Are Your Assets Protected?
Asset protection is more important than ever before. Today, you have risks at every turn. Lawsuits, high cost of long-term care, auto and home accidents, or years of Probate. We often settle and fail to consider the importance of comprehensive protection. In other cases, we only need the best legal document to protect what we own. Rolling the dice and sacrificing your savings or hard-earned assets is not worth it. And it is next to impossible to keep up with what you need for protection. Many changes you need come without warning.
Homestead Real Estate
Suppose you are married and currently working as the police. In that case, your principal residence should be titled Tenants by Entirety. This form of legal title protects your marital property from the creditors of one spouse.
Firearms
With the growing availability of concealed carry laws, more citizens are choosing to carry firearms and to keep them accessible for defense in their homes.
However, even for justifiable acts of self-defense, a claim for monetary damages can be made against you by your assailant or innocent bystanders. You can also be held liable for gun-related incidents while hunting, in gun clubs, or while shooting at commercial or private ranges.
Check out the Benefits Plan website for more information.
Asset Protection with Automobile Insurance
The most common auto policy written today is the same as 25 years ago – $100,000/$300,000. It means you have $100,000 in individual protection for damages caused by you or a covered driver on your policy. Similarly, you have $300,000 total coverage for all injured parties.
Consequently, you are personally responsible for damages that exceed these amounts. Even a minor accident can result in hospitalization, extended medical care, or death. However, Umbrella Insurance only costs an average of $250 per year. The policy provides an additional $1 million in liability protection for each covered vehicle and your residence.
Investment Real Estate
If you own commercial property, your renters can sue you for various reasons. For example, claims were made for injuries resulting from property defects inside and outside the residence. First, be sure you have the right coverage and are not overpaying. Secondly, eliminate any personal liability concern for excess claims by holding title to any investment property in a Corporation or an LLC. Moreover, a Series LLC allows you to separate liabilities from each property if you own more than one investment property.
Long-Term Health Care
Will you need it? Of those who live longer than age 65, 70% will need some long-term health care. To clarify, only 40% of people will require inpatient nursing care. However, all long-term health care is expensive. Fortunately, a hybrid insurance policy is offered exclusively to Benefits Plan members. This policy provides long-term care insurance; if inaccessible, it can be converted to life insurance at your death.
Living Trusts and Asset Protection
At the end of your life, or if you become incapacitated, property or bank accounts in your name are at risk of Probate.
- A Will must be probated. The rule is no one can legally sign your name. Therefore, all assets in your name are subject to the complete probate process at your death or incapacity. This court process averages 18 months and is costly.
- A Living Trust completely avoids Probate.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents and a Last Will and Testament for guardianship of minor children and to “pour over” any assets still in your name at your death out of Probate.
A Revocable Living Trust is a written, legal document that allows you to privately pass your assets to your family, friends, or charities after your death. Assets in a properly funded Trust are not subject to Probate. These include real estate, bank accounts, stocks, and minor beneficiary policies and accounts. Your life insurance policies and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations. However, it is often recommended that adult beneficiaries be named beneficiaries without legal or other restrictions.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan at the link below. Registration is free.
Visit www.cbaplan.com or call 1-312-559-8444 for assistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices.
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC/does not represent the completeness or accuracy of the information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Legal Capacity Consequences
Legal Capacity
The American Bar Association defines legal capacity as "the ability to perform a task or make a decision. State laws set out the standards of legal capacity for various tasks, such as consenting to treatment, making a Will, Trust or Deed, and making a gift or contract."
In Illinois, legal capacity depends on the circumstances:
- Unless proven otherwise, every adult is presumed to be able to make health care decisions. An often confusing example is that diagnosing Alzheimer's or dementia will not necessarily prove a lack of legal capacity. However, diagnosing advanced Alzheimer's or dementia could likely prove that legal capacity is lacking.
- Testamentary capacity: a person's mental and, therefore, legal ability to make or change a Will or Trust estate plan. While you must be over age 18 to enter into any legal contract, Will, Living Trust estate plan, or Power of Attorney, you must also:
◦ Understand the nature and extent of your property.
◦ Remember your relatives and descendants.
◦ Be able to articulate who should inherit your property.
