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9 Important Trust Planning Terms

Davidov Law Group

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We’ve found that our clients benefit from reviewing our “9 Important Trust Planning Terms” so we’re sharing it with you as well.  If you have any trust planning questions or concerns, be sure to consult with a qualified trust planning – estate planning attorney.

Trust

A trust is a legal agreement, technically, a contract.  The trust is like an instruction book that gives guidance to the trustee as to how to carry out his duties.

Irrevocable Trust

A trust that, in general, cannot be changed (without court order or trust protector intervention.)  Examples of irrevocable trusts would include insurance trusts, children’s trusts, spousal trusts, qualified residence trusts, and charitable trusts.  A revocable trust becomes irrevocable upon the disability or death of the trust maker.

Revocable Trust

A trust that can be changed anytime while the trust maker is alive and well.  The trust maker retains full control over assets and trust provisions because he serves as trustee.  A revocable trust becomes irrevocable if the trust maker becomes incapacitated or dies.

Trustee

The individual or corporate fiduciary (i.e. bank or trust company) that holds legal title to trust assets and carries out the instructions in the trust.

Testamentary Trust

A trust created under a will typically for a surviving spouse and children.

Trustee Powers

The trust provisions (i.e. instructions) that define what the trustee must, may, and cannot do.

Totten Trust

A “totten trust” is a pay-on-death (POD) or transfer-on-death (TOD) bank account.

Trust Corpus

The assets held in the name of the trust are called “trust corpus” or “trust res.”

Trust Merger

When the beneficiary and the trustee are the same individual, it is called a “trust merger.”  It’s as if no trust exists.  This is why it’s imperative that your beneficiary serves with a co-trustee to retain asset protection.

If you’re interested in trust planning or have estate planning questions, be sure to consult a trust planning – estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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The term “elder abuse” is a term that is commonly used to describe a various actions that causes harm to an elderly person. According to the Administration on Aging, elder abused is defined as any type of negligence or action by a caregiver or family member that causes harm or serious risk to an elderly individual.

There are several different types of elderly abuse, these include

  • Neglect – This type of abuse would include the refusal to provide the basic necessities to an elderly person by those that are responsible for that person; some examples would include health care, shelter, food, clothing, medicine, etc.
  • Sexual Abuse – An elderly person is being sexually abused if they are forced into any type of sexual contact and they have not or cannot give their consent.
  • Physical Abuse – Someone that is being physically harmed or threatened with physical harm or pain is being physically abused. In addition, depriving someone of basic needs is also considered to be physical abuse.
  • Emotional Abuse – If a caregiver inflicts mental and emotional pain on someone with verbal assaults or not talking to the person at all, this would be considered emotional or physiological abuse.
  • Financial Exploitation – This would include illegally taking, misusing or hiding funds, assets or property of an elderly person.
  • Abandoning – This type of abuse occurs when someone that is responsible for the care of an elderly person deserts or abandons them. For example, if an elderly person needs 24-hour care, and the person that was responsible for that care left them alone to run to the market, this would be considered abandonment and neglect.

Elder abuse is a serious issue, and cases of abuse are on the rise. The increase in elder abuse could be due to the fact that people are living longer, and as a result there are more elderly people that require caregivers today. Whatever the cause, elder abuse is a major problem in today’s society that needs to be addressed.

If you suspect that your loved one may be suffering from elder abuse, it is essential that you contact the proper authorities at once, and remove the person from the care of the person that is abusing them.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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When you take the time to design your will with your estate planning attorney, you must make the difficult decision of appointing a guardian for the care of your minor children. Many parents struggle with this decision. It’s a good idea to take extra care when making this choice, so that you avoid future conflict. Take a look at some of the tips below for advice on how to avoid conflict when choosing a guardian.

  • What if you’re not sure how your children will feel about your decision?

If your children are old enough, it’s a good idea to include them in discussions related to your guardian selection. You not only want to assure your children that they will always be loved and protected, but you also want to make sure that they will get along with their guardians. Take the time to listen to their opinions on the matter.

  • What if your guardian lives far away?

If you decide to appoint a guardian who lives out of town, it’s a good idea to also name a temporary guardian. This will allow your children to be protected before your guardian arrives. Your children will be cared for by the temporary guardian, until your permanent guardian is able to get to your children. This avoids your children being placed into foster care in the event of an emergency.

  • What if the guardian that you choose is bad with money?

If you’re afraid that your guardian will be unable to manage the money that you leave, you should consider naming another individual to manage these assets. This will allow your guardian to only provide care and physical support, while the other individual will handle financial decisions for your children.

Choosing a guardian is the most important decisions that you will have to make when creating your will. By taking a little extra care, you can avoid future conflicts before they arise. Take a look at our next blog post tomorrow (part 2 of 2), to learn more ways to avoid these conflicts.

If you have any questions, or if you’d like to create your will, consult with a qualified estate planning attorney.

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We explain to clients that not only do they need to have the legal documents that form an estate plan in place, they also need to take further steps to ensure that their estate plan works.

Your estate plan works if it does what you wanted it to do when you created it.  In other words, the picture in your mind matches up with the picture of what really happens when you’re up there sitting on the cloud, looking down at us.

1. Talk With Your Family.

Let your family know that you have done your estate planning.  Give them the contact information for your estate planning attorney and other professional advisors such as your CPA, financial advisor, and insurance agent.

Tell your family where you keep your estate planning documents and make sure that they have access when needed.

