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Forget About The “Estate” And Just Do Planning

Estate Planning isn’t just for people with estates…

I talk a lot about “estate planning,” whatever that means. It sounds like lawyer talk and often makes people’s eyes glaze over. Well, I want you to forget about the estate and just call it planning, because that’s all it is!

It’s planning…

• for getting older and making choices for your own care.
• on how you will pay for a nursing home, if it comes to that.
• for what will happen to those family heirlooms.
• for what will happen when you’re gone. (Would your family know what to do or who to turn to?)
• for your kids so they’ll be ready to inherit whatever you might leave them.

Everyday we help our clients use legal and financial solutions to plan for the people they care about and the stuff they own. Don’t let the terminology scare you away. We’ve worked hard to make planning as easy as possible.

The best first step is free and only takes an hour — attend our introductory workshop, Wills & Trusts: How to Get Started.  Click here to see when it’s offered next.

This workshop is a great way to get started on planning. You’ll learn about the basics of planning, how our innovative process protects your family and how we guide you through each step in the process.

Give us a call at 217-726-9200 and save yourself a spot today!

The Myth of a “Simple” Will

“I just want a simple will.”

We hear this a lot. The people who say it generally assume they have a “regular” family with straightforward assets. They don’t want to pay a lot for elaborate documents they don’t understand. They just want a last will and testament. We get that!

In reality, “simple” wills often backfire and cost families more money and stress in the long run.

Every family has unique circumstances that can cause challenges and heartaches. And “simple” wills can’t effectively deal with these challenges.

An effective will and estate plan is really for the loved ones you leave behind. It’s your final gift to them — and it can go smoothly via effective planning ahead of time, or it can be a huge mess that tears families apart. We see it all the time.

Bad estate plans destroy good families.

The bottom line — the cost of a “simple” will is more than most people realize. We see it when we help families deal with the aftermath of an ineffective plan their loved one left behind.

Our process for creating an effective plan is thorough. We use your expertise about your own family to help anticipate future problems. We then use our expertise to address those problems using the tools in our legal toolbox.

We get to know your family, if that’s what you’d like, so when the time comes, they will already be familiar with our team and our office. We help our clients plan for the unexpected, so when the unexpected happens, things can still go smoothly for their loved ones.

It’s hard to put a price on that kind of peace of mind.

But that doesn’t mean we charge you exorbitant hourly fees. The pricing structure at our firm is fairly unique. When David Edwards started the firm in 2008, he wanted everything to be designed around helping clients plan better and have more peace of mind. This included how he decided to charge fees. So, clients who work with us can be assured there are no surprises when it comes to that.

We charge flat fees that are agreed upon ahead of time. Read more about that here.

We are passionate about the fact that every family deserves an effective estate plan that can make one of life’s hardest transitions a little easier.

We believe that family legacy is important and that everything you’ve worked so hard for should be protected and passed down to the next generation as you wish.

If the desire for a “simple” will doesn’t quite sit right with you, or the fear of an expensive and complicated plan is keeping you from taking the first step in protecting your family, we encourage you to attend our next workshop. At this 1.5-hour workshop you’ll learn:

  • how effective planning includes death planning (estate planning) and LIFE planning
  • the 5 life stages to plan for
  • 9 easy-to-understand keys to aging with peace of mind
  • clear next steps to guide your planning

If you’ve been putting off planning, we encourage you to take the first step and call 217-726-9200 to RSVP for the workshop. Your path to peace of mind starts here.

 

Don’t Get Stuck With a Stupid Tax

Have you ever heard the phrase, “stupid tax”? I hate paying a stupid tax, because it’s always something that could have been avoided.

A few years ago my wife and I went with my parents to see an Illini basketball game in Champaign. After eating at the Ribeye on Neil Street (good food!), I ran through the snow to get the car. As I approached the car I had a sinking feeling.

I had forgotten the tickets. 

Thankfully, the box office was able to reissue forgotten season tickets, but I had to pay a stupid tax of $5 for every ticket being replaced!

We all get stuck paying a stupid tax every now and then. A few dollars isn’t bad as far as a stupid tax is concerned, but when it comes to estate planning, mistakes can be very costly. One of my primary goals is to help you and your family avoid paying any stupid taxes by thoroughly thinking through things and planning ahead.

Recently, a younger high profile celebrity died without thinking through what would happen to his estate if he suddenly passed away. His estate ended up paying a $12 million stupid tax. While most people won’t make that big of a mistake when it comes to planning, we see people all the time who did not properly plan, and therefore, end up owing a stupid tax. And the most frustrating part? It could have been avoided.

