Varian Law LLC

Keep Estate Planning Documents Safe, but Reachable

Documents created in an estate plan, such as a Will, an Advance Directive, a Durable Power of Attorney, etc., all need to be kept in a safe fireproof place. However, it might also be a good idea to have them easily accessible, according to the Bradenton Herald in “Here’s an easy way to keep your important papers with you at all times.”

One man who looked at all the documents that he and his wife had signed at their estate planning attorney’s office scanned the documents onto a flash drive. Note that there were no Social Security numbers, no bank account numbers or any sensitive information on the documents. The man took the flash drive, put a ring loop on it and attached it to his key ring.  However, what happened next proved the wisdom of his idea.

A few weeks later, he and his wife were enjoying their vacation, and his wife needed a visit to the emergency room at the local hospital. While in the admissions office, she was asked if she had a living will and other health care related documents. Her husband had everything with him. They had to locate a computer that was not on the hospital network, due to internal security policies, but they found one and were able to download the documents from the flash drive.

Remember that not all States recognize documents from all other States, and if you lose your keys on a regular basis, this idea may not be for you. However, having these documents on hand was far better than not in the situation presented.

Everyone, regardless of their age, should have their estate planning documents in order. Bad things happen even to young people. Most people leave their estate planning documents in a safe deposit box, a filing cabinet or with their attorney. While that is a secure approach, they do not have easy access to them.  The flash drive idea is just one way to have these documents with you while you are away from home.

Other pieces of information to consider adding to your flash drive: recent medical reports, a list of prescriptions, a list of doctors and any pre-paid funeral arrangements.

An experienced estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: Bradenton Herald (Nov. 12, 2018) “Here’s an easy way to keep your important papers with you at all times”

What Does It Take to Have a Happy Retirement?

Strong finances and a full social life can often be the keys to success.

There can be happy retirements and there can be challenging, and perhaps even unhappy, retirements. However, the state of those years is often created long before retirement age arrives, according to U.S. News & World Report in “Retired and Loving It? The Differences Between Happy and Unhappy Retirees.”

Here are some reasons to be cheerful ... or not:

Debt freedom or debt burden? Retirees with no or little debt do not worry about money as much as those who have debt. Paying off a mortgage is the biggest burden to retirement. That is a big amount to cover when you are not working. A big credit card bill and high interest rates can make matters worse.

Knowing what you spend. Knowing how bills will be paid in retirement starts with tracking and monitoring how bills are paid before you retire. Having a budgeting system, regardless of how you do it, will give you the information you need to know how much income will be needed each month or each quarter to pay bills. It can be as simple as a notepad or as complex as an accountant-level system, but this knowledge is really powerful.

Both spouses up to speed on money. It is not enough for one person to know how everything works. Both need to understand their financial status and communicate their concerns and wishes. Eventually, the harsh reality is that one or the other will die, leaving the other to either struggle to catch up or be ready to take the reins.

Multiple sources of income. The most content retirees have saved well and wisely. They have income from a few different sources. You do not want all your income to come from a tax-deferred retirement plan because you will be paying taxes on that income. For many, converting an IRA to a Roth makes sense (so that their withdrawals are not taxed).

It is not all about money. Having an active social life, pursuing interests, and enjoying day to day activities is key to enjoying retirement. Sometimes that comes about when people move from their single-family home into an active community, where there are full schedules and facilities that promote a variety of interests. An active network, especially one that is purpose driven, elevates the spirit and provides a strong connection to the community.

Reference: U.S. News & World Report (Nov. 9, 2018) “Retired and Loving It? The Differences Between Happy and Unhappy Retirees”

Parents Should Discuss Aging Issues With Their Adult Children

Some issues are not easy to approach for discussion. However, they are necessary.

With the holidays upon us, it is perhaps a good time to have a conversation with your parents about long-term care and other aging issues, according to News3LV in “Tough talks over turkey: Is it time to have “The Talk” with your parents?”

It is not easy to approach this topic, especially if you have a parent who is not open to discussing the harsh realities of aging. Even if you try your very best to be sensitive, they may still bristle. They may feel like they are too young to be spoken to about these issues, or worry that they will be considered a burden to your family, or that you simply want to get them out of the way.

Here are some tips for these conversations:

Do not wait. It is easier not to have the conversations at all. However, then when an emergency strikes, the family is faced with a series of decisions and missing paperwork. Explore options before a crisis. Let your loved ones get comfortable with the concept of talking about these difficult issues.

It is important to get up to speed with your parent’s health care benefits and their wishes. Do they have the right health care plan in place? Talk with them about the Medicare Advantage plans that are available to help them stay independent longer.

