Transfer on Death vs. Wills vs. Living Trusts

Benefits and limitations exist with different methods of transferring assets within estate plans.  Included among the most common methods of asset transfer are Transfer on Death (“TOD”) designations, Wills, and Living Trusts.  In consultation with an estate planning attorney, you should carefully consider your circumstances and goals in determining the best approach.  Many factors must be considered, such as privacy concerns, tax implications, the degree of asset protection, and costs.  The chart below seeks to identify some of the key distinctions among these transfer methodologies.

TODWillsLiving Trusts
Typically avoids Probate Court

Potentially avoids delays in distributions or transfers

Does NOT take effect until death

NO incapacity planning

NO tax planning

NO asset protection

NO creditor protection
May minimize estate taxes

Possible asset protection for children (from lawsuits, divorce, creditors)

Does NOT take effect until death

NO incapacity planning

Requires Probate Court

Attorney costs and court fees to Probate

Delays in distributions until Probate completed

Requires inventory and valuation of all assets

Public disclosure of inventories and values in Probate Court

Public notice to creditors 

Easier to challenge and contest
Takes effect immediately

Avoids Probate Court (delays, expenses)

Maximum privacy

Can address out of state property

Incapacity planning

May minimize estate taxes

Asset and creditor protection available

Potential protection of assets upon remarriage

Options for property use and purchase

Avoids family conflict

Difficult to contest

More front-end costs

Need to retitle assets

Takes time to design for preferences and instructions for incapacity 

The Big Three

A month after one of our sons settled into an amazing new apartment four blocks from his graduate school, I asked how he was doing.  He reported that graduate studies were challenging and he felt prepared.  He developed friends at school.  However, he said that moving to a new city and new place had been more difficult than he anticipated.

He loved his new life in an urban setting with everything within walking distance.  His new neighborhood was diverse and friendly.  All was well.  Except that he still experienced troubles adjusting to new circumstances.  He left the comfortable confines of a smaller college campus with close friends that he had called home for the four years prior.  He knew where to find whatever he needed in the old college town.  He knew which supermarkets and shops to frequent on particular days.  In sum, all his “routine” was gone and, with it, his comfort level.

I shared with our son a lesson I learned long ago.  There are the Big Three life events which inescapably and undeniably cause much stress:  changing your relationship status; changing your address; and changing jobs/schools.  He was experiencing two of three of these stress-inducing events at once.

The Big Three events are good reminders for all of us to think about our estate plans (or think about getting one if you do not have one!).  Getting married, divorced, remarried, becoming a widow, and having grandchildren are all examples changing your relationship status which should make you consider updating any estate plan.  Moving across town or across country should trigger an analysis whether your estate plan still meets your changing needs.  A promotion, new job or loss of a job should also make you evaluate the details of any estate plan.

As to our son, he quickly developed his new normal and new comfort zone at graduate school.  He surprised himself with this unease during transition even though he appreciated that it would be temporary.  Nonetheless, it was quite real to him.  He settled in on all fronts and just wanted a dog.  If you experience one of the Big Three, we cannot take away all the anxiety, but we can help with your new estate planning. 

Congratulations on Your New Home! Now What? Hint: Create or Update Your Estate Plan!

You purchased a new house.  Congratulations!  A new address brings new and exciting beginnings:  new opportunities; new friends and relationships; new restaurants and shops to explore; and new promises to never clutter the attic again!

A new home remains among the Big Three life events:  changing your address; changing your relationship status; and changing jobs/schools.  Together with changing your address, you may also be experiencing these other major life changes.  While exciting, these events can also be stressful.  As the dust begins to settle on your new mailbox, it may assist to take stock of where you are and better define (or plan) for any new direction in your new setting. 

Your new challenges may feel daunting, but remember that you are not alone with your new circumstances.  You may have an existing network of family and friends to whom you can and should turn for assistance.  Turn to the real estate agents who helped you in the moving process as they know the local community better than most (they know and can recommend painters, plumbers, lawn care services, etc.).  Secure the services of a local insurance agent or broker who can understand your new risk profile and local issues.  With a new address, think about establishing a relationship with a financial advisor or wealth management professional.  These types of professionals can assist to ensure that your assets such as bank accounts, 401(k) plans, pension plans, and insurance policies properly identify not merely your new address, but also beneficiaries and stakeholders per your wishes.

And think about your estate now that you have added a house to your list of assets.  If you do not have a Will or Revocable Living Trust, quite simply, you should now be seriously considering one (i.e., get one).  If you already have a Will or Revocable Living Trust, it may have been impacted with your move.

