Hello my MumboJumboites:
Hungry for knowledge today? My guess would be yes! I hope your day is going excellently and I thank you for signing in!
Did you know that people generally spend more time planning their annual vacation than planning their estate? Thought provoking huh? So my commentary today is going to drift a bit into the editorial side.
As a society, I believe we are drifting away from one that emphasizes disipline and character and toward one that emphasizes momentary enjoyment, star power, and/or immediate gratification. Heavy stuff I know but worth considering? When talking to people about estate planning, I often begin to feel the energy draining out of the room and it is always frustrating because this should be a topic of tremendous interest and engagement. Consider the fact that the average person spends thousands upon thousands of hours during his/her lifetime productively working in order to provide for those that he/she loves the most. Further, consider the fact that a random life event could virtually wipe out that lifetime of hard effort and leave those loved ones in a serious predicament. I've seen firsthand the results of good planning as well as poor planning and there is a tangible different in the stress level experienced by loved ones.
So to re-frame the issue, when approached with the topic of estate planning, one should rightfully engage the discussion with gusto, as the wealthy often do, because it involves protecting everything that one has worked so long and hard to achieve. The most engaging of these topics involve trusts and estates, wills, powers of attorney, business succession planning, living wills a/k/a medical directives and designations of healthcare surrogate, irrevocable trusts, family limited liability companies, corporations, limited liability companies, avoiding probate . . . etc, etc. Juiced up yet?
So the message is: before you plan your next vaca . . . get charged up about your estate planning!
Thanks for taking in some mumbo jumbo today.
Tuesday, October 19, 2010
Friday, September 24, 2010
The Big 3 Estate Planning Docs and a Probate Tip !
Hello Legal Mumb Jumbo Ites!
Yes, admittedly some time has passed since my last post. To offer a shameless excuse, the hectic pace of operating a new law office been a bit of an adjustment; but take heart as I am working to build greater discipline in this area, even as we are building more discipline in all of our systems here in order to ever improve our standard of client services. My goal is to offer a monthly post at this to occur at the middle of the month, so the next one will be on or about October 15th - I am putting it on my calendar as a recurring meeting!
OK, so the big three estate planning documents are:
1. Will 2. Power of Attorney 3. Living Will (also called Healthcare Directive) & Designation of Healthcare Surrogate
So I tell clients this all the time when they ask me about just doing a will. Any attorney that would do the will without the other documents without informing you of the need of all three is more than likely not experienced in estate planning and is thus not serving your interests. These 3 documents have very distinct functions which work together to begin to form a coherent estate plan. The will is an instruction sheet for the probate court, plain and simple, in that it tells the court what you (the testator) want to happen to your estate. Note, the will does not prevent probate - only a trust can do this - another topic. The power of attorney gives your appointee the power to manage your business affairs while you are alive and it expires upon death. Finally, the living will contains end of life instructions and should appoint someone (healthcare surrogate) to enforce those instructions. I know, not the most exciting or enjoyable topic but an important one for families nonetheless. I always say that the peace of mind you gain from setting up your plan may just help you live longer?
Oh, I promised a probate tip! - make sure all of your retirement accounts (annuities, IRA's, 401K's) and life insurance policies either have an individual or (if applicable) your trust designated as beneficiary of your estate. We've been doing some probates for clients where the estate was the named beneficiary.
Anyway friends, thanks for checking out some Legal Mumbo Jumbo and as always, I hope this was helpful.
Until next time.
Steven Gibbs, Esq.
Yes, admittedly some time has passed since my last post. To offer a shameless excuse, the hectic pace of operating a new law office been a bit of an adjustment; but take heart as I am working to build greater discipline in this area, even as we are building more discipline in all of our systems here in order to ever improve our standard of client services. My goal is to offer a monthly post at this to occur at the middle of the month, so the next one will be on or about October 15th - I am putting it on my calendar as a recurring meeting!
