The Art of Being a Smart Snowbird

The interstates get busy in September, when retirees take to the highways to leave the north behind and head to their southern or southwestern homes, reports Next Avenue in “7 Tips for Being a Successful Snowbird.” Some snowbirds have a more enjoyable experience than others, in part because of their preparation.

Here are a few lessons from the experienced snowbirds:

Choose a location that suits you. Don’t confuse a cold-weather home with a vacation spot. You’ll be living your daily life here. Therefore, you want to find the activities that you enjoy on a regular basis. If your regular life at home is busy and you like it that way, moving to a laid-back beach town or an isolated cabin in the woods may not be a good fit for more than a few days.

Look before you leap. Rent a place for a month or two, before committing to spending an entire winter there. You can’t know if you love a place before you live there for an extended period of time. If you’re not happy, you can try someplace else. Once you find the right spot, book the whole winter. Book the whole next winter as well. Good spots go fast.

Switch bills to be paid online. Before everything was online, it was tricky to take care of your home bills while living somewhere else. Make all your bills payable online or put them on autopay. If your bank doesn’t have a branch nearby, open an account in a nearby bank and link with your home bank, so you can easily move money between accounts.

Make new friends and new connections. One of the adjustments of snowbird life is leaving family and friends back up north. If you are in a community with lots of snowbirds, they are likely to be in the same position as you. Introduce yourself, join clubs and get active.

Don’t overbook your time with guests. You may love having friends come down, but being a frequent host takes a lot of time and energy. Don’t turn your winter residence into a bed and breakfast. Don’t be afraid to limit the number of nights for your houseguests. This is your home, not a hotel.

Make it a second home if you own it. If you buy rather than rent, it’s easier to keep some things there. Therefore, you are not lugging quite as much back and forth. However, even in a rental, you may be able to store some items, or rent a small storage unit nearby. Doing so will make travelling easier, and your snowbird nest will feel more like home.

Enjoy the ride back and forth. There’s no need to rush, if you’re going to be staying for a few months. If you’ve always travelled by interstate, maybe a side trip along local roads will break up the monotony and create some new memories. Stop by to visit with relatives along the way, or the national park that you’ve been meaning to experience. Make the ride an enjoyable part of your journey.

Reference: Next Avenue (Sep. 13, 2019)  “7 Tips for Being a Successful Snowbird.”

 

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What are Some Estate Planning Tips for Couples Without Children?

If you and your spouse are couples without children, the focus of your financial legacy may be quite different from what it would be if you were parents.

Motley Fool’s article, “5 Estate-Planning Tips for Child-Free Couples,” suggests that you may want to leave some of your money to friends, family members, charitable organizations, or your college. No matter the beneficiaries you choose, these estate planning tips are vital for childless couples.

  1. A will. You need a will because couples without children don’t have natural heirs to inherit their wealth. If you die without a will, your assets will go to your spouse. If neither of you has a will, the state intestacy laws determine which of your family members inherit from you. The family of the first spouse to die may be disinherited.
  2. A power of attorney. Who will make financial decisions for you, if you and your spouse become incapacitated? You can select a person to do this with a power of attorney (POA). You can name a person to pay bills, manage your investments and handle property matters, if you’re unable to do so yourself.
  3. Up-to-date beneficiaries. If you have retirement accounts or life insurance policies, the distribution of the proceeds at your death is made by a beneficiary designation, not by your will. A frequent beneficiary error is not keeping those designations current.
  4. Give money to charity now. You may think about leaving your assets to organizations that have enriched your life. You can set up a trust to be sure that your money goes where you want. Work with an experienced estate planning attorney.
  5. Remember the pets. If you have furry children, plan for their care when you’re not around to tend to them yourself. One option is to name a person to take care of your animal in your will. You can also put money into a trust specifically intended for the animal’s care or designate an organization that will provide lifetime care for your pet with money you earmark to that purpose.

Remember that couples without children need an estate plan, just as much as couples with children.

Reference: Motley Fool (September 9, 2019) “5 Estate-Planning Tips for Child-Free Couples”

Suggested Key Terms: Estate Planning Lawyer, Wills, Capacity, Inheritance, Power of Attorney, Power of Attorney, Pets, Trust, Beneficiary Designations

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Bargain and Sale Deed – Which is the Right Deed to Use?

Bargain and Sale Deed – When a property is bought, sold or transferred, part of the paperwork is the deed. What type of deed a property has and what type of deed is used when one person transfers their interest in a property to another person is important, says Bankrate in the article “Quitclaim vs. warranty deed: What you need to know.”

