Estate planning for blended families

Blended families are very common in today's society due to the high number of divorces, so this article covers good advice for estate-planning for those situations.

Estate planning for blended families can be complicated and usually involves a number of different considerations from traditional estate planning. A couple needs to determine what their goals are and a professional can assist in determining how best to accomplish those goals.

A few of the many considerations that you may want to keep in mind include providing for your spouse, protection for your children, and tax planning.

Usually a trust is the best way to go in planning for blended families. Trusts can be established to make sure spouses are provided for, while still providing some tax planning benefits and protecting some assets for your children.

There are a number of ways to set a trust up, all depending on what your individual goals are. Also, some couples keep assets individual by a prenuptial agreement, while others do not, making most, if not all, of their assets marital property. This affects the type of planning that should be done too.

If there are any beneficiaries who may be on government benefits, a special needs trust can be used so their inheritance would not affect their benefits.

Perhaps you have a beneficiary who is not financially responsible and you do not want them to have access to their full inheritance all at once. A trust can help accomplish your goals in that situation, too.

When a married couple each does a will, leaving all the assets to the surviving spouse, and then at the second death, distributing the assets to both of their separate children, it’s important that each person fully understands that the spouse could always change their will at any point.

This leaves the potential for the other spouse’s children to be disinherited. It also leaves potential for the surviving spouse to end up in a long-term facility, spending done most, if not all, of the remaining assets on the cost of care.

Read more:

http://www.greenbaypressgazette.com/article/20140127/GPG03/301270385/Carissa-Giebel-column-Estate-planning-blended-families

How to Request a Pre-Nup and Still Get Married

This article serves up very practical advice for newly engaged couples who are wondering how to ask for a pre-nup.

Congratulations, you just got engaged. You and your fiancée are on cloud nine, Nothing could be better. Now you have garner the strength to utter the most unromantic of words -pre-nuptial agreement. How do you do it?

Given the high divorce rate, a pre nuptial agreement offers a hedge against the unfortunate, but possible prospect of divorce. The agreement forces you and your soon-to-be spouse to discuss ending in the marriage even before it has begun.

So, how do you discuss divorce when you also planning your marriage?

1. Request a pre-nup soon after the engagement.

Do not wait until the invitations are in the mail to request a pre-nup. Ideally, a pre-nuptial agreement should be signed and negotiated well in advance of the wedding. Springing the pre-up on your fiancée on the eve of the wedding will leave him/her feeling as if they've been ambushed-not a great way to start a life together.

2. Explain why you want a pre-nup.

Be transparent and honest. You want a pre-nuptial agreement for a reason-why? Are you looking to protect an inheritance? Do you have children from a previous relationship or are you simply looking to protect assets? Do you have a family history of messy divorces?

3. Be transparent

For a pre-nuptial agreement to be valid, there must be full disclosure. Be prepared to honestly share your net worth and income. You are incentivized to reveal all your assets- any assets you own prior to marriage will usually remain your separate property if a divorce occurs; if your fiancée acknowledges something is separate property when you sign a pre-nup, he/she cannot later claim it is marital later when you divorce.

To read more:

http://www.huffingtonpost.com/daniel-clement/how-to-request-a-pre-nup-_b_4660427.html?utm_hp_ref=divorce&ir=Divorce

What If a Beneficiary Dies Before the Will Maker?

Very good article about a topic that is often discussed, and it is good for you to have this information even if you are nowhere near the will-planning stage.

In most states, when a beneficiary dies before the will maker, the gift originally left for the beneficiary may go to the beneficiary's heirs, if the beneficiary is a relative of the will maker. But if the deceased beneficiary isn't related by blood to the will maker, then the gift could potentially lapse -- meaing that the beneficiary's heirs won't be able to receive it.

Fortunately, most states have anti-lapse statutes that allow a beneficiary's heirs to still receive the gift even if the beneficiary dies before the will maker.

What Happens When a Gift 'Lapses'?

Under general probate law, a lapse means that the person who was originally supposed to receive a gift won't be able to anymore, and that gift will be returned to the will maker's estate. This scenario usually occurs when a beneficiary of a will dies before the person who drafted the will.

If there is a secondary beneficiary listed in the will, then the lapsed gift can go to that person. In circumstances where there is no secondary beneficiary, then the gift will go back to the beneficiary's residuary estate.

Gifts that are placed in the residuary estate are "leftover" gifts that aren't given to a specific person; probate courts take over the residuary estate and distribute the items according to your state's intestate succession rules.