If you’re not sure whether your estate will be slapped with a stupid tax, we encourage you to give us a call at 217-726-9200 or attend an upcoming workshop on estate planning. Wills & Trusts: How to Get Started is a great way to learn more about effective planning.

estate planning act of love

7 Reasons Estate Planning Is an Act of Love

When you think of Valentine’s Day, you probably don’t think about estate planning, but we do! We see the depth of our clients’ love for their families everyday as they put an effective plan together — a plan from which they may never see the benefits. A plan that will give their loved ones peace at a time of great loss and grief.

Here are seven reasons why our staff sees estate planning as a great act of love:

  1. It provides protection at every stage of the game. You’ve worked to protect your children throughout their life — when they learned to walk, when they learned to drive, even after they moved out. Creating an effective estate plan is another way we can protect our kids.
  2. It makes sure nothing important gets lost in the shuffle. You may have IRAs, multiple insurance policies or other assets that children know nothing about. It is incredibly stressful, after the loss of a loved one, to run around, playing detective, trying to gather necessary information about these things.
  3. It’s likely the largest financial gift you’ll ever make. You want to get it right. Even if you don’t think you have much of an “estate,” if you own a house, then you have an estate to pass on. Bad estate plans (or no plan) make big messes for those left behind to deal with.
  4. Without planning, your estate could cause great hardship. In Illinois, if you die without a will, your estate will be split 50-50 between your spouse and kids. This means that your wife could be prevented from selling the house because the children won’t agree to it.
  5. You can still watch out for that wayward child. It’s really difficult when our children don’t make the choices we’d like them to make for themselves. It causes everyone a lot of heartache. Creating a trust for a child like this can bring a deep sense of peace.
  6. Long-term Care Planning takes the burden off your family. The last decade of life is one of the most stressful times in the human lifespan. There is nothing harder for a child or family member than not being able to provide care for a loved one when the time comes.
  7. It takes the guesswork away. It is very difficult to be grieving the loss of a loved one (or the catastrophic illness of a loved one) all the while not knowing if you are making the decisions they would want made. Good planning prevents guilt and emotional conflict between siblings or family members.

If you’ve been putting off planning because of the hassle or the cost, we encourage you to take a step toward protecting your loved ones today. You’ve already taken at least one step by learning more in this post. Next, we encourage you to attend a free educational workshopAging With Confidence: 9 Keys to Wise Planning & Peace of Mind. See the upcoming dates here, and call 217-726-9200 to RSVP.

We also understand that time is of the essence if you have a loved one who is facing a nursing home or already in a nursing home. In that case, we urge you to call us right away at 217-726-9200 and one of our Elder Care Advisors will be more than happy to speak with you about your urgent situation.

(Video) What is an elder law attorney?

As people live longer and longer, it is more and more important to have an experienced elder law attorney on your side. If you have a loved one who is aging, or are concerned about the issues of aging for yourself or a spouse, please read on to find out what elder law attorneys do and how to choose a good one…

Elder law attorneys work with families to solve problems related to aging. They meet with, and help, clients reach goals related to finances and healthcare. They often collaborate with other professionals such as financial advisors, life insurance professionals and tax professionals to ensure an effective comprehensive plan for clients.

In addition to general estate planning, elder law attorneys should have expertise in helping plan for incapacity (due to things like a stroke) or long-term care needs. When it comes to long-term care planning, elder law attorneys coordinate private and public resources to ensure the client’s right to quality care.

Founding attorney, David Edwards, explains a little about elder law attorneys in the short video above.

How do you choose a good elder law attorney?

Because elder law is a specialized field, it is important to ask some specific questions of any elder law attorney you are considering working with. It is important that you feel you can trust the attorney and his/her staff, otherwise you may not end up with effective solutions for your goals.

