It’s important to designate someone with power of attorney over your financial assets so that they can take care of your estate if you are incapacitated. One of the most common reasons people push off doing so is because of the fear of financial abuse. However, taking a few simple precautions will help prevent that.
Choose Your Agent Carefully
Sometimes people choose the person they give power of attorney to for the wrong reasons. Do not choose someone just because they are your oldest child or because they may feel hurt. It doesn’t have to be a relative, and it doesn’t have to be the same person who’s getting your medical power of attorney for healthcare decisions. Choose someone who you can absolutely trust.
You can stipulate that the one who is taking care of your estate must notify your other relatives of their decisions. Giving other relatives the power to oversee your agent’s decisions will go a long way to prevent abuse. Another thing you might want to consider doing is appointing two people to be co-agents at once. Both of these options significantly decrease the chances of abuse.
You don’t have to give someone absolute power over your estate. You may want to put in some limitations, such as not allowing them to alter the beneficiaries of your life insurance. You may also want to limit when they get control of your estate — make it clear what qualifies as being incapacitated.
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On occasion, our loved ones pass away too soon and we find ourselves in the care of a minor with a custodial account left to them by their caretaker. Typically these custodial accounts include life insurance policies, pensions, and other inheritance. Until they come of age, custodians are able to access the account in order to use that money for their care. However, how exactly can they use that money?
One common question that custodians ask is if they can use the money from that custodial account to cover funeral expenses. The unfortunate answer is no. The best rule of thumb for what you can and can’t do with a custodial account is does it benefit the minor? Paying for a funeral, even for the parent of a minor, doesn’t benefit them. Paying for their school tuition, on the other hand, does benefit them. So if you are considering what you can and can’t do with the funds in the account of a minor in your care, typically you need to ask yourself if it truly does benefit them. If you are discovered using the funds frivolously, there can be serious consequences for it.
No matter whether you were left with the care of a minor and their money or just want to consider planning the estate for your family after you are gone, contact us today. Ford + Bergner LLP is dedicated to making sure that your wills and trusts are carried out in the best regard to the wishes of the deceased.
Many believe estate planning is only for those who are older, and it is certainly one of the last things they are thinking about after starting your family. However, estate planning is for people of any age, and there is actually no more important time to consider your estate planning than after you have had a child.
However, while young families may think their estate plan is as simple as your spouse then your child gets everything, it is just ever so much more involved. For instance, what if your spouse passes away too and your child is still a minor? Who will take care of your child as well as their custodial account until they come of age? Will you pick a family member to care for them and the money or just the child and leave money management up to an outside party?
Typically the best thing for young families to do, just in case, is to create a trust under their Wills that will allow a trustee to manage the child’s assets until a designated age. Many parents leave the same person in charge of both the personal and financial decisions for their minor children, while others prefer to split the responsibilities.
If you have recently started your new family and your thoughts are turning to the future, contact us today. Ford + Bergner LLP is dedicated to making sure families are taken care of.
It’s not uncommon for emotions to run high when family members make wrongful claims to a loved one’s estate. Quibbling over who really was to get that jewelry case or the heirloom chairs can be solved by giving specific instructions in a simple will—Written instructions and witnesses are important!
But even vague language in the will may prove a headache when it comes to deciphering intentions, such as using the phrase “as they may decide” instead of providing a list of items for each beneficiary, as noted in a Wall Street Journal overview on estate planning and wills.
The article notes that parents should not dismiss the human tendency to quibble over the family possessions, even when the Will clearly spells out the disposition of assets. Often forgotten, or downplayed by parents, is the “emotional attachment” a ring, for example, may have to one sibling—even though it’s actual economic value is minimal.
When it comes to appointing an executor(s), parents should realistically evaluate the potential problems with selecting two siblings who have never gotten along, particularly if the Will does not spell out who-gets-what. If hot disputes are anticipated, then the Will should include a ‘no contest’ clause:
“…it provides that anyone who contests the will forfeits the bequest he or she has been provided…(and) there has to be enough incentive for the potential contestant to accept the bequest under the will, rather than lose everything if the contest is unsuccessful.” Sharon Klein, managing director of family office services / Wilmington Trust in New York.
If you are looking for advice in making tough decisions for your estate plan, please contact Ford + Bergner LLP to assist you in making those decisions.
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