What is a quitclaim deed? A quitclaim deed is a kind of deed that transfers the actual legal rights to a property, if any exist, that the grantor—the person transferring their ownership in a property—has, with no representation, warranty, or guarantee. In other words, this kind of deed gives no guarantee of the title status of a property. It also doesn’t give any guarantee of whether there are any liens against it or if there are any other encumbrances. You only get what the grantor may have. There is nothing more.

If the grantor truly has the legal right to the property and there are no liens or other problems, then the quitclaim deed works fine. For the most part, quitclaim deeds are used then there’s no question about the ownership interest in a property. For instance, if a person is transferring ownership of a property they own to a limited liability company or, in the case of estate planning, into a trust that they also control.

That also holds true for transactions within the family, if a couple is getting married and the property-owning spouse wants to add the spouse to the deed. In a divorce, one spouse can also quitclaim their interest to the other spouse.

What about a bargain and sale deed?  This kind of deed is used in more complex situations, including when a person is getting a mortgage to purchase a home. In New York it is called a bargain and sale deed with covenant against grantor acts. In this case, the person transferring title of the property (the seller) is guaranteeing that they have a defensible ownership in the property and has the legal power to transfer their ownership interest to the buyer. The seller is guaranteeing the validity of the ownership against anything they might have done.

If the grantor of a bargain and sale deed with covenant against grantor acts misrepresents their ownership, they can be sued. Here’s why this matters, especially in estate planning.

Let’s say a few siblings inherit their mother’s house. They don’t need the house and decide to sell.  However, one of the siblings didn’t really want to sell the house and decides after everyone has agreed otherwise, that they want to keep the house. The sibling sues to get possession of the home. The other siblings could use the warranty they received under the warranty deed to bring in the other siblings to the lawsuit.

The bargain and sale deed with covenant against grantor acts deed protects the people who purchased the home, since some of the siblings sold the property without permission of all the siblings.

A warranty deed takes this one step further and guarantees against all acts in the past even if not caused by the grantor.

If there had been a quitclaim deed, the buyer of the property would be left to defend themselves in a court proceeding.

Bargain and sale deed with covenant against grantor acts are the safer option, when purchasing a property. In estate planning, buyers of an inherited home should purchase a home, only where there is a bargain and sale deed with covenant against grantor acts deed. Even in family transactions where things seem to be fine, a warranty deed will be better for the buyer.

An estate planning attorney can be a key source, when it comes to passing property from one generation to another and helping a sale of an inherited property go smoothly.

Reference: Bankrate (Sep. 4, 2019) “Quitclaim vs. warranty deed: What you need to know”

 

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Can You Make a Temporary Change to a Will?

People usually make changes to their wills when their relationship with heirs have changed, or if they get divorced, or when a spouse dies. They also change their wills when they do a regular review, which should be done every three or four years. However, most people make changes that are permanent, not necessarily a temporary change to a Will, says nwi.com in the article “Temporarily changing a will.”

There are three ways to change a will, none of which is temporary.

The first is to fully revoke the will. This can be done by executing a revocation, or by physically destroying it, by tearing it up or shredding it. If you revoked the will in full, you’ve changed it, because it no longer exists or is no longer valid. However, that it’s not temporary.

Another way to change a will, and the one that most people do, is by executing a new will. A new will should include language that states that all prior wills and codicils (i.e., amendments) are revoked and the new will is the only valid one. By executing a new will, you’ve changed the original will by revoking it. Again, this is not a temporary change. It’s permanent, or it is permanent until you execute a new will or revoke the will by destroying it.

The third way to change a will is to execute an amendment to the will. This amendment to the will is known as a “codicil.” By executing a codicil, an existing will is still valid, except for the portions in the will that are addressed by the codicil.

These are the most common ways to change a will. However, none of them is temporary change to a will. Anything that is done to change the will has a lasting effect, not a temporary one.

If the will is physically revoked, it no longer exists. If a new will is executed, the old one is revoked. And if you revoke the subsequent will, the original does not necessary become valid again.

There is a line of cases that say if a subsequent will turns out to be invalid, the prior one remains valid. However, the reasoning here is that the original will was never revoked in the first place, because the revocation failed. However, if the subsequent will was revoked, rather than failed because it was invalid, that would not be the case.

You might execute a codicil amending the will, and then revoke the codicil, but that may not work, depending on other facts and circumstances.

A temporary change to a will may not be an option, or it may be a bad one. Speak with an estate planning attorney to clarify your reasoning for seeking a temporary change to a will and find out how it might be accomplished.

