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One way you can reduce estate taxes and the costs of probate court is bypassing it. This is why trusts have become so popular. Trusts are an excellent estate-planning and property managing tool. They are fairly simple and inexpensive to create and are accessible to everyone.

Private citizens create trusts for many reasons. One particular reason why many people create a trust is to prevent certain assets or capital from going to probate court when you die. A way to do this is by creating a trust in favor of a beneficiary who at the time of the formation of the trust is incapable of managing the property that is intended for him or her, either because he or she is a minor, or because he or she has been legally declared incapacitated. For example, a parent can create a trust in favor of his three minor children, providing that the funds transferred to the trustee will be used to finance the children’s future college studies in equal parts. Another example would be the case in which a parent creates a trust in favor of his or her autistic child to provide for his or her future special needs, called special needs trust, for the child’s personal and medical care. Continue reading ‘Trusts – A Great Tool to Save Money’ »

Estate planning is a fundamental part of life planning and requires executing legal documents to ensure beneficiaries receive intended inheritance gifts in the event of death. While few people jump for joy at the idea of planning their estate, it is important to at least implement basic elements to protect loved ones.

Minimum estate planning should consist of a last will and testament, durable power of attorney, and healthcare proxy. Individuals whose estates are valued higher than $100,000 might consider transferring inheritance assets into a trust.

Executing a last will is a simple process that does not require a lot of time. A will provides details of how assets should be distributed. Upon death, the will is submitted through probate court and becomes a matter of public record. Probate can be prolonged when individuals die intestate (without a will) and assets are distributed according to state probate laws. Continue reading ‘Estate Planning is Essential For Protecting Inheritance Assets’ »

Did you know that approximately 60% of American adults do not have a written estate plan? This article will focus on a common estate planning tool – a Will or Last Will and Testament, and the advantages and disadvantages of having a Will.

What is a Will?

A Will is a legal document containing your written instructions for how your property/assets will be distributed and how your dependents will be cared for in your absence. Your assets may consist of bank accounts, brokerage funds, vehicles, real estate, items of sentimental value, and other personal property.

In a Will-based estate plan, your Last Will and Testament will cover four important points:

1. Who will serve as your Personal Representative/Executor;
2. What powers your Personal Representative/Executor will have;
3. Who will be your beneficiaries (those who will inherit your property); and
4. How your property will be transferred to your beneficiaries.

If you have minor children, your Last Will and Testament will also cover who serves as guardian for your children. There are several types of Wills, including the following:

Self-Proving/Testamentary Will

A self-proving Will, also known as a testamentary Will, is the traditional type of Will with which most people are familiar. It is a formally prepared document that is signed in the presence of witnesses.

Holographic Will

A holographic Will is one that is written by hand, not typed or created on a computer or word processor and without the presence of witnesses. These Wills are only valid in a few states. Maryland and the District of Columbia do not recognize holographic Wills. Continue reading ‘The Basics of Estate Planning – Wills’ »

What is a Trust?

A Trust, generally, is a legal entity that can hold title to property. There are three parties to a Trust agreement: the Trustmaker who creates the Trust, the Beneficiary who receives the benefit of the property held in the Trust, and the Trustee who manages the Trust. The property that is transferred to and held by the Trust becomes the Trust principal. If you create a Trust within your Will, it is called a Testamentary Trust. If you create a Trust while you are alive, it is called an inter vivos or Living Trust.

While you are alive, you usually will receive all the income of the Trust and as much of the principal as you request. Upon your death, the Trust assets are distributed to your Beneficiaries in accordance with your directions contained in the Trust agreement, or it can continue for specified purposes for a period of time. Continue reading ‘The Basics of Estate Planning – Trusts’ »

It was a matter of seconds. At birth, the fetus did not receive enough oxygen in her brain. Eli was born perfectly normal physically, but with serious learning and motor impediments. When she turned three, it was obvious to everyone. Eli was put under psychiatric treatment and prescribed some heavy medications to control her severe hyperactivity, attention deficit and erratic behavior.

The medications were effective partially taking care of some of her symptoms, but their side effects were devastating. Eli lost all her body hair, including her eyelashes and eyebrows. And even when she became able to socialize up to a certain degree, Eli would never be able to advance much in academics or to hold a job, get married or raise a family. In other words, Eli was a “special child”. She lived in a special world. Eli would always need close assistance and medical care. In addition, some of her medications were quite expensive.

