Having a plan for the what-if
Estate planning should be addressed at all ages, says industry expert

By Katherine Michalets - Freeman Staff

Oct. 21, 2015

ELM GROVE - With as many as 120 million Americans not having an up-to-date estate plan, industry expert Richard Behrendt is eager to share helpful advice.

As director of estate planning at Annex Wealth Management, Behrendt said everyone should have an element of estate planning - whether thatís a young adult at age 19 who should have a power-of-attorney in case he is in a bad accident to a 60-year-old mother and grandmother who should have a irrevocable living trust.

ďI can make an argument every adult should do some estate planning,Ē he said.

There is no size-fits-all option for what each individual needs, Behrendt said, so he advises meeting with someone who specializes in estate planning every three to five years or during a major life change, such as the birth of children or grandchildren, a move out of state or retirement.

ďIf you are not going to someone who is not really top shelf, really well versed, you are not going to get the right documents,Ē he said,

Itís important for young adults to be protected as well, he said, because itís possible for him or her to become incapacitated and the parent will no longer have legal responsibility for her child.

For one of the next major life stages, parenthood, Behrendt said a guardian should be appointed to raise the child in case something doesnít allow the parents to have that role anymore. When a person reaches their 40s or 50s and have started to pay off bills and accumulate more net worth, Behrendt advises creating a revocable living trust. And then at retirement age as a personís health may start to decline, itís important to have all of these items and advance health care directives.

A common mistake people make is not having all of their assets linked, such as their property and IRA fund. Itís also important to take in mind who the beneficiaries are, Behrendt said.

ďBe careful about leaving too much too soon to younger beneficiaries,Ē he said, explaining that if a 22-year-old college student gets what they perceived to be a big windfall of money he or she may drop out of school. Or, he said, itís important to take into consideration if the beneficiary is in a rocky marriage.

According to the AARP, there are several costly estate planning blunders that can be made, such as not getting an expertís review of documents. The organization said there are many options available for free legal forms, but an expert should review them after they have been filled in.

Another problem can be leaving lump sums to beneficiaries. Donald A. DeLong, an estate, business and tax-planning lawyer in Southfield, Mich., told the AARP that money left behind should be placed in a trust versus giving cash.

A revocable living trust or an irrevocable trust can contain so-called spendthrift provisions.

ďA spendthrift provision prevents the beneficiary from getting advances against or trying to get a loan using his interest in the trust as collateral,Ē DeLong said. ďIt also leaves the beneficiaryís creditors in the cold because the beneficiary has no control over or access to the trust funds in the trust.Ē

A trustee or executor also needs to be selected carefully, Behrendt said, and should be someone who is organized and trustworthy.

He said itís important to let that person know you are thinking of her for that responsibility and let her know that if she isnít interested in that role, you wonít be offended and will find someone else.

Basic concepts for estate planning

Last will and testament. A last will and testament directs how assets titled in your individual name will be distributed upon your death. Without a will, assets titled in your name will be distributed according to the laws of the state where you live.

Revocable trust. For some, a revocable trust is a better alternative to a will because a trust allows assets to pass to beneficiaries without the delay, expense and public records of a probate proceeding.

Durable power of attorney. A durable power of attorney for financial matters authorizes someone else to manage your financial affairs in the event you become incapacitated.

Advance health care directives.  A power of attorney for health care and a declaration of living will are also essential documents to have in the event you become incapacitated. A POAHC allows your agent to consult with your physician and other caregivers if you are not able to communicate on your own behalf.

Ancillary documents and considerations. You may also want to prepare a written memorandum of who should receive your personal property, such as jewelry and collectibles. Another important document to have is a form that complies with the Health Insurance Portability and Accountability Act (HIPAA) of 1996, which protects the privacy of your medical records.

Source: Annex Wealth Management


Providing for your pets after youíre gone

RALEIGH, N.C. (TNS) - Four years ago, Pam Miller went to the home of a woman who was dying of cancer. The woman had lived a full life and was in home hospice care. She was no longer aware of her surroundings, which meant it was time for Miller to come for her cats.

The cats were nervously hiding under couches, and Miller admits she felt sad taking them from the house before their owner passed. (Two days later, the woman died.) Miller took the cats to SAFE Haven For Cats, a Raleigh, N.C. nonprofit, non-euthanasia cat shelter and adoption agency she founded 23 years ago and has run since. Eight weeks after removing the cats, Miller reports with satisfaction, they were in new homes.

Miller doesnít want to think about what would have happened to the animals otherwise. ďIn a (traditional) animal shelter, the older cats, any cat with a medical issue, a cat that may not be quite perfect ... most of the time they end up dying,Ē she says.

One way pet owners can prevent that is to take the steps those catsí first owner did: She included her pets in her estate planning, and Miller was simply fulfilling her wishes.

In the fallout from a loved oneís death, too, there are so many things to take care of - the funeral, the house, and all the usual arrangements that come along with the grief - that itís easy to forget that something needs to be done with the pets.

To that end, Miller says, put a card in your wallet. It should say how many pets you have and where they are, and it should include the numbers of a vet, a pet-sitter and a trusted friend to whom youíve spoken about caring for your pets in case the worst happens. Anyone can do this.

If you have the means to leave a trust for your pets, talk to a lawyer with experience in pet trusts. Pets, being animals, canít legally inherit money as a child, niece or nephew could. With a pet trust, the money goes to the care and feeding of the pet. After the animal dies, the remainder can go to a person or to a nonprofit, though some pets live longer than others.

The ASPCA (American Society for the Prevention of Cruelty for Animals) has a good primer online for setting up a trust. Here are some of the highlights.

* Consult an attorney who specializes in estate planning to make sure pet trusts are allowed where you live.

* Itís recommended that your trust cover all pets in your life, rather than setting up separate trusts for each pet.

* Be detailed about the type of care required for your pet, and require that the new caregiver will provide regular veterinary care.

* Determine the amount of money needed to cover your petís needs and the amount of money needed to administer the trust.

* Choose a beneficiary for funds not used by the pet trust.

Email: kmichalets@conleynet.com