What Exactly Is Probate?

At all income levels, a proper estate plan is necessary to ensure that what you spent a lifetime building is handled exactly how you wish. Letting your wealth distribution fall at the discretion of the probate court, the state, or anyone else for that matter are all less than desirable options. Recognizing the need for an estate plan, the next step is to determine what documents are best for your unique situation. To that end and to save time in the process, we have put together a checklist to help you consider your options and make the best decision for you. Estate Planning Checklist Here is a brief overview of each of the steps involved in properly preparing an estate plan. Even if you seek the help of an attorney or estate planner, understanding this process will help you be prepared with all the necessary documentation available. The steps are as follows: Collect your important financial documents, and all prior estate planning documents (if any). Make an inventory of your assets, liabilities, and income from all sources; including digital assets or information. Consider a Last Will and Testament. Decide not only on the disposition of your assets but also on the executor of the estate. Consider if a living trust, or other probate avoidance documents, might be necessary. Decide who should hold a general (financial) power of attorney. Decide who should be named in a living will/health care power of attorney. Prepare for your tax obligations. Create a reference guide for your executor (and financial planners, attorneys and accountant). Revisit and update your documents periodically. Collect Your Important Documents Having your important documents on hand will make this process much easier. We recommend gathering any relevant insurance policies, financial statements for any of your accounts, any ownership documents you might have, and statements on any outstanding debts. Keeping these available will make this process much quicker and less stressful. Make An Inventory Of Your Property Including Digital Assets Or Information Some lists break this into two separate sections, but property is property. If it has a monetary value we want it assessed. Even if it is strictly sentimental, we still want it distributed to the proper person. Items that would typically fall under this section include but are not limited to: home furnishings, vehicles, clothes, jewels, cash assets, crypto, brokerage accounts and any insurance, stocks annuities, or retirement accounts. In the realm of digital assets it is also very important to include your social media accounts and any online access passwords that may be needed. These don't necessarily need to be included in the estate planning documents themselves, but how to access the official list may be. Create A Last Will And Testament Most people understand intuitively what a will is. It's simply a document that gives specific instructions for asset distribution after a person's death. It may also include care instructions or guardianship assignments for minor children left behind. The document will also designate someone to be the executor of your estate and distribute any property not controlled by some other contract (i.e. jointly owned or otherwise designated to a beneficiary). Decide On Your Executor Of The Estate Choosing an executor of an estate, or an estate manager is a critical decision for your estate plan. This task is so important that we recommend having a backup or two in the event the first choice is unwilling or unable to serve. Your executor should be responsible, financially stable, and generally able to execute the terms of your Will. These qualities ensure proper handling of your details. Decide If A Living Trust Might Be Necessary A living trust is similar to a will in many ways. It allows you to choose how assets are distributed but can also allow the beneficiaries to avoid probate court. A trust will most certainly involve more upkeep than a will, so it is not the solution for everyone. It should go without saying that decisions like this are best made with legal guidance. Decide Who Holds A Financial Power Of Attorney There are situations where you may need someone to speak on your behalf for financial reasons before your passing, in which case a Power Of Attorney may be necessary. There are a few different ways in which these powers can be granted. A General Durable Power Of Attorney is most often the preferred choice, as it is effective immediately and extends beyond a subsequent incapacitation. However, there are other types of powers of attorney that are best discussed with an attorney. Write A Living Will and Health Care Power of Attorney Living Wills and Health Care Powers of Attorney, also known as advance directives, control decisions regarding your end-of-life care. These exist to make known your desires on what measures are appropriate to take in prolonging your life, when you are unable to speak for yourself. Living wills insure notice to your family members prior to the implementation of your end of life decisions; and can be used in tandem with a healthcare power of attorney to ensure that your health care objectives are respected. Prepare For Your Tax Obligations There are a few different tax concerns at both the state and federal levels that you will want to keep in mind when setting up your estate plan. The IRS changes estate tax laws frequently, so make sure you're prepared by talking to a tax professional as well. Don't take for granted that rules and thresholds are the same from state to state and federally. Create A Reference Guide For Your Executors It's one thing to create a legal document telling the government who has the right to make decisions on your behalf; it's another matter entirely to set that individual up for success in executing your wishes. In an effort to lessen the stress on the person/people speaking on your behalf, you should create a guide including or directing them to everything they will need. The guide should include how to find and access all of the following (at least): financial accounts, insurance policies, credit cards, vehicle loans, and mortgages. Other information that would ideally be in the guide would include: who and how to contact close friends about your death, locations of any physical safe storage locations, and specific end of life requests ie. burial, cremation, etc. Revisit And Update Your Documents Periodically  The final and most important step is to revisit and periodically update the information in your estate plan. Once a year is a nice interval to assess how things like births, marriages, divorces, adoptions, and deaths might affect your previous plan. While doing this assessment you will want to make sure you have on hand updates of any pertinent accounts or documents. Make a plan now to preserve your legacy! Call us at 440-517-7165 to schedule an initial consultation or email Neil at nspike@spikelegal.com!

President Biden has signed the latest COVID-19 relief bill, which in addition to authorizing stimulus checks, funding vaccine distribution, and extending unemployment benefits, also provides assistance to seniors in a number of ways. The $1.9 trillion American Rescue Plan Act (ARPA) delivers a broad swath of relief, covering families, employers, health care, education, and housing. The Following Are the Provisions of The Relief Bill that Most Directly Affect Older Americans: Relief checks. The ARPA provides $1,400 direct payments to individuals earning up to $75,000 in annual income and couples with incomes up to $150,000. The payments phase out for higher earners and there are no payments for individuals earning more than $80,000 a year or couples making more than $160,000. Eligible dependents, including adult dependents, also receive $1,400. People collecting Social Security, railroad retirement, or VA benefits will automatically receive the payment even if they don’t file a tax return. The checks will not affect eligibility for Medicaid or Supplemental Security Income as long as any amount that pushes recipients above the programs’ asset limits is spent within 12 months. Medicaid home care. The Act provides more than $12 billion in funding to expand Medicaid home and community-based waivers for one year. This funding will allow states to provide additional home-based long-term care, which could keep people from being forced into nursing homes. The additional money will also allow states to increase caregivers’ pay. Nursing homes. Nursing homes have been hit hard during the pandemic. The Act supports the deployment of strike teams to help nursing homes that have COVID-19 outbreaks. It also provides funds to improve infection control in nursing homes. Pensions. Many multi-employer pension plans are on the verge of collapse due to underfunding. The Act creates a system to allow plans that are insolvent to apply for grants in order to keep paying full benefits. Medical deductions. If you have a large number of medical expenses, you may be able to deduct some of them from your taxes, including long-term care and hospital expenses. The Act permanently lowers the threshold for deducting medical expenses. Taxpayers can deduct unreimbursed medical expenses that exceed 7.5 percent of their income. The threshold was lowered to 7.5 percent under the 2017 tax law but was set to revert to 10 percent for some taxpayers in 2021. Older Americans Act. The ARPA provides funding to programs authorized under the Older Americans Act, including vaccine outreach, caregiver support, and the long-term care ombudsman program. It also directs funding for the Elder Justice Act and to improve transportation for older Americans and people with disabilities. To see everything included in the ARPA, please go here.