Did you know that The Serene Home can help with Estate Management?
Getting things in order, whether it’s your clothing, your kid’s toys, or your financial life is really about gaining peace of mind. Why else would you set out to do all the hard work of getting organized unless the end result brings you a feeling of security and well-being?
The good news is that many of the time and money consuming headaches of financial management, now and in the future, can be avoided with the help of an Estate planning expert who knows how to review and advise you about the various options available for your particular situation.
Today, with the assistance of Katya Sverdlov, the attorney behind Sverdlov Law, PLLC, and the Katya Sverdlov blog, we’re talking about how to think about estate planning so that you can move toward having your financial house in order as well as your closets!
Hi, Katya! What are some of the biggest mistakes that people make when planning for the future?
Biggest mistake is ignoring the issue of incapacity and death, thinking that it won’t happen to you, and not creating any documents. If you do not do it yourself, then the State you reside in will decide what will happen to you and your assets.
If you become incapacitated without having any advance directive, your family will have to apply for a Guardianship in a local court. The judge may grant Guardianship to a particular family member, or, if there is a fight amongst family members, then the judge may appoint a Guardian who is an outsider (a lawyer or a social worker).
If you die without having a Will, then the State of residence will determine how to distribute your assets based on the rules of intestacy. Your closest blood relatives will receive the money, regardless of whether you have been in contact with them, and regardless of whether you like them. You need to plan if you have specific wishes.
What are some of the major challenges you see facing surviving family members when it comes to dealing with the Estates of loved ones?
The major challenges that people face after the death of a loved one are:
a) Finding the assets. There is no central database where one can look up a person’s bank accounts, brokerage accounts, life insurance policies, etc. As a result, families can spend years looking and lots of money eventually goes to the Unclaimed Funds.
b) Waiting for probate to complete. The majority of people do not understand the rules of probate and do not understand that certain situations may cause years of delay in courts. In the meantime, all the money is frozen and inaccessible to heirs.
c) Fights over personal belongings. It’s relatively easy to divide the money – either based on the Will or on the intestacy rules. But when it comes to photographs, furniture, art and jewelry – personal feelings really come up. Unless the parents’ wishes are spelled out in great detail ahead of time, quite often families fight for years over the remaining personal assets.
What steps can someone take to avoid some of these challenges?
a) Plan for the possibility of incapacity. A Power of Attorney allows your agent to make financial decisions on your behalf. A Health Care Proxy allows your agent to make health care decisions on your behalf. Without these documents, a Guardianship process is a must. It doesn’t matter whether you have $1MM in a bank or only a monthly social security check – the process for incapacity planning is the same.
b) Plan for your Estate. Decide how you want to split your money. It doesn’t matter whether you have $100K or $10MM. Family emotions can take the same intensity regardless of the amounts of money.
c) Talk to a qualified attorney. You may not even know that your family situation can cause untold problems. For example – do you have children from a previous marriage? Make certain your current spouse understands your wishes and that they are appropriately documented. Do you have a special needs relative? Do not leave them money outright, so that not to jeopardize their benefits. There are many similar situations. Make an appointment for a consultation and discuss your individual situation.
Is Estate planning expensive? How does someone get started?
The answer really depends on the individual situation. Compare the cost of planning with the cost of NOT planning. For example, when people do not PLAN for long-term care, they end up paying a shockingly high amount for their own care. The cost of a nursing home in New York is currently $20K a month. If one does not have Medicaid – one has to pay for it privately. Yes, it comes as a shock to people, but Medicare does not pay for either home care or nursing home care.
The cost of a Trust to protect your assets ranges from $3,500 to $5,000. In addition, there are costs associated with Advanced Directives and a Will. However, even if you end up spending $5-7K on your estate planning, it will still be less than 1/2 of a monthly cost in a nursing home. And if this planning saves you and your family hundreds of thousands of dollars in long term care costs and future litigation costs, it seems that it is a good investment.
Having this conversation with our families could feel really uncomfortable. Do you have any tips for how to approach this conversation in a positive way?
I would suggest telling a story of a celebrity who did NOT plan. There are plenty of those – the artist Prince, James Gandolfini, etc. Their lack of planning cost hundreds of thousands of dollars and years of emotional distress to their families. Bring these up, and then mention that the same problems arise with people of lesser means. The best way of avoiding it is to plan properly and early.
Talk to a proper specialized estate-planning attorney; do not do these documents yourself. Most lay people and most attorneys who specialize in other areas are not aware of the complexities of Wills and Power of Attorneys.
For additional information, you can find Katya at:
She also has a free questionnaire that will help you identify documents needed before speaking with an attorney:
You can even schedule a call with Katya here:
In working with families who are faced with a loss, I often find that the surviving family members are unaware of the condition of the home left behind and may not be prepared to address some of the immediate concerns.
The Serene Home can help in the following ways:
• Set up an initial project management plan along with the family and estate administrators
• Communicate with the family throughout the process. Provide emotional support.
• Manage the discontinuation of your loved one’s mail, deliveries and scheduled services.
• Coordinate bill payment and property maintenance with the Executor.
• Inventory, sort and organize contents of the home for family to review.
• Assist with the distribution of the physical assets according to the will or trust.
• Help each family decide which items they want to keep separating sadness and guilt from what truly sparks joy for them.
• Work with the family to mediate areas of conflict regarding the distribution of property.
• Facilitate donation of items to non-profits or charities.
• Work with realtor to prepare the property for sale.
Check out The Serene Home Estate Management services here, set up time for us to talk and let’s work toward Bringing Serenity Home.