bad heir day

A Bad Heir Day: When Beneficiary Designations Trump Your Will

Download our Beneficiary Designations Form Now

Many people incorrectly assume that all their assets will be distributed through their will. Unfortunately, this is a big misconception. A good example of this is retirement savings, such as an IRA or 401(k). These accounts are passed on to the person or persons who were designated on the form when the account was started. Many people don’t give much thought to these forms, especially after they first fill them out, but that can cause huge problems down the road. (Read about how such a mistake cost the adult children of Leonard Smith $400,000.)

Just recently, here at Edwards Group, we had this sort of situation arise as well. A client had an old 401(k) from a previous job in which his parents were named as beneficiaries. Unfortunately, they had passed away so the 401(k) had no beneficiaries listed. When the client died, we had to go through the expensive process of probate court to get the 401(k) into the hands of the right people.

Improper beneficiary designations can also jeopardize nursing home care if Medicaid is paying for that care. Recently we had a case where the spouse of someone in nursing care died leaving money to the disabled spouse instead of their adult children. This large amount of money is now jeopardizing the surviving spouse’s benefits.

I cannot emphasize enough how important these beneficiary designations are! It is not enough to just fill out the form once and then leave them be. It is vitally important that you check these designations yearly as a part of the regular upkeep of your plan. (Download our Beneficiary Designations form here.)

So, what types of assets with beneficiary designations trump a Will?

  • Life insurance polices
  • Annuities
  • Retirement accounts such as 401 (k)s and IRAs
  • Bank accounts with a payable on death provision
  • Investment accounts with a transfer on death provision

And what kind of life changes should trigger a review of beneficiary designations? After the following life changes, you need to double check who you put on your beneficiary designation forms:

  • Marriage
  • Divorce
  • Births
  • Deaths
  • Job changes, including retirement
  • Long-term care needs of one spouse
  • Disability of a child or grandchild

Now, here’s what to do to make sure this doesn’t make a mess for you or your family:

Make a list of all retirement accounts, life insurance policies, annuities and investment accounts. To the right of those specific assets, write who the beneficiary is and the date you last designated them. Review this list once a year (like on April 15). Or join the Dynasty program where we help you keep up with all of this. We’ve also included a PDF you can download to help make the process easier.

This whole issue highlights why Laura and Liis are so important to the clients at Edwards Group. Many of you may wonder why we need two Asset Coordinators, but it is a big job and it is a critically important job. One of the biggest mistakes people (and even other attorneys) make is not properly handling assets within an estate plan. You cannot have an effective plan if the assets have not been properly titled, designated and coordinated.

As always, if you have any questions about beneficiary designations or any other estate planning or elder law issues, please call us at 217-726-9200. We will be happy to speak with you and answer any questions we can.

How to Avoid an Estate Battle After You’re Gone

Creating a “special stuff list” will go a long way in keeping the peace once you’re gone.

Sadly, in my line of work, I see families fighting much more often than I would like. And while the media might lead you to believe it’s all about the money, oftentimes the fights are about things like Grandma’s curio cabinet full of keepsakes.

When it comes to preventing a big fight after you die, a will just isn’t enough. Even with an effective will, there is plenty of room for disagreement and fighting. Because of this, I encourage clients to create a “special stuff list” that directs certain items to the people they want those items to go to. This list, which is officially called a Memorandum for Distribution of Personal Property, is then incorporated into the Will or Living Trust.

 

Here are 7 things to consider when making your “special stuff list”:

1. What did your parents or grandparents pass down to you that you want to pass on?

2. What items bring back the most memories of your family time?
3. Have you discussed with family what items they might want?
4. How will you preserve the stories behind the items? Write out the story and record a video or audio about it. Even a few short sentences will mean a lot.
5. Don’t rely on Post-it notes, masking tape or just assume, “the kids know who gets what.”
6. Create a special stuff list and make sure it is signed, dated, and copies sent to your attorney and also kept with your Will or Living Trust.
7. In order to better identify items, take photos and include it with your “special stuff list.”
We’ve created a great resource to help you create your “special stuff” list. Download the worksheet by clicking on the button below.