While most people wait too long to make a Trust or Will estate plan or essential Health Care and Financial Power of Attorney documents, often people believe a relative needs more legal capacity to do so than they currently have. However, that, too, is objective. Like a contract, a Will requires the highest capacity level; you are of sound mind and memory.
The Consequences of Lost Capacity
Last week, I received a call from a grade school classmate. Two years ago, he asked for my advice regarding his mother, who was in her late 80s.
He said she wants her real estate equal to his and his three brothers. They all agreed that his two brothers, who live with his mother, would remain in the house, as both have lived there their entire lives and have special needs.
I clarified that he needed to act quickly to protect the house and his brother's ability to live there at their mother's death. His mother needed to make a Living Trust that protects her two sons' interest in her estate in a Supplemental Needs Trust at her death, or they would lose their SSI and Medicare or be required to reimburse the government for benefits.
The family house would be sold, and 50% of the value would go to the government. Worse yet, his brothers would lose the only home they had known.
My old classmate was calling to update his mother's Power of Attorney. He said he 'dropped the ball' on the Trust but needs the POA for the long-term care facility where his mother now lives with advanced dementia.
I don't have to tell you the rest. It is too late, and the home is lost.
Don't be my old classmate. Please don't wait to do what you need and someday find out it's too late. Get a Living Trust estate plan while you have the legal capacity and are still here.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan at the link below. Registration is free.
Visit www.cbaplan.com or call 1-312-559-8444 for assistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices.
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC does not represent the completeness or accuracy of the information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Financial Agents Importance
Financial Agent for Power of Attorney
The Illinois Power of Attorney Act provides, in part, that every individual has the right to appoint an agent to make property, financial, personal, and health care decisions for that individual.
However, this right cannot be fully effective unless the principal empowers the agent to act throughout the principal's lifetime. This right includes, during periods of disability, the confidence that third parties will always honor the agent's authority.
There are two legal Power of Attorney (POA) documents, one for health care decisions and the other for financial decision-making.
Each has its importance, and everyone over 18 should have both of these documents. For another person you choose to be able to sign your name and handle your financial affairs legally, you need to sign a Power of Attorney for Property and name an Agent.
Financial Agents Power
Considering the authority you are granting an individual to sign your name and handle your financial transactions, careful consideration should be made in choosing the right person. Periodic review is essential to ensure that a person is still appropriate and, of course, is still available.
Your agent will have a legal responsibility that provides checks and balances, called a fiduciary responsibility. However, your bank accounts can be emptied and your finances shambles before you can enforce that fiduciary conduct. So, choose wisely and update when necessary.
Scope of Financial Agents Power
- When: For the duration, you have a choice; your agent's power begins immediately or only upon your disability is determined by a physician. Most couples choose to have each spouse's power to start immediately for the convenience of use in the document if one spouse is unavailable or chooses not to handle the household finances. Or maybe one spouse can't make the closing of real estate, and the agent can use the POA and could not do so if it was only activated on disability.
- How: The agent can use the POA for such financial transactions as:
- Pay bills, borrow transactions, and manage business operations. Banking, investing, insurance and annuities, and real estate transactions act as a Digital Fiduciary to access and manage online accounts.
- You are dealing with the IRS, Medicare, Medicaid, credit card companies, Social Security, VA, employment, and military benefits. Supplemental Needs Trusts and caregiver agreements.
- Hire agents, accountants, lawyers, and financial advisors.
- Why: You can only appoint an agent and sign the POA while you have your mental capacity. It is too late to do so if you are severely injured or illness limits your capacity. Now, you are subject to a full court proceeding to have a Legal Guardian appointed. Even if you are married, having your spouse established and operating under the court's control for the property and investments you own together is required. You do not want that to happen.
As you can see, there is no reason not to have a valid POA. Not having one can lead to financially disastrous consequences.
A POA of Property and Health Care should be part of a Living Trust estate plan. However, you can also obtain them separately. You can change or revoke a POA anytime while you still have capacity.
Living Trusts
At the end of your life or incapacitation, they risk Probate if you have property, investments, or bank accounts in your name.
- A Will = Probate. The rule is no one can legally sign your name. Therefore, at your death or incapacity, all assets in your name are subject to the complete Probate process, which averages 18 months and is costly.
