blackwell-law-pllc

What are Beneficiary Designations, and Why are They Important?

Wed, 10 Jul 2024 16:11:26 GMT

When estate planning attorneys ask for a full accounting of a client’s property ownership, it is not so we can see how much money the client has or that we are snooping. We need this information so we can review and consider each asset and determine the best way for it to be transferred at death. In many cases, and especially in a progressive nonprobate, transfer-at-death state such as Colorado, the majority of a person’s assets can be transferred outside of probate court. This is not only efficient and time-saving, but considerably reduces the cost of will administration. We can achieve this result by understanding the value and importance of beneficiary designations .

Every custodial account holding our monies and other assets, like stocks and bonds, typically requires the owner to designate in writing who will inherit the asset upon their death. These are called beneficiary designations which allow us to fill out a form with the financial company holding the asset and name our choice of beneficiary or beneficiaries. Assets such as retirement accounts (401(k)s, IRAs, 403(b)s and similar accounts), life insurance proceeds and annuity accounts all pass to heirs by beneficiary designation. Additionally, many financial companies, like brokerage firms and banks, allow you to name beneficiaries on non-retirement accounts, which are known as transfer on death (TOD) or payable on death (POD) accounts.

In a typical probate proceeding, the personal representative for the estate (the person to whom you have given administrative authority in your will) will strive to identify, inventory and collect all the decedent’s property, and this may require time and investigation. If property is illiquid (i.e. not cash), then the personal representative may need to work with experts and appraisers to put values to each item.

Depending on the specifics of the probate case, there may also be a need to sell off some assets to cover the costs of administering the estate, repaying creditors, or covering estate taxes. And court approval is necessary for execution of each of these steps. So, you can see how bequests would not necessarily be paid to heirs immediately after the death of the decedent. It could possibly take months or longer to settle this estate and heirs would wait. But heirs named beneficiaries in the beneficiary designations for the decedent’s retirement account or were beneficiaries of brokerage and bank accounts would receive distributions directly from the custodians of the monies ~ without probate involvement.

Transfer of monies through beneficiary designation avoids probate. Importantly, these designations can authorize direct payment of our largest assets, including bank accounts and retirement account. So, it is critically important to keep your beneficiary designations up to date and correctly naming those heirs of your choice. There are many life circumstances that might necessitate a change of a beneficiary designation:

Divorce
Remarriage
Death of Spouse
Death of a Beneficiary
Change of mind
Desire to gift to charity
Birth of children

Any estate planning that you undertake needs a thorough review of your beneficiary designations and your rights and those of your heirs regarding these forms. Let us know how we can help you plan your estate to transfer your treasures and property to your chosen heirs!

Estate Planning During and After Divorce: Essential Financial and Legal Factors to Consider

Wed, 10 Jul 2024 16:08:14 GMT

Part One: Immediate Needs

There is a great deal of intersection between family and estate planning law. A dissolution of a marriage changes so many areas of life and clearly requires one to protect their financial and legal status now and into the future, especially if you plan to remarry. This blog will consider some of the ways you can protect yourself during and post-divorce during this life-changing transition. As attorneys, we are definitely aware of the degree of uncertainty our clients experience. Our best advice is to gain back some of that control you may feel you have lost through divorce by understanding and being informed of your financial and legal options. The reality is that life will go on and your circumstances and those of your family need attention and care.

So . . . You are divorced or you will be divorced. Everything old is new now and your life is definitely like it was 6 months ago. Maybe it’s better, maybe it’s worse or maybe . . . it is just new and strange. If you have children, your first and foremost priority is taking care of them and making sure that they are OK and healthy, mentally and physically. Your life has changed, but so has theirs and you want to be there for them in the best way you can.

You may have moved or your spouse may have moved out. At any rate, your home is different now. During your divorce, you had to account for all of your joint possessions and divide them up as per what you agreed to or what the Court and your attorneys helped you decide. Your belongings are just yours now and maybe you’ve had to sell some property and split up the equity or you had to open a bank account in just your name. From here on, your credit will be your own and any property or things you buy will not be jointly owned, but just owned solely by you.

You may have split up ownership of a home and you may no longer own the same property you did when you were married, or it could now just be titled in your name alone. Or maybe you are now renting. Your furniture has likely been divided up and your kids now have a custody or visitation plan you and your ex need to follow. Your income and cost of living will definitely be different. Your decisions will now be solo ~ personal, financial, and legal.

