Estate Planning

Stationery Store Wills May Cost More Than You Know

 

(Updated 2/20/2017)

When the modern printing press was invented, a printer spent his days mass producing Bibles.  I’m willing to bet he could make a lot of dough kicking out fill-in-the-blank Wills at night.

Your Office-Store Will May Cost Your Family a Small Bucket of Money

The purpose of a store-bought Will is to save money.  There’s nothing new about legal forms.  Templates are as old as paper.  In some pyramid, there’s probably a sheet of papyrus that had a disclaimer in hieroglypics that said “No warranty – use at your own risk”.

Without proper drafting, however, your penny saved could cost your estate and your family a good bucket of dollars.

The Executor’s and Administrator’s Bond

Family members are often the people appointed to handle court probates for their deceased parents or siblings.  These family members are regularly required to post a bond, a type of money guarantee, with the Court.  A bond is insurance that the Executor or Administrator (we’ll stick with the term Executor here), will properly execute his duties and not mismanage the estate assets.

Executors must qualify financially to get a bond issued.  As is often the case, the less financially stable the Executor, the higher the bond’s cost, if it’s approved at all.   The cost of the bond comes from the estate and can very easily cost in the thousands each year that the estate is in probate. The Court will permit the Executor to recover the cost of the bond from your estate, but that reduces the money that is meant for your family.

Bond companies often require that the Executor be represented by an attorney. Adding the attorney will most surely mean doubling the probate fees.

Money Well Spent is Money Saved

Hiring an attorney to review and draft your Will costs a bit more than buying it off the shelf.  The price may rise from $25 to $200 in some cases.  However, for that small additional cost, your attorney can properly draft the necessary clauses to reduce or remove the need for a bond at all.  This small expense can save your family thousands in the end.

Featured Image: Printing Press, 1829 woodcut by George Baxter on WikiCommons

10 Things About Premarital Agreements Other Than Divorce

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(Republished and reposted 2/25/2017)

Premarital agreements also called prenuptial agreements can cause a good deal of stress and anger between soon to be spouses.  They can cause your fiance to believe that you don’t trust them or that your not “all in”.  Unfortunately, people see premarital agreements as divorce planning, sort of a downer from the start.

But really, premarital agreements have just as much to do proper planning for the marriage rather than the outcome of divorce.

Here are 10 purposes served by planning a premarital agreement that have nothing to do with splitting the couple up:

  1. Premarital agreements can protect one prospective spouse from the premarital debts of the other.  This can be useful where bad credit and debts are still haunting one of the partners coming into the marriage.
  2. Blended families, those with children from previous relationships, can use premarital planning to give clear distribution instructions to children from earlier relationships.
  3. Premarital agreements can be used to create a life estate for spouses-to-be to care for them after the death of one spouse and preserve inheritances to beneficiaries other than the spouse.
  4. Couples can avoid financial disputes during their marriage by specifying how community and separate property is defined between them.
  5. Self-employed spouses can use a premarital agreement to protect family assets or the assets of the working spouse in case of business bankruptcy or suits.
  6. Medi-Cal (California’s Medi-caid), ignores premarital terms that attempt to avoid the duty to support one spouse by the other.  But, in the case of divorce to avoid Medi-Cal support obligations, a premarital agreement can insure that the non-hospitalized spouse retains ownership of their property.
  7. Ownership interest and voting rights in LLCs and closely held corporations can be manipulated within premarital plans satisfying membership agreements and investment requirements.
  8. Premarital agreements can establish property ownership of real estate acquired during the marriage with pre and post-marital assets.  This is extremely important where one or the other spouse engages in business that can be a victim of lawsuits that might endanger community property.
  9. Rental property income from premarital acquired rental property can be defined as separate, community, or transferred to the non-owning spouse.
  10. Premarital agreements can provide terms and designations for one spouse’s preference for guardianship and conservatorship in proper contexts.

Talk to a qualified attorney before you begin working on your premarital agreement.  A proper agreement can enhance and protect the marriage rather than be an plan only for divorce.


Featured Image: CA Bride and Groom by debaird at Wikimedia Commons