- Living Trust completely avoids Probate.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents and a Last Will and Testament for guardianship of minor children and to "pour over" any assets still in your name at your death out of Probate.
- Your life insurance policies and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan at the link below. Registration is free.
Visit www.cbaplan.com or call 1-312-559-8444 for assistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices.
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC does not represent the completeness or accuracy of the information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Quitclaim Deed – Beware of the Risks
What is a Quitclaim Deed?
A quitclaim deed is also called a non-warranty deed. And for good reason. For instance, when you sign or receive a quitclaim deed, there is no guarantee provided that the property title is clean and free from any liens or other ownership interests.
A quitclaim deed doesn’t even ensure the person has the legal right to sell or transfer the property. Consequently, a quitclaim deed is the least safe form of title transfer, while a warranty deed is the safest.
When is a quitclaim deed most commonly used?
Most Common Uses and Risks of a Quitclaim Deed:
- Taxes
- You transfer or add someone to your deed; you have gifted that portion of the ownership. You now must file a gift tax disclosure on your tax return.
- If you transfer or add someone to your deed and die first, they are subject to capital gains tax on the difference between your original purchase price and the value at the time of your death.
- Family
- “My mother already transferred the house to me.” I can’t count the number of times I heard those words. If you quitclaim your deed to your children, you no longer own your home. Meanwhile, they might have other ideas of where you might live one day.
- Your home (actually their home now) is subject to a future divorce proceeding as an asset they own.
- Insurance
- Your homeowner’s policy must now list each owner as an “additional insured,” or any future claims may be excluded from coverage.
Joint Tenancy and Quitclaim Deeds
If two or more people purchase property and hold the title together, they are considered ”joint tenants.” Consequently, by law, the title passes to the surviving tenant. However, when the survivor dies, there must be a Probate proceeding to pass the title to another person, regardless if the survivor had a Will.
For this reason, a surviving parent might add one or more children to the deed by quitclaim. Interestingly, people often think it is a “quick” claim deed. Certainly, it is quick, no question. However, the issues that can result are anything but quickly resolved.
You should use this type of deed with extreme caution. Therefore, unless you transfer your ownership to your corporation or LLC or add your spouse to the title, there are much better alternatives that avoid the liability, tax, insurance, and future ownership risks outlined above.
If you are selling or purchasing property, use a warranty deed. Further, if you wish to pass your property to your children or another person as your death, use an estate plan. In conclusion, if you want to avoid the above Probate and taxes, ensure your estate plan is a Living Trust.
Living Trusts
At the end of your life or incapacitation, they risk Probate if you have property, investments, or bank accounts in your name.
- A Will = Probate. The rule is that no one can legally sign your name. Therefore, all assets in your name are subject to the Probate process, which averages 18 months and is costly.
- A Living Trust avoids Probate.
- Your financial accounts, life insurance policies, and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents. It also consists of a Last Will and Testament.
- A Will is necessary for the guardianship of minor children. It also transfers assets in your name out of Probate.
- A Living Trust contains a No Contest provision and beneficiary Asset Protection clauses.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan at the link below. Registration is free.
Visit www.cbaplan.com or call 1-312-559-8444 for assistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices.
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC does not represent the completeness or accuracy of the information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Please do not use this blog as legal advice, which turns on specific facts and laws in specific jurisdictions. No reader of this blog should act or refrain from acting based on any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader's state, country or other appropriate licensing jurisdiction.
Is a Gun Trust Necessary?
What is a Gun Trust?
A Gun Trust is a type of Trust similar to a Living Trust that takes ownership of your firearms and ensures an orderly and legal transfer of the guns at your death.
Name one or multiple Trustees responsible for transferring your firearms when you die. You can name Successor Trustees if a single Trustee is unavailable or not qualified to serve as Trustee. You also name the beneficiaries who will receive the firearms at your death.
The Gun Trust is revocable, meaning you can change it anytime if you wish to change the Trustee or the beneficiary.
Title I and Title II
The National Firearms Act (NFA) defines Title II firearms as:
- Machine guns (including machine pistols such as a Glock pistol with a conversion switch),
- Short-barreled shotguns ( less than 18 inches in length),
- Short-barreled rifles ( a barrel less than 16 inches),
- Destructive devices ( any explosive such as grenades and missiles),
- Silencers
- AOWs ( such as wallet and pen guns).
