Monday, February 1, 2016

Bowie, Rickman, Duke! How much time do we have left?

"Organizing is what you do before you do something, so that when you do it, it is not all mixed up," - A.A. Milne, English author best known for his books about Winnie-the-Pooh. (1882-1956).

Get your affairs in order: estate planning basics
1. Make a will.  In a will, you state who you want to inherit your property.
2. Consider a trust. If you hold your property in a living trust, your survivors won't have to go through probate court, a time-consuming and expensive process.
3. Health care directives. Write out your wishes for health care.
4. Assign Power of Attorney. With a durable power of attorney for finances, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs.
5.Beneficiary forms. Name beneficiaries for bank accounts and retirement plans makes the account automatically "payable on death" to your beneficiary.
6. Funeral expenses. Set up a payable-on-death expense account at your bank and deposit funds into it to pay for your funeral and related expenses.
7.Final arrangements. Make your wishes known regarding organ and body donation and disposition of your body -- burial or cremation.
8. Documents. Make sure your attorney-in-fact and/or your executor has access to your important documents.

The deaths earlier this year of pop star David Bowie, actor Alan Rickman and the co-founder of the Eagles rock band, Glenn Frey have baby boomers asking themselves, “just how much time do I have left?”
Alan Rickman
Patty Duke
Bowie and Rickman were both 69. Frey, 67. Actress Patty Duke, who died in March of a ruptured intestine, was 69.
Even though we may have parents who are living into their 80s and 90s, these high profile deaths remind us that we are on the downhill curve. The first baby boomers born in 1946 will celebrate their 70th birthdays this year. Yikes!

Estate planners say baby boomers could do themselves and their heirs a big favor and “get their affairs in order” even if they think they’ve got lots of time left.

But planning for your final years and ultimate death is not an easy topic for many. According to Forbes magazine, 55 percent of Americans do not even have a last will, leaving their heirs vulnerable to costly court fees and legal battles.
“How many people like to talk about death and dying,” asks Margaret Phelan, an estate planning attorney in Vancouver,
Wash. “People think they have time that this is not going to happen to them today. That’s why we have two crystal balls in our conference room. It would be a lot easier if we knew the future, but we don’t.”

Phelan says basic estate planning is a good idea for anyone over age 18, but especially important for baby boomers who may be in a blended marriage, who may own significant real estate and hold substantial assets in retirement investment funds. “Or you may have a relative with special needs, you may want to avoid probate court or you may wish to donate to a special charity,” she said. 

While it is easy to delay estate planning, the experts say getting the basics in place is doing everyone a big favor. Here are questions to ask yourself:
Do I have a will spelling out how I want my assets distributed at my death?
Is my will up-to-date? Has it been revised in the past five years?
Do I have medical care directives spelling out how I would like my end-of-life care to be managed if I no longer can make those decisions? Have I named someone to act on my behalf with a durable power of attorney for health care?
For those in a late in life second marriages -- Do I have a written “personal property memorandum” spelling out how my tangible assets are to be distributed among children and step-children at my death?

Average life expectancies
The average life expectancy in the U.S. is 78.8 years, a record high, according to the Disease Control and Prevention’s National Center for Health Statistics. Life expectancy for females is 82 years, for men, almost 77.
Among the leading causes of death? Heart disease, cancer, chronic lower respiratory diseases, stroke and diabetes. The bottom line is that we all die of something.

Meanwhile, seven out of 10 Americans say they would prefer to die at home, according to a 2010 Frontline report. The reality is that nearly 70 percent of us die in a hospital, nursing home or long-term care facility where other people may participate in treatment and care-taking decisions. Yet, only 20 to 30 percent of Americans say they have an advance directive spelling out their end-of-life wishes such as a living will.

Professionals say that organizing the basics of estate planning may cost as little as a few hundred dollars or several thousand dollars depending on the complexity of the documents.
In many areas, those with lower annual income may seek discounted or free estate planning consulting services through the local bar association or senior center.

Phelan cautions against using online forms for wills and other documents.
“I’m not a fan of these forms because they are not state specific and they may ask for information such as Social Security numbers that you do not want in the public record,” she said. “The biggest problem is that in filling these out, people often make mistakes. Those mistakes may not be discovered until there is a crisis or someone has died.”

Finding an attorney

How do you find an attorney to help with your estate planning? Seek out those who administer the plans that they draft. Ask them how many plans they do annually and how long they’ve been specializing in this work. Ask how you can get to know them through a seminar or work shop at no cost.
“I would run from anyone who quotes you a fee without first knowing what they will be doing for you,” Phelan said. “You really want someone who does both the planning and the administration of estate plans.”
The National Academy of Elder Law Attorneys NAELA, founded in 1994, is a place to start when searching for a qualified local professional. Searches can be done by zip code or by city.

First steps to a plan

To get started, Phelan advises her clients to make a list of what they own in terms of real estate assets, investments, bank accounts, life insurance policies or other holdings such as savings plans for grandchildren.
Then she asks them to think about who they trust to make decisions for them while they are alive and who they would want to make decisions to settle their estate when they die.
Phelan, who has been in practice for 30 years, feels so strongly about these issues that with her law partner, Karen Webber, she co-wrote a book, “What You Really Need to Know for the Second Half of Life,” that outlines the basic elements of estate planning.

For those worried about attorneys’ fees for the cost of estate planning, Phelan likes to ask this question, “How much will it cost if you don’t have a plan in place?”

To do nothing, means there’s no power of attorney and no appointed executor for a will, she said. There’s the cost of going through probate court and expense of any challenges to the settlement.
“Usually there’s a huge savings by doing an estate plan rather than doing nothing," she said.
By the way, David Bowie left an estate worth $100 million to be divided among his wife and children.

For more:
National Institute on Aging, click here.
"Plan Your Estate," from NOLO, click here.
“What You Really Need to Know about the Second Half of Your Life” by Phelan-Webber, click here. 
The Wall Street Journal Complete Estate-planning Guidebook, click here.
Retirement Mobilization Toolkit, American Institute of CPAs, click here.

Helpful Web sites:

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