Matthew R. Frick
LAKE COUNTRY TRUST BLOG
LAKE COUNTRY TRUST BLOG
Providing you with more information to better protect your loved ones

Getting Divorced? Don’t Overlook These 4 Updates to Your Estate Plan—Part 1
Getting Divorced? Don’t Overlook These 4 Updates to Your Estate Plan—Part 1
November 12, 2020
Going through divorce can be an overwhelming experience that impacts nearly every facet of your life, including estate planning. Yet, with so much to deal with during the divorce process, many people forget to update their plan or put it off until it’s too late.
Failing to update your plan for divorce can have a number of potentially tragic consequences, some of which you’ve likely not considered—and in most cases, you can’t rely on your divorce lawyer to bring them up. If you are in the midst of a divorce, and your divorce lawyer has not brought up estate planning, there are several things you need to know.
First off, you need to update your estate plan, not only after your divorce is final, but as soon as you know a split is inevitable. Here’s why: until your divorce is final, your marriage is legally in full effect. This means if you die or become incapacitated while your divorce is ongoing and haven’t updated your estate plan, your soon-to-be ex-spouse could end up with complete control over your life and assets. And that’s generally not a good idea, nor what you would want.
Given that you’re ending the relationship, you probably wouldn’t want him or her having that much power, and if that’s the case, you must take action. While state laws can limit your ability to make certain changes to your estate plan once your divorce has been filed, here are a few of the most important updates you should consider making as soon as divorce is on the horizon.
1. Update your power of attorney documents
If you were to become incapacitated by illness or injury during your divorce, the very person you are paying big money to legally remove from your life would be granted complete authority over all of your legal, financial, and medical decisions. Given this, it’s vital that you update your power of attorney documents as soon as you know divorce is coming.
Your estate plan should include both a durable financial power of attorney and a medical power of attorney. A durable financial power of attorney allows you to grant an individual of your choice the legal authority to make financial and legal decisions on your behalf should you become unable to make such decisions for yourself. Similarly, a medical power of attorney grants someone the legal authority to make your healthcare decisions in the event of your incapacity.
Without such planning documents in place, your spouse has priority to make financial and legal decisions for you. And since most people typically name their spouse as their decision maker in these documents, it’s critical to take action—even before you begin the divorce process—and grant this authority to someone else, especially if things are anything less than amicable between the two of you.
Once divorce is a sure thing, don’t wait—immediately contact us, as your Personal Family Lawyer®, to support you in getting these documents updated. We recommend you don’t rely on your divorce lawyer to update these documents for you, unless he or she is an expert in estate planning, as there can be many details in these documents that can be overlooked by a lawyer using a standard form, rather than the documents we will prepare for you.
2. Update your beneficiary designations
As soon as you know you are getting divorced, update beneficiary designations for assets that do not pass through a will or trust, such as bank accounts, life insurance policies, and retirement plans. Failing to change your beneficiaries can cause serious trouble down the road.
For example, if you get remarried following your divorce, but haven’t changed the beneficiary of your 401(k) plan to name your new spouse, the ex you divorced 15 years ago could end up with your retirement account upon your death. And due to restrictions on changing beneficiary designations after a divorce is filed, the timing of your beneficiary change is particularly critical.
In most states, once either spouse files divorce papers with the court, neither party can legally change their beneficiaries without the other’s permission until the divorce is final. With this in mind, if you’re anticipating a divorce, you may want to consider changing your beneficiaries prior to filing divorce papers, and then post-divorce you can always change them again to match whatever is determined in the divorce settlement.
If your divorce is already filed, consult with us and your divorce lawyer to see if changing beneficiaries is legal in your state—and also whether it’s in your best interest. Finally, if naming new beneficiaries is not an option for you now, once the divorce is finalized it should be your number-one priority. In fact, put it on your to-do list right now!
Next week, we’ll continue with part two in this series on the estate-planning updates you should make when getting divorced.
This article is a service of Matt Frick, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Will Your Estate Plan Actually Work When Your Family Needs It?
Will Your Estate Plan Actually Work When Your Family Needs It?
November 6, 2020
November 6, 2020 is “National Love Your Lawyer Day,” which started in 2001 as a way to celebrate lawyers for their positive contributions and encourage the public to view lawyers in a more favorable light... because we need the help.
As your Personal Family Lawyer®, we’re dedicated to improving the public’s perception of lawyers by offering family-centered legal services specifically tailored to provide our clients with the kind of love, attention, and trust we’d want for our own loved ones. With that in mind, this post gives some insight into how this vision for a new law business model first came about.
If you’re like most people, you likely think estate planning is just one more task to check off of your life’s endless “to-do” list.
You may shop around and find a lawyer to create planning documents for you, or you might try creating your own DIY plan using online documents. Then, you’ll put those documents into a drawer, mentally check estate planning off your to-do list, and forget about them.
The problem is, estate planning is not a one-and-done type of deal.
In fact, if it’s not regularly updated when your assets, family situation, and the laws change, your plan will be worthless. What’s more, failing to update your plan can create its own set of problems that can leave your family worse off than if you’d never created a plan at all.