If you moved from a different state, the laws where your new home is located will most probably control.  Trust and estate laws differ from state to state.  Your old estate plan may no longer provide the benefits and protections you worked so hard to put into place.  The old plan may now even be interpreted contrary to your wishes and desires.  If you moved across the state or even just across town, you should still address your estate plan at this time.  At a minimum, you should meet with estate planning counsel for a review of your existing Will or Revocable Living Trust.

Also, remember that any meaningful estate plan includes so much more than a Will or Revocable Living Trust.  You should use an estate plan to address potential needs during your life as well as plan for when you pass.  Your estate plan, in addition to a will or trust structure, should include at least the following:

General Durable Power of AttorneyIf you become incapacitated, a designated representative(s) can manage your business affairs per your specific instructions.
Advanced Health Care Power of AttorneyIf you become incapacitated, a designated representative(s) can make medical decisions, including life-sustaining choices, on your behalf per your specific instructions.
Living WillExpression of end of life medical choices.
HIPPA AuthorizationsAllows listed individuals access to your medical information if you are not able to authorize such access.

These documents serve as your protection if you are not able to express your wishes during your life.  There is no need to go to court.  There is no delay.  Use this time of your big move as an opportunity to create or update these powers of attorney and personal directives.  

We can assist with your estate planning needs.  We also can assist in directing you to financial advisors, accountants and insurance brokers who can assist in other areas if help is needed there as well.

To learn more about comprehensive estate plans, contact Michael Geiger at Geiger Law.  And, good luck in keeping your attic clutter free!

The Larry King Trap

Some would posit that Larry King lead a fascinating life pioneering late night cable television talk shows.  Countless others made a career and reached celebrity status following the trail Larry blazed.  His estate planning leaves a quite different legacy.

In 2015, Larry married wife #7 and they together prepared a new estate plan which essentially left everything to #7.  In 2019, Larry prepared a handwritten will supposedly directing that all prior documents be disregarded and left everything to his five children (from previous ex-Mrs. Kings), and excluded #7.  The 2019 “Will” referenced five children but Larry named only four of them; it incorrectly spelled some children names; and it included typos and grammatical errors as the norm.

Passing in early 2021, the battles over control of his estate began before Larry reached room temperature.  #7 claimed that while separated, she and Larry were reconciling in 2021 despite pending divorce proceedings.  #7 asserted that Larry’s children sought to unduly influence an elderly and infirm Larry King.  The children relied on the 2019 “Will” despite all its legal deficiencies.  The children, ranging in ages from 20 to 59, claimed that the 2019 “Will” established that #7 became just like #1 – #6.  Larry King teaches us to take seriously estate planning.  Entire estate plans can be compromised or undone with one hand-written document.  With his health failing at age 87 in 2019, those who encouraged having him draft a hand-written new “Will” had to appreciate that undue influence could become an issue.

The fastest growing segment of society getting married are those over age 70.  These December – December romances result in late in life blended families.  Extra care is needed to address estate planning at this stage, especially to avoid estate contest battles; make certain that your children are protected as you wish; and ensure that no mental capacity issues are in play.  Contact Michael Geiger at Geiger Law to avoid the “Larry King Trap” as well as for all your estate planning needs.

Happy Wife, Happy Life – Then What?

Some couples dismiss estate planning believing that nothing needs to be done as the surviving spouse or significant other will inherit everything and such are their wishes.  These couples may prepare by having the partner to survive designated as the beneficiary on financial accounts and assets.  Issues addressed.  All planning done.

The charm in that approach is that these assets should pass automatically to the survivor.  But what happens if the survivor gets in serious debt or gets in a car accident and is sued?  What if the survivor is disabled with medical care providers and government programs holding medical liens against all of the survivor’s assets?  Those assets meant for the survivor are NOT protected and could be reached by these creditors.  All could be lost.  Alternatively, asset protections and creditor protections could be built into a proper estate plan.

If the survivor gets remarried or in another committed relationship, what becomes of all the assets left outright to the survivor?  All those discussions and considerations of taking care of your children may die when the survivor passes.  Avoid these circumstances and pitfalls with an estate plan which anticipates and plans for such contingencies.  The plan may fully provide for the survivor and any needs which may arise while simultaneously protecting assets for children or others you designate.  

If you fail to fully or properly designate the survivor as the beneficiary, those assets may then need to go through the expensive and lengthy probate process.  The survivor may not be entitled to the asset.  Further, absent addressing these issues with certainty in a Living Trust or Will could allow others to contest your decisions.  

