Michigan Estate Planning Blog

What Do I Do If I’ve Lost an Important Document?

 

Many important documents may be decades old. Therefore, if they get lost, you should know how to replace them. AARP’s recent article entitled, “You’ve Lost an Important Document. Now What?” breaks it down for you.

Passport. To avoid becoming a victim of identity theft, report a lost or stolen passport by calling 877-487-2778 or completing Form DS-64 online at travel.state.gov. You can also print the form at the website and mail it to the U.S. State Department. To get a replacement passport, you must submit a Form DS-11 in person at a passport office.

Birth Certificate. Contact the vital records office in the state where you were born and order a replacement.

Marriage Certificate. Contact the clerk of the county where the license was issued. This office will let you know the documents required, the cost and how the copy can be issued (online, by mail, or in person).

Social Security card. First, consider the need for a replacement because you rarely need the physical card. However, a replacement should be obtained if you’re starting a new job or live in a state where you need it to apply for a Real ID. To obtain a new Social Security card, you’ll need a birth certificate, driver’s license, state-issued identification card, or a passport. You should then complete an application on the Social Security website (ssa.gov) and mail or take your application and original documents to your Social Security office (the website has information on locations). The replacement card is free.

Will. Laws relating to estate planning are different in each state. However, generally, if your will was accidentally lost or destroyed and not revoked, it will still be valid and represent your wishes. A copy of the will can be submitted to the court at your death. However, you must have left behind clear evidence that you didn’t revoke it—proof that it was accidentally destroyed or lost or testimony from an impartial third party stating that you didn’t plan to change it. Your heirs will also need evidence that it’s a true copy, which the original witnesses or attorney can confirm.

Car Title. The replacement process for the title to your vehicle varies by state. Contact your Department of Motor Vehicles. You may be able to submit a form, or you have to submit a photo ID, vehicle registration, or registration renewal notice.

Reference: AARP (Feb. 14, 2023 ) “You’ve Lost an Important Document. Now What?”

 

Estate Planning for Blended Families

Today, a blended family is more common than ever, with stepfamily members, half-siblings, former spouses, new spouses and every combination of parents, children and partners imaginable.

Traditional estate planning, including wills and non-probate tools like transfer on death (TOD) documents, as valuable as they are, may not be enough for the blended family, advises a recent article titled “Legal-Ease: Hers, his and ours—blended family estate planning” from limaohio.com.

Not too long ago, when most people didn’t take advantage of the power of trusts, couples often went for estate plans with “mirror” wills, even those with children from prior marriages. Their wills basically said each spouse would leave the other spouse everything. This will would be accompanied by a contract stating neither would change their will for the rest of their lives. If there was a subsequent marriage after one spouse passed, this led to problems for the new couple, since the surviving spouse was legally bound not to change their will.

As an illustration, Bob has three children from his first marriage and Sue has two kids from her first marriage. They marry and have two children of their own. Their wills stipulate they’ll leave each other everything when the first one dies. There may have been some specific language about what would happen to the children from the first marriages, but just as likely this would not have been addressed.

It sounds practical enough, but in this situation, the children from the first spouse to die were at risk of being disinherited, unless plans were made for them to inherit from their biological parent.

Todays’ blended family benefits from the use of trusts, which are designed to protect each spouse, their children and any child or children they have together. There are a number of different kinds of trusts for use by spouses only to protect children and surviving spouses.

Trust law requires the trustee—the person who is in charge of administering the trust—to give a copy of the trust to each beneficiary. The trustee is also required to provide updates to beneficiaries about the assets in the trust.

A surviving spouse will most likely serve as the trustee when the first spouse passes and will have a legal responsibility to honor the shared wishes of the first spouse to pass.

Your estate planning attorney will be able to explain the many different types of spousal trusts, and which is best for your situation.

Reference: limaohio.com (Aug. 20, 2022) “Legal-Ease: Hers, his and ours—blended family estate planning”

Separate Marital Estate Planning Goals, Separate Attorneys?