Reference: nwi.com (Sep. 8, 2019) “Temporarily changing a will.”

 

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Managing an Aging Parent’s Financial and Legal Life

Faced with aging parents,  it becomes more important for their children or another trusted adult to start helping them with their finances and their legal documents, especially an estate plan. In “Six tips for managing an elderly parent’s finances,” ABC7 On Your Side presents the important tasks that need to be done.

Make sure the family knows where important personal and financial documents are in an emergency. Start with a list that includes:

  • Bank, brokerage and credit card statements
  • Original wills, power of attorney, healthcare directive and living will
  • Insurance policies
  • Social Security information
  • Pension records
  • Medicare information

They’ll need a list of all accounts, safe deposit boxes, financial institutions and contact information for their estate planning attorney, CPA and financial advisors. Even if they don’t want to share this information until an emergency occurs, make sure it is somewhere a family member can find it easily.

Set up direct deposit for any incoming funds. Automating the deposit of pension and benefit checks is far more secure and convenient for everyone. This prevents a delay in funds being deposited and checks can’t be stolen in the mail or lost at home.

Set up automatic bill payment or at least online bill payment. Making these payments automatic will save a lot of time and energy for all concerned. If your parents are not comfortable with an automatic payment, and many are not, try setting up the accounts so they can be paid online. Work with your parents, so they are comfortable with doing this. They will appreciate how much easier it is and saving themselves a trip to the post office.

Have a “Durable Power of Attorney” prepared. This is a legal document prepared by an estate planning attorney that gives one or more people the legal authority to handle finances or other matters, if they become mentally or physically incapacitated.

Have a “Living Will” and a “Healthcare Power of Attorney” prepared. The Healthcare Power of Attorney allows a person to make health care decisions for another person, if they are mentally or physically incapacitated. The Living Will allows a person to express their wishes about end-of-life care, if they are terminally ill and unable to express their wishes.

Take precautions to guard against fraud. Seniors are the chief targets of many scams, for two reasons. If they have any kind of cognitive decline, no matter how slight, they are more likely to comply with a person posing as an authority figure. They have a lifetime of assets and are a “rich” target.

An estate planning attorney can work with your parents to assist in preparing an estate plan and advising the family on how to help their parents as they age. Most estate planning attorneys have access to a large network of related service providers.

Reference: ABC7 On Your Side (Sep. 5, 2019) “Six tips for managing an elderly parent’s finances,”

 

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What if a beneficiary is not a citizen?
Handsome four year old disabled boy in wheelchair opening front door smiling a welcome

What if a beneficiary is not a citizen?

When a person dies without a will, the distribution of his or her estate assets is governed by the state’s intestacy statute and the question is what if a beneficiary is not a citizen. All states have laws that instruct the court on how to disburse the intestate decedent’s property, usually according to how close in relationship they are to the person who passed away.

A recent nj.com article responded to the following question: “My ex’s new wife isn’t a citizen. Does she get an inheritance?” The article explains that under the intestacy laws of New Jersey, for example, if the deceased had children who aren’t the children of the surviving spouse, the surviving spouse is entitled to the first 25% of the estate but not less than $50,000 nor more than $200,000, plus one-half of the balance of the estate.

Also, under New Jersey law, aliens or those who are not citizens of the United States are eligible to inherit assets.

In California, if you die with children but no spouse, the children inherit everything. If you have a spouse but no children, parents, siblings, or nieces or nephews, the spouse inherits everything. If you have parents but no children, spouse, or siblings, your parents inherit everything. If you have siblings but no children, spouse, or parents, those siblings inherit everything.

Also in California, if you’re married and you die without a will, what property your spouse will receive, is based in part on how the two of you owned your property. Was it separate property or community property? California is a community property state, so your spouse will inherit your half of the community property.

In that case, an ex-husband’s wife who lives in and is a citizen of the Philippines doesn’t need to be physically present in the state to inherit assets from her husband.

If the deceased owned property in the Philippines, the distribution of those assets would be according to the laws of that country.

Reference: nj.com (August 28, 2019) “My ex’s new wife isn’t a citizen. Does she get an inheritance?”

 

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What Are My Estate Planning Checklist?

Many people think that having an estate plan just means drafting a will or a trust. However, there’s much more to include in your estate planning checklist to be sure all of your assets are transferred directly to your heirs at your death. A successful estate plan also includes provisions allowing your family members to access or control your assets, if you become incapacitated.

Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides us with a list of items every estate planning checklist should include:

  • A will and/or a trust;
  • Powers of attorney;
  • Beneficiary designations;
  • A letter of intent; and
  • Guardianship designations.

In addition to these documents and designations, a thorough estate plan also should consider the purchase of insurance, like long-term care insurance, a lifetime annuity to generate some level of income until death and life insurance to pass money to beneficiaries without probate.

Let’s look at each item on this estate planning checklist to make sure you haven’t left any decisions to chance.

Wills and Trusts. A will or trust should be one of the primary parts of your estate plan, even if you don’t have a lot of assets. Wills make certain that your assets are distributed according to your instructions. Some trusts also help limit estate taxes or legal challenges. Talk to an experienced estate planning attorney about wills and trusts.

Power Of Attorney. A durable power of attorney (POA) allows an agent or a person you assign to act on your behalf, if you’re unable to do so yourself. A healthcare power of attorney (HCPA) designates another person to make critical healthcare decisions on your behalf in the event of incapacity.

Beneficiary Designations. Some of your assets will pass to your heirs without being mentioned in your will, such as 401(k) plan assets. Therefore, maintain a beneficiary and a contingent beneficiary on these types of accounts. Likewise, insurance plans should have a beneficiary and a contingent beneficiary, because they also pass outside of a will. Your beneficiaries should be over 21 and mentally competent.

Letter of Intent. This is simply a document for your executor or a beneficiary to define what you want done with a particular asset after your death or incapacitation. Some letters of intent also contain funeral details and other special requests. A letter of intent isn’t legally binding. It helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is declared invalid for some reason.

Guardians. If you have minor children or are considering having kids, naming a guardian is very important. Be sure the person(s) shares your views, is financially sound and willing to raise your children. You should also name a backup or contingent guardian.

Without these designations, a court could order your children to live with a family member you wouldn’t have selected, or in some instances, the court could instruct that your children become wards of the state.

A will is a great place to start, but it’s only the starting point follow your estate planning checklist.

Reference: Investopedia (July 16, 2019) “6 Estate Planning Must-Haves”

 

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Can Charles Manson’s Heirs Get Profits from the manson killing?

The Quentin Tarantino movie, starring Brad Pitt, Leonard DiCaprio, and Margot Robbie, features the Manson killings and ends with a shocking bloodbath 50 years after the grisly murders.

Wealth Advisor’s recent article, “Charles Manson’s grandson can profit off of Once Upon a Time…In Hollywood,” also notes that the movie prominently features a song called “Look at Your Game, Girl,” written by aspiring songwriter Charles Manson before his followers’ murderous spree. The tune is sung a cappella by girls in Manson’s ‘family,’ as they walk through Los Angeles and forage for food.

Tarantino said that he only used Manson’s music, after assuring himself that his family wouldn’t benefit, and that royalties and licensing fees would go to the victims’ families. However, since the movie was released, controversy has exploded and a DailyMail.com investigation has discovered the issue around Manson’s music is far more complicated and likely to wind up in court.

“Quentin told friends that he struggled with the decision to use Manson’s music, and only agreed to use it after being assured that any money from its use would go to the victims’ families,” a movie insider told DailyMail.com

Mary Ramos, music supervisor on the film, agreed, noting “Even considering using that, we wanted to find out … what happens if this is used, where the money goes. And there was a trust set up for the victims, and no-one even associated with the Mansons and the Manson family makes money off that song.”

Manson had initially visited director Roman Polanski’s home in 1968 search of Hollywood legend Doris Day’s music producer son Terry Melcher, who had talked about giving Manson a recording deal. Manson was upset that Melcher changed his mind on the contract, and discovered that he no longer lived at the house.

On August 8, 1969, Manson ordered family devotees Charles ‘Tex’ Watson, Patricia Krenwinkel and Susan Atkins to return to the house and kill everyone inside, including actress Sharon Tate, Polanski’s wife.

Fast forward a few decades. Guns N’ Roses recorded Manson’s song “Look at Your Game, Girl” on the hit album ‘The Spaghetti Incident?’ that went platinum in 1993. Lawyer Nathaniel Friedman, who filed a 1971 wrongful death suit for one of the victim’s grandchildren, negotiated a lucrative settlement with the band.

However, that wrongful death judgment wasn’t extended, and eventually the rights to profits from Manson’s music reverted to the killer’s family, although that led to a bitter fight when Manson died in prison in 2017, at age 83. There were two men who claimed to be Manson’s biological sons. Another man said he was Manson’s biological grandson, and a friend claimed to have been bequeathed Manson’s estate in his final will.