Here are some good ideas in general to help you with this transition to a single person and begin planning for your future.

Consider having a cooling-off period where no major financial decisions are made . Although divorce requires many life changes, it may often be advisable to hold off on making any major financial decisions. This gives you time to plan for your future and not rush into decisions based on emotions. Maybe don’t buy a new home quite yet, or use cash to buy big ticket items right away. Sit on these plans and make these decisions when you are fully aware of your financial needs and wants.
Don't be afraid to seek expert help . The financial challenges associated with divorce may be a significant cause of anxiety for many divorcing folks. With all the emotional aspects of divorce, it may be essential to get advice from a neutral financial expert to ensure that you are set up for success. Consider asking your attorney for a referral to financial advisor who specializes in divorce and take full advantage of such expertise. Make sure you and your children have health insurance fully covered and understood and if needed seek out an expert in this area as well. Our firm has trusted relationships with people in these areas and we are happy to provide referral options to our clients.
Understand your lifestyle changes can impact your finances . Many couples have found that it is difficult to live on two paychecks, and with a divorce, each one will now be living on a single paycheck, with some duplicated living expenses (two mortgages or rent payments, two telephone bills, etc.) Returning to the workforce may require day care expenses for the children, lunches out, additional car expenses, gas and car maintenance, and maybe purchase of additional work clothes. Consider monitoring your cash flow situation monthly for a while to determine if and how it has changed, and if you need to adjust your spending habits.
And above all, don’t forget about your health and mental care ! Find trusted friends, family and experts to help you have a strong support system in this hugely important transition area. As important as taking a cooling time period before making any big financial changes, be sure to take all the time necessary and often, to assess and evaluate yours and your family’s health and mental wellness before making any lifestyle, living, career changes. Be good to yourself!

Here are some additional financial matters that will require your immediate attention:

Settlement Funds and Retirement Accounts

Perhaps you received a divorce settlement from the marital estate ~ for example, you may have split retirement accounts, proceeds from the sale of the house, or other marital assets were divided. Maybe you have a large chunk of money and need advice on how to invest it. Financial and tax counseling can help limit the risks of divorce and help you make sound decisions on how to invest your settlement.

Retirement accounts in particular represent an additional “bonus” as split marital assets, because of the tax deferral benefit they allow. These are very valuable assets and because of the tax implications, require special care. In some circumstances, the IRS may allow distributions from certain types of retirement accounts that are free from the 10% penalty for early withdrawal, if accessed in the correct time period. Income tax is still required to be paid, so if you have to make such withdrawals, be certain to set aside additional funds to pay taxes. It may also be advantageous to roll over a marital-settlement retirement account to another account in your name. Again, it is important to consult your financial adviser and tax professional for advice and assistance on these essential retirement issues.

Establish a Financial Plan

So, if estate planning is a blueprint for when you pass away, financial and retirement planning is the blueprint for your life. Just like a personal trainer, a good financial planner will keep you on track. Start this planning as soon as possible.

Change past relationships

If your financial matters are still in the hands of your former partner’s financial service provider, consider making a switch. It’s good to get a fresh start, not only for yourself personally, but for your finances as well.

Pay attention to your debt and your credit score :
Consider Automatic Payments: Auto financing, credit cards, and other large monthly payments will stay on track with direct debit from an appropriate bank account. This will go a long way to preserving credit and not missing a payment that could cost a quick 20% or more in finance charges.

Check Your Credit: You probably did this during your divorce case, but confirm that all jointly held credit cards are paid off. Write a letter to those companies disclosing the divorce. You might be tempted to simply close all former accounts and start afresh. Don’t. Closing accounts will actually lower your FICO score as this reduces your available credit capacity. Your credit score needs to stay as strong as you can get it to be. Protect your credit score like you would a treasured heirloom. Your credit score should be valued as part of your financial portfolio! It will certainly dictate the interest rates you are qualified for on credit cards and mortgage loans and it can also aid you in securing lower premiums for car and home insurance.

Refinance: If you are moving out of the marital home, insist that your former spouse refinance in his or her name. Make that condition a part of the settlement. Get your ex-spouse off of any joint debt if possible and part of your settlement agreement.

Stay Alert: Follow up on agreements made in the divorce settlement. If your former spouse is supposed to be paying a debt that your name is still associated with, make sure they are paying that debt. Even though your divorce decree says they are responsible, the creditors do not honor that document.

