If something unexpected happens to you and you haven't planned for everyone you love and everything you have, the State of California has a default plan for you.
Sound scary? Well, it can be. Those you love would have to deal with the red tape and bureaucracy of government procedures and regulations.
We at Sky Unlimited Legal Advisory help you understand the legal and financial consequences of not having a comprehensive Estate Plan to protect your loved ones ... and more.
Before meeting, we'll ask you to complete a Family Wealth Worksheet, which will help you understand what you own and what needs to be decided for the well-being and care of your loved ones and cherished belongings. We'll meet for a Family Wealth Planning Session™, where we spend some time together reviewing this document. You'll learn about our Planning for Life process and we will both decide if it makes sense to work together to design an estate plan that will best suit the needs of your family.
The foundation of your estate plan will often include a revocable living trust, which when done properly and maintained over time, should help your family to avoid the cost and delay of probate and minimize or eliminate estate taxes.
At Sky Unlimited Legal Advisory, we do not offer a "one size fits all" estate plan. We form a working relationship with our clients. We educate you, take the time to get to know you and your family. We will discuss your concerns, your goals, and will gladly and patiently answer all of your questions. Our goal is to create an estate plan that is exactly right for you.
Our services include a no-charge three-year review to ensure that as your lives change, so will your estate plan to safeguard your assets for maximum protection.
The strategies that are appropriate for protecting your assets are different for every family. Check out our proven process that gives you peace of mind...
In addition to providing aid for individuals and businesses, the CARES Act increases accessibility to funds and loans from certain retirement plans and accounts. The information the IRS recently published clarifies which individuals may benefit from the legislation and which plans and accounts are covered.
Retirement Account Rules Established by the CARES Act
Under the CARES Act, individuals may withdraw up to $100,000 in Coronavirus-related distributions from certain retirement accounts. Distributions are deemed “Coronavirus-related” if they are withdrawn from approved plans between January 1, 2020, and December 30, 2020, by individuals who have been adversely affected by COVID-19 in various specified ways (discussed below). Distributions may be taken from 401(k), 403(b), and individual retirement accounts (IRAs). Under normal circumstances, there is a 10 percent penalty for those who are under the age of 59.5 and withdraw funds from these accounts; however, the CARES Act waives this penalty.
In addition to expanding access to retirement distributions, eligible individuals may also take loans of up to $100,000 from their employer-sponsored retirement plans. Prior to the Act, the limit was $50,000 or 50 percent of the vested account balance. Any loans taken under this provision must be entered into by September 22, 2020. For existing loans, payment due dates have been extended, and repayment is not required through December 31, 2020.
However, trusts come with some distinct advantages over wills that you should consider when creating your plan.
That said, when comparing the two planning tools, you won’t necessarily be choosing between one or the other—most plans include both. Indeed, a will is a foundational part of every person’s estate plan, but you may want to combine your will with a living trust to avoid the blind spots inherent in plans that rely solely on a will.
Here are four reasons you might want to consider adding a trust to your estate plan:
1. Avoidance of probate
One of the primary advantages a living trust has over a will is that a living trust does not have to go through probate. Probate is the court process through which assets left in your will are distributed to your heirs upon your death.
During probate, the court oversees your will’s administration, ensuring your property is distributed according to your wishes, with automatic supervision to handle any disputes. Probate proceedings can drag out for months or even years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate.
It’s not as if we didn’t know we would all die (or become incapacitated) one day, but within our current reality, that “one day” has become an ever more real possibility. And one way to feel more in control over what’s happening out there is to make sure we all have our legal affairs in order at home. That way, if it does happen now, our families aren’t left with a big mess to clean up while they are grieving.
If you are trying to get your financial house in order right now, you may be just getting some basic documents in place. You may even be doing it yourself.
If that’s the case, it’s very important for you to know that the cost of a failed plan can be very high for the people you love. Plus if your documents are not properly signed, they will not work—period. End of story. And if your documents don’t work, your family could be stuck in court or conflict, which is probably the exact thing you want to avoid by handling your estate planning now.
There are many ways that plans fail, but one of the worst ways we see is when someone starts a plan and doesn't get it signed properly. You do not want this to happen to your family, trust me. If you care enough about estate planning, you will want to make sure your plan will work when your family needs it.
Today, we want to focus on one of the major risks of not being “in the know” when it comes to your parents’ estate planning matters: the undue influence of bad actors.
It’s an unfortunate fact that predators emerge during times of upheaval to take advantage of people. That means the COVID-19 pandemic can leave your parents vulnerable in more ways than one. But even when things go back to normal, this chronic problem of financial exploitation will still be a risk.
We see it happen far too often. Maybe your elderly parents live several hours away, in another state or country, and someone in their community gets close to them. Or maybe they have a close relationship with a financial advisor who isn’t really looking out for their (or your) best interests. This person could even be another family member, friend, business partner, hired caregiver, professional advisor, or even someone they’ve just met.
But if your will isn’t legally valid, those wishes might not actually be carried out, and instead the laws of “intestate succession” would apply, meaning that the state decides who gets your stuff, and it’s very likely not to be who you would choose.