OK, so the big three estate planning documents are:
1. Will 2. Power of Attorney 3. Living Will (also called Healthcare Directive) & Designation of Healthcare Surrogate
So I tell clients this all the time when they ask me about just doing a will. Any attorney that would do the will without the other documents without informing you of the need of all three is more than likely not experienced in estate planning and is thus not serving your interests. These 3 documents have very distinct functions which work together to begin to form a coherent estate plan. The will is an instruction sheet for the probate court, plain and simple, in that it tells the court what you (the testator) want to happen to your estate. Note, the will does not prevent probate - only a trust can do this - another topic. The power of attorney gives your appointee the power to manage your business affairs while you are alive and it expires upon death. Finally, the living will contains end of life instructions and should appoint someone (healthcare surrogate) to enforce those instructions. I know, not the most exciting or enjoyable topic but an important one for families nonetheless. I always say that the peace of mind you gain from setting up your plan may just help you live longer?
Oh, I promised a probate tip! - make sure all of your retirement accounts (annuities, IRA's, 401K's) and life insurance policies either have an individual or (if applicable) your trust designated as beneficiary of your estate. We've been doing some probates for clients where the estate was the named beneficiary.
Anyway friends, thanks for checking out some Legal Mumbo Jumbo and as always, I hope this was helpful.
Until next time.
Steven Gibbs, Esq.
Monday, June 14, 2010
Summer Blues and the Law?
Hello Mumbjumbo-ites. This edition of the blog should be about my requesting tips for maintaining a consistent blog. Anyway, there is plenty of fodder to discuss. Today, let's get off the somewhat depressing subject of foreclosures and talk about the lighter topic of basic estate planning - OK, so my material is limited . . .
It probably won't surprise many of you that most people spend more time planning their vacation than their estate. It also may not be a surprise to learn that most people do not have basic wills, powers of attorney or living wills set up.
Let me just share that the absence of these documents can result in a fair amount of stress for the family members. We experienced this kind of stress my own extended family when my uncle was involved in a motorcycle accident last year and the family was left to interpret his living will in order to decide whether to remove life support. In that circumstance, a document that is unfamiliar to most people, as had been the case for my family members, suddenly became of utmost importance. In fact, we poured over the words of that document in order to devine every word and the meanings behind them and each section. Even with the presence of a living will, we still suffered moments of tension when my cousin had to make the tough calls required in that situation.
It does not take long to put meaningful measures in place to protect family members from significant financial and emotional strain.
In the weeks to come, I will be talking more about basic estate planning and business succession planning and will be promoting our new product http://www.willbdone.com/ (not yet unveiled) but designed to help the average person complete their estate planning in an easy and affordable process.
Stay tuned friends and thanks for clicking.
It probably won't surprise many of you that most people spend more time planning their vacation than their estate. It also may not be a surprise to learn that most people do not have basic wills, powers of attorney or living wills set up.
Let me just share that the absence of these documents can result in a fair amount of stress for the family members. We experienced this kind of stress my own extended family when my uncle was involved in a motorcycle accident last year and the family was left to interpret his living will in order to decide whether to remove life support. In that circumstance, a document that is unfamiliar to most people, as had been the case for my family members, suddenly became of utmost importance. In fact, we poured over the words of that document in order to devine every word and the meanings behind them and each section. Even with the presence of a living will, we still suffered moments of tension when my cousin had to make the tough calls required in that situation.
It does not take long to put meaningful measures in place to protect family members from significant financial and emotional strain.
In the weeks to come, I will be talking more about basic estate planning and business succession planning and will be promoting our new product http://www.willbdone.com/ (not yet unveiled) but designed to help the average person complete their estate planning in an easy and affordable process.
Stay tuned friends and thanks for clicking.
Thursday, March 11, 2010
Legal Mumbo Jumbo - 1099's???
Hello Legal Mumbo Jumbo-ites!
As promised, the topic for this week is the ever popular 1099 and it's implications concerning short sales and deeds in lieu of foreclosure.
A few interesting points:
Generally speaking, where there is debt forgiveness, the forgiving debtor is required to issue a 1099. That reality leads to the potential result that when your short sale is accomplished, you just traded a creditor (your lender) for a supercreditor (the IRS). Pause and reflect on this . . .
There are situations where the 1099 is not a detriment but rather a benefit. For example, if you're insolvent or have lost a great deal of equity, a 1099(c) may not bear significant tax ramifications and having received it signifies forgiveness of the debt and the liklihood that there will be no further action by the debtor (i.e. deficiency judgement action).
If the 1099 concerns debt forgiveness on a primary residence, the debt is exempt under current federal legislation.
The key is awareness and discussing the ramifications of any short sale or other debt settlement with a competant tax advisor.
Until next time loyal friends. SJG
As promised, the topic for this week is the ever popular 1099 and it's implications concerning short sales and deeds in lieu of foreclosure.
A few interesting points:
Generally speaking, where there is debt forgiveness, the forgiving debtor is required to issue a 1099. That reality leads to the potential result that when your short sale is accomplished, you just traded a creditor (your lender) for a supercreditor (the IRS). Pause and reflect on this . . .
There are situations where the 1099 is not a detriment but rather a benefit. For example, if you're insolvent or have lost a great deal of equity, a 1099(c) may not bear significant tax ramifications and having received it signifies forgiveness of the debt and the liklihood that there will be no further action by the debtor (i.e. deficiency judgement action).
If the 1099 concerns debt forgiveness on a primary residence, the debt is exempt under current federal legislation.
The key is awareness and discussing the ramifications of any short sale or other debt settlement with a competant tax advisor.
Until next time loyal friends. SJG
Wednesday, February 17, 2010
Hello legal mumbo jumbo-ites. I am pleased to inform you that I have emerged from the post Holiday-New Years black hole of administrative quicksand and now stand ready to continue to provide you with the most practical and engaging legal blog available, given the challenging times in which we find ourselves.
That said, our foreclosure series continues and this week I would like to address the looming topic of deficiency judgments.
A close business colleague recently forwarded me a Yahoo article post dated February 3rd, 2010, in which the author addressed the topic of banks pursuing debtors after the short sale or foreclosure has been completed and the debtor had mistakenly assumed that everything was "hunky dory". This unfortunate event is called a deficiency action or when awarded by the Court, a "deficiency judgment".
Whether you are possessed with the courage and motivation to pursue a short sale of your property or have resigned yourself to an impending foreclosure, you need to know about deficiency judgments.
Simply put, a defiency judgment is the difference between what your property ultimately sells for (generally in a short sale or foreclosure sale) and the unsatisfied portion of the loan, although I have also heard it told that it can be based upon the difference between the current market value and the amount collected in the sale. Either way, we're talking about a stack of cash that most people just do not have handy at the moment.
On the positive and comforting side, deficiency judgments have not historically been pursued by most lenders unless there is a strong reason (i.e. deep pockets) to do so. Less comforting is the fact that in order to mitigate their losses, lenders may, when the dust begins to settle, attempt to pursue these types of judgments more vigorously. Only time will tell.
All of the above is not to say that a short sale or deed in lieu is not a viable option. In fact, there are many advantageous to being proactive and working with your lender to pursue a solution. All of these issues are case specific and, so goes the shameless plug for this week, an experienced attorney may be able to assist you in negotiating a settlement or waiver of the deficiency, depending upon the facts or the case and perhaps the fair or foul mood of the lender on a given day.
In many cases a bank may ultimately give the debtor a 1099 as opposed to pursuing a deficiency judgment as this option allows them to write off the loss. I will address 1099's and the issues relating thereto in next week's post.
As always, I hope this was helpful. Have a great week.
SJG
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