So much to consider! In Part Two of this Blog, we’ll continue discussing additional financial and legal steps you can take to gain back the control lost during divorce. And as always, Blackwell Law, PLLC is ready to help you with this transition time and provide you with the services you need to be in charge of your life!

Confessions of a Lawyer

Wed, 10 Jul 2024 16:01:43 GMT

3 things I didn't know!

You may or may not know the old Spanish proverb that translates roughly to the saying 'the cobbler's children have no shoes'... meaning that someone with a specific skill is often so busy assisting others that their own affairs go unattended.

Integrity has always been important to me, and I wanted to experience the process of drafting my own estate plan before helping others - I am SO glad I did.

Reflecting back on the experience, here are 3 things that I am beyond thankful to know now:

I needed to list my assets and debts all in one place – it is so much easier than having them scattered and unconnected to each other. I want my life’s financial accomplishments to easily transfer to my son when I am gone – now I know I have it all in place so that will happen.
Dealing and thinking about your own death is hard! But thinking about how my family would be lost if they didn’t know what I want, is equally upsetting. I want my adult son to understand what and how he’ll inherit. I want him to know that by putting together my thoughts and plans into a plan it is an act of love I can give to him. I DO NOT want him to have to spend any money, or worry, or feel guilty for one minute!
I didn’t know how good it feels to accomplish this life task! It is a weight off my shoulders!

If this was helpful for even one person, it was worth the time taken to write it!

Let me know your thoughts.

Planning for Your Digital Legacy

Wed, 10 Jul 2024 15:59:04 GMT

An estate plan often focuses on tangible property such as jewelry, artwork, money, and vehicles. However, in this age of technology, it is important to remember to include your digital assets. Digital assets consist of everything we own online. Because we spend more time on computers and smartphones than we ever did before, you may not realize how much digital stuff you own, from photos and videos to online accounts, cryptocurrency, and nonfungible tokens (NFTs).

Why Is It Important to Plan for Digital Assets

Planning for digital assets is important for several reasons. First, without a plan, digital assets may get lost in the Internet ether and not pass to your loved ones after your death due to the simple fact that their existence is unknown. Second, planning now means your family will not have to worry about hunting for these items upon your death while also grieving a beloved family member. Third, like most adults ( roughly 70 percent of us), you want certain aspects of your digital life to remain private. If you do not create a plan, your loved ones may learn things that you wish to keep secret. Finally, planning now can minimize the risk of identity theft, which happens to 2.4 million deceased Americans each year. Keep reading to learn more about why it is important to include digital assets in your estate plan and how to account for them.

Digital Assets: What Are They?

Instead of existing in photo albums and on videotapes and DVDs, most of our family photos and videos are now digital. Even if they lack commercial value, they certainly have sentimental value that you want to preserve for your family and friends. Social media accounts containing your photos and videos can also have value to your loved ones when you are gone. For example, a Facebook account can serve as a memorial after you pass away. When you consider all of the other accounts that you log into ( more than 130 on average), the list becomes quite lengthy.

Digital assets that you may own include the following:

Social media accounts (e.g., Facebook, Twitter, LinkedIn)
Financial accounts at brick-and-mortar and online institutions
Business documents and other files stored in the cloud
Cryptocurrency
NFTs
Databases
Device backups
Internet domain names and uniform resource locators (URLs)
Streaming service accounts (e.g., Netflix, Peacock, Hulu)
Merchant accounts (e.g., Amazon, Etsy, eBay)
Gaming tokens
Virtual avatars
Points-based loyalty programs (e.g., for groceries, gas stations, airlines, and hotels)
Rights to intellectual property, artwork, and literature
Online betting accounts
Monetized video content

Including Digital Assets in Your Estate Plan

Taking inventory of your digital assets may take some time, but it is worthwhile. If something were to happen to you, your estate planning attorney or another trusted person should have complete access to your online footprint. This includes usernames and passwords for all accounts. Tools such as Dashlane ( https://www.dashlane.com/features ) or the password manager integrated in your browser can be used to simplify the storage of usernames and passwords.

In addition, you should continuously back up all digital assets, including photos and important documents, to the cloud, and ensure that your attorney and trusted person can easily access them when the time comes.