The NFA excludes antique firearms manufactured before 1898 from regulations unless ammunition becomes readily available.
Title I is the classification of all other firearms, such as ordinary rifles, pistols, revolvers & shotguns, and they are only subject to individual state licensing requirements. However, the ATF requires registration of all Title II Firearms.
Do You Need a Gun Trust?
If you own any Title II firearms, you need a Gun Trust.
Any violation of a federal firearm law, intentionally or unintentionally, can result in the loss of the firearms, fines of up to $10,000, and sentences of up to 10 years.
A gun trust allows any trustee of the trust to possess a Title II firearm legally. While all Trustees must comply with the same background and identification checks, the Trust can avoid potentially disastrous consequences.
A felony charge is at risk if someone borrows your vehicle with a Title II firearm. Suppose you let a friend fire off a few rounds with your Title II firearm. Your friend is subject to the same felony charge, as only the registered Title II gun owner can use the firearm.
When a Gun Trust owns a Title II firearm, you can solve many issues by having multiple Trustees.
Without a Gun Trust that names qualified beneficiaries, the issue becomes compounded at your death, with your legal representative and family members at risk of felony charges.
In addition to these serious risks, the years-long Probate process will control your firearms ownership.
How is a Gun Trust different than a Living Trust?
Your Gun Trust controls your firearms, and your Living Trust controls all your other assets. Both are private and avoid Probate. Remember, if you only have a couple of Title I firearms, your legal representatives and beneficiaries are at risk depending on state laws.
A few Title I firearms can be transferred efficiently by your Living Trust. However, you should also consider the protections of a Gun Trust if you own multiple Title I firearms.
Living Trusts
At the end of your life or incapacitation, they risk Probate if you have property, investments, or bank accounts in your name.
- A Will = Probate. The rule is no one can legally sign your name. Therefore, at your death or incapacity, all assets in your name are subject to the complete Probate process, which averages 18 months and is costly.
- Living Trust completely avoids Probate.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents and a Last Will and Testament for guardianship of minor children and to "pour over" any assets still in your name at your death out of Probate.
- Your life insurance policies and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and regular updates on strategies to protect what you have earned, visit and register with CBA using the link below. Registration is free.
Tom Tuohy is the founder of Tuohy Law Offices.
LinkedIn
TomTuohy.com
312-559-8444
17W220 22nd Street
Oakbrook Terrace, Illinois, 60181
The information being provided is strictly as a courtesy. When you link to any of these websites, Comprehensive Benefits of America, LLC/does not represent the completeness or accuracy of the information provided. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Disaster Protection for Your Security
Disasters intrude into our lives without any warning in most instances. Therefore, it is critical to be prepared and protect yourself and your family.
I understand; we all deserve a break, and I hope you and your family enjoy one in August.
However, whether you are headed out for a long drive or getting on a plane for a more extended vacation, it is essential not to overlook the details that protect you and your family during unexpected events.
Accordingly, here is a disaster preparedness checklist:
Disaster Protection for Critical Documents and Valuables:
- Certain documents belong in a fireproof safe but don't always get there. Here are a few:
- Social Security Card (I hadn't seen mine in years and needed it recently for the REAL ID driver's license update. The deadline is 5/3/23.)
- Spare photo IDs if you lose your wallet.
- Vital records include birth, marriage, divorce, adoption, guardianship, and passport.
- Your estate plan, Living Trust, and Power of Attorney documents.
- Pet ID tags.
- Household contact information includes your doctors, financial advisor, attorney, insurance, church, school, employer, and home repair services.
- Vehicle titles, real estate deeds, and leases.
Lastly, here is a complimentary comprehensive checklist.
Disaster or Emergency Access to Health Care Power of Attorney
Someone must go home to retrieve your Health Care POA whenever we need this vital document. Please make sure you have access to it on vacation.
With this in mind, MYLO offers a significant discount of just $9.95 per year for this service for our customers.
Disaster and Insurance
- Please ensure no gaps in your family health care and accidental injury insurance. Consider travel insurance for peace of mind.
