Top 5 Mistakes People Make In their Wills

If you’re the average person living your life, and you’re one of the slightly less than 50% of the adult population who decides to actually write a will, for real, this time, then there’s a good chance you will make one of the following mistakes.  So to help you do the best job you can do with this important task (how important?  Just ask someone who had a parent or spouse die without a will) we’ve compiled the most common mistakes people make when writing their wills.

  1. Not finishing.  You’d be surprised how many people try to DIY their will but never actually finish signing them.  You have to sign in a very specific way, which varies depending on which state you live in but always involves some combination of you, witnesses, and a notary public.  Usually all these people have to be present at the same time and sign together, which makes it easy to put off and a lot of people never get around to it.  A will without the proper signatures is not a will. 
  2. Not updating.  A will should be reviewed and updated as your life changes.  Sometimes the problem is that what you own has changed significantly and the way you distributed it no longer makes the best sense.  More often, people you named as executor or other fiduciaries have died, become unreliable, or moved far away and can no longer serve. 
  3. Thinking that a will is all you need.  Not all of your property is disposed of by your will – if you have life insurance, or retirement accounts, and sometimes even your investment or ordinary bank accounts, have beneficiary designations.  This means that when you open the account, you are asked who you want to get the account at your death.  Anything you own that has a beneficiary designation will not be affected by your will.  This means you have to think about everything together and review (and change if needed) the beneficiary designations you have made at the same time you are preparing your will.  If you intend to give everything to your friend Bob, but you forgot that you named your friend Fred on your retirement account, then your intent will not be carried out. Also, there are other useful documents you may need to prepare in addition to a will, even though we tend to think about “writing a will” rather than “writing a HIPAA release,” there are a number of documents that typically are prepared when someone sits down to “do their will.”  These include a power of attorney, a medical power of attorney, a HIPAA release (that lets the people you name have access to otherwise private medical information), and a few others.  These documents will be needed in the event you become incapacitated, either temporarily or permanently.  If you are in a serious accident and spend months in a hospital or rehabilitation center, you will need other people to help handle your finances, your insurance claims, and other similar things, which they will not be able to do easily unless you have prepared these additional documents.
  4. Not letting people know about your will.  Once you have a will, and, hopefully, your other documents (see #3), you need to make sure people know they exist and where to find them when needed. 
  5. Thinking you can do it all yourself.  I know, this one sounds very self-important, but a lawyer really is useful when you want to write a will. If you want to make sure you do what you intend to do, hiring a lawyer is definitely the way to go.

Parker Counsel Legal Services consults with special needs families in Austin Texas, Dallas Texas, Western Mass, the New Hampshire Seacoast, and Northern New Jersey. Special needs trusts, guardianship, and more. Give us a call and tell us about your family situation for some guidance on how best to plan a safe, secure future for your child. 833-RED-BOOT (833-733-2668)

The Basics of Special Needs Trusts

What is a Special Needs Trust?   A special needs trust (SNT) is a tool that lets families provide money to take care of their adult kids without preventing them from receiving medicaid and services from related government programs.

Why do you need an SNT?  Medicaid benefits are available to people who 1) have a disability,  2) have very low income, and 3) have very few assets.   To qualify for medicaid, an individual cannot make more than approximately $1300 a month (specific amounts can be found on the social security website) and cannot have assets totaling more than $2000 (there are some items that are exempt from inclusion in the asset determination, like a home and a vehicle used for transportation).   If a parent is able to provide some money to make a good life for their child either through gift, inheritance or life insurance, the SNT is the way to do it.  Without the SNT, whatever money the parent leaves the child will have to be spent on basic care before government benefits can be used.

How does the SNT work?  Money or property the parent wants to make available to the child is put in the trust.  Most families use the trust to hold inheritance money, or they obtain life insurance that will be paid to the trust.  A trustee is appointed to spend the money on the child in accordance with the wishes of the parents or at the trustees discretion.  In order for the SNT to work for preserving medicaid eligibility, the money is to be used only for things that are NOT covered by government benefits, and cannot be paid directly to the child .

What happens to the money in the SNT if the child dies?  There are actually two types of SNT’s.  The first is created by parents or grandparents for the benefit of the child and funded with their own money and money from any person other than the child.  Money left in the trust upon the death of the child is distributed to beneficiaries who were named in the trust itself at the time it was created. Commonly, remaining money is left either to siblings or their children, or to a charity.

The other type of SNT is one that is created with money that actually belongs to the person with the disability.  These trusts are common when the disability is the result of an accident and there is a lawsuit or damages paid to the individual.  These may also be created if a parent dies and leaves money outright to the child without creating an SNT first. For these trusts, the money is used during the lifetime of the individual in the same way as for a trust created with other people’s money, and the individual may also receive government benefits.  But upon death, any money in the trust must first be used to repay the state for benefits received by the individual.

