Don’t Wait Until Too Late

​The scare of COVID forced many people to get more of their financial and estate papers in order. Since then, there is still a significant gap in what people have completed in case something unexpected happens to them or a loved one. The latest data is concerning.


​What is most alarming is the anguish, stress, and disruption it causes families as they discover when it is too late that certain aspects of an estate were not properly prepared, addressed, or were missing entirely. 
Don’t be a statistic of could have, should have, or would have. Be the one who truly took care of your family, your assets, and their futures.​

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Papers In Order

​When a daughter was asked to step in to oversee a spenddown for Medicaid on her mother and stepfather’s estate, she was pleasantly surprised to find an entire estate planning binder prepared by their financial advisory team with everything needed to manage their affairs.  The spenddown went smoothly for the stepfather having gone into a nursing home, with most of the spenddown being allocated to home improvements so the mother could comfortably stay in the home with it being made more accessible as she continued to age. Included in the binder was a copy of the will and testament, insurance policy documents, living power of attorney, healthcare power of attorney, trust documents, and special directives. While this was a modest estate with a small annuity, life insurance policies to cover funeral expenses, and the home as its most valuable  asset, the estate planning documents helped the family avoid probate expense and delays due to all assets being put into a trust, and bank accounts being assigned upon death. The stepfather passed about a year after being placed in a nursing home. At the time of the mother’s death, 4 years later, there was an outstanding statement from Medicaid in the amount of $89,000 for the care of the stepfather, which was deemed collectible upon the death of the spouse. Due to the meticulous records of the daughter, it was proven that the spenddown actually helped keep the mother off Medicaid. As a result, the statement was forgiven and dismissed as paid in full, resulting in more monies to the heirs upon the sale of the property. 

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7 Most Overlooked Essentials

​Estate planning is not just for the wealthy. In what I have experienced as well as what the industry is seeing as a whole. To follow are the most overlooked essentials that may apply to you and your family.

1. UPDATING BENEFICIARIES: It is all too easy to get a policy, an annuity, stocks, and a myriad of other financial assets, assign beneficiaries, and then leave it at that. There have been more cases than can be counted where ex-spouses received life insurance policy benefits instead of the spouse at time of death, or a child being left off of the list because the policy was purchased before, he/she was born and the policy was never updated. Make it a practice to review beneficiaries on an annual basis.
2. LACK OF A WILL: It’s 2023 and still it is mindboggling how many people do not have a will. Even the rich and famous fail in this arena, such as Aretha Franklin, when she passed away in 2018. According to Senior Living, only 34% of Americans have prepared estate documents. The majority of people who do have a will are 72+ in age at 81% compared to 45% of those 55 years old who have a will, 27% of 25–54-year-olds who have a will, and 24% of 18–34-year-olds with a will. When a will does exist, according to SeniorLiving.com, only 46% knew that they were the executor in advance.
3. LIVING POWER OF ATTORNEY: A Living Power of Attorney or Financial Power of Attorney is not the same as a Healthcare Power of Attorney, though some people get confused by this. A Healthcare POA gives you the ability to make decisions on behalf of the loved one’s health care. A Living or Financial POA gives you the authority to make financial decisions on their behalf should they become incapacitated and unable to direct and manage financial decisions themselves. Another important point to be made is that once the person is no longer living, the financial POA is no longer in effect. Then the estate executor or trustee takes over financial management of the estate assets. BE sure all of these directives are in place in your estate.
4. WHO TO CALL & WHERE TO START: According to an article in Legal Zoom, 52% of people don’t know where their parents have stored their estate documents. Too much scrambling and guessing goes on amidst the traumatic ordeal of a loved one being lost because of so much information that is nowhere to be found. Make a list of all your debts on an annual basis with account numbers and critical information that can be referenced later. Make a list of all key people with contact information who need to be resources who have assisted with everything from insurance, financial planning, healthcare, or household matters. Make copies of these lists to be kept in a safe deposit box and with your will directive documents. (Resource: Investopedia)
5. AVOIDING PROBATE: A Trust is a way to transfer assets and property after someone's death outside of Probate Court. This is the court system responsible for settling Wills, Trusts, Conservatorships, and Guardianships. Probate Court is both time-consuming and expensive, with the power to hold Heirs, Beneficiaries, and Trustees up for months. According to the California Probate Code, Probate Court can cost an estate an additional 2-4 per cent in attorneys fees and court costs. Talk to your financial planner about whether a Trust could be your family’s best strategy. (Resource: Trustandwill.com)
6. ASSIGNING TRANSFER ON DEATH: What happens if your loved one who passes away has bank accounts that are only in their name? They will go to probate because no-one was assigned as a beneficiary or fiduciary on the account. This is important not only for bank accounts but also for certificates of deposits and brokerage accounts. While many aspects were neatly considered in a multimillion-dollar estate for three heirs, all bank accounts were tied up for months awaiting probate due to no transfer assignment. 
7. NO INSURANCE: Insurance isn’t just a mechanism for having something to leave your heirs. It can also be a strategic financial instrument to pay for funeral costs, long-term health care, build more cash value, or pay off estate debts or taxes so you actually do have more to leave to your heirs. In the case brief mentioned earlier, when the stepfather passed away, the family thought there was a policy in place according to the binder, to cover funeral expenses. However, the family didn’t double check to confirm when he was moved into a nursing home, and only learned after he had passed away, that unbeknownst to their mother, the stepfather in a lucid moment, canceled the policy and didn’t let anyone know it was cancelled. 

For Your Future,
Lori

Lori Capozza Zeind

P.S. An organization entitled Hope Coalition America has an excellent Emergency Financial Aid Kit (EFFAK) that is downloadable and perfect for making sure that you have everything important in one place. It is not only great for emergencies, but also a great checklist to have checked off when preparing for life’s unexpected. The FDIC has made it available to the public. CLICK HERE to download.