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Not the Brady Bunch

F581EF6E-8017-4344-831F-9058490712ADGrowing up, I was a big fan of the Brady Bunch, and truly believed that all families were perfect and that all blended families got along just like the Brady Bunch.

Unfortunately, as I have gotten older and have practiced for several years, I realize that often that is just not the case.

It is imperative when planning in a situation with a blended family to not just go with the “I love you” Wills with everything going to the spouse. Many spouses will later get remarried and not take care of the kids from the first spouse’s relationship.

We traditionally recommend that we use trusts to be able to provide for the spouse after death, but then make sure that those assets come back to the family that they originally started with.

Every family is different and every situation is different, but the old days of just counting on your new spouse to take care of your children are long gone.

Although I like to believe that for the most part people are well-intentioned, unfortunately children of previous relationships don’t always get along with the new spouse.

Because of this, it is also imperative to decide who is going to make the healthcare decisions. Not having a healthcare directive or not being clear in who is going to make the decisions is asking for trouble.

There are very simple steps that every blended family can take to try to make the future less painful and emotional. 

At Bellomo & Associates we always talk about the future and how to plan in the best way, particularly for blended families. If you are in a blended family, take time now to put your wishes in writing to avoid a lot of heartache and pain later, and in doing so, give careful, unemotional thought to the dynamics of your blended family. The first step is to join us for one of our upcoming workshops.  Just click here to find the one that’s best for you!

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Why it is not enough just to have estate planning documents?

D380A277-AB87-4564-9CC8-AD38CD4EE8E3A friend of mine recently shared a story about what happened to her family, and it made me realize that it’s not just enough to have estate planning documents. My friend was the Power of Attorney agent for her mother.

Her mother was remarried, and the gentleman had actually raised her, and she considered him her father. When mom started to have issues and needed decisions to be made on her behalf, the hospital asked for the documents, and unfortunately the daughter did not have them in her possession.

The doctor and hospital continued to pressure the daughter to submit the Powers of Attorney immediately, in case something went wrong. The hospital offered to just have mom do new estate planning documents, particularly her Healthcare Power of Attorney, and Living Will. Rather than have to drive back to the house and try to find them, the daughter said to her mom ….”Go ahead and do a new Healthcare Power of Attorney.”  When the nurse asked who she would like as the Power of Attorney, the daughter chimed in and said “Mom, why don’t you have dad and me.”

The mom immediately said “No! You are always my Power of Attorney and I want you to make decisions for me.”  It was a very uncomfortable and awkward moment for the daughter because she could tell that her step-dad, whom she called her dad, was very upset and didn’t understand why mom didn’t trust him.

We spend a lot of time explaining the importance of having documentation in place, but rarely do we take the time to really emphasize the importance of getting those documents to the appropriate people.

We at Bellomo & Associates encourage our clients to take a copy of their Healthcare Power of Attorney and Living Will immediately to their doctors, and also to have it put in their charts at the hospitals.

We always provide extra copies of these documents so the children can have them as well. We try to explain the importance, and certainly will re-emphasize this in the future based upon my friend’s story.

It is not just enough to have the documents, but make sure you have them where you need them and your family members can find them so that you can avoid any undue heartache. Join us for an upcoming workshop to get your estate planning started!

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I did a trust, but did not put anything in it. Does it still work?

FA5C4784-E2E4-4A39-BAC9-8679C3BFAF73We often get this question in our office, and frequently have occasion to review estate planning documents which include a trust.

But when I ask what was put in the trust, clients have no idea what I mean.

A trust is a contract between the three parties: 

  1. The grantor, or the person who creates it; 
  2. The trustee, or the person who controls it; and 
  3. The beneficiary, or the person who receives it. 

It is a written, binding agreement among those parties that sets forth who’s in control, who gets the benefit, and when. However, in order for a trust to control the assets, the assets must actually be in the name of the trust. For example, if I have the Bellomo Family Trust, if I want my house to be in the trust, the deed must actually say “the Bellomo Family Trust” as part of the title.

