Klitzman Law Group, PLLC

An Estate Plan Can Say, ‘I Love You’ More than Flowers

Estate planning is more romantic than you might think. It ensures that someone or a group of people you care about receive instructions for challenging situations and how assets are distributed. It’s about ensuring that someone has a power of attorney and medical directives. These are acts of love, according to a recent article from Wealth Management, “Say ‘I Love You’ With an Estate Plan.”

With an estate plan in place, family members aren’t forced to make difficult decisions or worry about someone’s wishes not being granted. Without it, loved ones may face a lifetime of regret.

You may think spouses automatically receive everything upon the death of a spouse. However, it doesn’t always work this way. If there are children and there is no will, the assets are divided between the spouse and the children in many states. If the children are minors, the surviving spouse may be left scrambling to make up the difference to support the children. They won’t be able to access the minor children’s inheritance, as a court-appointed conservator may control the assets.

The last thing you want a grieving spouse to have to do after you’ve passed is to deal with legal complications, unexpected expenses and a struggle to pay bills. Creating an estate plan with an experienced estate planning attorney prepares the spouses for what will happen when one passes and allows the family to focus on grieving and caring for each other, instead of untangling disorganized finances.

Planning for estate taxes is another act of care for loved ones. Life insurance is often used to cover the cost of any taxes, which reduces the taxable estate and adds to the assets a loved one will receive. Without planning, an estate can lose one-sixth of its value in taxes alone, so tax planning should always be part of an estate plan.

To make estate plans more meaningful, you may want to leave a written note to loved ones. Often called an ethical will, this personal message shares the life lessons you’ve learned, values and encouragement. For some family members, the message of thoughtful and loving advice becomes an annual ritual, where the ethical will is read every year and often referred to when facing tough decisions in their personal and professional lives.

When someone dies unexpectedly or has no opportunity to say goodbye, having these final words can anchor loved ones through life. Putting your love and wisdom into a letter will add to your legacy.

Estate planning is more than paperwork. It lightens the pain of loss, preserves peace among the family and demonstrates caring for those you love. If you don’t have an estate plan, give yourself and your loved ones peace of mind by making an appointment today.

Reference: Wealth Management (Feb. 13, 2025) “Say ‘I Love You’ With an Estate Plan”

Warren Buffett has Estate Planning Opinions for Non-Billionaires

Warren Buffett, CEO of Berkshire Hathaway, has an enormous estate estimated at nearly $150 billion, three children and a plan for his wealth. He’s also got advice for parents about estate planning, as reported in a recent article from yahoo! finance, “Warren Buffet Offers One Piece of Estate Planning Advice to the Middle Class.”

Buffett has an annual letter to shareholders in which he comments on finance and families, among other topics. In the 2024 edition, he had a lot to say to parents. The primary advice he offered is to have adult children read their parents’ will and for the parents not to sign it until the children have had a chance to read it. He says this prevents any surprises after the parents’ death and tells the children what to expect when their parents do pass.

He believes sharing the estate plan is worthwhile so children can ask questions and make suggestions before the will is set in stone. Parents should not just show the will but explain what each part means, so their children understand the logic behind the decisions and the responsibilities they may have upon the parent’s death.

Buffett believes that sharing the will's contents can help prevent fighting among family members who might otherwise be angry and resentful. Giving the family a chance to learn how the estate was planned could make the family even closer.

Buffett’s own estate planning is more public than most billionaires. He is donating $1.1 billion of his Berkshire Hathaway shares to the family’s four foundations, with the three children responsible for distributing the rest of his holdings after he dies.

He added an interesting provision to his estate plan. All three of the Buffett children must agree on what to do with the money they are donating. If one disagrees, the other two must respect the third’s wishes. This will either make it harder for them to give away the money or be instructive in teaching them how to work together. Only time will tell if this strategy works for the Buffett family.

While you may not have billions in your estate to give away, your family will still be faced with decisions about their inheritances, regardless of their size. Some families don’t talk about money or death, which often leads to problems after parents have passed.

