Estate Planning
David Postic
Top 7 Reasons People Delay Making An Estate Plan

According to a survey conducted earlier in 2019, only 40% of American adults have a Will or Trust. That percentage drops dramatically for younger age groups. For example, only 19% of people ages 18-34 have a Will or Trust.

So what’s the big deal?

As Baby Boomers pass away, experts predict that over $68 trillion (with a ‘trill’) in wealth will be transferred over the next 25 years. And the estate planning of those Boomers will control where all that wealth goes.

Despite the hugeness of those numbers and the importance of estate planning, it is easy to procrastinate when it comes to actually setting your affairs in order. Here are the top 7 reasons (in no particular order) people give us to explain why they delay estate planning:

1. “I’m too young.”

First of all, you are never too young to have an estate plan. I wrote a series of articles specifically geared toward estate planning for Millennials. (Or you can substitute “Millennials” for “Gen Z” or whatever weird thing we are on now.)

Whenever young people say “I don’t have enough assets for an estate plan” or “I’m going to wait until I have a family,” what they are really saying is, “I don’t plan on going anywhere anytime soon.” Because young people don’t die, they live forever.

Top 7 Reasons People Delay Making An Estate Plan
Estate Planning, Taxes
David Postic
Everything You Wanted To Know About Estate ...

The Internal Revenue Service (IRS) recently announced that the estate and gift tax exemption is increasing in 2024 to $13.61 million per person, up from $12.92 million in 2023.

The IRS also confirmed that the annual gift exclusion amount is increasing from $17,000 per person in 2023 to $18,000 per person in 2024.

Read more: IRS Rev. Proc. 2023-34

Okay great, you might be saying to yourself. But what does that mean, and why does it matter?

Great questions.

There are a lot of misconceptions about estate taxes and gift taxes — often referred to as “death taxes.” What they are, who has to pay them, how to avoid them.

This article is my attempt to demystify the topic for you and to help you figure out how these tax changes could affect your estate plan.

Everything You Wanted To Know About Estate & Gift Taxes
Estate Planning
David Postic
8 Questions to Prepare Your Estate Plan for 2024

2023 is almost over.

The end of the year is a time for people to gather together with family and friends, to look back on the past 365 days, and to look forward to better, happier things.

People usually don’t want to think about things like—oh, I don’t know—their mortality. Death. Stuff like that.

However, it is crucial to regularly review and, if needed, update your estate plan. The end of the year is the perfect time to do that.

So before you completely wipe 2023 from your memory, ask yourself these 8 questions to make sure your estate plan is ready for whatever 2024 throws at you.

1. Will the right people get my “stuff”?

First, make sure your will or trust correctly states who will inherit your assets.

You should then review your pay-on-death (POD) beneficiaries on insurance policies, retirement accounts, and other assets.

Do they match the beneficiaries in your will or trust?

Related post: 7 Mistakes to Avoid When Naming Beneficiaries

Many people incorrectly believe that a legal document such as a will or a trust controls what happens to all of their assets.

However, beneficiary designations can override those documents.

For example: Your trust may say that your son John will receive your entire estate and that you are disinheriting your other son, David.

But if your insurance policy lists David as beneficiary, he will still get part of your estate.

You should therefore coordinate your beneficiary designations with your will or trust to make sure all of your assets are distributed the way you want.

8 Questions to Prepare Your Estate Plan for 2024
Estate Planning
David Postic
What's the Difference Between a Will and a ...

Lawyers love to be confusing.

We use insane-sounding words from Latin and Greek and some other languages that I’m pretty sure are completely made up.

Words such as testator, force majeure, per stirpes, and inter vivos.

Our words are so weird, we have to italicize them.

So I’m not surprised when someone asks me whether a Last Will and Testament and a Living Will are the same thing.

After all, both documents have “Will” in their names, right? It would only be reasonable to think that they are similar.

But they are not similar. They are very, very different.

So I’m going to cut through the legal jargon and explain the differences between Wills and Living Wills — and help you decide which one might be best for you.

Last Will and Testament vs. Living Will

Before diving into specifics, it’s first helpful to know how to define estate planning:

An estate plan ensures (1) that the right people are able to care for your SELF in the event you become incapacitated and (2) that the right people are able to get your STUFF in the event of your death.

Every estate planning tool fits into one of those two categories, and a good estate plan should address both areas of focus.

And as luck would have it, I will be discussing both categories in this post.

What's the Difference Between a Will and a Living Will?
Estate Planning
David Postic
3 Magic Ingredients in a Great Letter of ...

So you’ve got some nifty estate planning documents?

You are awesome.

Formal estate planning document can ensure your family is cared for after your death, avoid court, and minimize the burden your loved ones will face when you are gone.

But legal documents are only one part of the equation.

Your estate plan is not complete just because you signed some fancy papers.