Download Your FREE Resource

A Few More Things to Consider

While creating your list, don’t assume the things you find valuable will be the same things your family finds valuable. It’s always better to communicate about what you want to leave, and to whom, beforehand. Maybe you want your granddaughter to have your birthstone earrings, but maybe she’d rather have that old battered, blue pottery bowl that you used to make pudding in when she visited. You might never know the bowl was meaningful to her without a conversation, and you might even throw it out without any consideration, thinking, “Nobody’ll want this ol’ thing.”

A good resource on the matter is Who Gets Grandma’s Pie Plate, a resource developed by University of Minnesota professor, Marlene Stum. On her website, Stum gives tips about broaching the awkward topic of inheritance. Read Critical Conversations About Inheritance: Can We Talk? here for more. This article, from Consumer Reports, also has some good tips.

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.

Advice for Those Who Haven’t Planned Yet

Michelle and I don’t gamble very often. But when we do, watch out!

A few years go, the kids went to the grandparents’ and we spent the weekend in St. Louis. We were staying near Laclede’s Landing at a new hotel near the Lumiere Place Casino. The evening after we checked in, we headed out to do some serious gambling.

We stopped at the penny slots and started playing. About 10 minutes later, we hit a big jackpot! Being up all of $12, we decided to quit while we were ahead.

Do you enjoy gambling? We find that most of our clients don’t like to roll the dice about their planning. Instead, they want to tie it down so they can have real peace of mind.

Not planning ahead to protect your family and your assets is gambling.

What will happen if you die suddenly? What will happen if you need long term care?

Leaving things to chance is a gamble and the losses can be HUGE.

With good planning, you can have real peace of mind and not gamble that these vitally important things will just work out. By planning ahead, you can avoid these 4 hardships:

1. Stress. You wouldn’t purposefully place extra stress on your spouse or your kids, would you? But a lack of planning on your part can do just that, leaving everyone to wonder, “What should we do? Who do we contact?” Good planning makes it easier on your loved ones by providing a clear plan.

2. Delay. Messy estate plans take longer to wrap up, causing the stress and extra work of an estate to drag on and on. Good planning helps things get wrapped up as quickly as possible.

3. Conflict. Lack of planning can lead to arguments in the family. Arguments between siblings, between step-mom and step-kids, between nieces and nephews. Good planning will make it easy on the family, making less to fight about and less stress that can lead to conflict.

4. Loss of life savings. Lack of planning can result in the loss of your wealth — to the nursing home, to probate expenses, to taxes, to creditors or to wild spending by your heirs. Good planning will protect what you have worked so hard for.

If you’re interested in learning more about effective planning, check out one of our upcoming workshops. They are a free and no pressure way to get started! And, as always, if you have any questions at all or are unsure of what your next step should be, give us a call at 217-726-9200. Tarina would be more than happy to chat with you.

Get comfortable — no high-pressure sales tactics here

I remember a phone call I had with a company who sells software to law firms. Their product seemed like something that might be helpful, and I was interested to learn more. I spent an hour on the phone with this guy and things looked good — until the salesman ruined it.

In the last 5 minutes he got really pushy. I told him to give us a couple weeks to think about how this would fit with our firm and then check back with us. But he wouldn’t let it go. I’m sure he was following some sales training tactics he had been taught. Those tactics completely backfired.

I don’t want to be pushed into something I’m not sure about. I like to have time to think things over before I spend money. And I think most everybody feels that same way.

Nobody wants to be pressured into buying something they don’t really want or need.

And that’s one thing you’ll find about Edwards Group if you get to know us — I’m not a very “good” salesman. And I don’t want to be.

Why?

Because I don’t really want to sell you anything. What I want to do is educate you about the ways we can help your family.

We do things a little differently around here. Not everyone is a good fit to work with our firm. That’s why we focus so much of our attention and effort on making sure you’re educated about your options and the way things work before any payment is ever exchanged.

Because I’m not a good salesman, you don’t have to worry about being put in an uncomfortable situation or being coerced into agreeing to something that isn’t a good fit for your family.

Because I’m not a good salesman, you can be sure that if you decide to work with us, we’ll form a great team who can work together to protect your family.

