LAW OFFICES
STEPHEN B. YIM

Newsletter

 

Law Offices of Stephen

B.Yim

 

June 2014 Newsletter

I recently received a call from a client who has a daughter attending college on the mainland.  She had found out that her daughter had been in a ski-accident and was in the hospital.  When the mother called the hospital to find out the status of her daughter, the hospital would not release any information and did not allow the mother to make any decisions on her daughter’s behalf.  You can imagine that stress that this caused the mother, being thousands of miles and hours away from her daughter.

This situation is all too common and easy for families to overlook when children leave for college.  Once your child reaches the age 18 you are no longer entitled to see their child’s medical and financial records or make decisions on their behalf.  As a result, it is important for young adults to appoint trusted individuals to make medical and financial decisions in the event they are unable to do so.

Few 18-year-olds consider the need for an estate plan, simply because most have little in the way of property. But if your child were to lose the ability to make or communicate decisions, medical professionals might refuse to consult with or even release information to you.  Without proper documents, parents generally can't access a child's financial accounts, either.

When a child leaves home to attend college, whether it be in the US or abroad, many parents fear a call from law enforcement, a hospital, or their child’s friend, informing them that their child has been in an accident or an emergency has occurred. Chances are that most of the calls you will receive from your child during the four years they are away for college will be happy, and will involve a request for money. If the unspeakable does happen and you receive a call informing you that your child is in the hospital unconscious, in trouble, or in need of your help, there are things you can do now to make handling such a crisis much easier. Even in situations that are not emergencies, the options discussed will facilitate actions that need to be taken.

There are two important Powers of Attorney your child will want to consider making:

An Advance Health Care Directive gives you the ability to act on your child’s behalf with regard to medical decision-making, if your child is unable to do so. 

A General Durable Power of Attorney gives you legal authority to act on your child’s behalf, regarding financial matters, regardless of whether they are able to make decisions on their own or not. It can be used in matters of both emergency and convenience.

 

During the month of June, I am extending an invitation to anyone who would like to have a Durable General Power of Attorney and Advance Directive prepared.  My usual fee for these is $500.00 per Power of Attorney (one for health care matters and one for financial matters).  However, for the month of June, I will prepare both of these for a total of $375.00 plus the General Excise Tax, for a savings of $625.00.

 

For those of you who have not yet taken advantage of the new State of Hawaii law affording creditor-protection for property transferred to a Revocable Trust, I will prepare and record these deeds for $250.00 plus the recording fee and the General Excise tax, a saving of $250.00 off of my usual fee for deed work of $500.00.

 

REMINDER:

As a gently reminder, please also keep in mind that if we have not seen you in the past three years, or you have experienced any significant changes in your life, please schedule a review appointment.

 

And, if you or someone you know has separate trusts, one for each spouse, please consider discussing the Joint Legacy Trust as an alternative.  I discussed this in the 2013 Newsletter, and a recent article in Forbes Magazine addresses this. 

 

The new estate tax law and the creditor-protection deed law favor married couples, and these new favorable laws provide married couples who consider most of their assets as jointly-owned a never-seen-before opportunity to (1) save thousands of dollars in potential capital gains tax; (2) simplify their estate plans; and (3) secure creditor-protection for their Hawaii real estate.  Please call my office to come in for a free consultation to see if this Joint Legacy Trust is right for you.

Please find enclosed a complimentary copy of the Forbes Article.

Thank You for allowing me to help you with your estate planning needs.  We are constantly looking to improve the way we assist families with not only creating meticulous estate planning documents, we also strive to help our clients make informed decisions for all phases of life – from wellness, to diminished capacity, to incapacity, to end of life decision making, and finally passing on.  We not only look to assist clients in communicating their instructions, we also want to help clients pass on their intentions and reasons for making their plans.  And, we also want to help our clients’ Trustees, advisors, and beneficiaries clearly receive these instructions and intentions: to honor and respect our clients’ decisions, to make life easier for their loved ones and to preserve family relationships.

 

 

 

 

Law Offices of Stephen B.

Yim, 2013 Newsletter

 

We are already half-way into the Year!  This is our first Newsletter that we have prepared for our clients.  The intent of this Newsletter is to keep our clients up to date with laws that may affect your estate plan as well as provide you with information about our practice.  This newsletter addresses a couple of significant changes in our State and Federal Laws as well as some Frequently Asked Questions (FAQs) to help you with keeping your estate plan current.