Having the children read the will may be hard for some families. However, discussing what the will contains and the thinking behind the decisions is something to discuss with your estate planning attorney. There are families where discussions are productive and helpful. However, there are also families where the dynamics preclude such an open discussion.

Your estate planning attorney will have years of experience to draw on and can advise how to foster communication among family members. It’s ultimately your decision. However, knowing what other families have done is a helpful discussion to have with your estate planning attorney.

Reference: yahoo! finance (Feb. 16, 2025) “Warren Buffet Offers One Piece of Estate Planning Advice to the Middle Class.”

Is Wife Responsible for Husband’s Debt after Death?

The loss of a spouse is one of the most stressful events in life. It is hardly the time one is prepared to deal with the avalanche of bills and, in many cases, unpleasant financial surprises. A recent article from Forbes, “Managing Your Partner’s Debt After Loss: What Surviving Spouses Need To Know,” says that surviving spouses aren’t responsible for their deceased spouse’s debt unless they had joint credit cards or if any loans or property were jointly owned.

Any outstanding debts should be paid from the deceased spouse’s estate and not by the surviving spouse. The estate is simply the value of a person’s assets. In most cases, the decedent’s debts must be paid before any assets are distributed.

If the surviving spouse is the only heir, they receive whatever assets are left after debts are paid. They personally do not have to pay those debts. However, the deceased spouse’s debts will diminish their inheritance.

A worst-case scenario is when the estate doesn’t have enough money to pay for the debts, and the widow is left with nothing. In some states, it is possible to petition the court to reserve a portion of the money, known as the homestead exemption or allowance, to provide some financial support. This is usually done in cases where the spouse would otherwise be destitute.

An estate planning attorney can help determine how to settle the estate and manage debt to protect the surviving spouse. Understanding the different types of debt is needed to know what to do.

Credit card companies are aggressive about debt when someone dies. Collection agencies start calling shortly after the death, and even if the credit card is not in the surviving spouse’s name, they try to bully the grieving person into paying something. The estate planning attorney is better equipped to inform the credit card company, not the collection agency, of the person’s death, provide a death certificate and settle the debt with the estate. Having an attorney on your side is also helpful when negotiating how much of the debt should be paid.

Medical debt is a real problem for surviving spouses. Federal and state laws about medical debt and agencies focus on helping consumers. Healthcare providers will sometimes work out payment plans and reduce payments. A person struggling with grief may want to ask a family member or their attorney to help with negotiations.

Homes are usually the largest asset, carrying the biggest debt. If the ownership and mortgage are in both people’s names, it’s still due. The debt becomes an estate liability if the mortgage is solely in the deceased spouse’s name. The mortgage company can foreclose on the home if the estate can’t pay the debt. In most cases, couples have life insurance to protect them from losing their home. Your state may have laws to protect surviving spouses, which your estate planning attorney will know.

Considering the death of a beloved spouse is not easy. However, the unavoidable fact is that one spouse will die before the other. It would be a great kindness for both spouses to prepare for this eventuality. Having an estate plan created, including a will, sharing information about all debts as well as assets and working with an estate planning attorney to ensure that all the right elements are in place—trusts are funded, life insurance policies are paid, etc.—would allow the surviving spouse to grieve without the added stress of a tangled estate.

Reference: Forbes (Feb. 18, 2025) “Managing Your Partner’s Debt After Loss: What Surviving Spouses Need To Know”

Does an Estate Plan Improve Retirement?

Estate planning is more than determining who you want to inherit your worldly goods. It’s about planning for taxes, protecting yourself while alive and making life easier for heirs by streamlining asset transfers. A recent article from Kiplinger, aptly titled “Here’s How Estate Planning Can Make Your Retirement Easier,” explains it in detail.

Trusts are used to protect assets and are widely considered the most effective tools for estate planning. Timing matters in estate planning. If you might need to apply for Medicaid for long-term care, keep in mind there is a five-year look-back period. Trusts need to be funded for at least five years before assets are considered exempt for Medicaid purposes.

Let’s say you establish a trust when you turn 70 but need long-term care at age 73. Medicaid won’t consider you eligible until age 75. We can’t know when we will need long-term care. However, planning ahead makes applying for Medicaid better than dealing with an application during a health crisis. Talk with your estate planning attorney about a Medicaid Asset Protection Trust to see if this might be a good fit.

