Articles Tagged with Estate Planning

More and more of our lives are spent connected to the internet. Whether we are listening to music on iTunes, browsing social media like Facebook, or even paying our bills online, so much of what we do these days is done online.  Files, photos, music, and other things are no longer physically stored in a person’s home. Often these items are stored either on a website or “in the cloud.” We are truly living in a digital world. The repercussions of such can be felt in areas that you would not normally think about.

So exactly what happens when a person with digital assets is incapacitated or passes away? It is not as easy as boxing up and distributing someone’s things. It becomes complicated with online security protocol and trying to determine where certain items may be located. For those very reasons, there are a number of steps that you should take to better manage your digital assets.

Inventory your digital assets– Make a comprehensive list of all of your online accounts that may include your email, financial accounts, social media, online business accounts. Be sure to include your username, password, and any other required answers to security questions. Also, you should include information for your digital devices like a smart phone, tablet, or computer.

We all have heard about the importance of creating an estate plan for the benefit of our loved ones. In creating an estate plan, many people believe that their will is the final say on who gets what accounts after they die. While a will often is the final determination of who receives which assets, simple titling errors can create big headaches for all of those involved. The beneficiaries named on certain assets make the actual determination of where an asset may go even if a will states otherwise.

An estate plan can be frustrated by the way that a person titles individuals as beneficiaries of assets like bank or brokerage accounts. For instance, a mother may wish to have her estate divided equally among her three children upon her passing. However, if the mother names only one child as beneficiary of a savings account, only that child will receive the contents of that account because they were listed as the sole beneficiary. Obviously, that child is free to disperse the contents of the account equally to the other two children. However, the recipient of the asset is not under any legal obligation to do so. This situation can often lead to family problems.

Many people do not understand the implications and importance of titling on their accounts. When reviewing your estate plan, it is important to review who you have listed as a beneficiary on your accounts. Make sure that your wishes are expressed accordingly. In addition, it is also important to update your estate plan following any major life changes. If something has happened to a named beneficiary, be sure to update those accounts so that your wishes are met.

While many states choose to levy taxes on its residents through a number of taxes after they die, many states are beginning to rethink this common practice. There are a number of states that are competing for wealthy retirees through incentives like certain estate tax breaks. Although a state can bring in large amounts of tax revenue through estate or inheritance taxes, states are beginning to recognize that more benefits can be had from cutting them rather than increasing them.

Last year, the Tennessee state legislature chose to cut taxes in an attempt to hold onto some of its wealthy retirees and in hopes of bringing in more from elsewhere. Lawmakers chose to phase out the state’s inheritance tax over a period of four years. Tennessee currently allows property inherited from the estate to be exempt from paying the tax if it is valued under a certain amount. If the value of the estate is over the exempted allowance, the tax rate ranges from 5.5% at the lower end to 9.5% at its highest end. The tax exemption increases incrementally each year until being completely eliminated in 2016. The tax exemption schedule is as follows:

  • 2012 – $1,000,000

Former “Sopranos” star James Gandolfini died suddenly in June of this year shocking many of the actor’s biggest fans. Many people may be equally as surprised to learn that as much as $70 million of Gandolfini’s estate will go to pay taxes that could have easily been avoided. Gandolfini could have avoided the huge tax burden by merely utilizing better estate planning. There are a number of lessons that can be learned from some other famous figures.

Choose appropriate guardians for any minor children

Before dying, Michael Jackson chose his aging mother to act as a guardian for his children. Jackson also chose legendary singer Diana Ross to act as a guardian in case his mother was unable to. Some wonder whether Jackson should have chosen another person to act as a guardian or backup guardian. While there is no doubt that Jackson’s mother loves her grandchildren, questions would arise if she was no longer able to serve as guardian in her aging condition before the children reached the age of majority. If this did occur, it is possible that the children would have to move across the country to where Diana Ross lives. There seems to be too much room for potential error.

Life is full of change. Whether you move to a new state, have a baby, or get married, situations are always changing. Some of life’s biggest changes can have a lasting impact on other areas that you would not realize. Although you learn how to adapt or compensate for any changes, there will always be an impact in your life from any major change. Changes should also be reflected in your Will. Although many people have a Will, it is important to update it whenever you have any life changes.

So we have provided a list of major life changes that should prompt you to update your Will accordingly:

Changes in your family

With the hustle and bustle of life these days, we all have so many things going on. The 80’s classic movie Ferris Bueller’s Day Off has a great quote talking about the speed of life: “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” Whether it is keeping up with our families, jobs, or other interests, we are all looking for ways to spend more time doing what we love. As a result, many people are looking for an easy way to save both time and effort. However, there are some things in life that really do require specialized attention.

Online services have made so many things much easier. Many people use certain websites in an attempt to preliminarily diagnose an illness or even do their taxes, but we understand the limitations that those services offer. Those online services simply do not offer the same amount of attention to detail or a complete understanding of a situation that an actual doctor or accountant can provide. Similarly, a Tennessee wills lawyer can provide a number of benefits that online legal services are unable to match.

Services like LegalZoom are best suited for drafting basic and general legal documents. They are not law firms and are consequently unable to provide the state specific advice that an actual attorney could. Services like LegalZoom are unable to review your answers for legal sufficiency, draw any legal conclusions about the information you provided, or apply the law to your particular situation. Because each state’s laws are different, it is important to know specifically what your state laws are before drafting documents like a will, power of attorney, or other important legal documents. Using a Tennessee wills attorney gives you the peace of mind that you are receiving legal advice specific to Tennessee’s laws based on actual experience.

Every parent seems to have the “perfect” advice when it comes to rearing children: “We don’t let Abby watch TV because it leads to A.D.D.;” “Oh, we don’t let John eat anything but organic foods;” “Let him cry it out;” “Don’t let him cry it out.” Child-raising techniques vary with each child and parent. Some seem odd; some seem too traditional. The “dos” and “don’ts” of child-rearing are generally relative.

However, I think it’s safe to say that the following piece of parental advice is universal: you need to put together a plan for your children in the event that you are not around to raise them.

Estate planning is so much more than deciding how to divide and distribute assets. Individuals who have minor children or are the guardian of an adult child should plan for the care of their children regardless of the size of their estate. The absence of such a plan could result in a court appointing someone to control your child’s life and estate—someone who you otherwise might not have chosen. We suggest that you begin the process of planning for the future of your child’s care and estate before or just after the birth of a child.