Don’t be like Prince. Make sure you have a Will.

Sadly, celebrity deaths often provide a good opportunity to review what not to do when it comes to estate planning.

Imagine being worth $300 million and not even having a Will

The recent death of the eccentric singer, Prince, offered another opportunity to see what not to do when it comes to estate planning.

Despite being worth an estimated 300 million dollars, the 57-year-old performer died without so much as a Will.

So, how on earth did that happen? Unfortunately, the greatest threat to an effective estate plan is doing nothing. And that’s what A LOT of people choose to do when it comes to planning. It’s “easier” to do nothing. It’s “easier” to just wait and see. It’s “easier” to think, “I’m young. Nothing is going to happen to me yet.” It’s “easier” to assume things will just work out.

Dying Without a Will is a Nightmare for Your Loved Ones

Assuming things will just work out is really not easier. If you approach your estate plan like Prince, and die without a Will (which is called intestate), then your family will HAVE to go to court (an unpleasant process called probate). Your family will most likely DISAGREE about how things should be handled. Your family will be at the mercy of a stranger, sitting on a bench to make IMPORTANT decisions. Even if your family gets along now, chances are, if you die without an effective plan in place, the process will tear them apart. And if your family already doesn’t get along… well, there is virtually no chance they will ever be able to repair the damage that’s been done.

Don’t do this to your family! Don’t expect them to take care of your affairs after you’re gone. Don’t expect that a judge will make the same decisions you would have made. Don’t expect that everything will just work out. It rarely does. We see it everyday.

You can avoid all this by taking action. And the first step is easy — check out our monthly no-pressure workshops. Our Intro to Edwards Group: Wills & Trusts Orientation is a great, no-risk, first step to take.

Call us at 217-726-9200 to save yourself a spot at an upcoming workshop. They tend to fill up. Take action today. Protect your family.

A Lesson from Robin Williams: Having “The Conversation”

One way in which you can minimize fighting amongst your family after you’re gone is by having “The Conversation” before you go…

Does Your Family Have Trust Issues Like Robin Williams?

After his death last year, it appeared that Robin Williams did everything right when it came to estate planning. The bulk of his wealth was transferred through well-thought-out (and private) trusts that distributed his belongings to his three children while also providing for his current wife, so she could stay in the house they shared. And yet, his third wife and his three children still got involved in a court case with each other. So what happened? And what can we learn from this situation?

Effective Estate Planning Anticipates Emotions Will Run High

The first thing people should know is that all bets are off when someone dies. In the extremely emotional  environment of grief and loss, even the best families experience some stress and disagreement. It’s just hard to avoid. Every estate planning attorney could fill a book with unbelievable real life stories about this very thing.

Effective estate planning attorneys work hard to mitigate this risk and prevent these issues from tearing families apart. And that’s where “The Conversation” and the “Special Stuff List” come in. Over the next two weeks, we’ll look at two important actions you can take to minimize fighting in your family.

“The Conversation”

Just like the birds and the bees talk you once had with your kids when they were younger, this next conversation can bring up almost as much anxiety. Many times it’s “easier” to start a conversation about inheritance and estate planning during family gatherings or holiday get-togethers. I know. I know. That sounds like a real downer of a conversation for a family event, but let me assure you, it will be a lot less unpleasant than what your family will experience after you’re gone if you DON’T have “The Conversation” with them.

Here are 5 tips for talking about inheritance:

1. Share your own reasons or motives for bringing up the issue. Then try to clearly convey what values are really important to you. What’s important to accomplish with your assets after your death? What does fair mean to you? What does it look like? What items do you think have special meaning? What stories about those items need to be written down and shared with your family?

2. Ask “what if” questions to find out how your family feels about certain scenarios. “What if Mom had to go in a nursing home and I was already gone? Would you want to keep the house? What would you do with the stuff in the house?” Or “what if Mom and I downsized. What would you want us to keep?”

3. Clearly convey choices you’ve already made, like who is in charge of making decisions after you’re gone (or incapacitated). For example, if your will says that the children should share your estate 50/50, then one child may understand that to mean keeping the house and sharing it. The other child may see it as an opportunity to sell the house and get some money. Bam. Now you have a big fight and your children never speak to each other again. (This is a TRUE story.) It is vitally important to talk to your kids about how you want things done before you’re gone (and then make sure to tie it down legally, as well.)

4. Look for natural opportunities to talk about the issue. Sometimes the death of a neighbor or a friend can provide better timing for this conversation. Celebrity deaths like Robin Williams can also present good times to bring up the topic, especially if their estate is presenting problems you would like to avoid.

5. Listen. Remember that listening is an important part of communication and any conversation. Take time to listen to your family’s perspective and opinion throughout the course of “The Conversation.”