Life insurance is often used to help with estate taxes. While most of us aren’t likely to worry about estate taxes while the federal exemption remains high, there are still state estate taxes and some state inheritance taxes to consider. The federal estate tax exemption may not sunset in 2026. However, a life insurance policy may be an option for your family if it does. Today’s life insurance policies are often combined with long-term healthcare coverage, which is always a wise option as we age.

Beneficiary designations are an often-overlooked estate planning pitfall with costly consequences. If you’ve named someone on an account as the beneficiary, they will receive the asset, regardless of what your will says. If you neglect to update your beneficiary designations, it will be next to impossible for other heirs to get the assets, even if they do go to court. This is an easy thing to fix. Review beneficiary designations every time you review your estate planning documents.

Estate and retirement planning doesn’t end once you have a plan in place. Both estate plans and retirement plans need to be monitored and updated. Tax laws change, markets fluctuate and personal circumstances change.

Regular reviews of your estate planning with your estate planning attorney every three to five years will allow you to ensure that your wishes are current, and no opportunities have been missed. Regular updates will ensure that beneficiaries are correct, trusts are funded properly and your will is still aligned with your state’s laws.

Reference: Kiplinger (Feb. 18, 2025) “Here’s How Estate Planning Can Make Your Retirement Easier”

How Estate Plan Protects Your Family

Estate planning is one of many ways to make a difference to your family’s future. Whether starting from scratch or revising a will created many years ago, your estate plan gives you control over your assets and secures your loved ones. The title of a recent article from Florida Today says it all: “Your family’s future is important to you. These estate-planning tips can help secure it.”

If you don’t have a will, get started on this part right away. A will outlines how you want assets to be distributed upon your death. Without one, the probate court in your jurisdiction will determine who receives your property, and while you may not be around to see the results, your family will. If you have a will but haven’t reviewed it in a while, you’ll want to know if it still makes sense for you. Life is all about changes, good and bad, and your will should reflect your current life.

Living trusts keep assets in the family and pass from one person to the next without court involvement. Property owned by a trust goes directly to the beneficiaries without going through the probate process. Even better, trusts are used to appoint a trustee who will manage the assets if you become incapacitated. A trust works while you are living and after you have died. Families with significant assets, blended families and anyone looking for a smooth way to pass assets to loved ones rely on trusts.

People underestimate the importance of a Power of Attorney. A durable power of attorney gives a person of your choosing the legal authority to act on your behalf in financial matters. If you are too sick to pay bills or manage investments, an agent (the person named in the POA) can act on your behalf. Without this document, your family must petition the court to appoint someone to manage your life. The court has no obligation to name a family member or even someone you know to oversee your life. It’s far better to simply have an estate planning attorney create a POA suited to your needs.

You’ll also want an advance healthcare directive, sometimes called a living will, to express your wishes for healthcare in case you can’t. This document includes your wishes regarding life-sustaining treatments, organ donation and end-of-life care. The healthcare directive serves two critical purposes: it allows you to state your wishes and spares your family from not knowing what you want during a healthcare crisis. An emergency is no time for your children to guess what Mom wants.

Beneficiary designations are used in many financial accounts to allow the asset to go directly from the original owner to the beneficiary without going through probate. Beneficiary designations override your will. If you want your nephew to inherit your IRA but your IRA’s beneficiary designation is your spouse, your nephew gets nothing. People who have been divorced need to be extra careful about making sure their beneficiary designations are updated.

Parents of minor children must designate a legal guardian in their estate plan. Establishing a trust to own an inheritance for healthcare, education and living expenses ensures that their guardian will have funds to care for the children. Minors may not inherit property, so making a trust is the best way to protect and control their inheritance.

An estate plan, including a will, power of attorney, healthcare directive and trusts, is central to protecting your family and their future. An experienced estate planning attorney will help identify your concerns and know how to address them in a legally enforceable manner.

Reference: Florida Today (Feb. 8, 2025) “Your family’s future is important to you. These estate-planning tips can help secure it.”

