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Money Mistakes People Make After the Death of a Spouse

Everyone handles loss in their own way, but there are some common money mistakes people make after the death of a spouse. The following are four suggestions to help your finances weather this vulnerable time.

Don’t Rush Important Decisions

Grief is powerful. It alters the way we think and can affect memory function, as well as our ability to focus. If major decisions can wait, it’s best to put them aside for a while. It’s okay to pause. Well-meaning friends and relatives will likely offer unsolicited advice, but now is not the time to be moving money around, unless it’s really necessary. Instead, allow yourself the space to process emotions.

Spending Spree

Perhaps one of the most common money mistakes someone can make in this situation is to go on a spending spree. When a bereaved spouse attempts to move on or distract his or herself with retail therapy, or vacations, it can quickly lead to a downward financial spiral.

Money Mistakes on the Home Front

Sometimes a surviving spouse wants to hold on to the home they shared with their partner, and those memories they cherish there. But other times it may seem too painful not to sell right away. Maybe you no longer need as much space, or hope to relocate closer to family. All of those reasons are valid. Still, try to defer any major decisions for a few months.  

Even considerations such as paying off the mortgage might sound responsible, but consider meeting with a financial planner to ensure you’re thinking clearly and won’t be strapped for cash down the road.

Review Your Finances and Estate Plan

When you feel up to reviewing your finances, revise a budget. Spending needs will be different with one less person in the house, and you might choose to make some lifestyle changes. If you weren’t responsible for handling financial decisions in the past, be certain you fully understand your investments, sources of income, and all expenses, to avoid money mistakes.  

At this time, it’s also a good idea for the surviving spouse to review his or her own estate plan. Please contact us at Lewman Law for further information and assistance. Our office can be reached at (925) 447-1250.

Filed under Estate Planning Tips, Legal Services

Common Estate Planning Mistakes

It can be a relief to finally get your affairs in order, but keep in mind these common estate planning mistakes that are all avoidable with the right knowledge.

1. Not having an estate plan at all.

The worst thing you can do is nothing at all. If you die without a will, the state will decide who inherits your assets through probate court. In the absence of an heir, whatever you own becomes the property of the state. It’s especially important to name a guardian for your children, if you have any.

2. Your plan is out-of-date

Don’t create your will and then forget about it. Major life changes will require updates to your will, such as buying a new home, a birth, death, marriage, or divorce. Get in touch with your estate planner if your finances or life circumstances change. 

3. Not planning for disability

Not preparing for illness is a common estate planning mistake because no one wants to consider the possibility of being sick or injured. But it’s important to decide who would handle your finances and make healthcare decisions on your behalf in the event that you were unable to advocate for yourself.

4. Putting your child’s name on the deed

If you put your child’s name on the deed to your home, it becomes a gift that is subject to taxation. The alternative is to pass real estate to your child through their inheritance. Note, however, that gifts valued at less than $14,000 are excluded from this estate tax.

5. You aren’t too youngDon’t make the estate planning mistake of waiting until you’re older. It’s true that your needs will change as you age, but if you have a family or assets, it’s best to settle your affairs sooner rather than later. Plans can and should be updated down the road.

6. Reduce your estate tax through gifts

 A common estate planning mistake is failing to reduce estate taxes through gifts. These gifts can be made to individuals, organizations, or businesses of your choosing.  

7.  Forgetting the family pet

With everything else to consider, don’t forget to plan for your pets. It’s not only possible to establish a trust for your children, but for animals, as well. This is one way to ensure funds are available for their continued care. The last thing you’d want is for furry family members to end up in a shelter where they might be euthanized.

By preparing now, you make important decisions that affect your loved ones, instead of leaving things to federal and state governments. For more information on avoiding common estate planning mistakes, please contact us at Lewman Law to discuss your needs, and how we can help.

Filed under Estate Planning Tips

Why You Don’t Want a Joint Will

Why You Don’t Want a Joint Will

If you’re married, a joint will probably seems like it makes the most sense. After all, married couples share everything. But a joint will may not truly be in the best interest of the surviving spouse, and some states don’t even recognize them.

The Downside of Joint Wills

The main concern with a joint will is that it can only be revised so long as both spouses are alive and in agreement. It’s a tightly binding contract. This is most likely to become an issue if one spouse greatly outlives the other and there are unforeseen circumstances that arise. In this case, the remaining spouse must contest the will through court action should they wish to make changes.

While once common, joint wills are now rarely recommended. Depending on the document, the surviving spouse may not be able to manage funds according to life changes. For example, they may not be able to sell the family home if they wish to relocate or downsize, or to help grandchildren with the cost of college.  

Another reason joint wills can be problematic is if there are children from previous relationships, or the surviving spouse later remarries. Separate wills make it easier to sort out how assets are to be divided among beneficiaries. Another way to transfer wealth to children is to set up a trust, which may include any wishes or provisions.

Legal Advice

Joint wills are more likely to lead to costly probate litigation, and it’s important for the remaining partner to be able to amend their estate plan in order to address unexpected life changes. Laws vary by state, which complicates things. For alternatives to a joint will, it’s best to seek legal advice.

If you have questions about creating or revising your current will, please contact us at Lewman Law.

Filed under Estate Planning Tips, Legal Services

Protecting Your Digital Assets

Whether you realize it or not, you probably have digital assets. If you’ve ever signed up for a simple email account, or social media profile, you’ve left an online imprint with identifying information. The management of digital assets can seem like a legal grey area because inheritance laws haven’t quite caught up with our new tech world. But there are some steps you can take to protect your digital assets.

What is considered a digital asset?

Developments such as cryptocurrency, and apps like Venmo, have made online banking commonplace, but digital assets aren’t limited to finances. Rather, your digital assets refer to any personal information you access on the web, or store in the cloud. For example, subscription services, stored photographs, and Facebook content. If something happened to you, who would be able to access your business website or share saved Google Photos with your family?

Steps you can take now

1. Consult with an estate lawyer

An attorney that focuses on estate planning will be aware of the most recent laws and can help you determine how best to protect your digital assets. This may include a letter of instruction that explains your accounts, and how to log in, as well as your final wishes for their management.

2. Get Organized

Organize your accounts, usernames, and passwords. There are password managers available, such as LastPass, that remember all your access information, so you don’t have to. You only need to keep track of the “master password.”

3. Purchase an External Hard Drive

An external hard drive is useful for storing photographs and important documents that you want made available to your loved ones. The hard drive plugs into your computer and will need to be updated periodically to remain current. 

It’s risky to leave your digital assets in limbo once you’re gone. From the ownership of domain names to your Twitter account, deciding what to do with your digital trail can be time-consuming. If you need to update, or create a new will, Lewman Law can help. Contact us today to begin the process of protecting your digital assets.

Filed under Estate Planning Tips, Legal Services