Read more:

http://blogs.findlaw.com/law_and_life/2014/01/what-if-a-beneficiary-dies-before-the-will-maker.html

It's A Matter Of Life... And Debt: Know Your Rights

After the death of a loved one the last thing you are thinking about is outstanding debts, but unfortunately that is something many of us have to deal with, and in a timely fashion. It is good to know the laws that prohibit creditors from certain practices if you are dealing with this issue at present. This article is about one woman's story and how she dealt with such an issue.

It was January, 2001; one month after my husband's death. I awakened one morning to an envelope sent by a dauntingly large law firm; something that no one needs to receive immediately after you have buried your beloved. Left in both emotional and financial ruin at that point in time, I was also recovering from emergency (and major) abdominal surgery and my father had just been diagnosed with terminal cancer; from which he passed away three months later.

It was not an especially good season in time.

I anxiously tore open the envelope and was floored at its contents. After a terse and insincere "Sorry for your loss..." salutation, the letter went on to state that they were representing a financial institution that held a credit card and a credit line belonging to my late husband Mike; both opened seven years prior to our marriage. The letter further stated that I was "obviously responsible" for "taking care of your husband's obligations" and that if they did not receive payment in full within 30 days, they would take further action against me. This is in spite of the fact that while I did hold both business and personal accounts at this institution, my name had never been associated on the particular accounts that Mike held, nor had I ever once utilized his accounts.

Did I happen to mention that the actual institution never contacted me personally, despite Mike's over-25 year history with them; that they instead simply referred the matter to a law firm? Did I also neglect to mention that almost all of the officers and many of the employees of said financial institution were guests at our wedding? And his funeral?

Do I have to tell you how enraged I was?

First, rather than contact me personally, the matter was instead hastily referred to a law firm. Secondly, they were clearly attempting to (1) take advantage of someone in an obviously vulnerable state and (2) collect on debts for which I knew I was not responsible.

So despite the rage, the vulnerability and an extremely sore abdomen, I dusted off my own legal prowess and sent them a letter in response. I none-too-kindly informed them that Mike's accounts and the debts associated with them were not in my name, that these debts were amassed long before we were married and that if they continued to harass me, they too would be hearing from an extremely large and intimidating law firm in response.

I never heard from them again.

To read more:

http://www.huffingtonpost.com/carole-brody-fleet/loss-of-spouse_b_4559443.html?utm_hp_ref=estate-planning

Disciplinary counsel accuses R.I. lawyer of misconduct in divorce cases

This is really a shame, to think that many people entrusted that their divorce would be handled in a legal and professional manner only to find out this information. The article goes into the case more thoroughly.

PROVIDENCE — The Supreme Court disciplinary counsel accuses well-known Family Court lawyer William F. Holt of professional misconduct over his handling of four divorce cases.

Chief Disciplinary Counsel David D. Curtin last week petitioned the Supreme Court disciplinary board to consider taking action against Holt. He asks that the disciplinary board hear testimony on the allegations.

The petition outlines instances in which Holt is accused of misleading Family Court judges by submitting orders that had not been agreed to by the parties. In one case, Holt is alleged to have removed a divorce filing from the clerk’s office, thus delaying his client from being served and allowing the client the opportunity to remove items from the home.

Holt’s lawyer, John A. Tarantino, said Holt “is going to contest each of the allegations and present his side of the story.”

To read more:

http://www.providencejournal.com/breaking-news/content/20140108-disciplinary-counsel-accuses-r.i.-lawyer-of-misconduct-in-divorce-cases.ece

17 Ways Divorce Makes You Stronger

Divorce is one of the most trying things a person can go through, and it can usually change your life for the better if you allow it. This article outlines ways that divorce can make you stronger.

When you're going through divorce, you have to trust that living alone will eventually start to feel normal. You'll get used to walking through the front door and not having to shout, "Hey, I'm home!" You'll feel confident heading to dinner parties and events sans spouse -- and you won't feel the need to explain why he or she is missing to every person you run into.

And with time, you might even start to realize you've not only gotten used to life after divorce, you're a better, more resilient person because of it.

That's something HuffPost Divorce readers can back up with experience. On Monday, they shared with us the many ways they became stronger after divorce. Read their responses below, then head to the comments and tell us how splitting up made you a stronger person.

1. "Divorce gave me a chance to be myself without having to be what someone else demanded me to be. No more walking on eggshells."

2. "Divorce taught me not to let fear be my chauffeur, to drive my own life."

3. "It's shown me that I'm a much stronger person than I could ever imagine. I'm capable of moving mountains to keep my kids safe."

