Mark and Mary worked hard for what they had. They had a house, cars, retirement, and lived comfortably. Neither one of them ever stopped to think they had an estate. To them an estate was a big fancy house with manicured lawns and gardens.
Don’t think you have an estate because you don’t own a big fancy house? Think again. The estate we are talking about here isn’t a big fancy house.
In law, an estate is a collection of stuff. Your estate is everything you own or have ownership of. It is your house, car, clothes, jewelry, 401(k), checking, savings, and more. If you are lucky enough to be a musician, author, or inventor your estate includes your patents and copyrighted materials.
Your estate is also all your debts, everything you owe. You own your debts just as you own your clothes.
But, more than your stuff, your estate also contains your rights to make your own choices. When you turned 18, the law says that you, and you alone, make your decisions. Nobody else can sign for you or make your decisions. That is, unless you give them permission.
Do you think “estate planning” is just about creating an inheritance plan?
So, what exactly is “estate planning” if it isn’t all about leaving an inheritance?
Hi, I’m Gary and I own DeWitt law firm where we do great estate planning.
Your plan starts with a no obligation consultation. Get your no obligation consultation by going to plan with Gary dot com.
Estate planning is ancient. If you read the Bible, in Isaiah 38:1, you will find planning mentioned: “Set your house in order, for you shall die and not live.” The Greeks left Wills. Shakespeare left a Will.
Traditionally, estate planning was all about property and arranging for somebody to take over managing your business after death. But over the years it has evolved to cover much more than that.
Most people I talk to think that estate planning is about nothing more than passing their property to the next generation.
But planning is much more than just planning for your property, money, stuff, and estate. It is now about protecting you, your family, and your money during your lifetime too.
It’s not uncommon for me to see families who have had a parent or other family member develop sudden onset dementia, had a heart attack, had a stroke, or otherwise have become unable to manage their affairs.
“Estate Planning” is about protecting you, your stuff, your money, your privacy, and your estate during your lifetime as much as it is about leaving an inheritance. It plans for loss of capacity and keeps you and your family out of court.
Under the law, nobody but you has permission to make your decisions unless you give them permission. And to stand up in court, the permission must be in writing and done the correct way.
If something happens and you become unable to manage your affairs and money, then without a proper plan in place, nobody has automatic permission to manage for you. Somebody, hopefully somebody you want, must go to court, and get a Judge to give them permission.
Then that person must answer to the Judge every year with a report, inventory, and accounting of what you have. That puts what you own in the public record ruining your and your family’s privacy. Companies watch these records just waiting to pounce. Once they know that there is money available, they’ll present offers. Some of these are legitimate. Others are just financial predators trying to prey on your family and you.
This also applies to your medical decisions. Nobody but you has permission to make your medical decisions for you unless you give them permission. And the permission must be done the right way to be honored by the medical professionals.
Finally, traditionally planning is about passing your property on to the next generation. This is what Wills and Trusts are for. Trusts also help protect and manage your property during your lifetime. I’m not going to get into the differences, advantages, and disadvantages of these now. Suffice it to say that you can pass property on without creating more legal hassles and expenses than necessary.
Planning starts with a free no obligation consultation.
Schedule your consultation at plan with Gary dot com.
It was hard enough to grieve for Jim, but Jim’s family was facing the ordeal of probate with its maze of laws and court.
That short story sums up what happens to many people. They put off planning until they retire, an incident occurs, or they get frail. Planning is often an afterthought. Many people don’t realize what happens when they don’t have a plan.
Estate planning is about preparing for unexpected emergencies.
Planning lets you and your family •Recover faster •Be in control of who will manage the emergency (and your affairs) if you can’t •Feel more confident, in control, and able to cope quickly when a situation arises •Avoid legal hassles and messes •Get deserved peace of mind •
You plan financially for emergencies with insurance. But what about the legal and personal aspects of emergencies? That is where estate planning comes in.
