Estate Planning

Spouse dies, surviving spouse drives and hits a school bus which kills some young children. A Judgment in the amount of SIXTY MILLION DOLLARS is entered against the surviving spouse. If properly structured, the deceased spouse's money is protected from the creditors of the surviving spouse and the money stays in the family.

Everyone always thinks that his or her spouse married well the first time. Will they marry as well the second time? You can keep your money in your family and not have it go to the person that your spouse marries the second time, if you properly plan for it. You get to choose who enjoys your hard earned money.

There is a fifty percent (50%) chance if your children marry that they will divorce. Do you want your hard earned money to go to someone now outside your family or go to your grandchildren?

If you or your spouse are not citizens of the United States then you need to do some special planning to maximize the amount of your money you pass on to your loved ones and minimize the amount you give/gift to the United States Government.

A will guarantees probate. Estate Planning is how you title your assets. Estate Planning is about making sure that what you give goes to whom you want, when you want to give it, how you want to give it. A Simple Will does not cover a disability. A Simple Will fails to provide for you during your lifetime if you are incapacitated due to sickness, health, accident, or your "golden years".

Probate is like water passing through a leaking pipe. At the end, how much of your hard earned money will really be there for your loved ones? It is a lawsuit where you get to sue yourself for the benefit of Creditors and you cannot possibly win.

With a simple Will, can Paul and Ellen's story happen to you?

After five years of marriage, Paul and Ellen decided that they needed their affairs in order, so they made an appointment with an attorney. They requested that the attorney draw up Wills for each of them commonly referred to as simple "I Love You" Wills. The attorney completed the task as requested.

As an added precaution, Paul and Ellen decided to change the ownership of most of their assets to Joint Tenancy with Right of Survivorship (JTWROS) in an attempt to avoid including those assets in the probate process. Both Paul and Ellen felt secure in the knowledge that they were fulfilling their duties to each other.

Despite all of Paul and Ellen's precautions, when tragedy struck, Ellen was unprepared for the events that followed. Seven years after putting their estate in order, Paul was diagnosed with a brain tumor. Paul underwent surgery and the tumor was removed. Tragically, due to the tumor's size and location, Paul suffered complications during the surgery. As a result, Paul never regained consciousness; remaining in a vegetative state.

A few months later, Ellen found herself strapped for funds. To alleviate the cash flow problems, Ellen approached her stockbroker and requested that he sell some of their securities. Sadly, her stockbroker explained to Ellen that since their assets were titled JTWROS, both her's and Paul's signatures were required to complete the transactions. Since this was an impossibility due to Paul's medical condition, Ellen's broker was unable to fulfill Ellen's requests.

This situation forced Ellen to petition the Court to be appointed Paul's Guardian and Conservator. This is referred to as "Living Probate". The process and delays associated with a living probate caused her to incur additional expenses she could ill afford. And the public scrutiny of a competency hearing caused Ellen to suffer great emotional distress.

Paul died two years later. The ordeal exhausted most of the couple's assets. Even with Paul's Will designating Ellen as his sole beneficiary, Ellen's dilemma continued. Now, a probate court would oversee the distribution of Paul's assets that were not made joint with Ellen or had a beneficiary named on them.

Needing funds, Ellen contacted Paul's insurance agent to inquire about Paul's $500,000 life insurance policy. The agent informed Ellen that since Paul had been unmarried at the time he purchased the policy, he suggested that Paul name his estate as the beneficiary. It never occurred to either Paul or Ellen to change the beneficiary designation of Paul's policy.

If they had addressed the negligence of naming his estate as the beneficiary of his life insurance, Ellen would have received the proceeds of the life insurance without having to go to the Probate Court and make her affairs open to the public.

Naming your estate as beneficiary of your life insurance policies is crazy and definitely someone's malpractice. By naming your estate as the beneficiary of your life insurance policies, you are, in essence, leaving the proceeds to your creditors. All of Paul's creditors, the probate attorney and all other parties associated with the probate process were now entitled to share in Paul's estate with Ellen. In fact, they get to get their money before Ellen does. This is avoidable. Is this what you want? Think about your loved ones having to deal with this scenario.

What's wrong with a simple Will? What other estate planning strategies were available to Paul and Ellen? Paul and Ellen overlooked the creation of a living trust. A living trust is a document that directs how property transferred to the trust will be managed while you are alive, when and to whom the income from the trust property will be paid, and to whom the trust property will be distributed when you die.

A living trust can do everything a Will can do and then some. A living trust allows you to 1) control your property while you are alive, 2) provides for you and your family without court supervision if you and/or your significant other should become incapacitated due to illness, injury, or disability, 3) keeps your affairs private, 4) enables you to avoid probate , thus reducing legal costs, and 5) unlike a Will, a living trust is valid in every state.

If Paul and Ellen had executed a living trust and transferred their assets into the trust prior to Paul's disability, Ellen and Paul's trustee would have had the power to act in Paul and Ellen's best interest, relying on instructions contained in the trust agreement. In that event, Ellen would not have had to petition the Court to become Paul's guardian thereby avoiding the delays, costs, and emotional distress associated with the ordeal of a living probate.

As for Paul's life insurance policy, Paul could have named Ellen as the beneficiary or he could have named the trust as the beneficiary. By naming either Ellen or the trust as beneficiary, the $500,000 due from the policy would not have been subject to probate; thus allowing Ellen to have access to the funds for her immediate needs.

to find out what's wrong with your estate planning strategy. The mere act of executing a living trust is meaningless until you actually transfer your assets into the trust. If the follow-up process of transferring assets into the trust is overlooked, the benefits of the trust are negated. Some people have the mistaken belief that the attorney who draws up their living trust document will automatically transfer their assets into the trust. However, this is not always the case.

Here at Hamilton & Associates, PLLC, we are proud of having Estate Plans that work and hopefully exceed your expectations.

It is never too early to do your Estate Plan. It is possible to have an Estate Plan that will protect you and your loved ones. Consult your Attorney or Financial Advisor if you are interested in creating security for you and your loved ones.

Our goal at HAMILTON & Associates, PLLC is to protect you and your loved ones from the ravages of the Internal Revenue Service, Creditors and disgruntled family members by creating Estate Plans that work through counseling, personalized legal strategies, and planning. If you teach me about your family, I will teach you about the law and together we will create an estate plan that does what you want, when you want it done. Contact us to set up your estate plan and learn more about financial power of attorney and more.