cents, and were a hit. Within one year, over ten million were sold.

9. About 46 million turkeys are cooked for Thanksgiving each year.

It’s tradition, after all! And on Christmas, 22 million families host an encore with another turkey.

10. But not everyone eats turkey on Thanksgiving.

According to the National Turkey Federation, only 88% of Americans chow down on turkey. Which begs the question, what interesting dishes are the other 12% cooking up?

11. You might consume up to 229 grams fat during the big meal.

We hate to break it to you, but that’s about 3 to 4 times the amount of fat you should eat in a day.

12. The turkeys pardoned by the President go on to do some pretty cool things.

President George H.W. Bush pardoned the first turkey in 1989, and it’s a tradition that persists today. But what happens to the lucky bird that doesn’t get served with a side of mashed potatoes? In 2005 and 2009, the turkeys were sent to Disneyland and Walt Disney World parks to serve as grand marshal in their annual Thanksgiving parades. And from 2010 to 2013, they vacationed at Washington’s Mount Vernon state. Not bad!

13. Only male turkeys actually gobble.

You may have been taught in pre-school that a turkey goes “gobble, gobble” — but that’s not entirely true. Only male turkeys, fittingly called gobblers, actually make the sound. Female turkeys cackle instead.

14. Most Americans like Thanksgiving leftovers more than the actual meal.

Almost eight in 10 agree that the second helpings of stuffing, mashed potatoes and pie beat out the big dinner itself, according to a 2015 Harris Poll.

15. The Butterball Turkey Talk Line answers almost 100,000 calls each season.

Last year, the company’s popular cooking crisis management team also introduced a 24-hour text message line for the lead-up into the big day.

16. There are four places in the country named Turkey.

The U.S. Census has identified another seven called Cranberry, and a grand total of 33 dubbed Plymouth.

17. Black Friday is the busiest day of the year for plumbers.

Thanks to all that food we gobble up, Roto-Rooter reports that kitchen drains, garbage disposals and, yes, toilets, require more attention the day after Thanksgiving than any other day of the year.

*************

Excerpts from article on www.goodhousekeeping.com  by Taylor Murphy, November 13, 2017.

If you have any questions on estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

 

Halloween…A Spooky Day

Ramon Navarro
Ramon Navarro 1899-1968

Halloween is the one day when we explore the eerie side of life . . . and death. Each year haunted houses and ghosts make October 31 a spooky, scary day. But it’s also a day on which many notable have died, from both natural and unnatural causes.

Ramon Novarro was as big of a Hollywood star as they come. Known as Ravishing Ramon, he was pegged as the logical successor to Rudolph Valentino. At the height of his acting fame, he earned $100,000 per film and starred in classics such as Scaramouche (1923), Ben-Hur (1925), and We Were Strangers (1949).

Believing Novarro kept bundles of cash at his house, brothers Paul and Tom Ferguson phoned the recluse actor one night. Novarro invited them over only to be tortured and ultimately killed by the siblings. They were caught and sentenced to long prison terms. Novarro’s body was discovered the next day, on Halloween of all days, and became one of Tinseltown’s greatest scandals.

Other noteables to die on Halloween were River Phoenix, Indira Gandhi, Harry Houdini, Studs Terkel and John Houseman.

 

houdini
Harry Houdini 1874-1926

Harry Houdini ‘s Last Will and Testament

Harry Houdini, born in 1874, was considered the greatest magician and escape artist of his era, and possibly of all time. When he died in 1926 from a ruptured appendix, Houdini left his magician’s equipment to his brother Theodore, his former partner who performed under the name Hardeen.

His library of books on magic and the occult was offered to the American Society for Psychical Research on the condition that J. Malcolm Bird, research officer and editor of the ASPR Journal, resign. Bird refused, and the collection went instead to the Library of Congress.  The rabbits he pulled out of his hat went to the children of friends. Houdini left his wife a secret code – ten words chosen at random – that he would use to contact her from the afterlife. His wife held annual séances on Halloween for ten years after his death, but Houdini never appeared.

If you have any questions on estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900. For more information, please see my website, www.customestateplans.com

 

What is a “Ladybird” Deed and should you have one?

The name “ladybird deed” allegedly comes from the type of deed used by President Lyndon Johnson to pass property to his wife “Lady Bird” Johnson. These are also often referred to as enhanced life estate deeds.

With a ladybird deed, the grantors (owners) give property to the grantees (beneficiaries) but retain for themselves a life estate (the right to use the property during their lifetime) coupled with the right to sell, gift or mortgage the property at any time. If the grantors still own the property at the time of their deaths, then the property passes to the grantees. In other words, the owners retain all rights to do anything they want with the property, even if it means that nothing passes to the beneficiaries.

