Can I Make Estate Plans Without My Spouse?

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The average American family has changed a great deal over the last few decades. The assumption that a couple will share finances, tax obligations, and a last name is one that does not necessarily apply in the 21st century. There are more options than ever before to keep your finances, identity, and future plans separate. This sense of independence leads many married people to question: can I make estate planning decisions without involving my spouse? The answer can be more complicated than you might expect.

 

While it’s certainly possible to begin the estate planning process without your spouse, there are some things to consider. First, it is important to recognize that only assets you solely own can be controlled by your will or trust. Plans you make for certain personal retirement accounts (subject to some restrictions), savings accounts, and individually-owned property can be done without involving a spouse. Any accounts, deeds, or titles in both of your names, however, will need to be handled by both parties.

 

There are other considerations to take into account, too. For instance, if the planning spouse dies first, items owned by that individual will be distributed according to the plan. Any jointly owned property will go to the surviving spouse automatically. Should the non-planning spouse die first, his or her assets will be distributed according to state law. Depending upon the size of the estate and family circumstances, most, if not all of the assets will be distributed to the surviving spouse. Then, when the planning spouse dies, all of the assets will be distributed according to their estate plan.

 

This “default” planning can be especially dangerous for blended families. Without proper planning, the children of the first spouse to die may be inadvertently disinherited. For this reason, anyone with kids should involve their partner and co-parent in their estate planning process. Even if you keep other aspects of your lives separate from one another, it’s important to get on the same page about your legacy and the property you’ll leave behind.

 

There are certain aspects of estate planning that you can handle independently of your spouse. Executing powers of attorney for health care and financial decisions is crucial and can be done without involving your partner. Even if you would like to appoint your spouse as your agent under a financial power of attorney or proxy under a medical power of attorney, you need to properly execute the documents. Just because he or she is your spouse, does not give them the automatic right to make financial and medical decisions on your behalf. Should you become incapacitated, powers of attorney can help ensure that your wishes for your health and wealth are carried out.

 

Beyond powers of attorney, though, it’s advisable to get your spouse on board with estate planning. To get started, make a list of the assets you and your partner share. While you’re at it, outline individual retirement accounts, insurance policies, and approximate balances – this information will be necessary when meeting with an estate planning attorney. Simply involving your partner in the initial conversations about your joint assets can help ease anxiety surrounding the estate planning process.

 

We are here to help you with your estate planning needs. Give us a call and we can arrange a time to meet to discuss the importance of estate planning and help craft an overall estate plan that will protect everyone involved.

Small Business Owner? Know What Can Happen to Your Business If You Become Incapacitated or Pass Away

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Preparing your company for your incapacity or death is vital to the survival of the enterprise. Otherwise, your business will be disrupted, harming your customers, employees, vendors, and ultimately, your family. For this reason, proactive financial planning — including your business and your estate plan — is key. Below are some tips on how to protect your company and keep the business on track and operating day-to-day in your absence.

Preparing for the Unexpected

If you are a small business owner, your focus is likely on keeping the company running on a daily basis. While this is important, looking beyond today to what will happen if you can’t run your business should be on the top of your to-do list. If you die or become incapacitated without a plan in place, you will leave your heirs without clear instructions on how to run your company. This can jeopardize the business you worked so hard to build. The right plan along with adequate insurance can help keep your business running regardless of what happens.

Execute the Proper Business Documents

If your company has several owners, a buy-sell agreement is a must. This contract will outline the agreed upon plan for the business should an owner become incapacitated or die. Provisions in the buy-sell agreement will include:

  • how the sale price for the business and an owner’s interest are determined,
  • whether the remaining owners will have the option to buy the incapacitated or deceased member’s interest, and
  • whether certain individuals can be blocked from participating in the business.

Execute the Proper Estate Planning Documents

A properly executed will or trust will allow you to state how you would like your assets to be transferred — and who will receive these assets — at your death. A will or a trust also lets you identify who will take charge of the assets and manage their disbursement (including your business accounts) according to your wishes.