4. "Not having anyone to fall back on made me learn to rely on myself."

5. "I realized I was strong enough to survive all on my own. Losing so much so fast brings things into perspective."

To read more:

http://www.huffingtonpost.com/2014/01/06/life-after-divorce_n_4550466.html?utm_hp_ref=divorce&ir=Divorce

Divorce Recovery

Divorce Recovery

By Nancy Johnson-Gallagher, LICSW
Psychotherapist and Divorce Mediator

Is there such a thing as divorce recovery?  We can all cite instances of friends, family or acquaintance who just never seem to get over their divorce.  They continue to talk about, think about and, in general, complain about their divorce as if it happened yesterday, when in reality their divorce may have occurred years prior.  It often becomes difficult to be around such people and we don’t know how to support or be a friend to them.  Oftentimes we find ourselves pulling back from these people as we just don’t know what to say anymore.

However, we cannot ignore the realities of divorce in our society.  In the United States the statistics are clear, but cold. Fifty percent of all marriages will end in divorce, with sixty percent of second marriages ending in divorce.  Divorce affects many people beyond those divorcing spouses. Children especially are hit hard, with one-half of all American children witnessing the breakup of their parents’ marriage. Divorce is very stressful and is rated second only to the death of a spouse on the Social Readjustment Scale of stressful life events.

What can we do? Divorce makes everyone so uncomfortable, because if it happened to them, it COULD happen to us.  Here’s what you can do:

• Listen (without criticism or judgment).  Divorce is a loss, just as death is a loss. There are a lot of emotions which must be acknowledged and talked about.  Would you expect a friend to get over the death of a spouse or child in a few weeks time??  A divorce is different for everyone, but in general expect the roller coast of emotions to continue as long as 18 months to two years, dependent upon the length of the marriage.
• Encourage mediation and alternatives to adversarial divorce when indicated.  The hardest part of the process for kids (and everyone in general) is conflict.  Kids whose parents engage in ongoing conflict have the most profound problems. Encourage professional counseling help if you have the opportunity.
• Help with the physical tasks of readjustment. Your friend or family member needs your support in transitioning from being married where there were two people to perform the necessities of daily living and child rearing to being single and “doing it all.”  Moving, yard work, going back to school, learning to cook, finding baby-sitters, etc. can be overwhelming without support.
• Suggest alternative support systems.  Many organizations and websites offer divorce recovery workshops and materials to assist with the readjustment phase following divorce.  There are also many self-help groups to assist with adjustments that must be made.
•  Offer Acceptance in general.  Clearly, divorce is not going away. Don’t let your friends feel as if they are now “different.”  Let them know you are there for them in all ways.

WHAT’S IN A NAME? PRESERVING AN INHERITED IRA

An IRA can be a smart asset to transfer to your spouse and to others upon your death. It can provide tax-deferred or tax-free growth. The IRS is particular about the transfers and an error is made, the benefits can be lost. Here is a list of dos and donts:

1. Don’t transfer an inherited IRA into your own IRA unless you inherit it from your spouse.
2. Leave a copy of your IRA beneficiary designation form with your papers. Do not trust the entity holding the IRA to have a copy.
3. Designate a beneficiary and a successor beneficiary. If the IRA passes through a probate estate most benefits are lost.
4. Here’s the “What’s in a name” part: When you receive the IRA, it must be re-titled correctly such as “John Doe, IRA, deceased 2/25/12 F/B/O (for benefit of) Sally Doe, beneficiary.” A custodian might make a change from this exact title but be sure that they know what they are doing. An incorrect designation can have drastic  tax consequences. The key is to make sure that the custodian understands that this is an inherited IRA and that they are aware of how to establish an inherited IRA account.
5. When you inherit it, and if the donor was older than 70 ½ , make sure that the donor took all annual RMDs (required minimum distributions) including the year of death. If not, you must pay the RMD by year-end.
6. If you do not need the money or do not want the asset in your name (for various reasons) consider a disclaimer in favor of a contingent beneficiary.
7. If you change custodians, transfer the asset from “trustee to trustee” rather than to you and then to the new trustee. The rules are not the same as they are for a transfer by you of your own IRA such as the 60 day window to transfer rule.
8. Keep the inherited IRA separate always. Do not add to it.
9. Make annual withdrawals from the inherited IRA even if you are not yet 70 ½. This applies to Roth IRAs also.
10. Call your CPA!

http://www.counselfirst.com/elder_law_articles_ri.php#ira