Ladybird deeds are often used for Medicaid planning, i.e. to qualify an individual for Medicaid if he or she enters a nursing home. A residence is an exempt asset for Medicaid purposes, so the home does not have to be sold in order to spend down to the $2,000 in non-exempt assets needed to qualify for Medicaid. However, after the individual dies and the residence goes through probate, the State of Michigan will exercise its rights under the Medicaid estate recovery laws to force the property to be sold to reimburse the State for the amount of Medicaid benefits paid on behalf of the individual. With a ladybird deed, the home avoids probate administration, and thus, estate recovery.

Advantages of using ladybird deeds for estate planning is that they are relatively inexpensive, they avoid probate and they avoid some of the perils of joint ownership such as creditors of joint owners attaching liens on the property and joint owners exercising their rights over the property. In addition, the beneficiary can be changed at any time.

A disadvantage of using a ladybird deed to pass property to multiple beneficiaries is that it can cause disputes. In that case, naming a living trust as the beneficiary may work better because it puts one person in charge as trustee to sell the property and distribute the proceeds. If a person owns multiple properties and decides to change the plan of distribution, it is easier to amend the trust rather than multiple ladybird deeds.

If you are interested in discussing your situation and coming up with the plan that is right for you, please give me a call. I would be happy to assist you.

If you have any questions, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

Prince Rogers Nelson . . . His Estate Controversy

PrincePrince Rogers Nelson, better known to the world as Prince, died on April 21, 2016, at his home at Paisley Park, Minnesota. Prince died without a Will, Trust or any type of estate planning according to court documents filed by his sister, potentially causing big complications for that star’s sprawling financial estate and musical legacy. In probate documents filed with the Carver County District Court in Minnesota, Tyka Nelson, Prince’s sister, said that her brother died without a spouse, children or surviving parents. Ms. Nelson’s petition also listed five half-siblings as heirs, and asked the court to appoint a special administrator for the estate. Minnesota law treats surviving half-siblings the same as full siblings, raising the possibility of a drawn-out family battle.

It is always best to have an estate plan in place that designates who will administer your estate as well as who will receive your assets and under what terms. And, it is important to remember to revise your plan if your wishes or circumstances change.

If you have any questions on estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

Making Another Person Joint On Your Bank Account is NOT Good Estate Planning

I received a call the other day from a client who had made her bank account joint with her daughter so that her daughter could access the account on her behalf if needed. My client has a revocable living trust and a durable power of attorney, but choose not to use them for this account for some reason. Now, the daughter is getting divorced and the attorney for the daughter’s husband is claiming that this bank account is marital property and, therefore, part of the divorce settlement. I advised my client to hire an attorney to assist her in proving that the money in the bank account was hers alone and her daughter had never made any deposits or withdrawals to the account.

A better way to handle this bank account would be to retitle the account in the name of the client’s revocable living trust and name her daughter as power of attorney. That way, the daughter is not considered an owner of the account but can access the funds on her mother’s behalf if needed. By titling the account in the trust, the account avoids probate administration up the client’s subsequent demise. Another option would be to keep the bank account in the client’s name alone, name the daughter as power of attorney, and name a transfer on death (TOD) to be the trust or another beneficiary. This would also avoid probate administration. Banks have TOD and power of attorney designations that can be filled out at the bank for people who don’t have trusts or power of attorney documents.

A few years ago, another client had made his son joint on his bank account and a creditor of the son froze the account. Again, the client had to hire an attorney to get it straightened out, which was costly, and he didn’t have the use of the funds until the account was later unfrozen.

These are just two of the many unintended consequences that can occur when you place another person’s name on an asset of yours. Putting another person on the deed to your home can cause capital gains taxes for the other person, along with the same creditor problems mentioned above.

This is why I encourage people to do proper planning, to protect both yourself and your heirs. If you would like to discuss estate planning options, please call to schedule a conference.

If you have any questions, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

Will I Get Stuck With Family Member’s Debt After They Die?

I often get asked by beneficiaries of a deceased family member’s estate if they are personally responsible for paying off the family member’s debt. The answer is generally “no” but it depends upon the debt and how connected you are to the family member’s finances.

As a general rule, the assets in a deceased person’s estate must first go toward paying off the person’s debts before the beneficiaries receive any inheritance. A mortgage on a house may force the sale of the house unless there are other assets in the estate to pay off the mortgage or a beneficiary who wants the house as part of his or her share of the estate is able to pay off or refinance the mortgage. If the assets in the estate are not sufficient to pay off the debts, the beneficiaries are not personally responsible to make up the shortfall. Instead, the creditors usually will have to eat the shortfall.