 

 

 

The New “old” Tax Law

 

We all can breathe a sigh of relief with regard to the estate and gift tax law as President Obama recently signed into law the current Estate and Gift Tax law.  Essentially, we get to keep the Gift and Estate Exclusion of 5 million (indexed for inflation) dollars per spouse.  Also left intact is what is referred to as “portability” which means that a surviving spouse can elect to take a deceased spouse’s unused exclusion.  About the only significant change in this area is that the tax rate for estates above 5 million dollars increased to 40%.

 

The New State of Hawaii Creditor-Protection Deed

 

 In July of last year, the State of Hawaii gave us a new law that extends creditor-protection for real property held jointly as tenants by the entirety (husband and wife or reciprocal partners) transferred into Trust.

 

This means the property is protected from a lawsuit against one spouse, even when the property is held in Trust.

 

 The New Joint Legacy Trust - Learn how to Save tax, Simplify your estate plan, and Secure creditor-protection.

 

 The new estate tax law and the creditor-protection deed law favor married couples, and these new favorable laws provide married couples who consider most of their assets as jointly-owned a never-seen-before opportunity to (1) save thousands of dollars in potential capital gains tax; (2) simplify their estate plans; and (3) secure creditor-protection for their Hawaii real estate.  Please call my office to come in for a free consultation to see if this Joint Legacy Trust is right for you.

 

My Heartfelt Will – Coloring in your plan.

 

I am very excited about our “second generation My Heartfelt Will” which I copyrighted and provide to each of my clients to add their touch to their estate plan.  My Heartfelt Will offers each client to reach into their past to write their personal stories and experiences that shaped their lives.  It also allows for a place to write instruction and guidance to trustees and family members as to how they hope the inheritance is used to provide benefit and meaning to the lives of their beneficiaries.  The importance of this cannot be understated.  A recent study by Allianz Insurance Company revealed that 86% of baby boomers preferred family stories as opposed to receiving cash as their legacy from their parents.  And 65% of baby boomers said in the study that they felt it was very important that they receive instruction on how their parents’ wishes about their family, death, and estate should be fulfilled.  My Heartfelt Will is intended to add this meaning to one’s estate plan.  If you haven’t been in for a review in a couple of years, please schedule an appointment to review your plan and receive My Heartfelt Will as a gift from me.

 

Frequently Asked Questions (FAQs)

 

 

Q:              How often do you suggest that we review our estate plan and what is the anticipated cost of reviewing a plan?

 

 

A:              Estate planning should be viewed as a process rather than a static, one-time event because our lives are not static.  Change is always occurring, in the law, in your lives, in the community, everything is ever-changing.  Because our lives change, we want to review our estate plans to accommodate change.  It’s kind of like going to the doctor.  Because our bodies change as we get older, we see our doctors to accommodate these changes, whether through medication, surgery, or recommended life-style change, all in order to stay as healthy as possible.  With regard to the cost of reviewing the estate plan, the changes will vary depending on the work involved.  Usually, the review meeting is at no charge.  And you can always decide how much work you would like me to do for you after the consultation.  The process for reviewing a plan includes the following:

 

 

  1. Call our office to schedule a review meeting, about every three years after you establish your plan;

  2. Meet with me for about 45 minutes to go over your plan;
  3. After the meeting, our office will send you a letter to reiterate what we talked about in the meeting and to provide a quote for the anticipated work;
  4. You would then confirm that you would like to proceed with the work.

     

Q:        How can we prepare for this review meeting?

 

 

A:        The review meeting is a very important step in the estate planning process.  Not only can we discuss any changes in your life and any new laws, we can examine your plan with a better understanding of estate planning to ensure that your wishes are clearly spelled out.  The following suggested steps help to prepare for a meaningful review meeting:

 

 

  1. Take a look through your plan.  Pay close attention to who you named to make decisions for you and determine if you’d like to make any changes;
  2. Take a look at who your beneficiaries are and the timing and manner of distributions;
  3. Prepare an inventory of your assets;
  4. Check the title of your real estate and the beneficiary designations of annuities, retirement accounts, and life insurance;
  5. Give some thought to your beneficiaries, how are they managing money?  How are their relationships with each other or their spouses?  How are their careers?  Are there any concerns for any of them?
  6. How are you doing?  Are you planning to make any significant changes in your life such as moving?  How are you managing your affairs?  Do you feel you need more help in this area?

 

 

The Benefit of a Family Meeting

 

One key element of ensuring a successful estate plan and transition of assets is to engage in a family meeting with the lawyer, when appropriate, once the estate plan has been executed.  These meetings may not be appropriate when children are minors or family friction exists.  The benefit of the meeting is for parents to clearly state in their own words, their intention and meaning behind the estate plan, and for the children to meet the estate planning attorney and other advisors.  While there is a cost associated with this meeting (about $500.00), I believe it is a critical step in the estate planning process.