And because of that, you don’t have to worry about wasting your hard-earned money on a plan that doesn’t fit your family or was designed with another family in mind. Each of our plans are designed in collaboration with you, with the unique needs of your family as the guiding force in the process.

We understand that meeting with a lawyer can be intimidating. That’s another part of the reason we’ve designed our process the way we have. We don’t mind if you take a little time to get to know us first.

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. If, after attending a workshop, you would like to take the next step, you will receive $200 off your initial meeting fee.

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, trusts, 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 to experience the effects of bad planning. Take a step in the right direction today by attending a workshop, giving us a call, or signing up for our weekly email newsletter.

What’s Your Next Step in Planning?

Bailey has noticed that I talk to other cars a lot when I’m driving. When someone’s being slow I might say, “Come on out there, buddy, pull right out there.” Or “come on, you can do it,” when they hesitate just a little too long before pulling out so I can go.

As with just about everything in life, this reminds me of planning. No matter how much I talk to the other drivers in those cars, it doesn’t really do a whole lot of good. And that’s just like planning. Talking about planning doesn’t actually do any good, unless you do something about it. Whether that’s nursing home planning, estate planning, death planning, life care planning or special needs planning, talking about it or even coming to workshops and learning more doesn’t do any good unless you move ahead.

So what’s your next step in planning?

1. Attend a workshop – If you already know a little bit about planning, and want to know what it would be like to work with Edwards Group, we encourage you to check out one of our workshops. In addition to getting valuable information about the process, you’ll get to meet David and have the opportunity to ask him questions. We have two workshops going right now:

Intro to Edwards Group: Wills and Trusts Orientation – This workshop is the first step towards protecting your loved ones. You’ll learn about the 4 main reasons most estate plans “just don’t work” and how our process avoids these problems. You’ll also learn how we guide you through the process every step of the way and how our fees are structured. And just for attending this 60-minute workshop, you’ll receive $200 off our Initial Meeting fee. Click here for upcoming dates.

Life Care Planning: 13 Costly Misconceptions About Healthcare and Aging – This workshop expands upon our free Family’s Guide to Elder Law discussing 13 costly misconceptions about healthcare for your aging parents, the 6 stages of Life Care Planning, what long-term care insurance will and will not pay for, how to avoid losing control of your assets, when your parents should consider a reverse mortgage and when they shouldn’t, and much more.

To attend one of our free workshops, all it takes is a call to Tarina at 217-726-9200 to reserve yourself a spot. (Our workshops tend to fill up, so we want to make sure everyone has a seat.)

2. Call to schedule your Initial Meeting – At your meeting with David Edwards, which usually lasts about 45 minutes, we will review your concerns and goals. Dave will also help you understand the unique risks facing your family. Clients find this meeting to be very valuable in helping them understand their options. By the end of the meeting, you should understand your planning options, what they will cost and whether Edwards Group is the right firm for you. There will be no hard sale. We want all of our clients to feel comfortable before starting to work with us. It’s one of the keys to drafting a successful plan.

Did you know that Tarina was a client before she started working at Edwards Group? And one of her favorite parts of the job is talking to people who have questions or might be a little nervous about starting the process of planning. If you have any questions at all, she’d be happy to chat with you. Just give her a call at 217-726-9200.

3. Help your friends and family learn more – If you’ve already worked with us and had a positive experience, we encourage you to share all you’ve learned along the way with friends and loved ones who might need to know what you now know. One of the easiest ways to do this is by requesting our free guide:

Family’s Guide to Elder Law – In this free guide you’ll learn 13 costly misconceptions about healthcare for your aging parents, 6 stages of Life Care Planning, 12 reasons not to give your property to your kids right now, 7 essential questions to ask so your parents have an effective plan for the last decade of life, 3 smart ways to increase your parents’ monthly income and bring peace of mind, 6 ways to get good care without going to a nursing home, 20 red flags that signal when your will or living trust are out of date, and much much more. Just give Tarina a call at 217-726-9200 and she’ll send one out to you.