Because while formal estate planning documents can avoid legal obstacles after your death, they do not eliminate the myriad other tasks necessary to settle your affairs.

Think of it this way:

If you died today, would your family know what to do?

If they couldn’t remember anything you told them about your estate, would they be able to easily find all the information they need?

Read more: Why You Need to Have an Estate Planning Fire Drill

If you answered “no” to either of those questions, then your estate plan is not complete.

To make things easier on your loved ones after your death, the best thing you can do is create an estate planning letter of instruction.

3 Magic Ingredients in a Great Letter of Instruction

Estate Planning

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IRS Announces 2018 Estate and Gift Tax Limits

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IRS Announces 2018 Estate and Gift Tax Limits

[After this post was published, Congress passed the Tax Cuts and Jobs Act, which changed estate tax exemptions starting in 2018. Read this article for more information.]

The IRS recently (officially) announced increases in the estate and gift tax exemption for 2018. The combined exemption will be $5.6 million per individual, up from $5.49 million in 2017. In other words, if you die in 2018, you can leave $5.6 million (or $11.2 million for married couples*) to heirs without paying a federal estate or gift tax.**

The annual gift exclusion amount also has increased to $15,000 in 2018—up from $14,000 in 2017. This means you can now give away $15,000 (and a husband and wife can each gift $15,000) to as many individuals as you want each year without paying any gift tax. For example, starting in 2018, a couple could make $15,000 gifts to each of their four grandchildren, for a total of $120,000. Gifts beyond the annual exclusion amount count towards (i.e., reduce) the $5.6 million combined estate/gift tax exemption.

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How Do I Keep My Kids From Fighting Over My Estate?

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How Do I Keep My Kids From Fighting Over My Estate?

As a parent, you undoubtedly want your children to have successful and happy lives. And while money is not the only measure of success, you may want to give your kids assistance when it comes to finances. Many people utilize their estate plans to leave inheritances to their children to help them with financial and other aspects of their lives.

I am worried my kids will fight over my estate!

If you have multiple children, you likely want to leave each child his or her fair share of your estate. But this task is not always as easy as it sounds. Each child may be attached to different assets, and their lives may present different hardships and successes that make certain assets more desirable for them. If you don't take these factors into account, your kids could end up fighting over your estate even if you have a well-designed estate plan - especially if probate becomes necessary. Luckily, there are certain steps you can take to help mitigate these disputes or avoid them entirely.

Will an IRA Affect My Estate Plan?

Will an IRA Affect My Estate Plan?

Even if you set up a trust, you will continue to individually own your IRA and list individual beneficiaries for it. Your trust should not be the owner of your IRA, and naming your trust as the beneficiary of your IRA accounts can cause unanticipated consequences.

However, an IRA can be an important part of estate planning, so it is important to understand what options are available and what you can do to provide the maximum benefit to you and your loved ones and other heirs.

How can I make my trust a beneficiary of an IRA?

If you do want your trust to be the beneficiary of an IRA, it is important that the trust qualify for the “look-through” rule. This rule says that the IRS must be able to determine whether there is a designated beneficiary and who that beneficiary is. The four requirements that the trust must satisfy are as follows:

The Definitive Guide to Advance Directives

The Definitive Guide to Advance Directives

An advance directive for health care is a legal document that allows you to express your wishes for end-of-life care in the event you are unable to communicate those wishes to your doctor. In Oklahoma, an advance directive covers three topics: (1) the living will, (2) the health care proxy, and (3) anatomical gifts.

Part One: The Living Will

The main portion of an advance directive is the “living will,” by which you state your preference for the use of certain treatments under certain conditions. This is the most technical part of the document, so it is important to understand what these terms mean.

Can You Have a Handwritten Will?

Can You Have a Handwritten Will?

The handwritten will is a commonly misunderstood area of estate planning.

Under Oklahoma law, a handwritten or holographic will (as it is known in Oklahoma) can be a valid testamentary instrument if it is: (1) entirely in the handwriting of the testator, (2) dated, and (3) signed by the testator.

Sounds simple enough, right?

Problems With a Handwritten Wills

Actually, it’s not quite as simple as it seems.

Oklahoma courts are very strict when it comes to wills. If a document does not strictly comply with the statutory requirements, it will be thrown out. Consider these questions:

  • What if part of the document is typed while the rest is handwritten?

  • What if some of it was written on one date, then some more was written on another?

  • Where does the signature have to be located on the document?

  • Where does the date have to be located?

  • How does the date need to be written?

  • How do you need to identify your beneficiaries?

  • How should you describe your assets?

  • Do the pages need to be stapled or clipped together?

Importantly, there must also be evidence that the Testator intended this particular document as a will.

Is the language of your handwritten document sufficient to express that intent? Or could anybody argue that the document is simply a set of notes (or a mere draft) rather than a testamentary instrument?

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