Because they are not controlled by governments or banks, cybercurrency and NFTs must be handled carefully. You do not have the option of calling customer service to reset your password if you forget or lose it. NFT and cryptocurrency passwords should be stored online in a “hot wallet,” or in an offline device known as a “cold wallet.” Either way, someone needs to know how to access your passwords when you cannot.

Other estate planning considerations for digital assets include the following:

Your estate plan can provide that your digital possessions be handled by one or more cyber successors who can distribute your digital assets like tangible property.
One cyber successor can control your Instagram account, for example, while another can take possession of your Bitcoin.
Keep in mind that passwords should not be memorialized in your will, especially regarding cryptocurrency, as they could be made public if the will is submitted to probate court.
Consider how technologically savvy a person is before appointing that person as your cyber successor.

Next Steps for Your Digital Assets

Talk to your estate planning attorney about your digital assets and cyber successors. Have a conversation with potential cyber successors about how they would handle your assets, and make sure that they would carry out your wishes before appointing them. Digital assets can be placed into a trust or distributed through your will, or you could grant access to them through a power of attorney. With the help of an experienced estate planning attorney, you can feel relieved that your digital assets will be easily located, managed, and passed to your loved ones.

Let us know if we can be of help!

*Courtesy of WealthCounsel, LLC

Why Hire an Estate Planning Attorney

Wed, 10 Jul 2024 15:41:27 GMT

Estate Planning attorneys are often asked by prospective clients why they should be hired and what can they provide to the client that an online will creating service cannot. The answer is: A LOT! Could we also be so bold as to say: You get what you pay for!

If you’ve ever gone onto Legal Zoom or Nolo, you see an easy, fill in the blanks form for you to complete. There are drop downs and choices to engage with an associated state-appropriate attorney for a moderate fee. A nice and professional document can be printed out. It all appears quite easy and importantly, quick. It’s hard not to see any downside, right? And honestly, for many people, an online do-it-yourself (DIY) will is certainly better than having no written instructions in place. But in our experience, it’s the simplicity and speed that can indeed prove troubling, and unfortunately, potential expensive down the line when your heirs and family must administer this document.

We’ve looked at these services and provide some context:

Pros and Cons of DIY estate planning

A big advantage of using a DIY service is that you will have a quick and cheap plan, and, as we mentioned above, that may be better than having no plan at all. For the basic cost, you will receive a will, a power of attorney and an advance health care directive. Those documents will be important for folks who want to designate someone to handle emergencies if something unfortunate were to happen. This option works well for people who don’t own real estate or much else. If you just want to name a guardian for your minor child, a DIY service can do that easily.

But in our estimation, these online services presume that you already know what you want and additionally, you understand how these documents will work in your favor. But the reality is that many people have no idea what they want or need, nor do they know what questions need to be asked and answered. For example:

How is your property (real estate, securities, bank accounts, vehicles, annuities, artwork, antiques, family heirlooms, collections, IRAs and 401ks for example), owned and how can it be transferred to an heir?
Do you own retirement accounts?
Do you own property outside of the state?
Are your family dynamics complex; do you want to make sure your heirs don’t squander their inheritance? Do you foresee family/sibling/children problems when your distribution plans are announced? Do you have children in difficult marriages? Do you have a blended family? Do you want to intentionally disinherit a family member? Do you have a family member who has special needs? Have you divorced?
Are you fully aware of the tax consequences when your property is distributed? Is your estate large enough to be taxed?
Do you have a family-owned, closely held business?
Do you have the right people in place to be your personal representative or power of attorney agent?

Once you get into the complexities of family dynamics and perhaps trust language specific to your state and situation, DIY estate planning can cause more disputes than working with a team of professionals like the attorneys at The Harris Law Firm.

A Note Of Caution For Using DIY Online Wills

In our experience, the DIY option cannot and will not be able to help you plan with the above questions in mind and with these, and more, questioned answered as pertaining to YOUR personal situation. It is a truisms that we don’t know what we don’t know. You know some things about how you want to dispose of your assets after you die. What you may not know is all the case law and legislation that have evolved into your state’s probate code.

If you do decide to look for an attorney who specializes in estate planning, we hope you will consider Blackwell Law, PLLC. We are confident that we can help you better prepare your estate plan than an online service can. You may already have other trusted professionals with whom you work (CPA, Financial Planner, etc.) with whom we can work so that your ‘team’ can better support you and your family’s needs.

