The Truth About Six Common Estate Planning Excuses

It was recently Estate Planning Awareness Week. This concept was developed because estate planning is an often-overlooked element of financial wellness. And it’s one that is quite easy to put off thinking about.

Here at Edwards Group, it’s estate planning awareness week EVERY WEEK, because we see the pain and struggles families go through when effective estate planning has not been done.

Education is foundational to everything we do. The better educated you are, the better you can help develop a plan for your loved ones.

Here are six common reasons people give for not planning:

  1. I’m too young to do estate planning.
  2. All my property is titled in joint tenancy with my spouse, so I don’t need a will.
  3. Estate planning is only for the super-rich.
  4. Estate planning is too complicated and expensive.
  5. Doesn’t the government provide for that?
  6. We did a will after we had our first child.

Let’s dive into each of these a bit more…

1. “I’m too young to do estate planning.”

If you own a house, are married or divorced, and you have children, then you need a will (at the very least).

2. “All my property is titled in joint tenancy with my spouse, so I don’t need a will.”

Joint ownership, or joint tenancy, is a common method of owning assets. Particularly with husbands and wives. It can be a good tool, but it can also cause problems. Read about the pitfalls in our post, “Joint Ownership — Tempting But Risky“.

3. “Estate planning is only for the super-rich.”

The tools we use for planning, especially when it comes to elder law and Life Care Planning, are incredibly beneficial to middle class people who have worked hard all their lives. We encourage people to “Forget About the ‘Estate’ and Just Do Planning“.

4. “Estate planning is too complicated and expensive.”

We work really hard to make the process of planning as easy as possible for you. This starts with offering workshops where you can learn more about our process and even ask an attorney questions. At our Initial Meeting, everything is mapped out for you so you know what to expect and what it will cost. Read more about the cost of an estate plan here.

5. “Doesn’t the government provide for that?”

If you die without a will, the state of Illinois will decide what happens to your house, bank accounts, cars, etc. And I don’t know about you, but that’s the last thing I would want! The state of Illinois doesn’t know you or your family, so they might not make the same decisions you’d make. It really is best to plan ahead. I say it all the time, “Bad estate planning breaks up good families.”

6. “We did our wills right after we had our first child 25 years ago.”

Life changes. FAST. And out-of-date wills are a big threat to families. It’s great that you have a will, but is it still current? We like to look to the 3 L’s of Estate Planning — Life, Law, Learning — to assess whether a will needs to be updated.

There are a lot of reasons people put off planning. But the single greatest threat to an effective estate plan is procrastination. Here’s a blog post I wrote about that very issue a few years back. It involves water bottles nearly filling up our garage.

If you’re ready to get started, give us a call at 217-726-9200 to RSVP for an upcoming workshop or to schedule an Initial Meeting.

death parent

Case Study: When a Young Mother Suddenly Dies

The Brock’s were just an average young family in the 1980’s. The father, Robert, had been to Vietnam and back a decade earlier. The mother, Margaret, stayed at home with their two young boys, James and Steven. The family lived in a modest ranch house in middle America. But one day their normal life unexpectedly came to an end when the complications of a routine surgery left Margaret in a coma. Her sons were only 8 and 6 at the time.

The Death of a Loved One is Never Normal

Without health insurance or life insurance, Robert faced a very difficult situation as his wife lay in a coma. Margaret didn’t have any written health directives. Only Robert knew that Margaret didn’t want to be kept alive through artificial measures. After less than a week, Robert made the agonizing decision to remove Margaret from life support. Margaret’s parents and sister disagreed with how quickly he made the decision, which made a tragic situation even worse.

Margaret’s parents continued to be a part of their grandsons’ lives. They tried to make peace with her husband’s decision. But Margaret’s sister never forgave Robert. Margaret’s sister also lumped James and Steven in with her anger towards Robert. Instead of being a link to their missing mother and helpful part of the grieving process, she severed the relationship. The boys had not only lost a mother. They had now lost an aunt, an uncle and their cousins as well. Potentially powerful relationships in the healing process were gone.

Having already made the most difficult decision of his life, Robert Brock continued to face the harsh reality of life after his wife’s death. The bills from his wife’s surgery, hospital stay, and death piled up. However, Robert couldn’t sell the house to relieve some of that burden. Without a will, part of the house now belonged to the two boys and could not be sold until the boys were of legal age. Robert was forced to take on extra accounting work at night for a local small business. The boys would go with him after school and be expected to occupy themselves while their father worked an extra 5 nights a week.

A Cautionary Tale: What They Wish Could Be Different

Following the example set by his father, the youngest son, James, never dwelt on what happened or what could have been. He simply continued on with life. Now an adult himself, sometimes James wishes his father had handled things differently. For example, his father never told the boys the exact date of their mother’s death. James is still unsure of the date two decades later. For the most part, though, Robert and his boys chose not to let this tragic event define them in a negative way.