How to Create a Digital Estate Plan

Money and real estate are traditional assets that most people think of when creating an estate plan. However, you also have social media pages, photos on your phone and everything from ebooks to shopping lists on your digital devices. When you die, what happens to all these digital assets needs to be planned just as much—or maybe more—than traditional assets.

A recent article from The New York Times, “How to Prepare for Your Digital Afterlife,” explains the steps necessary to protect your identity and digital property with a digital asset estate plan.

Create a digital directive. A law known as RUFADAA (Revised Uniform Fiduciary Access to Digital Assets Act) allows you to give an individual the authority to manage your digital life. Most states have enacted this law; your estate planning attorney will know your state’s laws. You’ll want to create a document listing your accounts and a document telling how you want your online accounts and digital content managed if you are incapacitated or die. This should be included in your other estate planning documents.

Sharing account logins, usernames and passwords needs to be done carefully. You’ll need to store this information in a safe place, as it could be used to steal your assets and identity. This includes financial institutions, e-commerce stores like Amazon or eBay, insurance policies, online storage, email, social media, cable and wireless carriers, medical portals and media subscriptions.

There are password managers you can use, and some platforms, like Apple and Google, have apps to save this information. If you’d prefer to stay analog, use something as simple as a notebook. Just be sure to keep it in a home safe or another secure location.

Include the passwords and codes needed to log into the password manager itself and how to access your cell phone, tablet, laptop, or desktop computer. Your executor may also need your contact list so they can reach out to people to inform them of your passing. They’ll also need to be able to use your phone for any accounts requiring two-factor authentication.

Name a legacy contact and ask if they are willing to help. Just as you need to discuss your wishes for someone to be your executor, you also need to speak with your digital executor to ensure that they can and are willing to help your family with this process. In Apple, Google, Facebook, and some other accounts, you can name a legacy contact, the person who has your permission to manage the account after you’ve passed.

If you’re trying to handle digital assets for someone who didn’t make plans for their digital assets, you can expect it to take longer to settle the estate. Your first act may be to shut down social media profiles and other accounts to avoid identity theft. Notify the social media companies and request that they close their accounts. You’ll need a death certificate, identification and Letters Testamentary—court-issued documents provided to an executor to prove their authority to represent the decedent and their estate and your personal identification.

Unlike paper statements, digital assets, including cyber currency, don’t have a trail to follow. There won’t be filing cabinets stuffed with old statements or shoeboxes of invoices for anyone to reconstruct your life, so planning for your digital assets will make life easier for your executor and heirs.

Reference: The New York Times (Feb. 12, 2025) “How to Prepare for Your Digital Afterlife”

What Kind of Trust Helps a Family with Young Children?

Trusts are not just for wealthy people. They are used when a family has young children and wishes to ensure that there is a plan in place to care for the children in case the parents die or become incapacitated. A recent article from Business Insider, “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter,” explains what parents can do to protect their youngest loved ones.

There are a few different trusts to consider, depending on your situation:

Revocable Living Trust. The revocable trust is the most flexible. It is a separate legal entity with language directing how assets will be used for different scenarios. For instance, if someone dies or becomes disabled and their beneficiaries are all children, the trustee will manage and allocate necessary financial resources to support the children. Many estate planning attorneys consider a trust even more important than a will, since it doesn’t require the estate to be settled before trustees can access the assets.

An IRA Trust. You may want to consider creating an IRA trust if you own an IRA. This allows a minor child to be the beneficiary of the retirement account. On the death of the IRA owner, assets go into the trust, which has a trustee who manages the asset until the person comes of age or whenever the original owner wants them to receive the money.

When a regular IRA account is left to a minor, the family must petition the court to obtain a court-appointed guardian to manage the account until the minor is of legal age. With an IRA trust, you’ve clarified who the trustee should be and when the child will receive the money. If the money is not needed and can remain in the trust, it is a protected asset for their future.

A Trust for Minors. This allows you to leave assets to a child until they reach a certain age, which you articulate in the trust. You can leave all or a portion of the money to the beneficiary to be distributed when you feel they can manage it. You decide when to release the funds, who the trustee should be, the rules for how the money is to be spent and when the minor may receive income.

