October 2020 Newsletter
October 12, 2020
To my Clients, Friends and family,
Office
Our office remains open to serve past and future clients. We have instituted COVID 19 precautions for the protection of everyone:
Wear masks
Only one client or family in our office at a time. Please call from the parking lot when you arrive to make sure the earlier clients have left the building.
Sanitizing the conference room between clients.
Temperature taken at the door.
We are also working to reduce the number of in-office meetings. Other than when it is necessary to sign documents, we would like to avoid an in-office meeting. We will accommodate meetings with you by phone, facetime, or zoom.
Beneficiaries
Beneficiaries are one of the most important tools we use in estate plan. The primary reason is that an asset with a beneficiary will be distributed to the beneficiary on death and will not go through the probate process.
The probate process is expensive, time-consuming, and subject to creditor claims.
Beneficiary Forms
Whatever entity is holding your asset will have a beneficiary form for you to fill out. That entity might be a bank, credit union, the insurance company, a broker, a retirement account custodian, etc. Sometimes, they take the name TOD (transfer on death), POD (pay on death), and ITF (in trust for).
Types of Beneficiaries
Your beneficiaries can be individuals, a trust, a charity, or an institution like a college or university.
When your beneficiary is an individual or group of individuals, there is the possibility that the beneficiary might predecease you.
If all the named beneficiaries predecease you, the asset will have to go through the probate process to determine who it will be distributed to. It is important you do not allow that to happen. You avoid that happening by creating a beneficiary designation that covers that contingency.
“Per Stirpes” and “Per Capita”
It is very common to name a group of individuals to be the beneficiary of an asset. This might be your children or other relatives. If one of the groups predeceases you, what happens to their share?
“Per Stirpes” means that if the predeceased person themselves has an “issue” (a child born or adopted), then the issue will divide the share of the predeceased person equally.
“Per Capita” means that the predeceased person loses their share and the remaining surviving beneficiaries will divide the asset equally.
Primary and Contingent
If there is any chance that all the beneficiaries might predecease you, then you need to make a contingent beneficiary.
A Contingent beneficiary will only become effective if the primary beneficiaries are all deceased. If this happens and there is not named contingent beneficiary, then the asset will have to go through the probate process.
Biggest Problems
Not naming a beneficiary – the asset goes to Probate.
Naming your estate is a beneficiary – “Estate” means probate.
Naming a minor as a beneficiary – the asset is held by a parent or guardian until they turn 18. Then they get it all. Eighteen-year-olds often squander an inheritance.
A beneficiary receiving SSI and Medicaid – if the beneficiary receives more than $2,000.00, they will lose their benefits. You need to name a “Special Needs Trust” as a beneficiary to hold the funds.
Never use the word “or” in a beneficiary designation.
SEMINARS
All of the senior centers and libraries that had previously scheduled seminars this year have requested that we resume the seminar schedule in August. Here is the current schedule:
2020 NORTHVILLE SEMINARS
All seminars will be at 10:30 am
Northville Community Center: 303 W. Main St. Northville, MI 48167
Please call (248) 305-2851 to reserve a seat
October 20 | Wills, Trusts, and Ladybird Deeds |
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November 17 | New Laws Affecting your Estate Plan |
December 15 | What You Need to Know about LTC and Medicaid |
2020 PLYMOUTH SEMINARS
All seminars will be at 1:30 pm
Plymouth Friendship Station: 42375 Schoolcraft Plymouth, MI 48170
Please call (734)354-3222 to reserve a seat!
October 22 | New Laws Affecting your Estate Plan |
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November 12 | Wills, Trusts and Ladybird Deeds |
2020 WESTLAND SEMINARS
All seminars will be at 2:00 pm
Westland Friendship Center: 1119 N. Newburgh, Westland, MI 48185
Please call (734)722-7632 to reserve a seat
October 15 | What You Need to Know about LTC and Medicaid |
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November 19 | Wills, Trusts and Ladybird Deeds |
Please feel free to forward this newsletter to anyone you feel would benefit from it.
Very truly yours,
Gary