- While away from your home and traveling by vehicle, it is essential to have a current umbrella policy. Most people are underinsured with a common $100/300 auto policy. An umbrella policy is a few hundred dollars annually and gives you an extra $1 million to protect your vehicles and home.
Mental Health
Finally, please don't overlook the stress of the last few years at work and home. Protecting your mental health and reaching out to someone when needed has to be a priority.
Accordingly, here is an excellent list of resources covering many issues.
Enjoy your summer break!
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and regular updates on strategies to protect what you have earned, visit and register with CBA using the link below. Registration is free.
Tom Tuohy is the founder of Tuohy Law Offices.
LinkedIn
TomTuohy.com
312-559-8444
17W220 22nd Street
Oakbrook Terrace, Illinois, 60181
The information being provided is strictly as a courtesy. When you link to any of these websites, Comprehensive Benefits of America, LLC/does not represent the completeness or accuracy of the information provided. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Your Summer Checklist
A checklist helps to ensure no gaps in your health care, financial, insurance, or estate plan documents.
Power of Attorney Checklist
- Are your agents outdated because of age, disability, or residence?
- Is a minor now old enough to be your agent?
- Update your Health Care Power of Attorney to include authority for your agent to access healthcare workers remotely and to visit you via Zoom or Facetime.
Health Care
Whether a trip to the hospital is sudden or planned, you will need a current Health Care Power of Attorney document. You will be asked for this legal document, and if you do not have one, you must sign something you do not understand while in the hospital, under stress, and with plenty of other things on your mind.
A Health Care POA appoints a person to make all health care decisions if you cannot. This person can access your medical records to accept or withdraw treatment, admit or discharge you from the hospital, and make life-support decisions. If you have arrived at the hospital unconscious, it is chaos with your family and medical personnel. This isn’t a situation you want to be in or one you want for your family.
Take a minute to review your existing Health Care POA and ensure your agent is correct and that the document is current. If you do not have one, now is the time to get one.
Financial
The law holds that no one, not even a spouse, can legally sign your name unless you have a valid Financial Power of Attorney designating an agent.
Your Financial POA agent has the legal authority to manage your financial affairs if you can no longer make these decisions yourself. A Financial POA is an important document to ensure that your financial matters are handled efficiently in an unfortunate occurrence.
Now is the time to review or obtain a Financial Power of Attorney document.
Beneficiary Designations Checklist
- Were any children born after you opened your insurance policies or tax-deferred accounts?
- Have any beneficiaries died?
- Has your marriage ended, or are you separated from your spouse?
- Do any beneficiaries have a legal disability? Name your Living Trust to avoid government reimbursement from your estate.
- Are any beneficiaries minors under the age of 18? Name your Living Trust to avoid Probate.
Living Trust or other Estate Plan Checklist
- What has changed in your family? Have you moved?
- Does your estate plan reflect your current wishes if something happens to you?
- Are your beneficiaries the same? Do you need to remove a beneficiary or add a new one?
- Are any changes needed when transferring your assets to your beneficiaries?
- Do your beneficiaries require asset protection because of disability, legal trouble, or a failing marriage?
- Is your Trustee or Executor still appropriate?
- Are all your assets titled in the name of your Living Trusts?
Real Estate Deeds Checklist
- Did you remember to retitle your property deed into the name of your Living Trust after the refinance closing?
- Have you moved your residence? Did you take the title of your new property in the name of your Living Trust?
- Are you still working? If so, as the active police and married, the title to the deed of your principal residence should be in Tenants by Entirety for maximum asset protection.
- Have you gotten married?
Living Trusts, if Not Now, When?
We all know that we need an estate plan, and we should take care of it sooner rather than later. However, almost everyone procrastinates when it comes to this essential task.
At the end of your life or incapacitation, they risk Probate if you have property, investments, or bank accounts in your name.
Advantages of a Living Trust
- A Will is Probate. The rule is no one can legally sign your name. Therefore, all assets in your name are subject to the Probate process, which averages 18 months and is costly.
- A Living Trust completely avoids Probate.
- Your financial accounts, life insurance policies, and deferred compensation accounts can name your Living Trust as the beneficiary. This is subject to essential tax considerations.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents. It also consists of a Last Will and Testament. A Will is necessary for the guardianship of minor children. It also transfers assets in your name out of Probate.