If you need to set up a special needs trust for your own child or grandchild, give us a call at 512-804-9934 or 413-203-9358  and we’ll be happy to help you out.

Life is not like a movie

While happily scrolling my facebook feed today, checking out what my friends’ kids wore to the first day of school, and who is outraged about what today, I was suddenly stopped in my tracks by this headline:  “Last hospitalized Pulse shooting survivor discharged after nearly three months.

Pulse?  That was the horrifying mass shooting in Orlando that happened, when, a long time ago, right?  Long enough ago that I’ve had time to be horrified, outraged, sickened, sad, and then . . . going on with my life.  So the news that one of the victims is only now getting out of the hospital, that one of the victims has been under hospital care for nearly the whole of summer, stopped me in my tracks.

Because it’s easy to forget that tragic, massive events don’t end once the story has been thoroughly reported.  They don’t unfold like in the movies, where victims or car accidents, or fatal diseases, or even mass shootings, either die or survive.  In the movies, victims who die are buried and eulogized, victims who survive get up and leave.

In real life, injuries bring your life into a different dimension.  Three months in the hospital can decimate whatever order you had in your life, and if, as is likely, the recovery will continue after release for months or years longer, your life will and must be different.

Which is why planning for the possibility of disruption in your life is so very important.  Legal, financial, and personal contingency plans make the difference between hardship and disaster.  They make the difference between stress about the injury, and stress about every single thing in your life. They make the difference between having the people you know love and care about you around helping, and not having them there.

Writing a will is important, but it’s only one small part of what you will do with an estate planning attorney.  You will also get help putting a plan in place that gets as close as possible in the event of a traumatic injury,  to keeping you focused on your injury and recovery, not on everything else.

When you plan with Pam, things go more smoothly.

A good time to take action

Do the words “wills”, “trusts,” “estates,” and “health care directives” make you think of tools that help protect your family and your wishes if death or incapacity strikes?  Or do you ignore those words, thinking they don’t apply to little old regular you?

October 19th-25th, 2015 marks National Estate Planning Awareness Week.  This week is to spread the word that estate planning is for everyone.  A young parent just starting out, a hard working middle ager realizing you are not immortal after all, a wealthy entrepreneur or a senior citizen looking at finite resources, estate planning provides a solid legal foundation for protecting your family, your financial security, your wishes and your independence through all of life’s transitions.

Prepare and Protect Your Family:  If you have minor children, estate planning allows you to appoint the people you want to raise them in the event of your unexpected death or incapacity.  Trusts allow you to protect minor children, or even adult children, who may not be prepared to receive a large sum of money after you die.  Health care directives and powers of attorney make it easier for your family to manage  medical and financial affairs during a health care crisis or unexpected incapacity.  And of course, estate planning keeps your loved ones from unnecessary court and legal fees, and the worst of family feuds during the emotional time of loss.

Distribute and Maximize Finances:   For both large estates and modest ones, estate planning ensures that more of your money goes to your family after your passing. Proper estate planning can also help senior citizens and baby boomers qualify for Medicaid and additional VA Pension Benefits for health care without becoming impoverished or “spending down” everything they own. Some professionals such as physicians and contractors also look to estate planning to shield their personal assets from lawsuits, creditors and other risks associated with their occupations. And families with children who have special needs can provide money for their care without jeopardizing access to government benefits.

Define Your Legacy:  Do you have assets you wish to leave to certain people? Are you in a non-traditional relationship or blended family and want to ensure your loved ones are taken care of and share in your inheritance after you are gone? Is there someone you trust to make important medical or financial decisions on your behalf if you are unable to do so?   Without an estate plan in place, all of these personal decisions will be made by the courts if the unthinkable happens. This is why estate planning is such an important strategy in making sure your wishes are known and honored if tragedy strikes.

Your Peace of Mind:  With a well thought out estate plan in place, you have less to fear about the future – both for your own well being and that of your family members. Tools such as living trusts, powers of attorneys, insurance policies and health care directives can help you fund your future care needs and carefully design the life and independence you wish to enjoy during your later years.

Awareness is not enough—Take ACTION!

National Estate Planning Awareness Week is a great way to help more people become aware of estate planning and its role in  protecting your financial future and the people you love—the information is useless if you don’t take action!

Attorneys spend their days thinking of the worst that can happen, but its true that none of us ever know when our time will be up. Estate planning should  be taken care of early and often.  Make a plan and keep it up to date so that if an unexpected illness or accident happens, you won’t have lost out on the planning options once available to you.

Call for an appointment to discuss your own personal needs now.