The most important part of creating an effective plan and achieving peace of mind is actually taking a step forward. Many people think about planning for years… and then all of a sudden it can be too late. Effective planning is much easier achieved before a crisis hits.
Which next action step do you need to take today?
in-home caregiver agreement

9 Ways Elder Law Attorneys Can Help With In-Home Care

Because of the popularity of this post, we created a handout to go with it. Download the handout now.

Navigating the challenges of in-home care can be a little easier with an experienced guide by your side.

Here are 9 ways an elder law attorney can help:

 

1. Set up caregiver agreements and in-home caregivers.

There are a lot of pitfalls to watch out for with in-home care. As elder law attorneys, we are familiar with all these pitfalls and help people plan for, and avoid, these pitfalls everyday. One of the best ways to do this is through the use of a caregiver agreement.

2. Analyze how long your funds will last.

Because elder law attorneys do this sort of thing all the time, we are very familiar with what aging costs, the resources available to fund it, and how best to use the tools available to get good care for as long as possible.

3. Set up trusts for protection.

Years ago trusts were only thought of for the very rich, but that is no longer the case. These days, trusts are one of the most powerful tools in our legal toolbox. They can be used to help qualify for VA or Medicaid benefits, which translates to more resources to pay for care for you or your loved ones.

4. Draft powers of attorney or revocable living trusts.

These powerful and necessary documents help guide decisions during a disability – that time when we need to take away your checkbook because of a stroke or dementia. These legal tools help preserve dignity and quality of life. They also help you to stay in control as long as possible.

5. Help you qualify for VA benefits.

VA planning can be complicated, but qualifying for benefits can really make it worthwhile. Many people don’t realize they are eligible for in-home benefits through the VA, or how to prepare legally and financially to get the maximum benefit as soon as possible. We help families every month to qualify for VA benefits. We know the ins and outs of getting you qualified for the benefits you earned in service to your country. Learn more about that here.

6. Give feedback on care options.

Like I’ve said before, many people go to friends for advice on these issues, but chances are your friends have only dealt with these issues once or twice. We work in this field everyday which means we are very familiar with, not only legal issues surrounding in-home care, but other issues like which facilities and companies are the best to work with — and we’d love to be your resource in situations like this.

7. Plan for potential nursing home costs.

While everyone wants to stay in their own home as long as possible, the reality these days is that most people will spend some time in a nursing facility. Planning ahead now can help you be prepared for later. Suddenly being surprised by the need for Medicaid is not the kind of surprise you want.

8. Understand tax implications.

Sometimes good planning for long term care requires rearranging your finances. With IRAs and annuities, those changes could result in income tax. Working with your accountant, we help you understand the tax impact of long term care planning options.

9. Preserve your wishes upon death.

Sometimes, as we age, our current reality can jeopardize any plans we might have  for the future. Consulting with an experienced estate planning and elder law attorney can help maximize benefits now, providing good care during life, without jeopardizing your wishes for the future after you are gone.

Download the handout now

There is a lot to keep in mind when considering home healthcare, but we help guide people in these decisions everyday, weighing the pros and cons. If you need to speak to someone right away about your current situation, Tarina would be more than happy to talk with you at 217-726-9200.

If you’d like to learn more, call us and ask for our Elder Law Information Packet. This free guide covers 13 Costly Misconceptions About Healthcare for Your Aging Parents, the 6 Stages of Life Care Planning, 12 Reasons Not to Give Your Property Away Right Now, 7 Essential Questions to Ask So Your Parents Have an Effective Plan for the Last Decade of Life, 6 Ways to Get Good Care Without Going Into a Nursing Home, and MUCH MORE. We also offer free workshops on the above topic. Check here for upcoming workshop dates.

Keep learning: 7 Ways Elder Law Attorneys Can Help Even if Your Loved One is Already in a Nursing Facility

3 Estate Planning Questions to Start 2014

Fresh starts are really nice sometimes. “Out with the old, in with the new” can be energizing. Many people procrastinate when it comes to their estate plan, thinking, “Oh, I’ll never really need it.” But the truth is, everyone will need one at some point.