Be sensitive. Let them know clearly that, at some point during their visit, you want to discuss their future. Give that thought time to sink in. You do not want them to get defensive. Remember that talking about aging and death (or “end-of-life”) is difficult for everyone. Decide which topics to dig into and which you can leave for another time.

Be prepared and be specific. What topics do you want to cover and what are the most important ones to discuss first?

Long-term care wishes: do they want to try to live at home? If that is not possible, what would they like? Do they have the ability to pay for an in-home caregiver or would they be better off in an assisted living facility? Could they live with any family members?

End of life decisions: is a living will in place? Do they have a durable power of attorney? Have they thought about what they would like if they are no longer able to communicate their wishes?

Medical coverage: what kind of long-term care insurance do they have, if any?

Listen. Really listen. Hear what they are saying. Listen to their fears and their wishes. Speak in a loving manner and be patient. Let them know you will do the best you can to honor their wishes.

Take a break. If at first the conversation is halting, and they are visibly uncomfortable, it may not be the right day for them. Or, they are not yet able to share their thoughts with you.

Reference: News3LV (Nov. 12, 2018) “Tough talks over turkey: Is it time to have “The Talk” with your parents?”

Entertainment World often Looks at Retirement

Even though it is an unlikely source of planning for retirement, the movie industry often leads to the thought process about the later years of life, according to USA Today in “Hollywood can inspire you to save more in your 401(k) for retirement.”

If you remember Jack Colton, the male lead in 1984’s “Romancing the Stone,” then you know about a guy who spent his whole life dreaming of owning a sailboat, even while he was hiding from a foreign army and getting involved in a crazy criminal treasure hunt. Retirement savers need to find their own inner dream, one they cannot be distracted from and that will keep them focused on saving and investment, no matter what. Imagine your future self-doing what you love doing.

Then there is “The Bucket List,” with Carter and Edward, who are ready to have an adventure, when their diagnoses are terminal. If you have got some thoughts about a bucket list floating around, make them real. Write them down. Then put them in order of priority. Visualize what you will need to do to get there. Building your connection with your dreams will keep you motivated.

An example of keeping your eyes on the prize comes from Netflix, with “Fuller House.” This is a great example of how mapping goals can clinch a retirement strategy. Sitcom dad Danny Tanner gives his San Francisco home to his daughter. He is not retiring, but he planned for years to live where he wanted, while giving his daughter and her family his home. Know where you want to live in retirement and keep that in sharp focus.

“Everybody Loves Raymond” features Ray and his family and his parents. They live close together, so much so that they are involved in every detail of each other’s lives. Or, for a completely different lifestyle, remember the 2012 comedy “Quartet,” directed by Dustin Hoffman? This was about a retirement community for stage performers who sought to create a new community among their fellow actors.

Figuring out who you want to spend your retirement years with can have a major impact on where you will live. Do you want to be close by your family, involved with their daily lives, available for babysitting, family dinners, and the grandchildren’s soccer games? Or would you rather pursue your own interests and enjoy a warm climate?

Reference: USA Today (Nov. 11, 2018) “Hollywood can inspire you to save more in your 401(k) for retirement”

Are Only One of You Involved in the Finances? ... If So, Time To Make A Change!

There can be a high cost to the surviving member of a couple if the member who passed away was the person who handled all of the household finances, according to The Wall Street Journal in “When One Spouses Handles Finances.”

The cost of not knowing where the money is, how investments are structured, the state of your retirement savings, or the daily details of how bills get paid can be quite high when one spouse is unexpectedly put in charge.

Spouses are both urged to take active roles in the family’s investments and to be certain they are comfortable with the family’s advisors.  If they both are not comfortable with the professionals handling their money and legal matters, it may be time for a change. If the change is made after a spouse dies, it should be seen as a move towards independence, and not a betrayal of the spouse’s legacy.

Studies conducted by financial service companies have found that despite gains in education and, to some extent, compensation, women still let their spouses handle financial decisions. Even millennial women, those born between 1980-1996 (roughly sixty percent) leave those investment decisions to their husbands.  However, women are controlling more wealth and are more likely to divorce or outlive their husbands than at any other time in history, so taking the financial reins is very important.

Financial advisors are trying to bridge the gender gap. Some encourage spouses to create lesson plans, exploring one topic per session and then go to dinner afterwards (without the kids) to discuss Wills, insurance and investment basics, or whatever the topic of the week was.  Others hold quarterly meetings.

It can be frustrating for one spouse to deal with a non-involved spouse who either does not want to learn or has trouble grasping some of the concepts. In that case, getting a non-related person involved might be a good tactic. Set up meetings with your Estate Planning attorney, financial advisor, and CPA that are geared to reviewing your family’s assets and Estate Plan with the focus on bringing the non-involved spouse up to speed.