The following true story illustrates the consequences of not updating your plan, and it happened to a mentor of mine. Indeed, this experience was one of the leading catalysts for her to create the new, family-centered model of estate planning we use with all of our clients.
A game-changing realization: When Ali was in law school, her father-in-law died. He’d done his estate planning—or at least thought he had. He paid a Florida law firm roughly $3000 to prepare an estate plan for him, so his family wouldn’t be stuck dealing with the hassles and expense of probate court or drawn into needless conflict with his ex-wife.
And yet, after his death, that’s exactly what did happen. His family was forced to go to court in order to claim assets that were supposed to pass directly to them. And on top of that, they had to deal with his ex-wife and her attorneys in the process.
Ali couldn’t understand it. If her father-in-law paid $3,000 for an estate plan, why were his loved ones dealing with the court and his ex-wife? It turned out that not only had his planning documents not been updated, but his assets were not even properly titled.
Ali’s father-in-law created a trust, so that when he died, his assets would pass directly to his family, and they wouldn’t have to endure probate. But some of his assets had never been transferred into the name of his trust from the beginning. And since there was no updated inventory of his assets, there was no way for his family to even confirm everything he had when he died. To this day, one of his accounts is still stuck in the Florida Department of Unclaimed Property.
Ali thought for sure this must be malpractice. But after working for one of the best law firms in the country and interviewing other top estate-planning lawyers across the country, she confirmed what happened to her father-in-law wasn’t malpractice at all. In fact, it was common practice.
This inspired Ali to take action. When she started her own law firm, she did so with the intention and commitment that she would ensure her clients’ plans would work when their families needed it and create a service model built around that mission.
Will your plan work when your family needs it?
We hear similar stories from our clients all the time. In fact, outside of not creating any plan at all, one of the most common planning mistakes we encounter is when we get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works. Yet by that point, it’s too late, and the loved ones left behind are forced to deal with the aftermath.
We recommend you review your plan annually to make sure it’s up to date, and immediately amend your plan following events like divorce, deaths, births, and inheritances. This is so important, we’ve created proprietary systems designed to ensure these updates are made for all of our clients, so you don’t need to worry about whether you’ve overlooked anything as your family, the law, and your assets change over time.
Furthermore, because your plan is designed to protect and provide for your loved ones in the event of your death or incapacity, we aren’t just here to serve you—we’re here to serve your entire family. We take the time to get to know your family members and include them in the planning process, so everyone affected by your plan is well-aware of what your latest planning strategies are and why you made the choices you did.
Unfortunately, many estate planning firms do not engage with the whole family when creating estate plans, leaving the spouse and other loved ones largely out of the loop. We believe the planning process works best when all of your loved ones are educated and engaged. We can even facilitate regular family meetings to keep everyone up-to-date.
Built-in systems to keep your plan current
Our legal services are designed to make estate planning as streamlined and worry-free as possible for both you and your family. Unlike the lawyers who worked with Ali’s father-in-law, we don’t just create legal documents and put the onus on you to ensure they stay updated and function as intended—we take care of that on our end.
For example, our built-in systems and processes would’ve prevented two of the biggest mistakes made by the lawyers who created her father-in-law’s plan. These mistakes include: 1) not keeping his assets properly inventoried, and 2) not properly titling assets held by his trust.
Maintaining a regularly updated inventory of all your assets is one of the most vital parts of keeping your plan current. We’ll not only help you create a comprehensive asset inventory; we’ll make sure the inventory stays consistently updated throughout your lifetime. In fact, we’ve even created a unique (and totally FREE) tool called a Personal Resource Map to help you get the inventory process started right now, by yourself, without the need for a lawyer.
To learn more, visit PersonalResourceMap.com and start creating an inventory of everything you own to ensure your loved one’s know what you have, where it is, and how to access it if something happens to you. From there, meet with us to incorporate your inventory into a comprehensive set of planning strategies that we’ll keep updated throughout your lifetime.
As to properly titling assets held by a trust, when you create a trust, it’s not enough to list the assets you want it to cover. You have to transfer the legal title of certain assets—real estate, bank accounts, securities, brokerage accounts—to the trust, known as “funding” the trust, in order for them to be disbursed properly.
While most lawyers will create a trust for you, few will ensure your assets are properly funded. We’ll not only make sure your assets are properly titled when you initially create your trust, we’ll also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust. This will keep your assets from being lost, as well as prevent your family from being inadvertently forced into court because your plan was never fully completed.
For the love of your family
With us as your Personal Family Lawyer®, our planning services go far beyond simply creating documents and then never seeing you again. In fact, we’ll develop a relationship with your family that lasts not only for your lifetime, but for the lifetime of your children and their children, if that’s your wish.
We’ll support you in not only creating a plan that keeps your family out of court and out of conflict in the event of your death or incapacity, but we’ll also ensure your plan is regularly updated to make certain that it works and is there for your family when you cannot be. Contact us today to get started.