An Education Trust. In addition to creating a 529 College Account for a minor child, it’s a good idea to create an Education Trust to be sure the funds will be used for education. You can assign a certain amount for education and state the age you’d like the beneficiary to receive any leftover funds.

An estate planning attorney can help you create a plan for your children or grandchildren to ensure that they have the funds they need in case of tragedy and place guardrails on the money so it’s protected.

Reference: Business Insider (Jan. 31, 2025) “I asked an estate planning attorney the best way to establish a trust for my 2-year-old daughter”

What Happens When a Pet Outlives Its Owner?

While leaving millions to a pet is a little extreme, regular people who love their dogs, cats, parrots and other companion animals are wise to make plans to protect their pets in case they become incapacitated or die before their pets. A recent article from MSN, “Things That Happen When a Pet Outlives Its Owner,” looks at what can happen to pets after their owners die.

If plans for the pet, including funding for care, aren’t made, there’s no way to be sure the pet will avoid the fate of many senior animals: an animal shelter. Making matters worse, senior dogs have a lower adoption rate, putting them at risk of remaining at the shelter for the rest of their lives or being euthanized.

If your family loves animals, or you have close friends who are animal people, your pet might get lucky and be adopted by a family member or friend. However, this doesn’t always work out. Even well-meaning friends may have allergies or a lifestyle that conflicts with having a pet. There may also be behavior problems because the pet is grieving the loss of their owner in a new environment, and it may become difficult for the friend or family member to take care of.

Clear instructions about the care of your pet and money to provide for their food, veterinary bills and other costs need to be set down in a legally enforceable document if your pet is to avoid being passed like a hot potato from person to person or to end up in a cage in a shelter.

Pets are considered property, so you can’t leave money directly to them. You could name a caretaker in your will and leave them a certain amount of money to care for the pet. However, the will may not be enforceable. They may use the money for other things while your dog is neglected.

If you don’t name a caretaker, the court may decide where your pet will end up. This can delay the pet’s being placed into a home environment while decisions are being made. Even short shelter stays can be traumatic for animals that are used to living with people.

Exotic pets pose a different set of problems. A large bird with a 50-year lifespan needing a special diet and habitat will not be easy to rehome. A large tortoise with a 100-plus-year lifespan will probably end up living in an animal sanctuary if one can be found and if the sanctuary can afford to take on the cost and responsibility.

An estate planning attorney can create a pet trust in most states for several purposes. The pet trust should be funded with money for the pet's care. A trustee oversees the money, while a caretaker is named in the trust to have physical custody of the pet.

Some shelters, especially no-kill shelters, have arrangements where a donation is required to ensure lifetime care in a suitable environment. The donations often incorporate a Charitable Lead or Charitable Remainder Trust.

Planning for your pet’s future will provide peace of mind, knowing your beloved companion will have a happy life even when you aren’t there.

Reference: MSN (Jan. 30, 2025) “Things That Happen When a Pet Outlives Its Owner”

How to Create an Estate Plan That Works

An estate plan tells your loved ones and the courts how you want to divide your property, as well as protecting heirs from the expenses and stress created when there is no estate plan. According to a recent article from AOL, “Estate planning checklist: 7 key steps to making a successful plan,” an estate plan also saves your family from months, even years, of dealing with courts and government bureaucracies in settling your estate.

How to start? Follow these steps.

Make a complete inventory of your assets, both tangible and intangible. This means real estate, cars, financial accounts, digital assets, life insurance, retirement accounts, pension accounts and personal property. Save your heirs from a scavenger hunt and protect assets from being lost.

Decide who you want to care for your family. If you have children who are underage, name a guardian in your will. The guardian often serves as the conservator, managing the children's financial assets. Check on your life insurance policies, which provide funds for your family after you’ve passed.

Ask potential executors if they are willing to do the work. The executor carries out directions in your will. It can be a big responsibility. They’ll need to gather and manage assets, notify heirs, Social Security, Medicare, pay estate taxes, secure and possibly sell your home, and more.

Have an experienced estate planning attorney set up at least three key elements: a will, power of attorney and advance healthcare directive.