There are also times when James misses having motherly advice, but what he misses the most are the stories that define a lifetime. The story of his birth, stories from childhood, and stories from his mother’s life — all of those died with his mother (and when his aunt walked out of their life). Other than a few photographs, he has nothing left of her. His father’s way of dealing with the overwhelming sadness of the situation was to get rid of everything and sweep it under the rug. While Robert may have thought this was best for him and his boys, it left a big hole in their life.

What Good Is a Plan During a Tragedy?

An estate plan cannot erase the grief for the family left behind when a loved one dies, but it can ease the transition and facilitate healing. Here are some tools that families can use to help make things easier during the devastating and sudden loss of a loved one:

  1. Legal documents clearly stating end of life issues can ease the burden on a spouse who is faced with an agonizing decision like the one above. These documents also could have given other family members peace of mind knowing that their sister/daughter’s wishes were being carried out. In the end, this could have preserved important family relationships for those left behind in the distressing wake of loss.
  2. Preserving memories or special items that lay a foundation for adulthood can mean a lot to the children left behind, but preserving the stories behind those items through letters or audio recordings would have been priceless.
  3. Life insurance could have eased the daily financial stress of losing a spouse and raising children alone.

The death of a spouse or parent is never easy, but there are many things that can make sudden and devastating events, like the one above, a little easier for those left to live life without a very special loved one.

If you’re ready to get started on creating an effective plan that will anticipate what might happen in the future, give us a call at 217-726-9200. We’ll be happy to help you schedule an Initial Meeting.

power of attorney

Power Of Attorney FAQ’s

Elisa (who handles all of our communications like newsletters, mail outs and web content) was on the playground the other day talking to some moms after school. They know what she does, so through the course of the conversation powers of attorney came up. (We’ve talked about them previously here and here.) Some good questions were raised, so today we wanted to address some of those questions:

Won’t my spouse automatically be able to make medical decisions if I’m in an accident?

No. Just because you’re married doesn’t mean your spouse has all the rights to deal with your care and medical choices. In emergency situations, a spouse might be able to act, but any ongoing medical situation will require more legal authority. That authority either needs to be through a power of attorney or else a court guardianship order. And that HIPAA medical release you may have signed at the doctor’s office will not allow you to make decisions, even if it allows you to get information. What you need is a healthcare power of attorney that allows you to BOTH get information AND make decisions for your spouse.

Can’t my spouse manage our finances without a power of attorney?

Not necessarily. A spouse can access joint bank accounts, but other types of assets may be a problem. For example, if a car is in your spouse’s name, you would not be able to transfer it if the spouse is disabled. What if you need to sell your house? Even though the house is jointly owned you will need BOTH spouses’ signatures on the deed to sell it. What if the spouse can’t sign? That’s when a power of attorney will allow you to sign for your spouse.

Why do I need a power of attorney for my college age child?

Once a child turns 18 and goes away to college, you can no longer make decisions for him or her. So what types of issues might arise that would require you have a POA for them to act on their behalf?

  • Illness or accidents: again, if your child is over the age of 18 and is in an accident, just because you’re their parent does not entitle you to find out what’s happening medically. Imagine your child needs emergency surgery and is 8 hours from home. The doctors are not required, and in fact are prohibited, from speaking with you without your child’s approval.
  • After a tragic accident, as the parent, you would not be able to help pay bills or deal with your child’s bank accounts without some legal authority like a power of attorney.

Does an attorney have to draft the POA?

No, an attorney is not legally required to do the form. And the forms are available other places. But if you work with us, we provide advice about HOW to fill out the form. We deal with these issues every single day. It’s ALL we do. Because of that, we think about all sides of an issue, what potential pitfalls might be and guide you through what’s best for your unique situation – that’s why I’m sometimes called a “Counselor-at-law.” I give valuable counsel that can prevent heartache and wasted money. Read about the dangers of a do-it-yourself POA here.

Can’t the person I named as executor in my will just do it?

No! An executor has NO authority to act on your behalf before your death. Just because they have been named as someone to make decisions AFTER your death does not mean that hospitals, doctors, banks and/or the courts will recognize them as such while you are still living. Your death changes the authority that people can use. Before you die, it’s the power of attorney. After you die, it’s the executor.

As always, we’re just a phone call away. If, after reading about POAs, you’ve decided it’s time to do something about this important issue, give us a call. We will talk with you about the specifics of your situation and what the best next step might be. Give us a call at 217-726-9200.

Everyone Over 18 Needs One of These…

At our house we like to watch the old shows like Little House on the Prairie and Andy Griffith. Bailey, our daughter, loves watching “Half Pint” and Barney Fife. Those are great shows and they reinforce some great old-fashioned values.

In estate planning, there are often changing laws and new legal strategies. But there are also some old fashioned ideas that have not changed. One of those is the fact that everyone over the age of 18 should have powers of attorney for healthcare and property.

Everyone Needs a Power of Attorney

A power of attorney gives someone else the power to act for you if you can’t do it yourself. So if you have a stroke, get Alzheimer’s or get laid up and have to have your checkbook taken away, who will be in charge?

There are 2 types of powers of attorney. And you really need both of them.

