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
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How Do I Transfer Real Estate into My Trust?

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How Do I Transfer Real Estate into My Trust?

Have you ever solved a Rubik’s Cube?

Of course not. They are scientifically impossible. Just a way to keep kids quiet on long road trips.

But you’ve definitely seen a Rubik’s Cube at some point. And although the concept seems simple enough—get the same colors on the same side of the cube—all the moving parts and three-dimensional reactions make your brain hurt.

Estate planning sometimes seems like a Rubik’s Cube.

You have all of these lengthy legal documents with strange words that do all sorts of different things that an attorney explained to you once but which you have now mostly forgotten.

Take trusts, for instance. You generally get a trust to avoid probate. But by itself, a trust is just some paper. It may be fancy paper—and it’s likely expensive paper—but it’s still just some paper. And paper alone usually does not avoid probate.

Funding Your Trust With Real Property

Real property (which I will use interchangeably with “real estate”) is often the most valuable type of asset a client owns. That makes it all the more important for those assets to avoid probate.

How do you do that? By funding your trust.

What's on Your Estate Planning “Bucket List”

What's on Your Estate Planning “Bucket List”

Everybody knows what a “bucket list” is, right?

It’s a list (duh) of things you want to do before you die (i.e. “kick the bucket”). I won’t get into the weeds about the concept, so if you want to learn more about bucket lists and also ugly-cry through two boxes of Kleenex, watch the 2007 film The Bucket List with Morgan Freeman and Jack Nicholson.

But back to the blog.

Just as you and Morgan Freeman and Jack Nicholson have a bucket list for life, you should also have a bucket list for estate planning. Ask yourself: What do I need to do to arrange my affairs before I die?

Estate planning is about more than just legal documents. A good plan means accounting for your assets and providing the information, documents, and knowledge necessary to ensure a smooth transfer of those assets to the people you want to have them.

To help you create your own estate planning bucket list, here are 10 tips you can use to organize your estate before you die:

1. Get a Will or Trust.

Of course the first item on the bucket list is to create an actual estate plan. I’m an estate planning attorney writing on an estate planning blog. What did you expect?

Formal estate planning documents such as a Last Will and Testament or a Living Trust are crucial to make the administration of your estate as easy as possible. Without them, your estate could be tied up in messy probate — in some cases for years.

Medicare vs. Medicaid

Medicare vs. Medicaid

I am a lawyer, not a healthcare professional.

I mean, I did alright in chemistry, but I also don’t know my own blood type. So I am usually not the best person to ask about health-related issues. Nevertheless, I get the same question about once a week:

“What’s the difference between Medicare and Medicaid?”

Healthcare is confusing even under ordinary circumstances. But navigating federal programs like Medicare and Medicaid can feel overwhelming. Surprisingly, though, estate planning and other legal techniques can help with the process. (I will discuss some of those techniques in a forthcoming article.)

For now, however, let’s answer the question posed above and begin with a brief rundown of the differences between these two programs.

What is Medicare?

Medicare is a health insurance program administered by the federal government through the Center for Medicare & Medicaid Services (CMS). It primarily serves people over 65, regardless of income, but it is also available to younger individuals with certain disabilities or illnesses.

What is a Nomination of Guardian?

What is a Nomination of Guardian?

You are going to live forever.

You can eat whatever you want and drink whatever you want and run for as long as you want forever. Because you are invincible and nothing bad will ever happen to you.

Did you buy that? No?

Unfortunately, people don’t stay young and healthy forever. We don’t like to think of a time in the future when we will no longer be able to take care of ourselves, but it is incredibly important that you do so. Ask yourself:

  • If you become incapacitated, who will have the legal authority to take care of you?

  • If a parent or other loved one becomes incapacitated, who will be able to assist them with managing their assets or healthcare?

  • If you die before your children reach adulthood, who will have custody over them or be able to take care of their inheritance until they come of age?

You may not know the answers to these questions, and that’s fine. That is probably why you are reading an article on an estate planning website. (Either that or you are very bored.)

Whenever we ask questions about capacity or managing someone’s financial or medical care, we enter the realm of guardianships and conservatorships. Two big legal words with two big legal explanations. So, let’s dive in and learn more about these concepts.

What is a Guardianship?

A guardianship is a court-supervised process whereby the judge appoints a guardian to manage the personal care of a ward (i.e. someone who is physically or legally unable to manage their medical care). Similarly, a conservatorship is a court-supervised process whereby the judge appoints a conservator (similar to a guardian) to manage the assets of a ward (i.e. someone who is physically or legally unable to manage their assets).

7 Mistakes to Avoid When Naming Beneficiaries

7 Mistakes to Avoid When Naming Beneficiaries

“Probate” is a dirty word to most people.

Sure, sometimes it can be helpful. But you generally want to avoid it.

Think of it like the raw broccoli that for some reason is included on every party platter everywhere, but without the dip. No dip, just raw broccoli. Avoid. It.

One of the ways to avoid probate is by naming beneficiaries on your financial accounts and contractual policies.

In estate planning, a beneficiary is a person or entity who receives part of your estate after your death. You can name a beneficiary through your estate planning documents OR through a contract such as a life insurance policy, IRA, or agreement with your bank.

If you designate a beneficiary on an account or policy, then the assets or proceeds of that account or policy will pass directly to the named beneficiary, probate-free, after your death.

Sounds cool, right?

Right. It is very cool.

However, sometimes beneficiary designations can have unintended (and undesirable) consequences. Here are some mistakes to avoid when naming beneficiaries:

1. Not naming a beneficiary

This one seems obvious, but it’s worth mentioning because it is so easy to avoid.

If you do not name a beneficiary (or take other steps to avoid probate), you are virtually ensuring that your estate will be probated. And although probate is not the worst thing in the world, it is costly and time consuming. It is also usually avoidable.

Even if you believe all your accounts and policies have named beneficiaries, double check. Triple check. Check once a year. Do everything you can to make sure you don’t make the silly mistake of forgetting to name a beneficiary.

However, designating beneficiaries is not always as easy as it sounds…

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