Marriage is a partnership. Any partnership requires working together and, perhaps, compromise. But what if there is disagreement, especially when it comes to your estate planning? Marriage counselors stay in business because of marital disharmony. Commonly, they represent both spouses and seek to find common ground in a team approach. When it comes to estate planning, however, attorneys face a potential ethical dilemma. For example, estate planning attorneys cannot favor one spouse over the other, nor can they keep the secrets of one spouse from the other spouse in the course of “dual representation.” While there’s no sense starting trouble where there is none, nor in approaching anything in an overly legal or litigious way, sometimes spouses really do have different estate planning interests. It’s an ethical problem for the spouses and their estate planning attorney alike, as pointed out in a recent Forbes article titled “Ethics in Estate Planning for a Married Couple.” This certainly is an issue for attorneys (and their malpractice carriers) to fret about, but also for their clients to understand and appreciate. Indeed, at certain junctures it might be necessary for spouses to even engage separate counsel to wrangle their way through an estate planning impasse. This happens many times with prenuptial and postnuptial agreements, but in other instances as well. Do you not need separate counsel? Great! Still, take a moment to read the Forbes article about potential hazards. Above all, if you choose “dual representation,” make sure you both truly are represented – and included in all attorney-client communications.

Reference: Forbes (April 26, 2013) “Ethics in Estate Planning for a Married Couple”

For more information, see www.jerryreiflawyer.com

 

Later-In-Life Marriage Challenge

Some things just get easier with age, but marriage isn’t necessarily one of them. This especially is the case if yours is a “later-in-life” marriage. There may be some unique financial and legal shoals to navigate. If you’re no stranger to the game, then some of the later-in-life marriage challenges will be familiar, others less so. For example, do any of these issues have a familiar ring: shall we have “separate accounts or joint accounts?” is it better to “file individually or file jointly?” and shall we live in “your house or mine?” This subject was taken up in a recent MarketWatch article titled “Marrying after 50? Tackle these money issues first.” Essentially, young married couples simply don’t have as many accounts, assets, liabilities, health concerns, dependents, or complex family relationships. For them, marriage might be as simple as saying “I do.” Now that you’ve got all of that stuff and your own lifelong relationships, this can get complicated (and fast) when you add the stuff and lifelong relationships of your later-in-life spouse. If you haven’t thought through the potential challenges, here are a few to get you started: • Social Security and pension benefits • Healthcare, health needs, and Medicare benefits • Past marriages and alimony • Children and college financial planning • Your estate, your heirs, and your beneficiaries The original article goes into some depth regarding each of these points. Remember, however, they are complex and intertwined. When making your financial, tax and estate plans, don’t go it alone. Be sure to engage competent professional counsel.

Reference: MarketWatch (Feb. 27, 2013) “Marrying after 50? Tackle these money issues first”

For more information, see www.jerryreiflawyer.com

 

Portability and the Estate Tax Exemption Saginaw, Michigan

Sometimes it’s just nice to celebrate that good news is still good news. One positive of the Fiscal Cliff deal, ATRA 2012, is the continuation of certain estate and gift tax laws. A recent Forbes article titled “A Married Couple's Guide To Estate Planning,” explores some important considerations when it comes to fundamental estate planning. As so many of us hoped it would, the fiscal cliff-bridging budget extended the provision known as “portability.” As you may know, portability is the ability to pack up the unused tax exemption of the first spouse – that is, their gift/estate tax exemption – and pass it on to the surviving spouse. The surviving spouse doesn’t have to worry quite as much about triggering the estate tax when they pass. Why? Because they now have everything they own plus everything their spouse left them, and all of it can be sheltered from estate taxes by the estate tax exemptions of both spouses. The original article has more to say regarding how to secure this portability. For that matter, portability is also a limited achievement and a limited kind of protection between married persons. When all things are considered, you would be well-advised to consult with your estate planning attorney. There is more to “portability” and proper estate planning than meets the eye.