Why not start off the New Year with some peace of mind and take a minute to reflect on the state of your plan? Here are 3 things to consider heading into this New Year:

  1. Should your plan be changed to reflect changes in your life? Like a change in marital status or the birth of a child or grandchild.
  2. Did you acquire any new assets in 2013 that might impact your plan?
  3. Are your executors and trustees still the right people for the job?

There are many other considerations, but these three are a good start. As always, if you have any questions at all, feel free to call our office. We’d love to speak with you. And be sure to check out our upcoming workshops.

Have You Ever Paid Off a Child’s Credit Card?

If you’ve ever had to bail your child out financially, then keep reading.

I have a list that I call the “Dirty Dozen Mistakes of Estate Planning” and #7 on the list is: Thinking your child will start being good with money later if he or she is terrible with money right now.

Inheritances can disappear fast. This is true even when a child is pretty good with their money. But what if you KNOW the child is not wise financially? Maybe you have bailed them out more than once with credit cards, overspending, etc.? You keep telling them to budget and plan ahead, but they don’t.

What will happen when they inherit from you? Do you think they’ll wake up one morning and suddenly be good with money? Don’t kid yourself. People don’t often change how they spend. Your plan needs to take steps to protect the inheritance you leave. If not, it could be gone in a flash.

 

will

5 Reasons Not to DIY Your Will

I often hear people say, “I don’t need an estate plan. I don’t have an estate!” But that’s not true. Virtually everyone can benefit from having a personalized estate plan, which is, at the very least, a will. Without one, the state of Illinois will decide what happens to your house, bank accounts, cars, etc. when you die. And trust me, the state of Illinois doesn’t know you or your family, so they may not make the same decisions you would make.

The number of online and do-it-yourself legal providers continues to grow, and in a day and age where you can learn anything on the Internet, it may seem very tempting to just do a will on your own. After all, it’s just filling in the blanks, right? WRONG!

Filling out the forms may seem straightforward, but any mistakes you make may not come to light until it is TOO LATE. By doing things yourself now and trying to save a few bucks, you could cost your family more money than you saved. You could also create more distress, confusion and grief for them. Bad estate plans break up good families.

5 Reasons you should not do-it-yourself when it comes to your will:

  1. Legal Expertise – The law is complicated! That’s why I spent 3 years in law school and still spend several weeks each year in conferences learning more. I know what to do to make your plan work the way you want it to. I also know the unique laws of the state of Illinois.
  2. Counseling – Attorneys like me are called “Counselors at Law” for a reason, and I take that designation very seriously. Everyday I counsel families, guiding them through delicate decisions like providing for an elderly parent without interrupting government benefits, protecting family property when it’s time to enter a nursing home and deciding how to pass down wealth/assets so that they’re protected from creditors or irresponsible spending. No two families are the same, so why should wills be essentially the same document with a change in words here or there?
  3. Explanation of Intentions – Oftentimes there are hurt feelings or confusion that arise from someone’s choices made in their will. At Edwards Group, we not only take the time to get to know you, we get to know your family as well. We strive to develop a meaningful relationship with you so that when the time comes, we can provide appropriate guidance, explanations, etc. This type of relationship can help avoid costly or heartbreaking family feuds.
  4. Coordination of Assets – Wills control things you own, (or are titled in your name). But what about your assets that are not controlled by your will? Joint ownership, payable upon death, or beneficiary designations on IRAs, 401(k)s or life insurance policies are a huge part of the planning process. So huge, in fact, that we have two asset coordinators (Laura and Liis) on staff and that’s ALL they do! It can be very complicated to try and navigate coordination of assets on your own.
  5. Complexity – Most people think starting out that their estate plan will be simple, but many discover along the way that some personalized planning is needed. In that case, you need the guidance and counseling of an experienced attorney because you won’t be around to straighten things out when you die or become incapacitated.

The best advice I can give you is to become an educated consumer. Education is something we value here at Edwards Group. That’s why you’ll find page after page of estate planning information on our website. The better educated you are about planning, the better able we are to help you design a plan that perfectly fits your family and circumstances. Our process isn’t for everyone, but with a money back guarantee, you don’t have much to lose! Give us a call at 217-726-9200 to find out how to get started.