Reference: The Wall Street Journal (Oct. 22, 2018) “When One Spouses Handles Finances”

Myths and Facts about Retirement Communities

As your retirement approaches, many people decide between remaining in their home of many years, downsizing to a smaller residence or moving to a retirement community.  However, many myths about retirement communities exist that need to be researched, according to Next Avenue in “Retirement Living Myths and Must-Know Facts.”

Myth: Few people can afford to live in a retirement community. Well, they would not be so popular if that were true. When you total up a mortgage with taxes, utilities, upkeep, and what you may be paying for fitness and hobbies, that one payment would be covered when you move into a retirement community.

While there are monthly costs to a retirement community, many expenses are included and many other expenses—like paying someone to shovel snow, maintain lawns and gardens, fences and sprinkler systems—are gone. Not to mention the opportunities to meet new people and jump into hobbies and activities.

Myth: Retirement living is for sick people. Nursing homes and rehab centers are for sick people. If you move to a continuing care community, those services will be available to you if and when you need them. However, an active adult community is designed to suit the needs of active, mobile people. There are sports-oriented communities, with golf, tennis, fitness centers, and swimming pools. Others have performing arts spaces, art studios, and classrooms.

Myth: Staying at home is good to retain close ties with your existing friends. Sadly, social networks dissolve, as people move away to live closer to their children, need to go to a nursing facility or die. Those who are left behind are more likely to become isolated and that can lead to depression. Making the transition to an active community leads to more connections and that leads to a better quality of life.

Myth: You will never see a young face again. There are always ways to engage with members of different age groups outside of your home. Some communities even have formal mentoring or volunteering programs.

Fact: Travelling is easier when you live in a “lock it and leave” setting. There is no worrying about mail, the lawn, or security. Common areas are maintained, and someone keeping an eye on your property.

Fact: You will meet many people in their mid-60s. That is the most common age in active communities. They are social people seeking a carefree and active lifestyle.

Fact: You are still in charge. Depending on the community, you can keep your car and your beloved pet. You can have the children for overnights. You own your own home, and you own your independence.

Reference: Next Avenue (Nov. 5, 2018) “Retirement Living Myths and Must-Know Facts”

Are You An Adult? Then You Should Have a Will

Only 60% of adults in America have a Will.  To me, that is an astonishing figure.  What are the other 40% waiting for?

If you have a collection of tangible personal property, a house, a savings account, an amazing wine cellar or a handful of expensive watches and no Will, then the State law will decide who will receive all of your property, and it will not matter what you wanted.  Moreover, after you pass away, not having a Will is more costly than having one.

If you have minor children and no Will, then the Court will select a guardian for your children regardless of your preferences.  Moreover, if you have a child with special needs and no Will, then your inheritance would likely cause them to lose valuable governmental benefits, such as Medicaid.

Everyone should have a Will.  However, you also should have a Power of Attorney and an Advance Directive, and you may need some form of Trust as well.   There are many different estate planning tools available to protect you, to protect your family, and to transfer your assets efficiently down the generations.  

Once your Estate Plan is created, you should also tidy up the details, such as funding Trusts, retitling assets, modifying your beneficiary forms, etc.

An experienced Estate Planning attorney can assist you with creating and implementing your Estate Plan, which should be based on your specific circumstances.

Reference: Robb Report (Nov. 10, 2018) “Rest in Wealth: The Ins and Outs of Estate Planning”

Yes, Even Millennials Need An Estate Plan

It does not matter which generation you belong to when it comes to Estate Planning.  If you pass away without an Estate Plan, it is likely that the people you love will face many trying days of tough decisions and trying to straighten out your Estate, according to the Chicago Tribune in “Family Finances: Even millennials need an Estate Plan.”

A Will details how you want assets distributed after death and appoints a personal representative to collect and distribute those assets.  Without a Will you are dying “intestate” and the State will decide how to distribute your property.  However, if you have a Will, the entire process becomes much easier and in accordance with your own desires.

There are two other documents that are even more important than a Will for a single healthy millennial. The first is a Power of Attorney. Through this legal document you appoint the person who is empowered to make decisions about financial matters on your behalf if you cannot.  It is for when you are incapacitated, by illness or injury, and also if you are unavailable for other reasons, like if you are travelling.

The second document is called an Advance Medical Directive. This document defines your end-of-life wishes about medical treatment. The person you name will be able to carry out medical decisions on your behalf.  If you do not designate a health care agent and fall into a persistent vegetative state, you will probably be kept alive artificially by default. This may not be what you wanted, but if no one has the legal document telling them what you wanted, then this is what happens.