Reference: Forbes (January 9, 2013) “A Married Couple's Guide To Estate Planning”[updated to ATRA 2012]

For more information, see www.jerryreiflawyer.com

 

Same-Sex Couples Endure Complex Estate Planning Issues Saginaw Michigan

With the election now over, gay marriage advocates see something entirely new across the states. As you probably know, three new states approved same sex marriage: Maine, Maryland, and Washington. What do these new developments mean for same-sex couples and their estate planning challenges? With the three newest states to uphold same-sex marriage, that makes an official total of nine states plus the District of Columbia, plus an assortment of 12 other states with various forms of “civil unions” and “domestic partnerships.” It’s a good sign for advocates, but all the same it’s important to remain in perspective, as put by Forbes staffer Deborah Jacobs not too long after the election: “Gay Marriage Scores Victories In All Four States That Considered It, But Tough Road Lies Ahead.” For planners, being able to take care of one another and your family, either with legal rights or transfers of assets, is a matter of balancing the right legal appointments, documents, and tax codes. But same-sex couples occupy a strange place that requires a steady hand: states vary greatly even when they permit same-sex marriage, the institution that opens up so many planning avenues, and yet the federal government doesn’t recognize any of them. As we watch the Supreme Court take on the Defense of Marriage Act (DOMA), there may be more new developments on the horizon. Whatever the outcome may be, same-sex couples still face unique and complex trials when it comes to their estate plans.

Reference: Forbes (November 7, 2012) “Gay Marriage Scores Victories In All Four States That Considered It, But Tough Road Lies Ahead”

For more information, see www.jerryreiflawyer.com

 

The DIY Trust, a Project to Reconsider

In today’s times of “Recessionistas” and “repurposing”, there are many people out there trying their hand at DIY projects to save some dough. Some have even dappled in DIY estate plans. Is this new self-made practice a good idea when it comes to your assets and loved ones? Forbes addressed this matter last month in an article titled “What Could Happen If You Write Your Own Living Trust?” As the title suggests, estate planning is not a DIY project to take lightly and the article recounts several “horror” stories of layman-driven estate planning gone awry. I recommend reading the article, if this is a project you are considering. Admittedly, whenever an estate planning attorney sounds the alarm against DIY estate planning, he or she runs the real risk of coming across as self-serving. I get that. Nevertheless, your estate plan is not your deck. No, your estate plan is the legally binding roadmap to protect everyone you love and everything you have when you cannot. Period. If you botch the deck project, there usually is a fix. In a worst case scenario, you re-sand and re-stain (perhaps with a darker stain). If you botch your estate plan, on the other hand, your minor children may not be reared by the guardians (backup parents) of your choosing, may squander or lose their inheritance, and your spouse’s next spouse may take it all anyway. The list goes on. Additionally, if you botch the estate plan, to whom will your loved ones turn for relief when you are gone? Unless you carry “errors and omissions” insurance, no one. I’m all for DIY projects to save a dollar here and there, but when it comes to your estate plan, is it really worth

Reference: Forbes (August 16, 2012) “What Could Happen If You Write Your Own
Living Trust?”

the risk?

 

Couples Over 60: Marriage or Cohabitation?

More seniors today are choosing to cohabitate instead of walking down the aisle, and the consensus is not that the institution of marriage is lost as we age – it’s more of a financial decision to protect one’s retirement income. Regardless, whether you (or a loved one) elect to marry or to cohabitate, you really ought to carefully weigh the consequences and seek appropriate counsel. The dilemma between marriage and simple cohabitation (truthfully, it’s not so simple) was explored in a recent Yahoo! article by way of Bankrate.com. The article, titled “Financial pros and cons of shacking up after 60,” illustrates that there is much to think about, breaking many of the most important financial decisions into stages. Essentially, there are important ramifications either way when it comes to retirement income, social security, and the medical care available through Medicare or Medicaid. And then there are the greater concerns of what is to happen to your respective families: whether they remain separate or have become joined, what inheritances to leave, or even how to ensure the well-being of the survivor. Whether or not you choose to marry at an older age, make sure you have carefully considered the consequences of your decisions and then plan accordingly.

Reference: Bankrate, Inc. via Yahoo! Finance (August 17, 2012) “Financial pros and cons of shacking up after 60”

Is it Time to Review Your Estate Plan?