Although a will can be used to pass assets at death, creating and properly funding a trust allows any assets owned by the trust to bypass the probate process making distribution of assets to heirs much faster, private, and may reduce the legal fees and estate taxes your heirs will owe.

Additionally, a trust can help your loved ones manage your trust assets if you become incapacitated. While you are alive and well, you typically act as the trustee of the trust, so you can manage your business and assets with little change from the way you do now. But unlike a will, a trust allows your successor trustee to step in manage things if you become incapacitated. This process avoids court involvement, allows for a smooth transition of trust management (which can be very important if your business is an asset of your trust), and proper continuing care for you in your time of need. Although having a will can be a great way to start, most business owners are much better off with a trust-based estate plan.

Purchase Additional Insurance

Whether you own the business by yourself or are a co-owner, it is important to have separate term life insurance and a disability policy that names your spouse and children as beneficiaries. The money from these policies will help avoid financial hardship while the buyout procedures of buy-sell agreement are being carried out.

Contact an Estate Planning Attorney

Having a plan for your business in the event you are unable to continue managing the company is essential to keep the company going. An attorney can explain the many options you have to protect your enterprise so that you can focus on what you do best — running your company. Give us a call today to get started protecting your business, (888) 450-7999 or  info@bellehlaw.com.

What to Expect from Estate Planning in 2018

start-2018What to Expect from Estate Planning in 2018

 2017 is now fading into the rearview mirror. As we all look ahead to 2018, let’s consider a few things to watch regarding estate planning, so you and your family can be completely protected.

  • The death tax. The death tax has been in a state of flux ever since the early 2000s when the Bush administration’s first tax cuts changed the exemption and tax rates. The recently-passed Tax Cuts and Jobs Act is the latest significant change. Starting January 1, 2018, the estate tax exemption amount will double to $11.2 million per person (married couples have $22.4 million of combined exemption). Like the current exemption, this amount will adjust annually for inflation. However, this enhanced exemption expires on December 31, 2025, at which time it will return to an amount similar to the $5.49 million per person exemption we’ve had in 2017. Similar to what happened when the Bush tax cuts phased in (and were scheduled to expire) during the 2000s, we’ll face the same situation over the coming years – the law provides a deadline and timetable, but political activity may result in something entirely different. Regardless of your stance on this new tax law, if you have a plan based around the now-old rules, it’s time to visit with us, so we can make sure the plan still meets your needs and goals while maximizing the benefit to your family, charities, or other beneficiaries.
  • Incapacity planning. What happens if you don’t die? Historically, much of estate planning focused on what happened to your assets after your death. With cognitive impairment at near epidemic proportions, you must plan for the contingency that you don’t die and instead require assistance managing your affairs. Depending on your circumstances, this could range from a relatively simple matter of ensuring you have a trusted person authorized to make decisions to extensive planning to become eligible for help paying for nursing home care. Either way, now is the time to work with us to ensure that your plan protects you, even if you don’t die.
  • Giving your family lifelong financial security. Although you may not have a “large” amount of wealth now, you probably have an IRA or a life insurance policy. A modest IRA or life insurance policy could be the foundation for lifelong financial security for your family. To make this a reality, you need to set up your affairs with the proper structures to ensure money avoids costs, taxes, and the risk of financial immaturity or ignorance. We are here to help you ensure that the savings you’ve spent a lifetime building will be there for your family.
  • Fixing broken or old trusts. Many people have inherited assets from parents, aunts, uncles, and others through a trust. Some of these trusts may use old strategies or be expensive or difficult to administer. The law recognizes that old trusts may need some refreshing. There are many options available to modernize an old trust, and the best way to get started is to meet with us so we can explore which option is best for you and the trust you inherited.

2018 will likely be an exciting, dynamic year. No matter where you are on the estate planning journey, carve out some time to talk with the Belleh Law Group, PLLC at (888) 450-7999 or email: info@bellehlaw.com to make sure that you and your family are fully protected.

 

Give us a call today.

The Belleh Law Group, PLLC – www.bellehlaw.com – (888) 450-7999 – info@bellehlaw.com