What happens to your digital assets when you die? Facebook now has a default where it memorializes your account, and you can appoint a legacy contact or direct Facebook to delete the account, if that is your preference. Google now lets you choose up to ten trusted contacts who can download data from your Gmail, photos and more, if you become inactive for a certain period of time. Most States have now enacted laws that govern how an Executor can access your digital assets, but you still have to tell the platforms, one at a time, what your wishes are.

Cryptocurrencies, like Bitcoin, are another aspect of millennial life that have to be addressed in advance if you do not want them to disappear completely when you die.

Estate Planning documents are governed by State law, so it would be a good idea to meet with an Estate Planning attorney to advise you in creating an Estate Plan that fits your unique circumstances.

Resource: Chicago Tribune (Oct. 9, 2018 “Family Finances: Even millennials need an Estate Plan”

Business Owners Need to Plan for Their Future and Their Families

What would you like to happen with your business?

If you are a business owner, you have worked long and hard to be successful. However, there comes a time when you look toward the future and decide what you would like to happen, according to Northern Nevada Business in “Protect your business through estate, succession planning.”

The continuity of any business when the owner leaves the business because it is sold or because of death must be dealt with so that the owner, family members and business partners have a plan in place.

An estate plan with a business succession plan helps a smooth transition occur if the owner should die unexpectedly. Even a basic plan that authorizes a partner or key employee to continue operating the business on a temporary basis will serve to protect the value of the business and the good will of its customers.

It is not easy to decide who the successor will be, but it is one of the big decisions that must be made. If you simply name a spouse or a child who is not ready to take the helm, you could doom the business. If the family is involved with the business, you will need to give clear directions as to who will be responsible for what tasks.

If you have got adult children who have never worked in the business at all, and worse, never worked in the business together, you could be looking at the end of the business. Consider a plan where family members become “silent owners,” and key employees are given more authority. You will need to work with an estate planning attorney who has helped clients successfully accomplish this so that family strife does not spill over into the business.

Some families use life insurance proceeds to provide the funds for a child, spouse or partner to buy out the other business partners when the founder dies. This is also a way to provide assets to family members who will not receive any interests in the business.

Make sure that your estate plan aligns with your business succession plan. A buy-sell agreement defines the exit strategy for partners and details what will happen to the business in the case of retirement, disability or death.

If no family members or partners want to take on a leadership role, you will need to identify a key employee and discuss with them the possibility of buying into the company. This can help foster employee retention and offers consistency during the transition.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, which may include a business succession plan.

Reference: Northern Nevada Business (Oct. 30, 2018) “Protect your business through estate, succession planning,”

Your Estate Plan May Be Done, but Is the Job Finished?

As life progresses, an estate plan becomes even more important to you and your family.

As a person’s life progresses and the difficulties that can arise do, they are often motivated into creating an estate plan, but that is not necessarily the end of the story, according to the Brentwood Home Page in “The will and estate plan are done, what now?”

Once your Will and estate plan are done, the planning process does not stop, even in the face of an urgent situation. There are still tasks that must be done, and perhaps the most important one of all is talking with family members about the plan and what your wishes are.

Many families get started on their estate plan in the attorney’s office, discussing what they want to happen to their assets, who their executor should be and how they want their end-of-life decisions to be made. However, they find it difficult to discuss those issues with their children, and as a result, when the first parent passes, the only one who knows what the plan is (and where it is) is the surviving spouse.

Will the adult children know where to find the documents if the surviving spouse is so bereft that he or she is not functioning well? Will the surviving spouse or the children know what the next steps should be?  Will the person who was designated the executor know that this is their role?

Once you have completed your estate plan, do not leave out this critical next step. The executor and those left when you (or your spouse) have passed have a big job ahead of them, and you do not want to make it harder.

It can take months or sometimes years to settle an estate.  Here are a few facts to be aware of:

• Wills and estate plans are not filed with the court before death. The estate planning attorney may have a copy, but the court will want the original documents.
• The executor will need original death certificates.
• An attorney, possibly the same one who created the estate plan, should guide you through the settlement of the estate.
• Once the Will is probated and the executor is appointed, the beneficiaries will need to be named and creditors notified.
• The decedent’s property will need to be managed. This can be tricky if he or she owned a business, rental properties or other assets that require day-to-day management.
• Tax returns must be filed.

The administration of an estate is not a simple process, and many people to handle it without professional assistance. However, that is not a good idea.

An experienced estate planning and estate administration attorney can advise you on creating an estate plan that suits your unique situation, and then can help your heirs implement your plan after your death.

Reference: Brentwood Home Page (Oct. 31, 2018) “The will and estate plan are done, what now?”