Timeshares: Lots of fun until you die…
If you have not properly planned, timeshares can inadvertently saddle your loved ones with headaches and needless expenses when you die. Few people realize that most timeshares are deeded real property, even if it is only a week in Sedona or two weeks in Hawaii. If you own the timeshare jointly with someone (e.g., a spouse or friend), you may be fine. But what if you and your spouse die in a common accident? Or your spouse has passed and you now own it yourself alone? Owning real property subjects you to a probate in that state when you die. If you do own a timeshare, make sure you have thought about succession planning. Some options are to place the timeshare in a trust, or to add a child or friend you wish to inherit your timeshare deed before you die (assuming they are willing to take on the annual expense after you are gone). Otherwise, you may end up costing your family far more money dealing with the timeshare than it is actually worth, not to mention the added stress!
Are you a blended family? You NEED to talk about Estate Planning
I find many blended families avoid the topic of wills and succession planning because it can create tension between spouses. It can raise touch point issues in the relationship. Maybe you are much closer to your kids than your spouse’s kids. You may have even lost touch with children because of hurt feelings when you divorced and remarried. If you don’t confront this sensitive area you can leave behind a mess when you die. A home that has been in your family for generations could end up with step-kids or people you have no relationship with. A beloved spouse could be forced from the home when you die. The only way to ensure your wishes are carried out is to start the discussion and visit an attorney to come up with a plan.
Make sure your loved ones are protected.
Update Your Beneficiary Designations
Many people have not looked at the beneficiary designations on their Life Insurance, Retirement or Annuity Accounts for years. With most of these accounts, you were most likely prompted to designate a beneficiary when you first opened the account. People do not realize that any beneficiary designation made on these accounts will override their will, trust, or other estate planning documents executed. Too often, an ex-spouse is inadvertently left as a beneficiary or a later born child is omitted. Taking the extra step to add contingent beneficiaries to retirement accounts can even result in dramatic tax savings for your loved ones. A few minutes of work on your end can eliminate grief and consternation for your heirs after you pass.
So please, review all those designations to ensure they reflect your current wishes.
Should I Run My DBA-Small Business as an LLC or Corporation?
The answer is an unequivocal “YES!” Owning and operating your business as an LLC or S-Corporation may not only potentially shield your personal assets from business creditors and lawsuits, but the new tax law heavily favors operating as one of these types of “pass-through” entities. It is a win, win. BUT there are definitely traps for the unwary, and only a professional (not a web-site) can help you choose which form of business entity is right for you. Talk to a lawyer today.
What happens to the stuff in my house when I die?
There is a statute in Maine that allows you to tell people who you want to get your “tangible personal property” (that’s a fancy word for “stuff”) with a simple list in writing. Tangible personal property includes furniture, jewelry, dishware, art, even cars and pets. The general rule of thumb is that if you can touch it, it’s tangible. Not included are cash, stocks, bank accounts, life insurance, real estate, etc. This list does not have to be witnessed or notarized or carry any of the formalities of a will, yet your Personal Representative/Family must legally respect those wishes as if it did. The advantage is you can give a grandchild or neighbor something special to remember you by. If you get mad at them or lose touch you can change the list at any time without having to re-do your will or see a lawyer. These lists can be invaluable road maps for your loved ones when you die. They can also prevent fights over hot-point items like wedding rings or family heirlooms. I recommend that you date and sign your list, especially if you use your computer to generate it. Keep the list where it can be easily found. You can have just a few items or you can map out the distribution of your whole house, that’s totally up to you.