Having “The Conversation,” along with detailed and effective legal planning will go a long way in avoiding the problems that Robin Williams’ family is now having. Read more tips on having “The Conversation” here.

In our next blog post we’ll talk about creating your “Special Stuff List.” This special list further clarifies your wishes and intentions with regards to certain special pieces of property. (Like your paperweight collection or the antique shotguns you inherited from your grandfather.)

As always, if you have any questions, please feel free to call us at 217-726-9200. We will be more than happy to help you in any way possible.

Save Your Family Extra Anguish After You Die: Prepare a Will

Tarina, our Client Coordinator, hears it all the time, “I wish I hadn’t put off planning for so long. I just feel so much better now that we have a plan in place.”

Do you want to make things easier on your family?  Or more difficult?  Good planning will spare your family stress, conflict, and expense later.  I will never forget this article from Today.com by reporter Sharon Epperson where she talked about her father passing away and what his planning meant for her and her sisters, “By making some important decisions while living, my father helped to lessen the overwhelming stress of coping with [his] sudden loss.”

Sadly, loved ones left behind bear the burden of lack of planning.

So, what happens when you die without an effective plan or even a will?

In the US courts, if someone dies without a will it is called intestate, which basically means the state will decide what to do with any assets. There will be a lot of paperwork, court appearances, etc.

One of the most difficult things is making a list of all assets and debts. Since these types of things are not typically discussed freely, this can be a real headache for your loved ones left behind. During a time of grief they have to play detective trying to hunt down what you may own or owe.

There are also many assets that aren’t determined by a will. For these type of assets your loved ones will have to gather the necessary paperwork to prove whom the beneficiary or new owner is. Assets that aren’t passed down by will are:

  • Life insurance proceeds
  • Jointly owned assets, such as real estate or bank accounts
  • Property held in a living trust
  • Funds in IRAs, 401(k)s, or other retirement accounts
  • Payable-on-death bank accounts
  • Residential real estate with a “Transfer on Death Instrument” recorded with the county

We know there are a lot of reasons people don’t plan. Tarina says a lot people admit (after planning) that they were really intimidated by the process or didn’t feel they knew Dave well enough, but none of them regret finally taking the leap and planning. At Edwards Group we’ve worked really hard to make the process as painless and effective as possible. We also offer a money-back guarantee. Now, what attorney do you know of who does that?

If you’re ready to stop gambling on what will transpire if the unthinkable happens, here are the next steps to take:

1) Our free, no pressure workshops are a great way to learn more about the planning needs your family may have. They are also a great way to get to know our firm better.

2) If, after attending a workshop, you would like to take the next step, you will receive $200 off your initial meeting fee, and you can read more about that process here.

3) Not ready to talk to a person yet? We have put a lot of our time into developing a website that contains helpful information about all aspects of planning. You’ll find hundreds of articles about estate planning, trust, Veterans benefits, Medicaid and Medicare on our website. Feel free to use the search button to quickly get to what you need.

No matter what, I hope that you will take the time to learn about ways to protect your family and your assets. The other side of our practice involves helping people who didn’t plan properly clean up the mess that’s left behind. My sincere desire would be for every family to have effective planning strategies in place and for no family to have go through the consequences of bad planning. Take a step in the right direction today by attending a workshop, giving us a call at 217-726-9200, or signing up for our weekly email newsletter.

6 Estate Planning Pitfalls to Avoid

1. Your plan is not personalized. You may have a Last Will & Testament or even a trust, but do you know what it does? Do you feel like it fits you well? Or are there some things about it that you wish you could change? Some people end up with fill-in-the-blank forms that do not reflect their families, their values, goals or concerns. You need a plan that fits your goals.  Are you comfortable with your existing plan?

2. Disorganized assets. You may have a great Will or trust, but how you own assets or what your beneficiary designations say could undo what your Will or trust says. Assets can be owned many different ways (individually, jointly, in a corporation, LLC, trust), while beneficiary designations cover your IRA, 401(k), life insurance, and annuities. We need to make sure your Will or trust fit together with your asset instructions like puzzle pieces. For instance, no assets are governed by your trust unless the asset is transferred to the trust. And a beneficiary designation will rule first over what your Will says about an asset (just ask plenty of ex-wives out there who got surprise life insurance when their ex-husbands died!) How will you make sure your assets fit with your planning? What are some beneficiary designations you need to check and/or update?

3. Your plan is not up to date. How old is your plan? 10, 15, 20 years old? Some people signed an old dusty Will many years ago and have not looked at it since. But their lives have changed in many ways since they signed it. Life is always changing. Our assets go up (or down), we retire, get married, divorced, have grandkids, move, remarry, loved ones pass away. All those things affect your plan. When your plan does not adjust to your life changes, you are left with a mess later. What life changes have occurred since you last updated your plan?