Do not risk the welfare of the surviving spouse or partner.  Create an estate plan to provide for survivor’s needs as you see fit.  And, contact Michael Geiger at Geiger Law for all your estate planning needs.

Can Your Social Media Life Ever Get Laid to Rest?

Facebook.  Twitter.  WhatsApp.  Snapchat.  Instagram.  LinkedIn.  Just how many social media and information sharing sites are among those for which you have an account?  We can only imagine the number and diversity of future social media sites which will arise over the next ten years.  Some of these listed sites may be relegated to the attic of the internet collecting dust next to your Myspace page.  Yes.  Your Myspace page still exists and others can still access it!

What happens to your electronic life upon your demise?  The short answer is that it lives on without you.  Your immediate response may be: “So what?  I have moved on.”  But perhaps there may be information and data among these sites which you no longer would want shared.  There could be family-related information or photographs at issue.  There may be business interests which are no longer anyone’s business.

Many established social media sites, but certainly not all, have matured to include steps to deal with legacy (i.e., after death) user concerns.  Most newer sites incorporate such measures as part of their platform.  Yet, dealing with each of these sites remains a painful and lengthy process for loved ones.  You can help to ease that burden.

Consider appointing a Digital Executor to address your on-line existence in the event of death or incapacity.  A Digital Executor can more readily access sites and follow your expressed wishes.  Also consider using a password management service which protects and stores your passwords and provides one log-in for you to access accounts.  Your trusted Digital Executor can then easily access accounts to comply with your directives.  Be sure to use a password management service with a digital legacy feature to provide a “how to” roadmap for the Digital Executor.

Proper estate planning can act in your stead, including how to address your digital legacy.  To learn more about comprehensive estate plans, contact Michael Geiger at Geiger Law.  

Blended Families Are Special

Remarriage rates after divorce are over 75%.  As a result, blended families are simply part of the fabric of our culture.  Each spouse may bring children from a prior relationship.  The blended couple may have their own biological children.  The new blended family may appear as the Brady Bunch with all kids of the same age or there may be vast age differences between the children.  Older couples embarking on remarriage may place their grown children in instant relationships with newly minted 40-something-year old stepbrothers and stepsisters.  

While all circumstances are unique, by and large, the estate planning goals of blended families remain fairly consistent: 1) provide for the surviving spouse; 2) provide for the children; and 3) preserve the estate for the children and their descendants.  There may (does) exist inherent tension or conflict among these goals.  The good news is that proper estate planning tackles these issues directly; establishes a structure to achieve each of these goals; provides clarity and certainty for all family members; and reduces the potential for future conflicts.

The process begins with careful listening to, and exploring, the expressed desires and goals of couples in a blended family.  Quite often, one spouse may place greater emphasis on preservation of assets for children of prior marriages.  One spouse may want to ensure that the surviving spouse’s needs will always take priority.  One spouse may desire that the biological children of the blended couple come first.  A candid, and perhaps even difficult, discussion is necessary to understand not merely the goals, but also the blended family dynamics, already existing conflicts, and potential future areas of conflict.  Only then can a proper estate plan be crafted with appropriate protections.

Assets can be held and managed in different fashion within living trusts allowing for distributions to the surviving spouse or children while still providing creditor protections, asset protections and wealth preservation.  For example, the blended couple may agree that certain assets should be “locked up” in trust for the children, but could still be used by the surviving spouse for emergency situations.  

Where appropriate, certain assets may intentionally be left to pass beyond a living trust to ensure “minimum” distribution amounts to beneficiaries.  A life insurance policy could designate the children of one spouse as beneficiaries thereby providing an amount certain to those children upon the death of that spouse.  401(k) plans can be utilized in a similar fashion.  However, care must be taken in this approach as those assets may become subject to creditors of the designated beneficiaries.

As importantly, structures may be established to lessen or eliminate future entanglements between the surviving spouse and stepchildren, or among the different families brought together in the blended family.  Professional trustees may be used to ensure independence in trust administration.  Separate trusts may be established to address the assets of each spouse so that the separate families need not involve each other on estate administration matters.

Numerous methods remain readily available to accomplish the oft-times complex goals in the blended family situation.  It all starts with the honest discussion and evaluation and prioritization of those goals.  Michael Geiger can help with his experience in estate planning.  Contact Michael at Geiger Law for assistance with all your estate planning needs, including assistance with your own Brady Bunch blended family.

DIY Estate Plans? Scarier than Halloween!