After a long legal battle, Manson’s grandson, Jason Freeman, won and was given permission to take possession of the killer’s remains in March 2018. However, there’s still a fight ongoing over who will inherit the Manson estate. However, Freeman will most likely prevail, given his early success. As a result, any royalties, licensing fees, or profits from the use of Manson’s song in “Once Upon A Time…In Hollywood” probably will go to Manson’s grandson.

Reference: Wealth Advisor (August 27, 2019) “Charles Manson’s grandson can profit off of Once Upon a Time…In Hollywood”

 

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Does My Business Need a Succession Plan?

Succession plans are typically created to prepare for the owner’s retirement or untimely disability or death. Research shows that 78% of small business owners responded that they plan to use the sale of their business to fund their retirement. However, just 25% of private business owners say they have a succession plan in place.

The Houston Business Journal’s recent article, “Three tips to employing establishing a strong succession plan,” takes up this matter for discussion.

Applying a proactive succession plan may help your business successfully move to new leadership and keep operations running smoothly. Here are a few tips for establishing your succession plan.

Regardless of whether you’re going with a family member to succeed you or bringing in someone from the outside to take over, it’s important that the plan is communicated beforehand. You don’t want workers speculating or feeling blindsided by the decision.

Be sure that you have legal documents in place and clear expectations, guidelines, and rules, so there aren’t any gray areas when the time of transition comes.

If you are appointing a family member, set out details on how other family members will contribute to the company if they are interested. You could have more than one family member run the company, but it may be best to have one clear decision maker.

If you want to have an outside party come in to run the company or have a longtime employee assume leadership, be open to ideas. Don’t overlook someone who may be a good leader and a good fit for the position. As business climates shift, technologies advance and workplace skills change, make a selection of a leader who can adapt to those changes.

As you create your succession plan, leverage a team of experts, such as an estate planning lawyer and an accountant. You should also work with a business broker who can provide a realistic valuation of your company.

Reference: Houston Business Journal (September 3, 2019) “Three tips to employing establishing a strong succession plan”

 

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Can Multi-Generational Living or the Golden Girls Model Work for Families?

Multi-generational living is not exactly new, and as people are living longer, it may start becoming more common. Shared households bring many benefits, including convenience. Why should a nurse daughter travel 20 miles a day to take her mom’s blood pressure, asks The Mercury’s article “Do shared living arrangements make sense?”

There’s also the benefit of increased financial security. Two households merged into one can share expenses, including mortgages, property taxes, utilities and more.

Whether this works in each case, depends upon the situation and the relationships of the individuals involved. If there is flexibility and relationships are good, it can be a blessing. Imagine grandparents and grandchildren who are part of each other’s lives on a daily basis, rather than a twice-a-year visit. Multi-generational living or shared households bring many benefits, including convenience. arrangement needs to start with a lot of discussions and understanding the wants and needs of each participant. It needs to be based on reasonable expectations. A happy joint living arrangement can swiftly be derailed, if parents assume that grandparents are willing to be 24/7 babysitters, or if grandparents consider household chores something for their children and grandchildren to do.

Multi-generational living or Joining living arrangements must also address financial considerations, estate planning and everyone’s personal experiences and convictions. What works for one family may not work at all for another. Each family must work through their own details.

Here are some examples where a joint living arrangement works.

Parents and children buy a house together. When parents and children live too far away, and the parent’s house would require too much modification for them to continue to live there, both sell their homes and buy a much bigger home that can be made handicapped accessible. The parents make most of the down payment. The house is titled in joint names. Titling is critical. One half is owned by the father and mother, the other half is owned by the spouse and adult child. Each half would be tenants by entireties (in states where that form of ownership between spouses is available) as between the spouses, but joint tenants with rights of survivorship as to the whole.

Parent moves in with adult child. A widow or widower comes to live with a son or daughter and their family. The parent makes contributions to the monthly expenses. There is a written agreement, which is very important for Medicaid rules regarding gifting. If modifications need to be made to the house—a mother-in-law suite—a written agreement details who contributed what, so that it is not considered a “gift” by Medicaid.

Adult child moves in with parent. This is a “buy-in,” where an adult child obtains a home equity line of credit to purchase an interest as joint tenant with right of survivorship. The house can be inherited by paying one-half of the value.

None of these strategies for Multi-generational living should be done without the help of an elder law attorney who is knowledgeable about Medicaid, estate planning and real estate ownership. When it works, this arrangement can benefit everyone in the family.

Reference: The Mercury (AuG. 28, 2019) “Do shared living arrangements make sense?”

 

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