5 Questions to Ask an Elder Law Attorney

  1. How many Medicaid applications have you processed? Was the firm able to protect assets in most of these cases? Have you ever been turned down for an application?
  2. Are you accredited with the VA? As with many government programs, there are fairly strict standards that protect citizens from those looking to take advantage of seniors or Veterans. In order to be involved with a VA application, an attorney must be accredited by the VA. Read more about aging VA benefits here.
  3. Have you done VA apps for in-home care, assisted living and nursing home care? Each one is slightly different. Experience matters when it comes to the type of app your family might need.
  4. Do you have staff solely focused on helping families with long-term care issues? Helping families apply for public programs to offset the skyrocketing costs of long-term care is a very involved process. It’s probably no surprise that the bureaucracy of the process can be overwhelming (and tricky) for those who are not experienced with it. Mistakes during the process are very costly – emotionally and financially.
  5. Does the firm have free information to help families get started? This is a big decision.  Like we said above, you must be sure you can trust the attorney you choose to work with. Taking advantage of free educational materials is a great way to get to know the attorney. It’s also important to get to know his staff along with the general feel and philosophy of the firm. Not every family is a good fit for every attorney. It is a very personal decision.

You can read more about choosing an elder law attorney at the National Academy of Elder Law Attorneys’ website. Or, be sure to take a look at these additional articles on our website:

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

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

Not Your Best Option: Life Estate Deeds

So, what are life estates or life estate deeds?

Sometimes, instead of using a trust, people will use a life estate deed to try and protect a house or farmland. This means they deed the land to their kids but reserve the right to still use the house or the farm as long as they are living. Because all of the instructions are contained in the deed itself, it can sound like a nice, simple solution. Life estates can seem like a cheaper and easier alternative to a trust…

But life estate deeds do not always work as advertised.

A Life Estate Case Study

The house had been put into a life estate a while back. The mom was now in a situation where she needed more care and was going to a nursing home. The family wanted to sell the house, but if they sold the house, then a percentage of the house would be considered an asset for the purposes of Medicaid. Even with good legal planning, some of the funds would have to be spent on nursing home costs, and the ultimate goal of planning is to protect your hard-earned money and assets (like your house) that you hoped could be a legacy for your family someday.We recently had a situation here at the office that is a good example of why life estates are generally not a good option.

4 Reasons Life Estates Don’t Work

1. They don’t protect ALL the value. People are surprised by how much of the value of their house or property is still considered theirs if they need Medicaid. This is all governed by a Medicaid table. (See it here.) So, what are the exact problems with life estates and why don’t life estate deeds “work”?

Here’s how that works: if someone is 65-years-old, Medicaid says that almost 68% of the house is still considered yours. At age 70, 60.5% is yours. At age 80, 43.66% of the value of the house still counts as yours. 

So what does this mean? It means that if you are 70-years-old, have a stroke and need to go to a nursing home, when your house is sold then 60.5% of the house sale money stays in your name and is exposed to long term care costs. This is true even if it has been more than 5 years since the deed was done.

2. You don’t own or fully control your house or property anymore. If something unexpected happens and you “need” to sell the property, you can’t without getting the kids to sign off on it, because they actually own the property. You don’t own it anymore (even though you have the right to use it for the rest of your life).

3. You can’t change who gets it after you are gone. With a deed, it’s a done deal. The house goes to your kids at your death — no matter what. There is no way to change it. So, if your child dies before you do, you can’t reconsider who the house or property goes to. It will go through his or her estate and be completely out of your control (even though you have the right to use it for the rest of your life).

4. Life estate deeds could prevent you from getting VA benefits. The VA sees things differently and assumes that any income interest or life estate you might have are entirely yours (and therefore counted as an asset). Depending on the situation, this could cause you to be denied VA benefits. For instance, farmland with a life estate would typically prevent VA benefits without further planning.

 What’s the Solution?

In contrast to the above issues with life estates, nest egg trusts can effectively address all of these issues:

• They can protect 100% of the value once 5 years has passed.

• You can be the trustee of the trust where your farm or home is kept, which means you can sell the property, buy a different house if you want, etc.

• You can reserve a rewrite power (called a “power of appointment”) so you can change who gets it at death. That way, if circumstances change, you can respond to them appropriately.

• A trust can be set up to allow VA benefits or be adjusted later to qualify for VA benefits.

Trusts are one of the best tools that we have in our legal toolbox to help clients, and our firm is one of the best at setting them up. If you are considering a life estate deed, please give us a call first to see if there are better options available for your unique situation.

As always, if you have any questions or concerns about estate planning or elder law, Medicaid planning, long-term care planning or Veterans benefits, please give us a call at 217-726-9200. We’d be more than happy to speak with you!

 

Is Your Estate Plan Old and Clunky?

David Edwards loves what he does, and it’s obvious because he can connect just about anything to estate planning! In this post, Dave and his dad explore how estate planning is like… old tennis rackets. 