Over the past few years, DIY estate plans have gained in popularity.  Just fill in the blanks and out pops a will, a trust, or even powers of attorney.  Have you carefully considered whether these documents:

  • Conform to state law; 
  • Could contain inaccurate, incomplete or contradictory information; or
  • Account for changing life circumstances such as new children/grandchildren, marriages, or divorce.

I was asked to look over a DIY will.  Upon review, I asked this new client if he ever lived in Utah?  No.  Did he plan to move to Utah?  No.  Did he own property in Utah?  No.  Why all the questions about Utah, he asked.  Because he selected Utah instead of Tennessee as the controlling law for his will.  I am not so certain that his family would have enjoyed traveling to Utah to probate his estate after he passed.

The list of horror stories associated with DIY estate plans would frighten ghouls and ghosts at Halloween.  A faulty DIY estate plan could very well result in a judge in Probate Court, and not you or your family, deciding who inherits what assets.  You may find that DIY healthcare directives and financial powers of attorney may not be accepted at precisely the time you need them to operate without challenge.  Your family and loved ones will be left wondering who will be in charge of making critical healthcare and financial decisions for you.  Instead of caring for you and following your instructions, they might be forced to request a judge to appoint someone to make decisions for you – perhaps even a total stranger to you and your family.

If you have a DIY will, trust or other estate plan documents, invest in a thorough review by an estate plan professional.  Avoid uncertainty.  Avoid anxiety.  Avoid will contests.  Contact Michael Geiger at Geiger Law for assistance with all your estate planning needs.

Charles Dickens Was Right!

Jarndyce v. Jarndyce.  Fans of Charles Dickens understand well this legal case.  The Jarndyce will contest lawsuit continued for years in the background of Dickens’ novel Bleak House.  It was only after the Jarndyce estate was drained of all of its money in order to pay the lawyers did it come to an end.  Every character associated with the Jarndyce case suffered an ill fate.

As usual, Dickens accurately portrayed another societal ill through Jarndyce.  Litigation is costly and sometimes only the lawyers win.  Legal challenges to wills or trusts are not simply costly, they also forever alter family dynamics and eviscerate even the hope for family harmony. Proper estate planning anticipates legal challenges to wills or trusts in order to preserve assets and better ensure that your wishes are honored.

But who might challenge your will or trust and why?  A family member, friend, or complete outsider could initiate such a lawsuit because they feel wronged by the amount or absence of inheritance; they believe the will or trust does not reflect your wishes; or the will or trust fails to meet necessary legal standards.

Proper estate planning would incorporate a Contest Clause.  If anyone challenges the document, the Contest Clause directs that the challenging party is to receive nothing from the estate even if the lawsuit succeeds.  Other tools exist for the estate planner to protect your wishes.  Detailed Statements of Intent can explain the “why” behind a gift or absence of inheritance.  Expressly disinheriting some or leaving a nominal amount could signal true feelings.   Such measures may assist those left behind as well as a judge who is called upon to interpret your intent.

Avoid the fate of Jarndyce v. Jarndyce and avoid will contests.  Contact Michael Geiger at Geiger Law for assistance with these matters and all your estate planning needs.

Who Needs an Estate Plan? Hint: YOU!

So many people think of a Last Will & Testament when they hear “Estate Plan”.  However, a good Estate Plan includes so much more and actually addresses potential needs arising during your life.  Unfortunately, the ongoing pandemic reminds us all that we need to prepare for when we can no longer address our own affairs.

First, do you need an Estate Plan?  Do you fit into any of the following groups:

ElderlyDivorcedParentFront Line WorkerTeacher
YoungSeparatedGrandparentMedical ProviderInvestment Banker
Middle-AgedPregnant Step-ParentHome OwnerTenant in Apartment
MarriedEngagedPet OwnerChief ExecutiveTrolley Operator
SingleOR, anyone 18 years of age or older with a pulse!

If so, you need an Estate Plan.  Make certain that your Estate Plan includes the following:

Document Purpose
Last Will & TestamentDirects distribution of Estate assets upon death
Revocable Living TrustTrust established for your lifetime plus directs distribution upon death
Health Care Power of AttorneyIf you become incapacitated, your representative can make medical decisions per your specific instructions
General Power of AttorneyIf you become incapacitated, your representative can manage your business affairs per your specific instructions
Living WillExpresses your end of life medical decisions
HIPPA AuthorizationAllows listed person access to your medical information

We can assist with your Estate Planning needs.  Contact Michael Geiger at Geiger Law.  Michael’s direct line is (901) 219-5549.