Estate planning is a lifetime process. Your plans are constantly changing, growing, and adapting as you live your life. Don’t forget to reflect these changes in your estate plan. It’s a good idea to review your estate planning at regular intervals. But there also are certain life events that could trigger the need for review and updates. Forbes points out three of them in their recent article, “When Should You Redo Your Will”? The top three events listed in this article include changes in the law, impending good fortune, and financial setbacks. Essentially, you really need to adjust your estate plans whenever your life or finances change. Another recent Forbes article offers the “5 Life Events That Require An Estate Planning Review.” Their handy checklist says you should review your estate plan when: 1. You get married. 2. You get divorced, or your spouse dies. 3. You purchase or refinance a home. 4. You open new savings, bank or investment accounts. 5. You have new children or grandchildren. So, have you reviewed your estate plan lately?

Reference: Forbes (August 9, 2012) “When Should You Redo Your Will?”

Forbes (August 13, 2012) “5 Life Events That Require An Estate Planning Review”

First Comes Love, Then Comes Marriage (or is it the Prenup?)

Summer is the official “I do” season as couples across the country exchange marriage vows. However, given the dismal marriage success rate, many of those exchanging nuptials (not to mention their respective parents) are also pondering their exit strategies in case things don’t work out. Single life can be complex on its own with its own hopes, debts, investments, family members, obligations, and health concerns. Marriage, on the other hand, can be a uniquely tricky institution. When you multiply single life by two in a manner legally recognized by IRS agents, insurers, and in-laws, then everything becomes compounded. Estate planning can be a complex adventure, too, especially if you are blending families with children from a previous marriage. In addition, issues regarding family inheritance, family businesses, farm and ranches, can require careful navigation. Now that you have a special someone in your life worth keeping, it may be worth mitigating concerns early and intelligently through prenuptial agreement planning. If you recoil, or simply want to know more, then a recent article in WealthManagement.com will be worth your time. The article is titled “Debunking the Pre-nup Myths,” and, as the title promises, it may help you and your intended get a more accurate handle on the subject. On the other hand, even if you are familiar with the world of prenups, The Wall Street Journal offers some practical premarital counseling of its own in an article titled “Easing the Sting of Divorce.” Finally, even if there’s already a slice of wedding cake resting in the freezer and all is happy and well, there’s the less frequently discussed option of the postnuptial agreement. This matter was taken up in another article by The Wall Street Journal titled “Spouses Turn to Postnups.” Ultimately, the relevance of any of these approaches varies depending upon your unique needs and objectives, along with those of your partner. This is not a do-it-yourself project. Be sure to engage appropriate independent legal counsel to represent your respective interests to avoid potential conflicts of interest and unnecessary litigation down the road.

Reference: WealthManagement.com (June 12, 2012) “Debunking Pre-nup Myths”

            The Wall Street Journal (June 15, 2012) “Easing the Sting of Divorce”

The Wall Street Journal (June 16, 2012) “Spouses Turn to Postnups”

Married Couples and Long-Term Care Logistics

Marriage is a unique economic and legal institution. Indeed, when it works out, marriage also means a happy lifetime of living with another. Of course, because life lasts longer and health wanes differently between persons, those unique economic and legal parts to marriage can translate into difficult times later in life. Against the backdrop of the in sickness portion of the vows, one difficulty that arises was addressed recently in a Wall Street Journal article titled Long-Term Care and Couples: Who Pays?. That difficulty is the phenomenon of the “well spouse,” the “ill spouse,” and Medicaid. Practically speaking, if one spouse becomes chronically sick and needs long-term care, will the other spouse be driven into poverty? Marital assets, whether owned by the husband or the wife, are part of the equation when it comes to determining Medicaid eligibility. Medicaid is the joint federal/state government program to provide means-tested health care assistance to those who qualify. With both federal and state coffers bleeding red ink (with a few state exceptions), Medicaid money is tight, especially in terms of long-term care coverage -- whether married or single. As the Wall Street Journal article notes, however, some states are treating the “well spouses” more generously than others regarding how much wealth they may retain while the “sick spouses” are receiving taxpayer support through Medicaid. I recommend reading the original article. Also, consider purchasing long-term care insurance so Medicaid does not become part of your future. In any event, a consultation with a qualified Elder Law Attorney would be prudent to evaluate your options.

Reference: The Wall Street Journal (April 2, 2012) “Long-Term Care and Couples: Who Pays?”