This article is a service of Matt Frick, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

6 Changes to Watch For In Your 2020 Taxes
6 Changes to Watch For In Your 2020 Taxes
November 1, 2020
Although you may have just filed your 2019 income taxes in July, now is the time to start thinking about your 2020 return due next April. While it’s always a good idea to be proactive when it comes to tax planning, it’s particularly important this year.
In addition to annual updates for inflation, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides individual taxpayers with several new tax breaks, most of which will only be available this year. The sooner you learn about the different forms of tax-savings available, the more time you will have to take advantage of them.
Here are 6 ways your 2020 return will differ from prior years, and for your benefit:
1. Waived RMDs
You are typically required to take an annual required minimum distribution (RMD) from your IRA, 401(k), or other tax-deferred retirement account starting in the year when you turn 72, but the CARES Act temporarily waived the RMD requirement for 2020. The waiver also applies if you reached age 70½ in 2019, but waited to take your first RMD until 2020, as allowed under the SECURE Act.
RMDs generally count as taxable income, so taking this waiver means that you may have lower taxable income in 2020 and therefore owe less income taxes for 2020.
However, there are a number of factors to consider, including the state of the market and your living expenses, when deciding whether or not to waive your RMDs. Given this, consult with us or your tax professional before making your final decision.
2. Higher standard deduction
If you do not itemize deductions, you can use the standard deduction to reduce your taxable income. Trump’s tax reform legislation nearly doubled the standard deduction starting in 2018, and it has increased even more for inflation since then. For 2020, the new standard deduction amounts include the following:
● $12,400 for single filers
● $24,800 for those who are married filing jointly
● $18,650 for people filing as a head of household
3. Higher contribution limits for certain retirement accounts
Depending on the type of retirement account you are invested in, the maximum amount you can contribute may have increased this year. The contribution limit for a 401(k) or similar workplace-retirement plan has increased from $19,000 in 2019 to $19,500 in 2020. If you are 50 or older in 2020, the 401(k) catch-up contribution limit is $6,500, up from $6,000.
On the other hand, the amount you can contribute to a traditional IRA remains the same for 2020: $6,000, with a $1,000 catch-up limit if you’re 50 or older. However, if you made too much money to contribute to a Roth IRA last year, the maximum income limits for contributing to a Roth have increased, so you may be able to contribute in 2020.
In 2020, eligibility to contribute to a Roth IRA starts to phase out at $124,000 for single filers and $196,000 for married couples filing jointly. Those phase-out limits are up from 2019, which started at $122,000 for single individuals and $193,000 for married couples.
4. New charitable deduction
In most years, you are only able to deduct charitable donations on your income tax return when you itemize deductions. However, the CARES Act included a provision to allow everyone to claim up to a $300 “above-the-line” deduction for charitable contributions even if you take the standard deduction in 2020. This change was designed to encourage people to donate money to charity to help with COVID-19 relief efforts.
5. Adoption credit changes
If you adopted a child this year, you can claim a higher tax credit on your 2020 return to cover your adoption-related expenses such as adoption fees, court and attorney costs, and travel expenses. The maximum credit amount for 2020 is $14,300, which is a small increase from last year.
6. New rules for early withdrawals from retirement accounts
If your finances were seriously impacted by the coronavirus, you may be in dire need of funds to cover your expenses. Thanks to new rules under the CARES Act, you now have more flexibility to make an emergency withdrawal from tax-deferred retirement accounts in 2020, without incurring the normal penalties.
Ordinarily, permanent withdrawals from traditional IRAs or 401(k) accounts are taxed at ordinary income rates in the year the funds were taken out. And pulling out money before age 59 1/2 would also typically cost you a 10% penalty.
But thanks to the CARES Act, you can avoid the 10% penalty (if under 59 1/2) on up to $100,000 in coronavirus-related distributions (CRDs) from your retirement account. You are also allowed to spread such distributions over three years to reduce the tax impact. Or better yet, you can opt to put this money back into your retirement account—also within three years—and avoid paying taxes on the money all together.
That said, emergency withdrawals are only available to those individuals with a valid COVID-19-related reason for early access to retirement funds. These reasons include:
● Being diagnosed with COVID-19
● Having a spouse or dependent diagnosed with COVID-19
● Experiencing a layoff, furlough, reduction in hours, or inability to work due to COVID-19 or lack of childcare due to COVID-19
● Have had a job offer rescinded or a job start date delayed due to COVID-19
● Experiencing adverse financial consequences due to an individual or the individual’s spouse’s finances being affected due to COVID-19
● Closing or reducing hours of a business owned or operated by an individual or their spouse due to COVID-19
Because early withdrawals can negatively impact your retirement savings down the road, if you are looking to take advantage of this provision, you should consult with us and your financial advisor first. Also note that employers are not required to participate in this provision of the CARES Act, so you’ll also need to check with your plan administrator to see if it’s available at your workplace.
Maximize tax-savings for 2020
While the deadline for filing your 2020 income taxes isn’t until April 15, 2021, with all of the new COVID-19 legislation, the earlier you start planning your taxes, the better. Consult with us, as your Personal Family Lawyer®, for support in clarifying how these new changes will affect your return and to implement strategies to maximize your tax savings for 2020 and beyond.
This article is a service of Matt Frick, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.