- A Living Trust contains a No Contest provision and beneficiary Asset Protection clauses.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and regular updates on strategies to protect what you have earned, visit and register with CBA using the link below. Registration is free.
Tom Tuohy is the founder Tuohy Law Offices.
312-559-8444
17W220 22nd Street
Oakbrook Terrace, Illinois, 60181
The information being provided is strictly as a courtesy. When you link to any of these websites, Comprehensive Benefits of America, LLC/does not represent the completeness or accuracy of information provided. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
POD and TOD Account Disadvantages
POD and TOD Accounts
What are POD and TODs? They are an increasingly popular method of providing for the distribution of financial accounts at your death. They are helpful in certain situations; however, there are critical limitations and risks associated with using them.
Payable of Death (POD)
A Payable on Death (POD) designation is commonly available at banks and used for checking and savings accounts and CDs. Other financial institutions usually use a Transfer on Death (TOD) designation. A POD and TOD are used to name a beneficiary for which the account balance transfers on death.
- Advantages
- Useful for transfer on death in smaller estates of less than $100,000 in total assets with no particular circumstances. (see below)
- Appropriate for many checking accounts, particularly those held at Chase Bank, to avoid inconveniences.
- It avoids Probate but comes with risks.
- Disadvantages
- Disinheriting: Regardless of the size of your estate, you might unintentionally disinherit a child or other intended beneficiary. Or the beneficiary might not share the funds with your other children as you had hoped. The account ownership automatically transfers to the only person(s) named on TOD or POD. These funds now become part of the named beneficiaries’ family estate if that person dies simultaneously with you or shortly after your death.
- Creditors: Since the funds are owned by your beneficiary immediately, they are also subject to any creditor claims, lawsuits, or divorce filed against the beneficiary.
- Minors: Like with life insurance policies, deferred compensation accounts, and IRAs or other beneficiary designations. If the beneficiary is under 18 at your death, the proceeds or funds go to Probate.
- Disability: If your beneficiary has a disability now or acquired one from an accident or illness before your death, In that case, the POD and TOD funds could end up with the government or jeopardize their Medicaid and SSI.
- Predeceased Beneficiary: The funds are subject to Probate if your beneficiary dies with you or before your death. There are no alternate beneficiaries on TOD/POD accounts.
- Squandering Inheritance: Statistics show that most inheritance is spent within 18 to 36 months. I am confident the shorter the time, the younger the beneficiary.
POD vs. Living Trusts
I write about Living Trusts frequently because they are much more than an estate plan. Living Trusts organize your assets now and safeguard them after your death. They also can avoid all of the above disadvantages of POD/TOD designations.
Living Trusts also protect your assets from Guardianship Court if you acquire a disability. Additionally, if you are contemplating a second marriage, a Living Trust is essential to segregate your assets from future marital funds for prenuptial protection.
Living Trusts, if Not Now, When?
We all know that we need an estate plan, and we should take care of it sooner rather than later. However, almost everyone procrastinates when it comes to this essential task.
At the end of your life or incapacitation, they risk Probate if you have property, investments, or bank accounts in your name.
Advantages of a Living Trust
- A Will is Probate. The rule is no one can legally sign your name. Therefore, all assets in your name are subject to the Probate process, which averages 18 months and is costly.
- A Living Trust completely avoids Probate.
- Your financial accounts, life insurance policies, and deferred compensation accounts can name your Living Trust as the beneficiary. This is subject to essential tax considerations.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents. It also consists of a Last Will and Testament. A Will is necessary for the guardianship of minor children. It also transfers assets in your name out of Probate.
- A Living Trust contains a No Contest provision and beneficiary Asset Protection clauses.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan on the link below. Registration is free.
Tom Tuohy is the founder Tuohy Law Offices.
312-559-8444
17W220 22nd Street
Oakbrook Terrace, Illinois, 60181
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC/ makes no representation of the completeness or accuracy of information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice relative to your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
George Halas, Prince, and a Chicago Cop
What could those three people possibly have in common?
Horrendous estate planning.
Not Having an Estate Plan
Prince
Let's dispense with Prince first and then find out why George Halas and a Chicago police officer have unofficially ranked #1 and # 2 as the two worst estates the decades-long Chief Judge of Cook County Probate ever heard.