If you were suddenly unable to make your own choices, who do you want in charge, the Government or family?
If you want to make sure your wishes are carried out the way you want, then you need a plan. Your spouse doesn’t automatically have permission to make your decisions.
If you want to control who will make decisions for you; who will manage your money; who will take care of you; and who will get how much and how, then you need a plan. Your family isn’t automatically in charge.
If you want you, your assets, and your loved ones protected when you can’t, you need an estate plan.
If something happened tomorrow, will your family face probate? Most likely they will. How would your property be distributed? Without a plan, according to the State’s rules.
If you want to avoid probate for your family, you need a plan. Probate is your default plan.
If you want to minimize messes and family fights, you need a plan. Family’s fight and lawyers make a lot money without plans.
Without a plan you don’t leave control to your spouse, children, or loved ones. Instead, you leave control to the judges, courts, and laws of Arkansas.
In summary…
If you become unable to make your own decisions, then somebody, hopefully not adult protective services, will have to step up. They will have to go ask the court’s permissions to make decisions for you. Once the court puts them in charge, only they can they manage your money and healthcare.
When you pass, then the state has already decided who will get how much, when, and how. Your spouse doesn’t automatically get everything. Most people don’t like the state’s default plan when they hear it.
The first reason you need an estate plan is to be in control of the distribution of your estate.
Without a plan, the State, not you, decides who controls distribution of your stuff. You lose all choice when a Judge takes over.
Recently I had a lady come in who had just lost her husband unexpectedly. He owned valuable land close to the XNA airport only in his name. But he had never written a plan for how that land was to be distributed.
So, the state decided how it was to be split up. She gets 1/3rd of a “life estate” in the property. A life estate means she owns 1/3rd of it during her lifetime only. She can’t sell it without his children’s permission. Then when it would sell, she would only get a portion of the 1/3rd because it’s a life estate. Figuring she is about 65 years old; she gets 65% of 1/3rd of the estate or about 22% of the total instead of 33%. And the older she gets, the less she gets if the land is sold.
His children split the other 78% evenly between them.
If you want to control who gets what, when, and how much; control who will manage your affairs if you can’t; protect your assets and finances; protect your family; or control who manages your healthcare if you can’t then you need an estate plan.
The second reason is that without a plan, the State, not you decides who controls and manages your money, property, affairs, and healthcare if you can’t. You lose all power.
Mark had been diagnosed with rapid onset dementia. Fortunately, his wife brought him in to get a durable power of attorney almost immediately. After determining that he still had the mental capacity to sign, we had him execute a durable power of attorney with his wife as his agent.
Due to an unfortunate turn of events, he needed to go into long term care about 8 weeks later.
Without his durable power of attorney, his wife would have needed to go to court to get a guardianship. That would have taken about $3,200 and trips to court instead of the $600 they spent on the durable powers of attorney. Not to mention, they don’t have to see a Judge and make part of their private affairs public.
The same goes for healthcare. Without a healthcare power of attorney, somebody will need to step up and get a guardianship to be able to oversee medical treatment.
If you want a say in who will stand in your place to make decisions, then you need an estate plan.
If you want to control who gets what, when, and how much; control who will manage your affairs if you can’t; protect your assets and finances; protect your family; or control who manages your healthcare if you can’t then you need an estate plan.
Not to mention reducing and eliminating taxes, headaches, anxiety for your family, worry, hassles, and money given to lawyers to settle the estate.
Let me ask, why do you buy insurance? I know I buy insurance to protect against the future risk of losing money. I buy insurance to protect my health and property against the high cost of replacement.
You do estate planning for much the same reason. Plan to protect against future legal hassles, losses, costs, and risks.
Let’s assume you leave a $200,000 estate. That isn’t hard to do by the time you add up the value of your home, cars, furniture, and other things.