However you choose to get your plan completed, DIY or with the help of an experienced attorney, we hope that you will get your estate plan done, and soon. You never know what surprises life will bring. One thing we can promise is that you’ll have peace of mind once you have a plan in place.

Incapacity Planning

Wed, 10 Jul 2024 15:32:40 GMT

As important as estate planning

An extremely important element to any estate plan is creating an ancillary, or supplemental, plan to take care of your affairs if you became incapacitated. Every adult should have a written plan to let your loved ones know what you want if something were to happen and you could not make decisions about your finances or your health care. We call these written instruction Advance Directives, and every Blackwell Law estate plan includes them.

Advance Directives are comprised of a durable financial power of attorney, a durable medical power of attorney, and a living will, sometimes known as a do not resuscitate order. The powers of attorney are ‘durable’ which means that they become effective when you are deemed incapacitated, and they cease if and when you are no longer incapacitated. Most of our clients choose to include a clause in their powers of attorney that require two physicians to determine incapacity, and some require a panel of physicians to make this determination. These choices are yours to make and the reason why it is important to put your decisions in writing.

In the first two documents, you will appoint an ‘agent’ to manage your affairs or health decisions. A financial power of attorney allows you to appoint your ‘attorney in fact’; someone who stands in for you on as many financial rights and powers as you provide in writing for them to assume. If you become incapacitated, this attorney in fact can act on your behalf in a wide range of business affairs including banking and real estate matters, continuing most of the operations of your self-owned business, paying your bills, including your mortgage, and more. Your attorney in fact has the power to keep your finances and obligations in order when you cannot.

In the case of the medical power of attorney, your agent is the person you appoint to make decisions about your medical care if you become unable to make those decisions yourself. Your health care agent may be a family member or a close friend who you trust to make serious decisions. The person you name as your health care agent should clearly understand your wishes and be willing to accept the responsibility of making medical decisions for you. In either the financial or health care power of attorney, you can appoint a second and third person as your alternate health care agent(s). The alternate(s) will step in if the first person you name as the agent is unable, unwilling, or unavailable to act for you.

We all know stories of people who were injured or became ill and thus were unable to communicate to their family how to pay their bills or worse, what steps they want their doctors to take if they cannot recover. Sometimes, without these written orders, your friends or family must either make these difficult decisions, or petition a court of law to appoint a guardian and conservator who will make these decisions on your behalf. Or perhaps even worse, your family members could fight over who makes these decisions, thus costing time, money and disharmony.

Having all these wishes expressed in writing will provide peace of mind to you and your loved ones. These directives can offer an effective resolution to family disputes and anxiety. We can help you craft your own Advance Directives that meet your needs and those of your family and other loved ones.

Welcome To Our Blog

Tue, 28 May 2024 20:15:20 GMT

Welcome to the official blog of Blackwell Law PLLC , where we aim to provide you with valuable information on various legal topics. Whether you are looking to understand recent changes in the law, need insights on how to plan your own estate or how to protect your assets for your family, we want to be a resource for you. Our goal is to create a resource that is both informative and accessible, offering content that can assist you in navigating the complexities of the legal landscape.

Our Purpose

The purpose of this blog is to keep our clients and the general public informed about relevant legal issues, trends, and updates. We will cover a wide range of topics, including but not limited to:

Updates on new laws and regulations
Practical tips for dealing with legal matters
Insights into various areas of law such as family, criminal, corporate, and real estate
Summaries of important court decisions
General advice on protecting your rights and interests

Our experienced attorneys will contribute their knowledge and expertise to ensure the information we provide is both accurate and practical. We hope this blog becomes a go-to resource for anyone seeking to broaden their understanding of the law.

Important Disclaimer

While we strive to provide helpful and accurate information, it is important to note that nothing on this blog should be construed as legal advice. The content provided here is for informational purposes only and is not a substitute for professional legal counsel.

If you have specific legal questions or need assistance with a particular issue, we strongly recommend that you consult with a qualified legal representative or lawyer immediately. Each legal situation is unique, and professional guidance is crucial to address your individual needs and circumstances effectively.

Thank you for visiting our blog. We are committed to offering content that helps you stay informed and empowered. If you have any suggestions for topics you'd like us to cover or questions about the information provided, please feel free to reach out.

Stay informed, stay protected, and remember, we are here to help you navigate the legal world with confidence.

Sincerely,

The Team at Blackwell Law PLLC