Thursday, November 13, 2014

Avoid Accidentally Cutting Someone out of your Will -- Ademption and Abatement Explained

Some wills lump together all property in the estate, and simply divide it amongst the beneficiaries.  An example would be a clause in a will saying, "I give all my property, real and personal, to my two children, to be divided in equal shares, per stripes."  In contrast, other wills break out specific pieces of property, which is known as making specific devises.  For example, "I give my 2014 Ford Fusion to my son, John; I give my house at 123 Main St, Naperville, IL, to my daughter, Erica."  However, making specific devises carries risks, especially to those who do not frequently review their estate plans:

Wednesday, November 12, 2014

Controversial Estate Plans: Can you Legally Encourage Divorce? Disinherit a Spouse? Make Religious Restrictions?

"Testamentary freedom" is a terms lawyers use to describe a person's freedom to dispose of his or her own property at death.  While American law generally supports the idea of testamentary freedom, this power is not limitless.  In this article, I will discuss controversial estate planning provisions, such as provisions that disinherit spouses, encourage divorce, or make religious restrictions.

Monday, November 10, 2014

Estate Planning Advice for Military Members and Veterans

If you are currently serving in the Armed Forces or are a dependent or retiree, you are entitled to free legal assistance services at an installation legal office.  In my seven years as a JAG, I saw hundreds of legal assistance clients from all over the country.  By far my most most common legal assistance service was estate planning, especially for airmen deploying to a combat zone.

JAGs must be licensed to practice law in at least one US jurisdiction (Illinois in my case).  In the civilian world, only an attorney licensed in your state can give you legal advice.  However, a special law, 10 USC 1044, allows JAGs to provide worldwide legal assistance, and mandates that states give full effect to the wills, healthcare directives, powers of attorney, and notary services we provide.

Most of my military estate plans were for couples, and I would commonly provide eight to ten documents at the end of an appointment -- everything from wills to trusts to community property arrangements, durable powers of attorney, living wills, and advance funeral directives.  JAGs are happy to provide these services at no charge, saving our fellow military members thousands of dollars in legal fees.

Additionally, note that JAGs may be intimately familiar with common military estate planning issues, like owning property in multiple states, having domicile outside one's state of residence, and having one's family spread in jurisdictions across the country or the world.  JAGs also commonly insert clauses in estate planning documents designed to express military members' wishes regarding burial in VA cemeteries, burial with full military honors, etc.

One note of caution:  I have observed over the years that deploying military members may be quick to request a general power of attorney from the legal office.  A general power of attorney grants the appointee the legal power to make transactions on behalf of the grantor.  If the document is drafted to be "durable," it continues to remain in effect even if the grantor becomes incapacitated due to a combat injury or other medical condition.  I understand people's reasoning for wanting these documents:  Once a military member deploys half way across the world, the last thing he or she wants to be worrying about is taking care of day-to-day financial issues back home.

However, be aware that a general power of attorney can be used to empty a bank account, sign up for new accounts, sell a car, etc.  Giving this kind of power to the wrong person can destroy your finances, your career, and worse.  A JAG may be able to direct you to more appropriate tools to accomplish your objectives, like a narrowly-tailored special power of attorney (or no power of attorney at all).

Finally, note that you are not limited to legal assistance services from just your branch.  During my years of service, I helped Airmen, Soldiers, Sailors, Marines, dependents, and veterans alike.  A JAG from your nearest legal office can assist you with your estate plan.

Some useful links are below:
Air Force Legal Assistance
Army Legal Assistance
Navy-Marine Corps Legal Services
Coast Guard Legal Assistance
American Bar Association Pro Bono Resources for Veterans

Published by Ian Holzhauer, Esq. of Nagle Obarski PC in Naperville, IL.  

Note:  The information above is not legal advice and is not the basis of an attorney-client relationship.  If you need assistance, you can hire an attorney to assist you with your individual legal needs. 

Thursday, November 6, 2014

Prepare for your Attorney Meeting

My wife and I will be seeing an attorney tomorrow to update our estate plan.  In theory we could prepare the plan ourselves, but there is an old adage that, "an attorney who represents him/herself has a fool for a client."  Knowing this, we value the outside perspective of a different estate planner taking a fresh look at our situation.

I thought this would be a good time to cover my next blog topic:  How to prepare for your first meeting with your estate planning attorney.  Some basic tips follow:

Monday, November 3, 2014

Probate Avoidance Topic #5: Life Insurance

Courtesy of NARA
This is topic #5 in this series on strategies to avoid the court-supervised probate process.  Previously in this series, I have provided an overview of the probate process, discussed how to avoid probate by using a living trust, explained how to use joint ownership and death beneficiaries, and most recently discussed lifetime giving as a probate-avoidance strategy.

Today's post will describe life insurance, one of the oldest, most flexible, and widely-used estate planning tools.  Unfortunately, many internet resources discussing life insurance and estate planning have a laser-like focus on one topic:  Using an irrevocable life insurance trust to avoid federal estate tax.  However, federal estate tax only applies to estates above $5.34 million this year ($10.68 million per couple).  For many families  below this threshold, these internet resources may be confusing and irrelevant.  This post explains some of the more fundamental aspects of life insurance as an estate planning tool: