Protecting Your Estate Plan With a Broad No-Contest Clause

In one recent case from Michigan, that state’s Court of Appeals had to address a dispute about a man’s will. The man, Danial Span, had a daughter, Kayla. Span and Kayla’s mother divorced when she was 3 and, sometime later, he surrendered his parental rights and her stepfather adopted her in 2007. Two years prior, though, Span and the girl began forming a relationship. When he created his will in 2013, Span identified Kayla as his daughter, but left her nothing.

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Span’s 2013 will also contained a “no-contest” clause in it that, as with many such clauses, dictated that any person who challenged the will would forfeit their entire inheritance they were scheduled to receive under the terms of the will. In Span’s circumstance, the exact language of his no-contest clause stated that any beneficiary who “contests in any court any of the provisions of” the will would be treated as if she predeceased Span.

A week after Span signed his will, he died. Catherine Jock, Span’s personal representative (and the sole beneficiary of his estate) submitted the will for probate. The daughter challenged the will. The basis of her contest centered on Span’s mental capacity and the validity of the signature on the will. The personal representative, acting on behalf of the estate, tried to enforce the no-contest clause against the daughter. The trial court concluded that the personal representative could not enforce the no-contest clause against the daughter because the specific nature of the daughter’s challenge was one challenging the execution of the will and the testator’s capacity, and was not an attack on any provision in the will.

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Because the appeals court upheld the trial court’s ruling that went against the daughter on the substantial portion of her will contest, it did not need to reconsider the trail court’s ruling on the no-contest clause. Nevertheless, the case of Span’s will is a clear reminder of the need to approach no-contest clauses carefully. The language used in Span’s no-contest clause is fairly common. If your desire is only to prevent your potential beneficiaries from launching a challenge against a specific term (or terms) in your will, then such a clause could be beneficial.

However, contests that challenge a provision (or provisions) within a will are only one avenue for upsetting an estate plan. For some disgruntled people, their ends may be accomplished just as effectively by getting your plan invalidated in its entirety. If your goal is to protect yourself from both types of challenges, then, if no-contest clauses are enforceable in your state, you might benefit from using a clause with broader language than what Span had in his 2013 will. A experienced estate planning lawyer can help advise you about the whether no-contest clauses are enforceable in your state and, if they are, what degree of breadth would best match your planning goals.

Summary: For residents of states that allow no-contest clauses in estate plans, such provisions can offer a degree of protection against an unfair or frivolous court contest that would seek to undo your plan. Court cases have clarified whether or not the clauses are enforceable in a given state and, if they are allowed, how far they can go in protecting your plan. Depending on what your goals are, a broadly-worded no-contest clause may be able to give you the best protection against litigation by a disgruntled heir.

 

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#LegacyAssurancePlan – How a Detailed Estate Plan Can Potentially Save Your Family Headaches, Heartaches… and Maybe Legal Fees, Too

 

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Creating a carefully crafted and detail-oriented estate plan is important for several reasons. One, the more decisions you make and clearly communicate to your loved ones, the fewer decisions they’ll have to make on their own while they deal with the stress of carrying out final arrangements and the pain that comes with loss. Without a clear plan, they may have to agonize as they desire to do what you would have wanted, but feel unsure what that preference would have been.

Another important potential benefit that comes with detailed planning is that it reduces the possibility for conflict. With anything that remains an uncertainty when you die, the possibility will exist that your loved ones may fall into disagreement about what should be done and what you would have wanted. Last summer, the case of Teffany Teresa Love and her final arrangements, which went all the way to the Tennessee Court of Appeals, offers some insight about this point.

What was the issue that took this woman’s loved ones to the probate court and eventually to the appeals court? It wasn’t her money, her house, her vehicles or her financial accounts. It was her headstone. On one side, her grave marker contained just her married name, “LOVE.” On the other side, it read “Teffany Teresa ‘Terri’ West.” The name West referred to a man named Bobby West, who claimed to be Terri’s biological father. Terri died with no estate plan; the stone and inscriptions were chosen by her husband and her two adult daughters. The problem arose when Terri’s adoptive father, Joseph Gullett, sought to take over administering Terri’s estate for the express purpose of changing her headstone to read “Teffany Teresa ‘Terri’ Gullett.” Ultimately, the appeals court sided against the adoptive father, concluding that the right to control the deceased woman’s headstone went, like the right to control her remains, from her husband (first) to her adult daughters (second). Since the husband and daughters all agreed, “West” remained on the stone.

This woman’s case presents two clear potential reasons for engaging in detailed estate planning including final arrangement planning. First, if you have loved ones who you know (or fear) may fight over issues like your final arrangements, you can possibly reduce the risk of quarrels, and potential litigation, by making those decisions yourself and putting them in your plan. Second, as the Tennessee court pointed out, the law recognizes a specific order of priority in terms of who makes your final arrangement decisions. If you do not want your final arrangement decisions made by the person who would stand to hold that role according to your state’s laws, you need a plan where you make as many decisions as possible for yourself and, depending on your state’s laws, where you appoint the person you desire to serve as your agent for final arrangement decisions.

Summary: There are several things about estate planning that are true far more often than they are not. If you procrastinate, you may run out of time, because none of us knows what tomorrow will bring. If you fail to create a plan, the government will make one for you — and it may be one that you wouldn’t like. Once you make a plan, you have to maintain it in order to be sure it will work as best as it can. A properly created and maintained plan can give you a great deal of control over your affairs, even after you’re gone. Last, but not least, if that benefit of control is important to you, the more thought and detail you put into your plan, the more benefit it will give you.

Reverse Mortgages and Your Estate Plan With Legacy Assurance Plan Bradenton, Florida

What is reverse mortgage and estate plan? Legacy Assurance Plan could help you it better understand. A reverse mortgage may be the right option for some seniors but needs careful consideration before being accepted.

If you watch much TV (beyond premium channels and public broadcasting,) you’ve probably seen commercials marketing reverse mortgages to seniors. Reverse mortgages can offer real benefits to some seniors, depending on their circumstances. However, these reverse mortgages can also come with distinct risks, too. Before you make the decision to take out a reverse mortgage, you should educate yourself on all of the impacts that a reverse mortgage will have, including on your estate plan.

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A reverse mortgage can be very helpful to some seniors. Generally, advisers might suggest a reverse mortgage as a viable option for seniors who have relatively little cash but a lot of equity in their home. The money received for a reverse mortgage can be invaluable to some people. The proceeds of a reverse mortgage may help pay for in-home care, which may allow you or a loved one to avoid, or at least put off, going into a nursing home.

There are downsides, though, as it relates to your estate plan. A reverse mortgage can impact your Medicaid eligibility. Depending on the state where you live, it is possible that your state’s Medicaid agency could view the payments you receive from your reverse mortgage as income and this added “income” could put you above the threshold for continued Medicaid eligibility. Even if your state doesn’t view the payments as income, your state could view a lump-sum or the accumulation of monthly payments received as part of a reverse mortgage as assets that might take you over the allowable maximum for continued eligibility.

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Additionally, there is the scenario in which you die before you pay back the total amount you took out in your reverse mortgage. When that happens, the loan is paid back from the proceeds of the sale of your house. But what if you don’t want to sell your house or you don’t want to leave your loved ones a diminished asset? One way to deal with this is by using life insurance. Buying life insurance for the purpose of having the proceeds cover your outstanding reverse mortgage balance potentially can accomplish two goals. One, this strategy can potentially lower your death tax obligations, as your it lowers the amount of equity you have in your home, so the total amount of your taxable estate (for purposes of death taxes) is reduced by that same amount. Also, this strategy ensures that your loves ones will receive a set amount of inheritance that won’t be impacted by the fluctuations of the real estate market.

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If you’re considering a reverse mortgage, your estate planning professional can help you go over your circumstances and goals and decide if it makes sense for you.

Summary By legacy Assurance Plan: Reverse mortgages can provide clear benefits to some seniors, but also come with their own set of potential drawbacks. A reverse mortgage can help you cover some health care costs and may help you delay going into a nursing home. However, reverse mortgages could, depending on the eligibility rules observed in your state, negatively impact your Medicaid eligibility. They can also reduce the size of your estate that you leave for your loved ones, unless you plan for the payment of this debt after your death (using a vehicle such as life insurance.) Whether a reverse mortgage is right for you and your estate plan depends on the particular facts of your situation.

Understanding How You Can Protect Your Wishes as Recorded in Your Estate Plan

When you make the decision to create an estate plan, you likely put a lot of time and thought into getting that plan into place and making sure that it accomplishes exactly what you want. For this reason, almost anybody who puts in the effort of establishing a plan would also want to be sure that their wishes are protected from being undone after they’re gone. Depending on the laws in your state, a “no-contest” clause may be a viable solution.

“No-contest” clauses, also known as “terror” clauses (or, in some cases, by the Latin “in terrororem”,) are provisions inserted into estate planning documents like will or trusts. They state that, if a beneficiary under that document goes to court to challenge the legal validity of the document, and loses, then that beneficiary, regardless of what the plan document originally said, receives nothing.

These clauses can be very effective in some cases. For example, assume that your estate plan leaves one of your beneficiaries the flat sum of $75,000. Also assume that, if your estate plan were ruled invalid by a court and your assets were divided up according to your state’s intestacy laws, that same beneficiary would receive $250,000. A “no-contest” forces that beneficiary to consider carefully whether or not she can win in court, as a defeat in court means loses a significant sum — that being the $75,000 distribution.

A well-drafted “no-contest” clause will likely differentiate between a beneficiary who files a court challenge seeking to invalidate your estate plan and one who goes to court seeking a clarification of some aspect of your plan that is unclear. Even carefully drafted plan documents can sometimes have provisions that are ambiguous or vague. Most people would not want to punish their beneficiaries for asking a judge to make a ruling that clarifies a confusing provision, assuming that the beneficiary is not asking the judge to throw out the plan entirely.

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It is important to bear in mind that “no-contest” clauses are not legal in all states. Some states have decided that they violate public policy and have declared that they are unenforceable. In some states, the enforceability of a “no-contest” clause depends on whether the clause is placed in a will or a living trust. In Michigan, for example, the legislature passed a law declaring “no-contest” clauses in wills unenforceable. Because the law didn’t mention living trusts, the state Supreme Court there decided a few years ago that “no-contest” clauses in living trusts are allowable. So, if you live in Michigan (or a state whose law mirrors Michigan’s,) and you want to protect your wishes you’ve set up in your plan, you may want to consider utilizing a living trust in order to gain the added benefit of a valid and enforceable “no-contest” clause, in addition to the other potential advantages offered by a living trust.

Summary: “No-contest” clauses can serve important purposes in protecting the wishes you’ve enshrined in your estate plan. These clauses may provide a power financial disincentive that discourages disgruntled beneficiaries from using the courts in order to invalidate your plan and obtain a larger portion of your wealth as a result. “No-contest” clauses are not legal in every circumstance, however. The laws in your state may not allow them. In some states, “no-contest” clauses are allowed in living trusts and not in wills, which may provide an addition reason for residents of those states to consider using living trusts.

Digital Estate Planning and Estate Plan Reviews | Legacy Assurance Plan

If you are looking for digital estate planning?  Legacy Assurance plan will made you convinced for the decent knowledge about this new technologies. These days, more and more people of all ages are living more and more of their lives online. As that percentage continues to increase, estate planners continue to “bang the drum” of including your online and digital assets when you formulate your estate plan. Having a plan that allows your loved ones, after you’re gone, not only to have the benefit of your tangible assets, but also your electronic things, is essential. What’s also vital is making sure that you keep your digital estate plan in mind when it comes time for an estate plan review.

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When one crafts an estate plan, the things one leaves behind usually have either financial value or sentimental value. Digital assets are no different. Many people may think to include their access codes for their online banking or stock accounts, but may not be as diligent when it comes to, say, social media. All of these are important, though. Just as that old shoe box full of photographs and old letters probably has great value to someone in your family, so do your images saved in your smartphone or on your Instagram, Pinterest or Facebook accounts, or personal messages in your email.

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Without a digital estate plan, gaining access to your electronic assets can be difficult or sometimes next-to-impossible. The internet is filled with stories of loved ones faced enormous challenges from Yahoo! or Apple or other electronic service providers when it comes to gaining access to an account of a deceased loved one. These battles often come at a price of great stress and considerable time for the loved one. If a court and/or lawyers must become involved, then it becomes stressful, time-consuming AND expensive!

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Just like estate planning for tangible assets, estate planning for digital assets is an ongoing process, not a one-time deal. An estate plan review is great time to make sure that everything in your plan is up-to-date. Not only should ask yourself if you’ve undergone any life events that might affect your plan, you should also inquire about your digital assets. Just like you might need to contemplate how a new grandchild might impact your plan, you should also make sure that changes in your online accounts are reflected. If you opened a new account, whether it’s a new online banking account or a new email account, make sure that your digital plan includes the necessary username and password information for accessing that account. If you’ve changed any of your passwords, you should make sure that your list of existing usernames and passwords is still 100% accurate. If you have relocated your list of usernames and passwords to a new location, make certain that your instructions to your loved ones regarding how to access this list once you’re gone are current.

 

Summary: Sometimes, we overlook how much little personal items will mean to our loved ones after we’re gone. Your old photos and letters might seem trivial, but to a loved one, it might be an invaluable way to stay close after you’re gone. In this age of email, Facebook and Instagram, accessing those memories may mean going online. To help keep your memory alive for your loved ones, your estate plan should include appropriate instructions for accessing your digital assets. Additionally, you should review your plan routinely to make sure that all parts of your estate plan, including your digital estate plan, is current and up-to-date. For more information about this or other estate planning matters, contact Legacy Assurance Plan at 844.306.5272

How Legacy Assurance Plan To Estate Planning Can Help Your Blended Family

Whether a first marriage ends due to death or divorce, a second marriage can represent an wonderful opportunity for you and your new spouse. With these second marriages often comes the “blended family,” so named because your new marriage involves blending the children you, your spouse (or both of you) have from a previous marriage. In order to protect the financial well-being and happiness of everyone in your blended family, you should strongly consider engaging in prompt and comprehensive estate planning.

Estate Planning for a Blended Family

Blended families present a unique set of estate planning issues. In some cases, you may wish to leave inheritances to both your children and step-children, but perhaps give a larger share to your biological children. In other instances, you have a very close relationship with your step-children while maintaining little to no relationship with your biological children.

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In either circumstance, you can create these legacies, in whatever proportions you see fit, in either a will or a trust. If you desire to disinherit your biological children and leave an inheritance to your step-children (and have not legally adopted your step-children,) this may require especially careful planning, in order to protect against court challenges to your will or trust.

Perhaps the most common concern, though, doesn’t involves not “his” or “hers” estates, because many couples in second (or subsequent) marriages have merged the majority of their assets. The concern, then, involves what happens to those assets when the first spouse dies. Some families may be fearful that the children of the first-to-die spouse could lose their inheritance if their step-parent alters the terms of the estate plan to “freeze” them out.

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In these cases, the use of trusts may be particularly helpful. A couple with a blended family may choose to create two individual living trusts, instead of one married trust. Because trusts can be broadly customized to meet their creators’ needs, a living trust can serve to protect both a grantor’s spouse and his/her children. As an example, a living trust for a spouse with a blended family may give instructions that the assets within it are, after the grantor dies, to be used to support and benefit the surviving spouse during the rest of his/her life, and then distributed to the grantor’s children.

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Alternately, if each spouse is sufficiently wealthy, the trust may dictate that the assets be distributed to the children immediately upon death. You also have significant flexibility in who is the trustee of your trust. You could, for example, name your spouse and one or more of your children as co-trustees, to ensure that both segments of your blended family have a voice in the decision-making process.

Summary: Blended families are more common than ever, now outnumbering traditional families. These families have unique and sometimes complex estate planning needs to ensure that the legacy each spouse desires to leave may come to pass. Using trusts, possibly including multiple trusts, may help a blended family provide for both the surviving member of the marriage, as well as each spouse’s portion of their blended family.

Legacy Assurance Plan Of America – Take Steps Now To Help Reduce Risk Of Legal Challenges To Your Estate Plan After You Die

Legacy Assurance Plan of America’s for Estate Planning –  When famed actor Mickey Rooney died earlier this year, some reports estimated his estate to be worth as little as $18,000. That, however, did not stop Rooney’s family from fighting about the actor’s will. This is not necessarily surprising as, sometimes, it is the smallest estates that produce the biggest estate battles after the testator dies.

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So, what can you do to avoid a messy situation or painful showdown over your assets after you die? One thing is to communicate with your loved ones. By sharing your wishes with everyone affected by the terms of your will or living trust, you can minimize the chance of an uncomfortable surprise. You should also be certain that your estate planning documents communicate clearly about why you made your choices. If you are leaving a loved one nothing because you gave that person gifts of significant value during your lifetime, spelling out that reasoning can potentially be beneficial, both for that loved one and for a court, if a legal challenge occurs.

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You should clearly mention all of your children, and make some provision for them. Even if you do not wish to leave them an inheritance, leaving them a nominal amount, such as $1, may help avoid problems. That’s because, if you make no provision for a child, he/she can claim in court that the omission was an oversight, and that he/she is entitled to a fraction of your total estate in accordance with the portion stated in your state’s statutes.

Both wills and living trusts can be challenged in court. These cases are generally difficult for the challenging party to win. The person mounting the challenge must show that you were mentally incompetent when you created your will or trust, that you were under the improper influence of another person when you made your will or trust or that your estate plan was the product of fraud. Communicating clearly about the goals, objectives and reasons for your plan is especially important if you are disinheriting immediate relatives, are providing a substantial inheritance to distant relatives or non-relatives, or maqke changes to your plan on your “death-bed.”

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If you are concerned that a loved one may be dissatisfied with the size of his/her inheritance, one possible option is a “no-contest” clause. A no-contest clause potentially dissuades beneficiaries from challenging your estate plan by saying that, if a beneficiary goes to court, then that beneficiary does not get his/her inheritance, but instead gets a nominal amount, like $1. No-contest clauses are not legally enforceable in all states, however.

Summary: There is no such thing as a “bulletproof” estate plan that cannot be challenged in court. However, there are steps, both legal and non-legal, that you can take to reduce the likelihood that anyone would choose to challenge your plan and you can get help from Legacy Assurance Plan Of America. The key to most of these steps is clear communication, so that your estate planning desires and objectives, along with your state of mind, are clear to your loved ones, and to a court if your plan becomes the subject of a challenge