Knowing this, Tom, Eli’s father, a successful entrepreneur, became deeply concerned about Eli’s future. He was especially concerned about Eli’s welfare in times when he wouldn’t be around to provide for her. Who would pay for Eli’s home care and medical needs once he’d leave this existence? He decided to consult his attorney. Continue reading ‘Stop Worrying – Create a Special Needs Trust For Your “Special Child” Now’ »

Did you know that approximately 60% of American adults do not have a written estate plan? Estate planning is extremely important, but most adults do not fully understand what estate planning is and how it works. Adults also do not fully understand that without an estate plan, a judge, who does not know you, your family, or your wishes, will determine who gets your assets and who will care for your minor children.

What is estate planning?

Estate planning involves both planning for the possibility of mental incapacity and planning for death. It is one of the most important steps you can take to make sure your wishes regarding your assets and healthcare are honored, and that loved ones are provided for after you are gone. Though often overlooked or even put off, a comprehensive estate plan can answer a number of legal questions that often arise whenever anyone dies. Continue reading ‘What is Estate Planning?’ »

One of the most important elements of financial planning is to decide what will happen to your assets after your die. It’s even more important for the single person as opposed to married people. Married people can transfer unlimited wealth to a surviving spouse without incurring estate taxes. This option is not available to single people. Another danger for unmarried people is that they have no spouse to make medical, legal or financial decisions for them when they become incapacitated. That makes it even more imperative that single people set up a sound estate plan.

There are several ways in which a single person can set up a sound estate plan, but since estate laws vary from state to state, by far the smartest approach is to hire an attorney who specializes in estate planning. Some lawyers will charge by the hour, while others will do a basic estate plan for a fixed price. To save time, and possibly some money, you can purchase a software packages that will help you organize your assets and other information that the attorney will need to prepare your estate plan. Continue reading ‘Estate Planning For the Single Person’ »

An estate planning attorney is an integral part of developing end-of-life strategies. Lawyers who specialize in this field help individuals execute a last will and testament, durable power of attorney, healthcare proxies, and revocable or irrevocable trusts.

Hiring an estate planning attorney is necessary when individuals want to keep inheritance assets out of probate. Probate is a legal requirement in all 50 states and is used to validate wills, determine rightful heirs, settle outstanding debts, and distribute inheritance property to designated beneficiaries.

Numerous strategies exist to avoid probate. The most common include establishing irrevocable life insurance trusts, living trusts, and designation of transfer on death and payable on death beneficiaries.

On average, the probate process takes six to nine months to settle. When decedents die intestate (without a will) probate usually takes between nine months to one year to complete. Much depends on the estate value, court caseload, and family dynamics.

Working with estate planning lawyers is particularly important when family strife exists. Sadly, death can bring out the worst in people. Anger, greed and envy can drive heirs who feel slighted to contest the will and prolong probate for months or years. Continue reading ‘Do I Need an Estate Planning Attorney?’ »

You paid good money for a comprehensive estate plan to protect your family and assets. So, when was the last time you reviewed it?

An old, outdated plan is basically no good to you or your family, so take a little time to have your plan reviewed to make sure it will work the way you intend. If you pass away with an outdated estate plan, your current wishes will not be carried out. A well written estate plan should change and evolve as your family and life change and evolve. I recommend you review your estate plan at least every three years or sooner if one of the following events occurs:

* If you are newly married or if you re-marry
* If you get a divorce (even just legal separation)
* If you move to another state
* The birth of a child
* You adoption a child Continue reading ‘How Often Should You Review Your Estate Plan?’ »

An irrevocable trust is a trust which, once set up, cannot be changed or canceled without first getting the permission of the beneficiary. The grantor may not withdraw contributions from the trust. There are certain tax advantages accruing when the trust is irrevocable. Using this type of trust a person is allowed to give away his or her assets or money even before death, which is not possible in the case of a revocable trust. Thus, an irrevocable trust is a trust that becomes permanent after being established and may not have changes made to it or be revoked once formed.

There arrangement must be set up per the grantor’s wishes. In establishing the arrangement for estate planning purposes, the goal of the trust would be to minimize federal estate tax. If passing on real estate or other property, the grantor will be giving away the property to the beneficiary permanently. This would mean that the grantor no longer owns the property and so it does not qualify as part of the total estate and no federal estate taxes need to be paid. In the event the grantor takes out a life insurance to pay for the federal estate taxes, this may then be the only asset of the trust and it would be possible for the policy to be separate from the grantor’s estate and not subject to taxation. Continue reading ‘Maximize Tax Benefits With an Irrevocable Trust’ »