Typically, we will see it say, “Jeffrey R. Bellomo, Trustee of the Bellomo Family Trust dated October 22, 2019”. The bank account, or other assets that I want to be in the trust, must also have the exact same titling. If the titling is correct, then the agreement between those three parties governs, and what occurs will be set forth clearly in the trust document. 

Unfortunately, if the assets are not titled in the name of the trust, then they will be distributed by the way that they are titled. For example, if the asset is titled jointly with Jeffrey and Whitney, when Jeff dies, the asset would transfer automatically to Whitney. This process is called non-probate, and goes outside of the probate process, but is subject to inheritance tax.

Currently, the Pennsylvania inheritance tax to a spouse is zero, so in this specific circumstance, the result would be a zero tax and avoid probate. However, if the account was in Jeff’s name alone, and he died, then it would go through his Will, which is the probate process. The executor in his Will would have to go the courthouse and open an estate and follow that process to the end. 

If you want your trust to work the way you intended it to, It is imperative that you make sure you have the assets are properly titled into the trust. If you have questions about your assets and how they’re titled contact us and we’ll help get you the answers you need!

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Mom's In A Nursing Home And She Has No Planning

0CE0483C-EC11-42B4-A8C4-00797990DE25_4_5005_cI recently spoke with a client who told me that his mother is in a nursing home, but mom and dad didn’t do any prior planning. He and his family were convinced that dad was going to lose everything. I needed a few minutes to talk him off the ledge.

In Pennsylvania, even if a person does not have prior trust planning done, as long as they have capacity or have a power of attorney that grants the appropriate powers, we are still able to protect 100% of the assets for the spouse who is not in the nursing home. The son could not believe that that was a possibility. Fortunately, mom still had the ability to sign a power of attorney granting his father the ability to make decisions on her behalf.  

This story could have gone horribly wrong if mom still did not have capacity and the ability to sign a new power of attorney. Many people have heard me say that I believe anyone over the age of 18 should have a financial power of attorney. Although powers of attorney are inexpensive, they can provide the ability to protect 100% of assets for a spouse. In the event that a person is unmarried or a widow or widower, we can still protect 50% of assets.

Of course, any time we deal with laws and interpretations, things can change, so I often remind people that they should plan now, so that they don’t have to rely on a law still being in plan in the future.  

I was very pleased that in this specific case we we’re able to help this family even when they didn’t think that help was a possibility.  If you’re looking for some answers to your family situation, estate planning and/or asset protection planning, join us for one of our upcoming workshops.  Just click here to find out more.

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How often should I update my estate planning?

E0A4DF60-89CA-4FC3-A81F-90489755EF13We are asked this question all of the time by our clients, as well as people in the community who come to our events. There is certainly no hard-and-fast rule, but in my opinion, you should look at your estate planning every one to three years, depending on your circumstances.

In my opinion, your estate planning that takes care of your family and loved ones after you are gone, or while you are alive but not able to make your own decisions, is probably the one of the most important actions that you will take in your life.

Unfortunately, on average, people will wait 20 years in between their updates of their estate planning. It always baffles me when I see people who did planning, but it was done at a time when their circumstances were completely different, and therefore currently their documents are virtually useless. 

We encourage our clients to review or at least look at their documents every one to three years. So much can change in that period, such as health, finances, marital status, children, etc., that it is imperative to review them on a regular basis. Changes will probably only need to be made if you want to change the disposition or who is going to act as an agent, but there could be circumstances where laws have changed and you need to make minor updates.

It never hurts to pull out your documents once a year and take a look at them and see if everything remains accurate. You should also talk to your estate planning attorney to make sure that nothing has changed in the law that may affect your plan.  

At Bellomo & Associates, we offer a maintenance program for most of our estate plans that, for a nominal fee, you can get access to our office and to our attorneys as often as you need to make changes at no cost above the original maintenance fee. For maintenance clients we also offer monthly presentations, yearly picnics and events, and appreciation gifts.

For those clients who remain in our maintenance plans continuously and without interruption, we also update documents and provide a 1% fee guarantee upon the death of the maintenance client. If you would like to learn more about this program or how you can update your documents, please feel free to give us a call and come to one of our weekly workshops. 

 

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