Estate Planning is Like… Old Tennis Rackets

When my parents were first married (around 1967 or so), my mom’s parents gave them each a tennis racket. They were nice sturdy wooden rackets with the frames that you could screw down to keep them from warping.

My parents used them a little, but not too much before they ended up in storage in the attic above the garage. When I was in the 10th grade, I signed up for tennis at the YMCA one summer. Since I needed a racket, my dad proudly offered, “We have a couple of nice ones up in the attic. Barely been used.”

I came home after that first lesson and said, “Dad, the coach said that I need a new racket.” As we shopped for the new racket, my dad later told me he realized just how much things had changed in the past 20 years or so. That wooden racket was really heavy and clunky compared to the new, lightweight metal ones.

Dave and the Taylorville Boys Tennis Team

David Edwards and the Taylorville Boys Tennis Team around 1989

David Edwards and the Taylorville Boys Tennis Team around 1989

Dave’s Dad Tells Us How Old Rackets are Like Estate Planning (And No, Estate Planning is Not a Racket!)

Recently my dad reminded me of this story and thought it would be a good topic for a newsletter or a post. And he was right!

Old tennis rackets are like estate planning… if we’re not careful, our estate plans can become “clunky old wooden rackets” and be really out of date. They just won’t get the job done.

But there’s another great lesson in here, too, concerning our children —

Don’t send them out into the world with “clunky old wooden rackets.” Be sure to give them the training and the tools they need to face what lies ahead.

Our firm is pretty unique in that we work with the whole family to draft an estate plan that is effective. That means that when the time comes to put your plan into action, your kids will already have met us, know who to call, and we will help guide them through the process during one of the most stressful times of their life. What better tool to get the job done?

If you’re new to Edwards Group and wondering if we’re the right estate planning firm for you, please check out our FREE workshop, Aging With Confidence: 9 Keys to Wise Planning & Peace of Mind. We hold it every month and it’s a great way to learn:

  • that planning must include both estate planning (death planning) and LIFE planning.
  • the 5 life stages to plan for and which one you’re in.
  • simple planning steps to take on your own — plus options for additional guidance from the Edwards Group team.

Call 217-726-9200 to save your spot at an upcoming workshop or to schedule an Initial Meeting.

10 Non-financial Planning Issues (Infographic)

Lesson #2 from Robin Williams – Your “Special Stuff” List

Another way (see the first way here) in which you can minimize fighting amongst your family after you’re gone is by creating a “special stuff” list before you go.

Creating a “Special Stuff” List Can Minimize Fighting Amongst Your Family After You’re Gone

Last week, we talked about having “The Conversation” with your kids and how it can really increase the chances that things will go as planned after you’re gone. This week we are really excited to offer you a special resource that will help you decide who should get what special possessions and heirlooms! (Keep reading for the FREE resource.)

Many families fight over the personal property “stuff” as much as they fight over money. (Sometimes even more than they fight over money.) When it comes to preventing a big fight after you die, it’s not enough to deal with the financial items. You must deal with property that has emotional or family value.

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.

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 they might want? Some families have a “lottery” style selection process where they openly discuss item by item what they may want. Others prepare a “fire inventory” list of their belongings and then send copies to their children, requesting that the children mark the items they want on a scale from 1-10 with 10 being they want that item the most. Once the children return their lists to the parents, the parents can then more adequately assess who will get what.

4. How will you preserve the stories behind the items? Write out the story, record a video or audio clip about it. Even a few short sentences will mean a lot when you’re gone.

5. Don’t rely on Post-it notes, masking tape or just assume, “The kids know who gets what.” This just doesn’t work!

6. Make sure your “special stuff” list or letter is signed and dated, with copies sent to your attorney. Also keep copies with your Will or Living Trust paperwork.

7. In order to better identify items, take photos and include them with your “special stuff” list.

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 the old battered, blue pottery bowl that you used to  make pudding in together. 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.”

DOWNLOAD Your FREE “Special Stuff” List Worksheet

It’s very difficult to see families torn apart by issues like “who gets Grandma’s yellow pie plate?” Our firm is always seeking ways to make planning easier for you, and we are really excited about our latest resource: Your “Special Stuff” List Worksheet. Set aside an afternoon to spend going through the worksheet line by line, and you should be well on your way to making sure your family will still be speaking to each other after you’re gone.

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.

robin williams; death; wills; trusts

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 in 2014, 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 a future 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.

[Photo by Jacobo Hoyos Zea via Flickr, licensed under Creative Commons.]