The Pitfalls of DIY Wills: Buyer Beware

More than ever, DIY wills are becoming more common. It’s understandable that with resources like Google, many of us are turning to the internet for information and resources. However, many people don’t realize how risky it is to create DIY legal documents because simply put, we don’t know what we don’t know. Here’s what you need to know before you decide to create your own will or use an online service.

While online companies are making legal services more accessible, they’re also doing their customers a disservice, as evidenced in the recent case of In re Estate of Aldrich, heard in a Florida appeals court. Ms. Aldrich created her will using a downloaded template from E-Z Legal Forms without the advice and guidance of an estate lawyer. It appears, based on the forms she created herself, that she wished to leave specific assets to her sister, and then to her brother if her sister died before her. Her sister did die, but Ms.Aldrich, not realizing this would affect her own assets someday, did not properly update her will.

The assets specifically named in the will went to Ms. Aldrich’s brother, but the template she used did not include a residuary clause, which establishes where unnamed assets should go. As a result, the unnamed assets Ms. Aldrich acquired after she created her will passed under Florida’s intestacy laws and into the hands of her nieces, children of another pre-deceased sibling, instead of to her brother, as she seemed to have wanted.

Unfortunately, because she did not consult a lawyer, instead of leaving her brother her assets, Ms. Aldrich left him with a long, expensive, and otherwise unnecessary court battle. Services like E-Z Legal Forms do not provide personal legal advice or ongoing legal support. Had Ms. Aldrich worked with an estate lawyer to design and then update her plans, she would have left her brother an inheritance of love, rather than a nightmare of time, money and heartache.

This is an important lesson to learn because people too often create their will without having a lawyer review it and then forget to update it as loved ones pass on and new assets are acquired. In the end, their wishes aren’t honored because they weren’t clearly defined, leaving the matter in the hands of the probate court.

This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents, she helps folks make informed and empowered decisions about their life and death, for their sake and their loved ones. That’s why Myrna offers a Life and Legacy Planning Session, during which you’ll get more financially organized than you’ve ever been before, and make the best choices for the people you love. You can begin by calling her office today at (813) 514-2946 to schedule a Life and Legacy Planning Session and mention this article to find out how to get this $500 session at no charge. 

How to Protect Family Heirlooms From a Family Feud

The passing of family heirlooms from one generation to another should be a welcome and sacred tradition for families. Unfortunately, this process, if not done carefully, can cause long-lasting family rifts.

There are many stories of families that have split over a silver tea set, or family photo albums. In fact, you may be surprised to discover that far more family conflicts occur over cherished family mementos instead of money. If you don’t want that to happen in your family, here’s what you can do as part of your estate planning:

1. Add specific designations to your Will and/or Trust.

Typically, a Will or Trust will specify that all personal property goes to the “residue” and is split equally between all heirs. But you may want to get more specific with items that are already family heirlooms or that you want to become family heirlooms. All too often children will discover after Mom or Dad has passed that an item was promised to more than one person. This is why it is important to create a list of your family heirlooms, assign names to each item and share that list during a family gathering while you’re still alive and well. This list (formally called a personal property memorandum) can then be incorporated into your will or trust, so it becomes legally binding. It is also wise to take photos of those special items to help identify them.

2. Make it fun.

Indicate in your Will and/or Trust that you want your family to make it a game and “auction off” your special items.  Each family member can be given “credits” to use to “bid” on the items they want. Or you could suggest that items be chosen round-robin style with each family  member getting to make one choice (starting with youngest or oldest, as designated by you) before going back around for family member’s to make their second choice. Then, after all the picking is done, family members can trade amongst themselves.

3. Give it away during life.

One of the best ways to ensure your family doesn’t fight after you are gone is to give away family heirlooms during your lifetime. By doing this, you can create even more connection with the people you love.

4. Leave a recorded legacy.

We’ve found the best way to pass on more than just your money is to record a story associated with each one of your family heirlooms. Include where the heirloom came from, who you are passing it onto and the special significance it has to you.  This recording is likely to become the most valuable asset you can leave behind.

One of the main objectives of our law practice is to keep families out of court and out of conflict through thoughtful estate planning. This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents, she helps folks make informed and empowered decisions about their life and death, for their sake and their loved ones. That’s why Myrna offers a Life and Legacy Planning Session, during which you’ll get more financially organized than you’ve ever been before, and make the best choices for the people you love. You can begin by calling her office today at (813) 514-2946 to schedule a Life and Legacy Planning Session and mention this article to find out how to get this $500 session at no charge. 

Friday the 13th

Friday the 13th is back!

Americans consider this the unluckiest day of the year. Because of that, there’s an exhaustive list of things that people avoid on this date, from the number 13, to black cats, spiders, mirrors and cemeteries. This date has even become a pop culture phenomenon, inspiring characters like Freddy Krueger and Jason from A Nightmare on Elm Street and the Friday the Thirteenth movies.

Forget Freddy Krueger, here are some things that should REALLY scare you.

Did you know that 64% of Generation Xers (ages 37-52) don’t have any estate plans in place? And it gets scarier for millennials (ages 18 to 36), because 78% of them don’t have any estate plans. That means that they don’t have a Will, Trust, Power of Attorney or a Living Will (medical directive).  What is something that Xers and millennials do have? Millions of millennials have kids without the protection of legal arrangements for who takes care of them (and how) if both parents suddenly die or become incapacitated. They’re leaving it up to fate (and the State!) to decide what happens and who takes care of the kids.