Assets that pass by beneficiary designation to an individual, such as life insurance and retirement benefits, are not subject to paying off the deceased person’s debt.  However, life insurance and retirement benefits payable to the deceased person’s revocable living trust or estate will be subject to payment of debts.

You may be personally responsible for paying off a deceased person’s debt if you co-signed or guaranteed a loan to deceased person. Co-signers on joint credit cards, mortgages and other loans are on the hook for any remaining balances. A guarantor of a loan will have to pay if the deceased person’s assets are not sufficient to cover the loan. In community property states, the surviving spouse is responsible for marital debts.

TIPS:  Be careful about co-signing on credit accounts. And have enough life insurance to cover your debt.

Excerpts taken from “Debt Questions You May Be Afraid to Ask” by Sean Pyles, Q&E Media, Thursday August 10, 2017. For the full article see hometownlife.com

If you have any questions, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

 

 

 

TO GO BOLDLY . . . Funerals in Space

Space-blog

The first memorial service in space was in held in 1997, when a private company sold “seats” to carry the ashes of 24 people (including Gene  Roddenberry, the creator or Star Trek)  into sub-orbit. The remains were carried in capsules, comparable in size to a standard AAA battery, so they only contained about one gram of a deceased person’s ashes. The rocket then carried the remains into space and orbited the Earth.  Since then, the idea has continued to grow and capture people’s interest, offering them access to a unique and meaningful resting place. Since Gene Roddenberry’ s flight, the remains of more than  150 people have been “buried in space”, including sixties counterculture guru Timothy Leary,  James “Scotty” Doohan, also of Star Trek fame, and astronaut L. Gordon “Gordo” Cooper.

If you have any questions about estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

 

Pet Trust Primer

Cat

Those of us who think of our companion animals as family members are becoming aware of the fact that part of our responsibility to these dependent creatures is to make sure that their care and comfort continue uninterrupted should we become incapable of caring for them ourselves. One way to plan for that contingency is to set up something called a pet trust. To help you decide if this might work for you, here are some basic definitions and guidelines to keep in mind:

What is a Pet Trust?

A pet trust is a legally sanctioned arrangement providing for the care and maintenance of one or more companion animals in the event of a grantor’s disability or death. The “grantor” (also called a settlor or trustor in some states) is the person who creates the trust, which may take effect during a person’s lifetime or at death. Typically, a trustee will hold property (cash, for example) “in trust” for the benefit of the grantor’s pets.  Payments to a designated caregiver(s) will be made on a regular basis. The trust, depending upon the state in which it is established, will continue for the life of the pet or 21 years, whichever occurs first. Some states allow a pet trust to continue for the life of the pet without regard to a maximum duration of 21 years. This is particularly advantageous for companion animals that have longer life expectancies than cats and dogs, such as horses and parrots.

Why a Pet Trust?

Because most trusts are legally enforceable arrangements, pet owners can be assured that their directions regarding their companion animal(s) will be carried out. A trust can be very specific.  For example, if your cat only likes a particular brand of food or your dog looks forward to daily romps in the park, this can be specified in a trust agreement. If you want your pet to visit the veterinarian four times a year, this can also be included. A trust that takes effect during the life of the pet owner can provide instructions for the care of the animal(s) in the event the pet owner becomes incapacitated (sick, injured, comatose, etc.) Since pet owners know the particular habits of their companion animals better than anyone else, they can describe the kind of care their pets should have and list the person(s) who would be willing to provide that care.

Doing Your Homework

In addition to providing the name and address of a trustee and successor trustee, a caregiver and successor caregiver (all of whom can be corporations and/or individuals) you will be asked to provide enough information to:

  • Adequately identify your pets in order to prevent fraud, such as through photos, microchips, DNA samples, or alternatively, by describing your pet as a “class”—in other words, as “the pet(s) owned by you at the time of your illness/death;
  • Describe in detail your pet’s standard of living and care;
  • Require regular inspections of your pet(s) by the trustee;
  • Determine the amount of funds needed to adequately cover the expenses for your pet’s care (generally, this amount cannot exceed what may reasonably be required given your pet’s standard of living) and specify how the funds should be distributed to the caregiver;
  • Determine the amount of funds needed to adequately cover the expenses of administering the pet trust;
  • Designate a remainder beneficiary in the event the funds in the pet trust are not exhausted;
  • Provide instructions for the final disposition of your pet (for example, via burial or cremation).

Pet trusts can offer pet owners a great deal of flexibility and peace of mind. In the state where no pet law exists, however, or if a companion animal has a longer life expectancy, other arrangements must be considered in combination with or in lieu of a pet trust.

If you have any questions, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

Excerpts from ASPCA online, Pet Planning.