Probate will cost your family $12,000 or more off the top. Probate costs just about 6% of the total estate. That’s money to the attorney and others first, not your family. If you create a basic plan to eliminate probate for $2,000 and it costs $1,000 to settle it later, you just gave your family an extra $9,000.
Probate takes 10 months or more to get done once it is started. A plan to eliminate probate reduces that time to a few months.
Probate must pay your final expenses and bills. A plan to eliminate probate doesn’t have to pay those bills saving your family even more money. No telling how much that will put in your family’s pocket.
Probate can put your financial information in the public court record. This gives financial predators the opportunity to find out how much your family is getting. Then those same predators can prey on your family trying to get their money.
A plan protects against future emergencies and medical events. Planning makes sure that your family doesn’t have to end up in court to get permission to manage your financial, personal, and healthcare decisions.
Without a plan, family often must go to court to get permission from a judge to make your decisions. The basic, uncontested cost, for this is $2,400 plus filing fees and other costs. Then, every year, an accounting of your property must be published in the public court records. Your family may find themselves preyed on by financial predators.
With a plan, your family already knows who will be in charge. Not only did you save your family $2,400 but you also saved them the hassles of going to court, filing paperwork, and more.
I’ve just talked about 2 of the major reasons you want a plan. There are many more and all of them protect against future risk, just like insurance.
You don’t need to create your own estate plan and I want to tell you why.
The State Government has already written a plan for you and if it works for you, you don’t need to write your own plan.
Let me lay it out for you, and you can decide if their plan is good for you or not.
First, the State’s plan for your final estate is probate. Technically, since you don’t have a Will, it is called intestate succession. Because you didn’t leave a Will or Trust, the state has to make all the decisions. The state has already decided who will get what, when, and how much. Your spouse, if you are married, gets 1/3rd and your children will split the other 2/3rds. If you family can’t agree on who gets what, then a judge will decide for them. The judge may even have to order most everything sold and just split the money. Your private affairs and net worth become part of the public record for anybody to look at. This can lead to financial predators preying on your family.
This whole process should only take about 12 to 16 months. It will only cost 6 to 10% of your final estate.
Second, if you can’t make decisions anymore because of dementia or any other reason, somebody will have to go ask a judge for permission to make decisions for you. Their power to make decisions is limited and they will have to ask the Judge permission to do many things. Also, your private affairs and worth become part of the public record for anybody to look at.
The initial trip to court will set your family back at least $3,000 in legal fees alone not including filing fees and other costs.
Third, your healthcare will be in the hands of the doctors and they get to make all the decisions concerning your healthcare if you can’t make the decisions yourself. You could be kept alive on machines against your wishes while your family fights among itself and with the doctors concerning your care.
If this doesn’t sound like what you want for you and your family, then I would like to invite you to talk to me about creating your own plan to take the place of the State’s plan.
Today I want to talk to you about how to avoid probate.
Hi. I’m Gary DeWitt, the owner of DeWitt Law Firm.
We do estate planning. We do it well. We make it as fast, simple, affordable, and painless as possible.
If you have questions about estate planning or probate, you can setup a time to talk, for free, by going to plan with Gary dot com. The meeting is free.
Avoiding probate is many people’s goal in creating a plan. It’s usually a matter of listening, creating an inventory, and looking at all the possible tools at my disposal then using the best combination. Only experience in planning can create the proper combination.
You want to keep as much of your estate out of probate for several reasons.
First, anything passing outside of probate is not subject to creditor claims in Arkansas.
Second, it is faster and simpler.
Third, probate is expensive and time consuming. You can just assume a probate will cost 6% of the GROSS value of your estate. Debts are not subtracted out when calculating the percentage. So on a $200,000 estate the cost will be around $12,000 and a year of time.
Finally, probate is a paperwork filled hassle for family and loved ones. People are generally filled with anxiety until it is done. A basic probate with a Will has over 100 steps to be done. And that is if everyone signs waivers. Without waivers, the process takes longer and involves even more paperwork.