There is also a dementia epidemic in our country, with new cases arising at an alarming rate. Without any estate planning, families of dementia patients usually have no choice but to initiate guardianship proceedings in order to access medical, legal and financial benefits and claims. Generally, guardianship cases cost at least 2 to 3 times the cost of an estate plan. That process places an emotional and financial hardship on families and caregivers.

The good news is that so much of that emotional and financial hardship can be avoided through solid estate planning.

This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents. She can help you make informed and empowered decisions about life and death, for yourself and your loved ones. That’s why she offers a Life and Legacy Planning Session, during which you will get more financially organized than you’ve ever been before, and make the best choices for the people you love. You can begin by calling Myrna’s office today to schedule a Planning Session and mention this article to find out how to get this $500 session at no charge.

Contact us today at (813) 514-2946 to get started on a plan to protect your future and have more peace of mind on Friday the 13th, and every day!

Risky Moves When Leaving Assets to Your Child

Setting up a trust for your children can ensure that the money you leave behind for them will take care of them, in the way you want. But you can ruin your plans with the following risky decisions:

Leaving Assets Outright to Kids
One of the worst things you can do is to do nothing, which means that whatever you are leaving behind will go to your children outright, unprotected and directly to them when they turn 18. But, worse than that, it means that a Court will decide who handles the assets for them (and whoever is named as their guardian) before they turn 18. And, it’s very likely that those assets will not be used in the way you want. On top of that, if a professional Trustee is appointed, the costs of handling the assets could drain what’s left for your kids, quickly.

Not Carefully Choosing a Trustee
Even parents who do the right thing and set up a trust to hold what’s being left behind for their kids sometimes do not think carefully enough about who the Trustee should be taking care of the assets. Do you want one trustee or a co-trustee who can ensure the funds are well managed? Choosing more than one can provide some accountability for how the funds are used.

Not Properly Protecting Assets Left in Trust
Parents should be careful when setting up a trust that distributes the trust assets directly to their children at specific ages or stages, instead of holding those assets in a flexible lifetime trust that will protect their kids’ inheritance from future divorces, creditors or lawsuits. Unfortunately, many folks do not understand how to use trusts to establish this kind of vital protection. Some people think that such trusts are only for rich people. But even if you’re not a millionaire, protecting those assets and teaching your children how to grow them (instead of squander them) can be a vital part of your legacy.

Neglecting to Fix Beneficiary Designations
Lastly, make sure your insurance policies are directed to your trust and not directly to your children. This is a common mistake. Naming minors or even young adults as the beneficiaries of insurance and retirement accounts is a sure-fire way to ensure they are not used in the way you want and unnecessarily get stuck in a court process. A trust can both provide for and protect your children after your death, as well as ensure you are cared for the way you want in the event of your incapacity.

If you’re ready to set up an effective plan for your family’s well-being and care, contact attorney Myrna Serrano Setty. She can help you protect, preserve and enhance what matters most. This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents. She can help you make informed and empowered decisions about life and death, for yourself and your loved ones. That’s why she offers a Life and Legacy Planning Session, during which you will get more financially organized than you’ve ever been before, and make the best choices for
the people you love. You can begin by calling Myrna’s office today to schedule a Planning Session and mention this article to find out how to get this $500 session at no charge.

What You Need to Know Before Naming Beneficiaries

Once you have chosen the people you want to receive any of your assets — either from a will, a trust, a life insurance policy or a retirement or bank account – the way you designate how they will inherit should be a key consideration.

Here are five things you need to know before you name your beneficiaries:

  1. Beneficiaries of a will have to wait. Any assets you bequeath to a beneficiary via a traditional will have to wait for their money or property until the probate process has been completed.  In some cases, this can take many months or even years — and if the estate is complex, the legal fees can deplete that inheritance.  If you want to make it easier for your beneficiaries, consider creating a Revocable Living Trust as part of your estate plan. A trust does not go through probate. Upon your death, the successor trustee distributes the assets to your beneficiaries.
  2. Retirement plan and life insurance policy benefits are paid directly. The assets in a life insurance policy or retirement plan are not subject to probate and pass to your beneficiaries directly.  Your beneficiaries will receive these assets after providing the account owner’s proof of death and a proof of identity for the beneficiary. Naming contingent beneficiaries is important. if the primary beneficiary predeceases you, the assets will likely go into your estate and may be subject to taxes.
  3. Minor children should not inherit directly. Naming a minor child as the beneficiary of a life insurance policy or other assets is never recommended. If you fail to name a guardian, the state could take over the assets and name someone to manage those assets on the child’s behalf. This can result in additional expenses that would eat into that inheritance, and those assets may not be managed according to your wishes. Instead, the wise move is to create a trust to hold these assets for the benefit of a minor child and name a successor trustee to oversee the management and distribution of the funds in a way that complies with your wishes.
  4. Give careful consideration to naming retirement plan beneficiaries. Studies have shown that most beneficiaries of a retirement plan take the cash immediately, which may not be your intention.  Generally, advisors don’t recommend that you name your estate as a beneficiary. That is because that may not allow your spouse or younger beneficiary to take advantage of an IRA rollover or the “stretch” IRA option that could allow your IRA to grow tax-deferred over many years.
  5. If there are multiple beneficiaries, name them. If there are multiple beneficiaries for an insurance policy or retirement plan, don’t make the mistake of just naming one person — say, the oldest child — and assuming they will make the proper distributions. Instead, designate a separate share for each beneficiary.  If one of your beneficiaries has special needs, create a trust for their share so any inherited assets don’t disqualify them from important government benefits.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today at (813) 514-2946 to schedule a time for us to talk about a Life and Legacy Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.