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Burlington, VT office 802.540.0529
Hanover, NH office 603.643.6072
Rutland, VT office 802.773.3822
Woodstock, VT office 802.457.9492

January 12, 2011 Newsletter Archive


Eleven in '11
(Reasons Why Estate Planning is still Relevant)

With all of the discussion of the estate tax exemption increase to $5 million it is easy for us to put aside estate planning for another day. But planning is not just about estate tax planning for the rich. Everyone should plan, and if you already have a plan, you should review your plan.

Here are our top eleven reasons why everyone needs estate planning:

    1. Understand Your Values and Objectives. When is the last time you discussedwhat you would like to have happen should you become incapacitated, or how to best guide your child's relationship with money, or your end of life concerns? These are all important questions that arise during our estate planning meetings.

    2. A Will and a Trust. A will simply allows you to designate to whom you wish your property to pass upon your death. If you have minor children your will includes the person you name as guardian should you die before your children reach the age of majority. A revocable trust is an instrument which allows you to re-title your assets so that your trust now owns this property and avoids probate, and the trustee manages the distribution based on your wishes. If you do not already have these instruments, it is important to create your estate plan. If you do have a will and perhaps a revocable trust it is essential to review your assets, your designations, and other aspects about these documents to be certain that what they say remains in line with your current wishes. Proper estate planning ensures that you are able to preserve your wealth, provide support and financial stability for your surviving spouse, children and grandchildren.

    3. Plan for your Disability. Financial and Health Care Powers. Ensure your wishes are met. Executing financial and health care powers of attorney now will ensure that your wishes are carried out when you are no longer able to make decisions for yourself.

    4. Plan for Special Needs. Ensure that you are meeting the needs of loved ones with special needs. A special needs trust entails specific planning to properly ensure that individuals with special needs have a mechanism to maintain government benefits, if needed, as well as funding to supplement those benefits.

    5. Support your Favorite Charity. In your will or trust you can name one or several of your favorite organizations to receive a cash gift or other property. If you choose you can create an irrevocable trust to secure this charitable bequest, or you may choose to establish a Donor Advised Fund with an organization such as a community foundation to extend for years to come your family's tradition of giving charitably.

    6. Re-title Assets and Avoid Probate. By executing and re-titling assets into a revocable trust you ensure that your assets are distributed most speedily and smoothly with minimum or no court oversight. Since you last drafted your estate plan you may have bought or sold or otherwise accumulated or lost assets. Proper planning requires up to date documentation of your assets. Your trust may protect and preserve your assets and protect your estate from creditors.

    7. Your Family Situation has Changed. Birth, death, marriage, divorce are all part of life. Often clients wait for long periods of time before having a review of their estate plans. A new grandchild is a reason to celebrate, and also a reason to review your estate plan.

    8. Name Your Nominees. It is probably time to review your nominees. In your will you will name an executor to shepherd your estate through the probate process, if you have minor children you will name a guardian, and in your trust you will name trustees and successors to manage and distribution the trust's assets. In your financial and health care powers of attorney you will name agents to make financial and health care decisions when you are no longer able to make them. Make sure that the people that you have named continue to be the ones that you know will best serve your wishes in these roles.

    9. Estate Tax Planning. Tax planning is still critical for some estates and should not be underestimated because some states, like Vermont, have a much lowers estate tax exemption than $5 million. There are still techniques for minimizing estate taxes.

    10. Protect Retirement Assets. IRA's have special considerations and your planning should maximize you beneficiaries' benefits. Additionally, make sure that you have designated that beneficiaries that you want to name on your retirement and life insurance plans. These designations should be reviewed every few years so that your choices are accurately reflected.

    11. Peace of Mind.

 

Let's go for a Drive, Dad: Conversations with our Parents

They pleaded with us to eat our vegetables, do our homework, clean our rooms and practice our instruments, but now that we want them to talk to us about their health and well-being, we cannot get a word out of them, let alone, any action.

We talk to many clients with elderly parents and one issue that comes up with frequency is how to address our aging parents' needs without alienating them. Just why is it so hard to have these conversations? It may be our deep-rooted role as their child. Parents will often continue viewing themselves as the caregiver no matter how old their grown children are. We also correctly respect our parents' autonomy. However, we must remind ourselves and our parents that we are not here to parent our parents, but to collaborate with them and give them our support. Below we present some ideas of how to go about having those discussions.

Set the Stage

If you plan to discuss a serious matter with your parents make sure they are relaxed and comfortable. Rather than bringing up the topic of long term health care, housing or finances at a family gathering, plan a special, separate occasion on which to visit your parents. Perhaps over morning coffee or lunch you can bring up topics in a conversational, non-threatening way. Visiting your parents at their own home, unrelated to large family events gives you the added benefit of seeing how they are living at that period of time.

Empathetic Conversations

One way is to discuss a situation from your own point of view. For example, if you have recently spoken with your own attorney about your will, powers of attorney and advance directives, you may be able to bring this up in a casual manner. This conversation may lead to suggestions about how you can specifically help your parents.

Invite Siblings

Sometimes, for various reasons, it is optimal to have the entire nuclear family together so that the conversations are shared. The benefit is that everyone is in attendance and listening to the conversation. The drawback is that this can create chaos and disharmony, especially in families prone to conflict.

Get Organized and Know the Issues

Before launching into random discussions you should put some constructive thought into the topics you want to cover. Although you do not have to see an elder law attorney, you may want to consult with such a professional to discuss the issues involved. You can also check out Life Care Planning on our web site www.melendymoritz.com.

Issues to discuss with your parents include the following:

Avoid Conflict

Unfortunately, it may take a crisis to force your parent to recognize his or her vulnerability. If you have set the stage and tried to discuss reasonably estate and life care planning, your concerns and your support, without success, you may have to table the idea for a short while, wait for another opportunity, and provide your parents with reading materials. You may find that one parent is more interested in the conversation than the other. After talking to that parent, he or she may nudge your other parent into action. In your conversations ensure your parents that you want to be a partner not a pest in your parents' lives, you want to honor them, see that their wishes are carried out, and offer assistance where you can. Be genuine, be patient, be kind, and be prepared for the time when your parents are finally willing to have a conversation about their circumstances.


Melendy Moritz PLLC is a client centered boutique firm. We focus on your unique needs by providing the individualized legal counseling and advising tailored to your specific situation.

We concentrate on the planning that matters to you.
Call us at 603.643.6072 or 802.457.9492

 

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