  1. Power of Attorney for Property  This allows someone to help you pay the bills. It allows someone to sell your car, your house or even get funds from your IRA. It also allows them to run errands for you, like forwarding your mail, dealing with pets and filing taxes.
  2. Power of Attorney for Healthcare  This is a separate document that gives someone the power to get medical information, make decisions for you as to treatment or surgery, make end of life decisions, and follow through on organ donations. Read “Why You Need a Healthcare POA” HERE.

What happens if you don’t have one of these? Well, if you have a stroke or other disability, someone may have to go to court to seek a guardianship. Some people call this a “living probate” because you are in probate court while you are still alive. As you can imagine, this costs time and money. And the judge will oversee the guardian making your decisions.

Powers of attorney are needed regardless of wealth level for anyone over age 18. Even college kids need them in case they are injured, so their parents can have access.
Give us a call today (217-726-9200) and set up a free phone chat with Dave. Depending on the details of your unique situation, he can then recommend what the next best step will be with regards to a POA.

elder fraud

Granny We Need to Talk: Questions that Can Stop Elder Fraud in Its Tracks

In our past two posts we talked about how Elder Fraud is on the rise and the types of fraud to look out for. Here are 7 questions to ask your friends and loved ones that can raise red flags about the possibility that they are being set up as a target for Elder Fraud:

  1. Have you had any recent phone calls or solicitations? (Cold-calling is still a very effective way to take advantage of seniors.)
  2. Has anyone recently asked to obtain your Power of Attorney?
  3. Has anyone with regular access to the home asked for financial information?
  4. Is a financial advisor pushing you to move money or purchase a financial product that you don’t understand or sounds “too good to be true”?
  5. Has anyone asked to borrow money?
  6. Has anyone borrowed things from you and not returned them?
  7. Are you donating to any new charities that you have not previously supported?

Maintaining this sort of dialogue with neighbors, friends and professionals connected with your older relatives could stop fraud in its tracks.

If you are struggling with the challenges of an aging loved one, we encourage you to give our Elder Care Advisors a call. They are here to help seniors and their families make the best legal, financial, and care decisions possible. Just call 217-726-9200 and ask to speak with an Elder Care Advisor.

illinois cornfield joint property ownership

Joint Ownership Seems So Fair and Easy…

Grandad left his property to Dad. Then when Dad passed away he left it to his two daughters and one son. The three kids owned it jointly after he died. Everything seemed fair and good. They never saw a need to divide the property.

Well, the son was in his 50’s when he started facing health problems. The family was sad to see his health go downhill so quickly. Finally, he spent time in a nursing home before passing away.

Not long after his death, the sisters were surprised to learn that the State of Illinois had placed a lien on the family property because of the nursing home care their brother had received. Now, the sisters were faced with a really tough situation of how to pay off the lien. Should they sell the land or take out a loan and pay off the government so they could try to keep it in the family?

The problem with jointly owned property

Jointly owned property — it sounds so clean, easy and fair. But it can also lead to many problems. Do you and other family members own real estate jointly? If so, then not only do you have to worry about your own estate planning, but you also better make sure the other joint owners have planned well, too. If not, their lack of planning could land in your lap later.

Our team is experienced in helping families deal with the challenges that farmland or family property presents. The key is planning AHEAD to lessen the challenges that may come. Our comprehensive process helps identify and anticipate potential problems that can crop up. (No pun intended.) Give us a call at 217-726-9200 to get started today, or keep learning more with the following articles:

6 Ways to Save the Family Farm

Saving the Family Farm

12 Reasons Not to Give Property or Money to Your Kids Right Now (a free report)

Joint Ownership – Tempting But Risky

Joint ownership with a right of survivorship, or joint tenancy, is a common method of owning assets.  Particularly with husbands and wives, it is a very common ownership method. Many people hear about joint tenancy as being a good estate planning tool – a way to transfer their assets to a loved one without court probate and without spending money on attorney’s fees.

Joint tenancy is a good tool, but it can also cause problems. For instance:

  • If you put a child on your house as a joint tenant, and your house may be at risk later if your child gets divorced or goes bankrupt.
  • If you name your 2nd spouse as a joint owner, you risk having your assets go to their family (step-kids) instead of your own family.
  • If you put inherited assets into a joint account with your spouse and later get divorced, you may be fighting over whether that was considered a gift your ex-spouse gets to keep.

There are many “simple” estate planning solutions floating around out there. We sometimes like to refer to them as coffee shop estate planning, because they are informally passed through conversations with friends and neighbors. But unless you consult with an experienced estate planning attorney, these “simple” solutions can cause big problems for your family down the road.

To learn more about the basics of estate planning, we encourage you to check out some of the following resources on our website:

3 Proven Essentials That Will Make Your Plan Successful

[Free Workbook] 6 Estate Planning Pitfalls to Avoid

[Free Report] 12 Reasons Not to Give Your Property to Your Kids Right Now

How to Choose an Excellent Estate Planning Attorney

If you’re ready to get started planning today, give us a call at 217-726-9200 to schedule an initial meeting.