4. After death legal fees spiral out of control. Do you know that many lawyers over the years have made more money cleaning up messy estates after death than they do planning the estates? It’s the dirty little secret of estate attorneys. Don’t just assume “it will all work out fine after I’m gone.” A cheap Will now may lead to expensive court battles later. But a good plan now, where you invest your time, energy (and yes your money) is the best way to reduce expenses at your death. A good plan will avoid probate court, avoid family battles, and reduce the legal fees needed.

5. Your family is not prepared for the plan. When the time comes for your plan to start working (upon your disability or death) will your family know who to call and what to do? Will the people you’ve chosen to be your “helpers” do their job well? Or will their personality result in procrastination, extra stress or conflict among siblings? Who are your helpers, and have you talked with them about it? Bad estate plans break up good families.

6. Your plan leaves your family open to ongoing risks. A good estate plan has two parts. First, smooth transfer of assets (avoiding probate, taxes, family fights). Second, protecting what you leave behind. If you leave an inheritance to your son, what if he later gets divorced or sued? Will your hard earned money end up with an ex-spouse or a creditor? Good planning can protect against that risk and many others, such as nursing home costs during your life, kids who spend too much, disability benefits, many more. Are there any potential risks you can anticipate?

What Trusts Do and Don’t Do

2-year-old Cole has a book that talks about the right and wrong ways to do things. Like, “Do wear underwear. But don’t wear it on your head!”

WOULD YOU USE A MICROWAVE TO WASH DISHES?

The other day I met with a client who wanted to use their microwave as a washing machine.

Okay, not exactly. BUT what they were trying to do was just as ineffective. They had a revocable living trust and they thought it would protect their assets from nursing home costs. IT WON’T!

What Living Trusts Won’t Do

Just like kitchen appliances have unique tasks (you wouldn’t use a whisk to knead bread), different legal tools have unique tasks as well. A trust is a tool, but there are many different types of trusts. And each type of trust does different things. Here are some things a revocable living trust won’t do:

  1. Won’t protect you from nursing home expenses.
  2. Won’t protect you from creditors or debts.
  3. Won’t help you qualify for Veterans benefits.
  4. A revocable living trust will not avoid probate. (Not the document itself. You also need to retitle assets to the trust in order to avoid probate.)

However, other types of trusts WILL protect from nursing home costs, creditors and help with VA benefits.

What type of trust do you have? What type of trust do you NEED? We talk to clients nearly every week who think their old trust does something that it doesn’t actually do. Sometimes they find out too late. Other times we can still help fix things.

Let us help review your plan now and see what type of trust or other legal tools fit your family. Here’s how:

Post-it Notes Are Not Legally Binding

I once heard of someone asking her grandchildren to go around the house putting Post-it notes on the things they wanted after she was gone. Is it enough to put Post-it notes on things in your house to say who gets them after your death? I suppose it’s better than nothing, but there are definitely problems that might introduce:

  1. What if they fall off?
  2. What if someone take the Post-its or moves them around?
  3. What about items without a Post-it note?

Of course Post-it notes are not a legally binding way to transfer your property after death. Instead, you should put these instructions in your will or trust, or add them to your “special stuff list.”

What is the “special stuff list”? It’s a list, authorized by your will or trust, that specifies where you want items to go (such as family heirlooms, jewelry, collectibles, etc.). Once you sign and date the “special stuff list,” be sure to keep the list with your important papers, plus send a copy to your attorney so it will be available later.

Personal property disputes are often at the root of the most difficult family conflicts. Make sure your family knows your wishes.

Get your FREE “Special Stuff” List Worksheet here.

Illini or Probate? What’s worse?

Maybe you’ve heard the joke about the Illini tickets left on the dash of the car in plain sight? Yep. Someone broke into the car and left 2 more tickets on the dash with them! (Cubs fans can thank me. Originally, I was going to use the Cubs in the joke.)

Today we’re going to talk about “What’s worse than Probate?”

What is Probate?

Probate is where the judge has to get involved in carrying out an estate after death — where nothing can be done until the judge signs the order appointing an executor. Wills are designed to go through probate. That’s just how the law works. Probate ALWAYS adds extra expense and delay. Plus, it’s public record.

What’s worse than Probate?

Uncle Fred was getting older. He finally got to the point where he was not able to stay at home any longer. His favorite nephew in Missouri said, “Come live with me.” So Uncle Fred moved to Missouri and enjoyed several years there before passing away. After he was gone, the family realized that he still owned his house in Illinois, so they had to go to probate court in Illinois. Plus, he had moved his bank and investment accounts to Missouri when he went to live with his nephew. So now they were faced with probate court in Missouri, too!

So… what’s worse than Probate? 2 Probates!!