The musician Prince died on April 21, 2016. He had no estate plan. Six years later, his estate, valued at hundreds of millions of dollars, is still in the predictable mess of the Probate Court system. Because Prince left no estate plan, the state is left to determine how much his estate is worth and who will receive it.
Having a Plan but not a Good Plan
If it sounds unimaginable that someone with assets, royalties, and a legacy eventually worth billions didn't plan for the inevitable day he wouldn't be here, the list of well-known people who did the same can fill a book. The court ordered Jackie Onnasis's personal property sold to pay otherwise avoidable estate taxes. James Gandolfini, "Tony Soprano," had a Will but not a Marital Trust, and because of that mistake, his estate paid the IRS $30 million, and his 13-year-old son ended up in the center of, you guessed it, a Probate battle.
Aretha Franklin, Elvis, Tony Hsieh, founder of Zappos (that estate may never settle), Kobe Bryant; the list goes on.
George Halas
On October 31, 1983, George Halas died without a Living Trust or a workable succession plan for the Chicago Bears. He wanted his son, Mugsy Halas, to take over the Bears, but Mugsy died suddenly in 1979, and George never created an alternate plan. For over a dozen years, the children of Mugsy and the children of his daughter Virginia McCaskey battled in Cook County Probate Court to the extent that ownership shares of the Bears had to be sold to pay for the legal fees. The Halas kids weren't even invited to the Super Bowl. Today, many fans wish the McCaskeys had sold all their shares.
Most importantly, this mess is not what George Halas wanted for his family and the Chicago Bears.
The Chicago Cop
A Chicago Police Officer died, leaving a Will as his estate plan to provide for his seven children. His kids fought each other in Probate Court for 18 years until there was nothing left in their father's estate. One day, I stood before the chief judge, who told me he hated this case as much as he did George Halas's case.
Whether it was the grandchildren of George Halas and the future of the Chicago Bears or the children of a Chicago Police Officer and a family's entire savings and legacy, none of it should have happened, and all of it should have been avoided.
Having a Will or no Will as an Estate Plan = Probate
If there's a Will, there are relatives. And if there isn't a Will, there are even more relatives.
A Will is merely your wishes that a Probate Court follows to distribute your assets. A Last Will and Testament must be probated. This rule comes from the law that no one can legally sign your name. Therefore, if you die with assets in your name, a Probate Court judge must appoint an Executor to sign your name for the asset transfers to your named beneficiaries. The court determines who receives your assets if you do not have a will.
The system cannot handle everyone's estate. Therefore, it can take years to get through the process. And that is if no one contests, which is very easy. It doesn't matter if you are a celebrity; probate is not the way to go.
The police officer's kids fought with each other because they could. Every example I gave above was easily avoidable.
Living Trust Estate Plan Avoids Probate
I have spent more time in Probate Court than I ever want to remember. So, I dedicated my career to helping people avoid the system and keep their affairs private and their families at peace with each other, and I am grateful for you and your memory. No matter who you are that is a legacy you deserve.
The first hurdle of planning is just getting it done. Estate planning is not high on anyone's list. But we all know how uncertain life is, and none of us are getting out of this thing alive. And none of us know when we will go.
To avoid massive headaches and expenses for your family and give yourself peace of mind, you need a Living Trust estate plan.
How Does a Living Trust Work?
Your real estate titles (in all states) transfer from your name to your Trust name. Life insurance policies and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
A Living Trust estate plan includes Health Care and Financial Power of Attorney documents. It also consists of a Last Will and Testament. A Will is necessary for the guardianship of minor children. It also transfers assets in your name out of Probate.
Finally, a Living Trust contains a No Contest provision and beneficiary asset protection clauses.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan at the link below. Registration is free.
Tom Tuohy is the founder Tuohy Law Offices.
312-559-8444
17W220 22nd Street
Oakbrook Terrace, Illinois, 60181
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC/does not represent the completeness or accuracy of the information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice about your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
Know Your Health Care Rights
We have all experienced the health care system. Honestly, can you say you are looking forward to your next experience? Part of it is the uncertainty of what we will find out. However, most of our anxiety and frustration is about the feeling we are not in control. Well, you can be, and you have the right to be in total control of your health and your care.
HIPPA
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is an often abused federally protected patient health care protection. Unfortunately, most of us roll our eyes at the mention of those letters, because typically the process brings bureaucratic delivery, endless seemingly unnecessary paperwork, and lack of ease. Consequently, HIPPA is often a sword against us rather than a shield protecting us.
Essential Health Care Rights
HIPPA guarantees your fundamental health care rights:
- You have the right to request and receive copies of all of your health care records. Don't let any medical provider tell you differently or delay producing your health care records. I know from legal experience that with medical errors or less than ideal treatment, the production of records slows down. If you are ever on the receiving end of improper care or malpractice, immediately demand to see every single one of your records, including all nurse's notes, lab testing, x-rays, act. This information is essential even if your care was excellent. It is your health care history, and it can be critical to successful and timely treatment in the future.
- You have the right to share this information with others and request that your provider do so.
- Your must receive your medical records within 30 days.
- Medical record production cannot be denied if your bill is not paid in full.
- You can request delivery of records on paper, digitally, or viewed online. Today, having a digital health care dashboard is a feature that should be common for health care providers. It allows you to have all your records in an easily viewed and indexed digital platform. Your entire health care history can be available to you and, importantly, be available for your subsequent health care treatment and discussion of options.
Informed Consent
This notion that we are in the dark about our health care history and options for treatment and hand over our health and welfare to medical providers is what we grew up expecting.
Most hospitals have patient advocates available to help you fully understand your condition and treatment options. Use them.
Always insist on a thorough and understandable explanation of your treatment, options, expected outcomes, and access to second or third opinions. It is your health and your future.
Health Care Power of Attorney
You have the right to appoint an agent to act on your behalf to make all health care decisions for you if you are unable or unwilling to do so. Therefore, please do not risk leaving that power in the hands of medical providers instead of your family or trusted friend.
Importantly, this essential document also includes your comprehensive instructions on life support, access to your medical records, and whether you wish to avoid prolonged suffering or extend your life for as long as possible. You can also choose to spend your last days at home and provide for your final plans and wishes.
Power of Attorney documents are readily available and customized to your specific wishes. In the POA's I prepare, I include the insistence that your family has access to be with you in your hospital room or to see you electronically via Facetime, Zoom, or other digital means. This recent practice of allowing people to suffer alone and even die alone is unconscionable.
All your health care directives are included in your preferred Living Trust estate plan.
Docubank
Unfortunately, when we seek medical treatment we almost certainly do not have our Health Care POA with us. Today there is a service, Docubank, that will provide you with a wallet card that allows any medical provider to access your POA 24/7 365 anywhere in the world.
Docubank gives clients a 65% discount – only $25 a year for this card that also can include your emergency contact person, family members, and a medical snapshot. Call our office and we will make sure you are given the discount.
Living Trusts
At the end of your life, or at incapacitation, if you have property or bank accounts in your name, they risk Probate.
- A Will must be Probated. The rule is no one can legally sign your name. Therefore, all assets in your name are subject to the Probate process, which averages 18 months and is costly.
- A Living Trust completely avoids Probate.
- Your financial accounts, life insurance policies, and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
- A Living Trust estate plan includes both Health Care and Financial Power of Attorney documents. It also consists of a Last Will and Testament. A Will is necessary for guardianship of minor children. It also transfers assets in your name out of Probate.
Comprehensive Benefits of America
For an expanded presentation of asset protection and financial wellness strategies and to receive regular updates on strategies to protect what you have earned, visit and register with CBAPlan on the link below. Registration is free.
Visit www.cbaplan.com or call 1-312-559-8444 for assistance with registering.
Tom Tuohy is the founder and CEO of Comprehensive Benefits of America, LLC, and Tuohy Law Offices.
The information being provided is strictly as a courtesy. When you link to any of these websites provided herein, Comprehensive Benefits of America, LLC/ makes no representation of the completeness or accuracy of information provided at these sites. CBA does not provide professional financial, investment, tax, or legal advice. You should seek certified financial planners, CPAs, and attorneys for advice relative to your personal needs. See complete Disclosures and the CBA Security and Privacy policies.
17W220 22nd St.
Suite 300
Oakbrook Terrace, IL 60181
admin@cbaplan.com