The Will names a guardian and an executor and gives directions for distributing assets. The biggest estate planning mistake people make is not having a will. When this happens, the court assigns someone to manage your estate, and your family will have to live with whatever the court-appointed person decides.

A Power of Attorney allows someone to care for your business affairs if incapacitated. A Medical Power of Attorney, or Healthcare Proxy, will enable you to name someone to be involved with your healthcare, speak with your doctors and health insurance company and help make decisions for you. These documents should be customized to convey your wishes as to how much or how little you want these people to be able to do.

An advanced healthcare directive is used to state your wishes if you are incapacitated about what kind of treatment you do or don’t want to receive if you are at the end of your life. For instance, if you don’t want to be resuscitated or if you don’t want CPR to be performed, this information goes into the AHD. This document can be challenging to consider. However, it is a blessing to spare your family from having to guess your wishes during a time of crisis.

Discuss the use of a trust with an estate planning attorney. Trusts are not just for wealthy people. Some trusts take assets from your taxable estate and distribute them directly to beneficiaries outside of probate. Many kinds of trusts serve different purposes, so your estate planning attorney will help you understand which is best for your purposes.

Determine who to leave your assets to and how to structure your estate. If you have young children and you don’t establish the correct trusts, they may inherit everything when they turn 18 or 21. This is rarely a good idea.

Tax planning is a part of estate planning. While you may not face federal taxes, your state may have its estate tax, and some states still have inheritance taxes. Rates and exemptions are different in every state.

The incapacity planning part of an estate plan is for you. However, the rest is for your family, to take care of them and show them how much you care about them and their futures.

Reference: AOL (Feb. 4, 2025) “Estate planning checklist: 7 key steps to making a successful plan”

Does Your Estate Plan Include Digital Assets?

Technology has changed many aspects of estate planning from the lawyer’s point of view. It’s as easy to meet with clients on a video call as in person, and documents can be reviewed and shared through a secure document portal. Estate planning attorneys now include digital assets as well as traditional assets, like real estate and financial accounts. A recent article from Cape Gazette, “Estate Planning for Digital Assets,” explains how to address digital assets.

The definition of digital assets itself is constantly evolving as new assets are added, but for the most part, they include:

• Electronic communication: emails, social media posts, blogs
• Reward programs: credit cards, airline miles, hotels.
• Financial accounts: PayPal, Venmo, online investment and banking accounts
• Digital asset collections: music, videos, photos
• Intellectual property: domain names, articles, books, artwork, videos
• Electronically stored data

The rules of ownership of data and the platforms holding the data are more complicated than most people think. The law attempts to balance the privacy of the original owner or creator of the data and a fiduciary’s need to access assets after the original owner’s death or incapacity.

Every time you create a digital asset, you are asked to agree to a contract, known as a Terms of Service Agreement or TOSA. This is usually presented as a long page of small type with a box to check to state you agree to the terms. With a single click, you’ve agreed to the terms of a legally binding contract prohibiting another person from accessing the account. Even if your executor or Power of Attorney has a username and password, they may not have the legal authority to access your digital accounts, although some states have passed laws to give fiduciaries some authority to access digital assets. Your estate planning attorney will know the law in your jurisdiction and incorporate this into your estate plan.

For your estate plan to protect digital assets, you’ll need to start by creating an inventory of all assets with this information:

• What type of asset
• Where it can be found (the URL address)
• User name
• Login information
• Does it require two-factor authentication, which verifies the user using a text to a mobile phone or email address?

You’ll also want to review each digital asset to see if there is any provision for assigning someone to manage your account in case of incapacity or death. Some of the larger platforms offer this ability, which is far easier than going to court to obtain photos from a loved one’s cell phone.

Another step to protect your digital assets is to name a digital executor through a Power of Attorney, so they can act on your behalf. It would be prudent to ensure that the POA includes a specific provision expressly providing the authority to access digital assets. This is required in some states.

Your estate planning attorney will help you protect your digital assets as part of creating a comprehensive estate plan.

Reference: Cape Gazette (Feb. 7, 2025) “Estate Planning for Digital Assets”