Anyone with assets in more than one state needs to plan carefully to make their plan work smoothly in each and every state. Watch out for timeshares, vacation homes and ownership in family real estate. If overlooked, all of these could add time, expense and hassle in the form of extra probate for you or your loved ones.

Good planning, especially with a Living Trust, works well across state lines.

Attend (or tell a friend about) our FREE New Client Orientation Workshops — a good first step towards preparing an effective estate plan. At this 1-hour workshop you’ll hear about how we work, whether Edwards Group is right for you and key steps in our unique process. Just call us at 217-726-9200 to RSVP or get more information. In the meantime, be sure to sign up for our weekly e-newsletter with estate planning tips and up to date workshop information.

David Edwards quoted in State Journal-Register regarding Mayor Davlin’s probate case

In today’s Springfield State Journal-Register, David Edwards was referenced as a source in discussing the status of Mayor Tim Davlin’s probate case.

Yesterday while David was in the Orlando airport ready to board a plane and head back home from the Heckerling Institute on Estate Planning in Orlando, SJR reporter Bruce Rushton called with questions regarding the probate process and specifically the meaning of some of the terms and language in the court filings regarding Davlin’s case.

Click HERE to check out the article: “Davlin will left property to his children”

Losing a Loved One: Why hire an attorney? 5 reasons

After losing a loved one, sometimes the question is, “Do I need to hire an attorney?” But maybe a better question to ask is, “Should I?” How would you benefit, as an executor or trustee, by hiring an attorney? How would your family benefit? Here are some reasons to hire an attorney to assist with the legal and financial details after a loved one’s passing.

1. To get your thoughts together. Sometimes just getting started is overwhelming. Maybe one meeting with the attorney will help set you off in the right direction.

2. You need legal help. Sometimes there needs to be court action through probate or addressing a legal dispute. In these cases, you do need an attorney, unless you want to wade into the legal system on your own.

3. To reduce your stress. When someone passes, there is business to take care of. I just mean personal business, the kind we all deal with in our lives. Paying bills, getting income, investing money, filing tax returns, etc. Some of these you could take care of on your own. But sometimes you may want to delegate them. At Edwards Group, we deal everyday with banks, investments, life insurance companies, and real estate questions. We know how to maneuver through all the asset transfers. We understand what those companies need, how their forms need to be filled out, how to get past a difficult customer service representative. Maybe you want to delegate some of that to us.

4. To get the job done right. Many people own annuities and IRA’s. Those are potential potholes for the family. Many times we have seen a family try to handle an estate on their own, only to pay tens of thousands of dollars in extra income tax that could have been avoided or delayed with some good legal advice. That’s just one example. In many families, the attorney’s fee will pay for itself in avoided legal, financial, or tax mess ups that could haunt you later. In addition, if you are the executor or trustee and you mess up something, the liability could come back on you later to repay the lost funds.

5. To reduce conflict. Even the closest families will have a potential for conflict after losing a loved one. The grieving combined with the stress in an unknown situation often results in siblings butting heads. In those cases, an attorney who can help guide the process and talk straight to a family member with unreasonable expectations is a big help.

If you have lost a loved one, please contact our Client Coordinator at 217-726-9200 or at Tarina@EdwardsGroupLLC.com to discuss your situation and see how we can help your family.

To read more about what to do after the death of a loved one, click here.

What is probate and why do people want to avoid it?

You may have heard people discuss probate and how horrible it is.  But what in the world is probate?  And why do people want to avoid it?  Probate is, simply, when the court has to get involved to help transfer assets after someone has died.  This court process is set up to make sure things are done properly and the family is aware of what is being done.  As a result, there are several truths about probate that cause many people to want to avoid it:

Public Process  Your last will & testament, as well as the probate court documents, are all public record.  Your nosy neighbor could go to the courthouse, or maybe just look online, to see where you are leaving your assets.  She may also be able to see how much you were worth at death and where you owed debts.

Delay  Because of the court process and various required tasks (petitioning the court, publishing a claim notice, notifying family members, reporting to interested parties), there is additional delay before the estate can be finalized.  At a minimum, probate will usually take 8-10 months, and often takes 18-24 months.

Expense  Because of the additional tasks required by the court process, there is additional expense involved, both in paying the attorney but also in publishing notices and providing reports to the rest of the family.

Reminders to Contest the Will  One of the required probate steps is to notify the family of the last will & testament being admitted to the court.  As part of this notice, all family members (who are legal heirs according to the law) are given notice of the proceedings as well as a reminder that they have the right to challenge the Will.  The notice even gives them the deadline for challenging the Will and basic steps to be taken.  So, the lack of privacy is an issue, not just with the nosy neighbor, but also with the family troublemaker who was purposely left out of the estate plan.

To learn more about wills, trusts and other estate planning issues, check out the Wills and Trusts section of our website.