If you’ve created a will online, we congratulate you for doing SOMETHING, but we strongly recommend that you have it reviewed and make sure it does what you want, and is actually legally valid. We’ve seen it far too many times: someone THINKS they’ve created a will because they did something, but the SOMETHING was the WRONG THING, and their family is left to deal with the fallout, confusion, and complications that result.
The validity of a will depends on where you live when you die, as last will and testament laws vary from state to state. Most states, however, require wills to meet the following criteria in order to be legally binding:
And even if you don’t need to be hospitalized, if you do experience symptoms and test positive, you might have to stay quarantined for enough time that you’d lose income. These risks highlight the need for everyone, regardless of their age or current state of health, to have some form of disability insurance coverage.
You might think you don’t need disability insurance, especially if you’re young and in good health. Hopefully, you’re right. Unfortunately, though, becoming disabled can happen to anyone at any time. This isn’t specific to coronavirus either; it has always been true.
The Americans with Disabilities Act has detailed specifics on what a disability is, but the most basic definition is that an individual has “A physical or mental impairment that substantially limits one or more major life activities of such individual.” That can apply to a car accident or other injury, or a debilitating illness documented by a doctor, including mental illness.
The sad fact is that, according to the US government’s statistics, one in four 20-year-olds become disabled before reaching retirement age. That makes it all the more important that you consider how to protect yourself with insurance.
It brings to mind something a colleague of mine shared recently. One unremarkable weekend, she left her small children with a babysitter and headed out to enjoy dinner at a restaurant with her husband. But as she sat there, a thought crept into her head that she couldn’t let go.
What would happen to her kids, she thought, if she and her husband got into a car accident on the way home?
And even though my colleague is an estate planning lawyer herself, and she had a will at home naming guardians for her kids, she didn’t have a definite and clear answer that provided the comfort she wanted. Her will was in a vault, and her named legal guardians lived thousands of miles away. It was that thought that spurred her to take action, not only for her own family, but to create tools and resources for others as well.
If you’d like to read the book she wrote as a result of her own discoveries, it’s called “Wear Clean Underwear: A Fast, Fun, Friendly—and Essential—Guide to Legal Planning for Busy Parents” and it’s the best-selling book on legal planning for families. We’d love to send it to you as our gift. Simply email us at firstname.lastname@example.org or call us at (650) 761 0992 and ask for your copy, and we’ll send it your way, free.
Currently, the burden is on you to both carry on with your work and manage your child’s full-time care and education. Two full-time jobs that you’re trying to do by yourself, likely without teachers or care providers to help you.
If you are like most parents, you were probably struggling with guilt even before the virus. You simply can’t make it to every award ceremony or recital, and you might not have as much time to play with your kids or help them with their homework as you’d like. Those feelings of guilt may now be compounded by all the additional responsibilities you’ve had to take on in a short space of time.
Take a deep breath, and let me let you off the hook here for a minute. I have no doubt you are doing the best you can, and your kids see it, and know it too, even when they are being ungrateful pains in the rear.
I’ve got a few ideas about how to shift the guilt. They're a little unconventional, but I invite you to give them a try and then message me to let me know how they went. We love hearing from you.
Let’s start with one thing that is fully within your control, can help to alleviate feelings that you are not doing enough, and that you can get handled easily, for free, right now--- name legal guardians for your kids, so the people you want will take care of them, if anything happens to you.
No matter how rich or poor you or your parents are, especially in the wake of the COVID-19 pandemic, you need to be asking these and several other questions. When your parents become incapacitated or die, their affairs will become your responsibility, and it will be impossible to ask them to clarify anything. So, if you do not know whether or not they have estate planning in place that will help you best support them, read on.
The Best-Case Scenario
In a best-case scenario, your parents have an updated estate plan, and they’ve walked you through it. They have provided an inventory of their assets that’s easy for you to find listing out everything they own, how it’s titled, and who it should go to and how. Ideally, it also includes directions on how to handle their non-monetary assets, and an audio recording or written stories that pass on their values, insights and experience. On top of all that, it’s best if they’ve introduced you to the lawyer who set it all up, so you know who to turn to when the time comes.
However, the use of the word “unprecedented” regarding what’s happening now is not an exaggeration. And they may not understand it all or what they should do, not because they aren’t wise, but because the news has been confusing to interpret.
As of 4 pm on March 17th, the number of confirmed cases of COVID-19 across the United States was only 7,043 cases across the United States with 95 confirmed deaths from the virus. And this doesn’t sound like that many, or seem to warrant the kind of lock-in that we need in order to stop the spread. So, if your parents are seeing these numbers, they may not be taking the need to stay home seriously.
This video from Dave Asprey, founder of Bulletproof, makes the case quite clearly about why we need to stay home, even if we aren’t afraid of getting sick ourselves.
When we first became aware of COVID-19, the novel coronavirus, there were several TV pundits and other authority figures saying that the virus was just another version of the flu. We’ve learned a lot more about the seriousness of COVID-19 in the past few days, and the current advice is for people to stay home, particularly for the next two weeks, in order to “flatten the curve” and slow the spread.