It’s a matter of picking the right methods to meet other goals. A couple with a special needs child will have a different plan than a couple without children. A stable couple with children will have a different plan than a couple who have children with unstable marriages.
Here are just a few of the ways you can avoid probate, and a few things not to do.
Beneficiary deeds. This is a special deed that leaves property on the owner’s death to who you want it to go to without probate. However it does have some drawbacks.
Trusts. Perhaps one of the best ways to avoid probate is to have a trust created. With a trust you get to put the rules on who gets what, when, how, and how much.
POD. POD is payable on death and is used to transfer bank accounts without probate.
TOD. TOD is transfer on death. TOD is used to transfer things with a title without probate, like cars. The rules are pretty strict on what qualifies.
Beneficiary designations. Beneficiary designations are used on life insurance, annuities, and the like to transfer outside of probate.
A few things not to do include
1.Putting your children on the deed 2.Putting your children on your accounts
You don’t want to do either of these because you run the risk of losing your real estate and money to their creditors, IRS, or lawsuit judgments. Not to mention the Medicaid implications.
If you have any questions on estate planning or probate or want to chat, you can setup a time to talk to us by going to plan with Gary dot com.
Planning gives peace of mind, confidence, security, and certainty in an uncertain world.
You can setup a time to talk, for free, by going to plan with Gary dot com. The meeting is free.
Creating a great estate plan is a process, not an event. I have a 5-step system. More on that in just a moment.
Hi. I’m Gary DeWitt, the owner of DeWitt Law Firm.
We do estate planning. We do it well. We make it as fast, simple, affordable, and painless as possible.
If you have questions about estate planning or probate, you can setup a time to talk by going to plan with Gary dot com.
Before law school, I had a computer programming career. In that career you learn that mistakes and errors are easier to correct early in the process that late in a project. Changes and corrections are cheaper, easier, and faster to correct in the beginning that at the end.
The proper system catches mistakes early and gets them corrected now, not later.
The proper system simplifies the work you have to do. I do the hard part.
Step 1 is to have an initial meeting in person, over the phone, or via zoom. At this meeting I will actively listen to you and get your goals and needs out on the table.
Step 2 is for you to fill in the information I need to create a plan summary in the comfort of your own home. You’ll then return that to me.
In step 3, I create a summary of the people and their roles. This summary is sent to you. You have the chance at this point to make sure names are spelled right and the correct people are in the roles you wanted.
Step 4, I create a summary of the plan and present it to you. This summary is a basic outline of the plan. Again, you have the chance to review and make sure it is what you wanted before the next step.
Step 5, I create the final documents and we have a signing and advising meeting. At this meeting I answer questions, we sign the documents, and give you any last minute advice or coaching needed.
If you have any questions on estate planning or probate or want to chat, you can setup a time to talk to us by going to plan with Gary dot com.
Hi. I’m Gary DeWitt, the owner of DeWitt Law Firm.
We do estate planning. We do it well. We make it as fast, simple, affordable, and painless as possible.
If you have questions about estate planning or probate, you can setup a time to talk by going to plan with Gary dot com.
Great estate planning is more than just creating a stack of documents.
Great estate planning is a process that I divide into 4 parts.
Part 1 is actively listening. Active listening is more than just taking notes and nodding your head. It means listening to what you are saying and asking probing questions to uncover your goals and needs. It includes asking clarifying questions.
Part 2 is advice. Sound advice on financial matters and legal matters can make the difference between an okay plan and a great plan.
Part 3 is coaching. You need coaching and advice on the best way to handle your assets and affairs. Coaching means working with you to arrange assets and affairs.
Part 4 is the documents. The documents, while important, wouldn’t be as good without the first 3 parts. The right peer-reviewed documents can make the difference between a rock-solid plan, an okay plan, and a plan that fails.
If you have any questions on estate planning or probate or want to chat, you can setup a time to talk to us by going to plan with Gary dot com.