2.  Organize.

Organize your financial paperwork and keep it in labeled files with your estate planning documents.  Don’t make your loved ones play hide and seek.  It’s too stressful and time consuming, and things are easy to miss.

Be sure that you write down online accounts (with account numbers, user names, and passwords) and the combination for any fire safes.  Be sure to include the safe deposit key as well.

3.  Use Docubank

Use Docubank or some other reputable document storage service so that your health care documents such as your living will and health care power of attorney are always available when you need them.

4. Proper Asset Ownership

Be sure that you own your assets properly.  For example, you will only avoid probate if your assets are funded into your trust.  And, another example, your will only controls assets in your individual name.

5. Update Every Three To Five Years

Review your estate plan, beneficiary designations, and asset ownership every three to five years to ensure that your plan matches your current needs and the current law.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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Many people don’t realize that minors can’t legally inherit property.  Naming a minor in your will or trust must be done with carefully crafted language.  If not, the court will intervene and take control of the gift.  As a result, much money and time are wasted.

It’s important to have a basic understanding of these 8 important, minor related, estate planning terms.  If you have questions or have a minor in your life, consult with a qualified estate planning attorney.

Minor

Any individual, age 17 or younger is a minor.  Even though they think they’re all grown up, they’re not.

Child’s trust

A trust created for a minor or young adult.

Custodian

No, it’s not the janitor.  A “custodian” is an adult named to manage property left to a minor under the UTMA or UGMA (i.e. Uniform Transfer to Minors Act and Uniform Gift to Minors Act.)

Descendent

Lineal offspring such as children and grandchildren are descendents.

Financial Guardian

The person either named in the will or appointed by the court to manage the minor’s property.

Guardian of the Person

The person either named in the will or appointed by the court to take care of and make decisions for a minor.  Such decisions include school, welfare, life-style, and medical decisions.  In other words, the guardians of the person are the people who raise the kids if the parents are disabled or deceased.

Pretermitted Heir

A child who is not named in or not provided for in a will.  Most states assume that if a child is not named, it is an error.  A pretermitted heir inherits his fair share.  If you wish to disinherit a child (or grandchild), you must explicitly do so.

Uniform Transfers (or Gifts) to Minors Act

The state law that regulates how assets can be transferred to a minor.

Do you have a minor that you care about in your life?  If so, be sure to consult with a qualified estate planning attorney when creating your estate plan.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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As the elderly continue to age, long term care becomes a big concern.  Are you looking for a way to keep Grandma at home?  There are steps that you can take to make the home safer so that she is better able to function on a daily basis.  Take a look at some of the tips below.  If you have any questions regarding other ways to avoid long term care, meet with an estate planning – elder law attorney.

  • Move items so that they are reachable.

It may be difficult for Grandma to reach some of her cabinets and cupboards around the home.  Taking the time to do some minor changes will make it easier for her to access items. Take a look at the kitchen area and bathroom area to see where adjustments need to be made.  You may even consider lowering cabinets or shelves on your own.

  • Take care of safety hazards.

Slip and fall accidents can be extremely dangerous.  If you notice things lying around the home or items thrown in unsafe areas, take the time to make fixes.  This includes making sure that all carpets are safely placed on the ground and clutter is out of the way.  Hardwood stairs can be especially slippery.  Consider adding carpet and an additional handrail.  If Grandma has a history of accidents, this is especially important.

  • Consider making it easier for Grandma to live on one floor of the home.

If Grandma has difficulty accessing stairs, it may be a good idea to allow her to live on one floor of the home.  This can be relatively easy to do if the main floor of the home has a bathroom area.  Make sure that everything is easily accessible so that Grandma is able to live comfortably.

With a little extra effort, you can help Grandma delay or avoid long term care.  Take some time to make her home safer and more comfortable.  If you have any questions about other ways to avoid long term care, consult with a qualified estate planning – elder law attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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Many people have their own thoughts and ideas regarding estate planning and the importance of planning.  It’s important to make sure that you understand the truths associated with estate planning so that you can properly prepare for the future.  Take a look at some common estate planning myths below to learn more about estate planning misconceptions.  If you have any questions, or if you’d like to begin your estate planning, meet with an estate planning attorney.

  • I’m too young to plan.  No one is too young to create an estate plan.  Everyone age 18 or older should have a plan in place.  If you continue to put off your planning for a later date, you may not be prepared for life’s unexpected events.  Don’t think that you’re too young or too poor to do planning.
  • Once I plan, I am set for life.  Estate planning is not something that should only be done once.  As you go through life, your needs will change.  It’s important to regularly review your estate plan with your attorney so that you can make sure that it still meets your individual needs and goals.  When you come in for an update, your estate planning attorney will be able to notify you of law changes that may effect your planning.
  • I should do my own planning to save money.  While it is legal to do your own planning; in practicality, doing your own planning can have costly effects.  It is in your best interests to work with an estate planning attorney so that your plan is legal and error-free.  Additionally, an attorney will be able to look at your individual needs and create a customized plan that works best for you.  Don’t try to do your own planning in order to save some money.

Don’t make your own estate planning assumptions.  Instead, make sure that you’re properly informed about your needs as well as the estate planning process.  If you’re ready to begin your estate planning, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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When creating your will, you must appoint an executor to handle your estate’s affairs during the probate process.  This person will be helping you and your loved ones in a number of ways.  Are you unsure of the duties that your executor will face during the probate process?

Take a look at some of the information below to learn more.  If you have any questions about probate or your executor’s duties, meet with an estate planning – probate attorney.

  • Your executor will be responsible for starting the probate process.  He or she will need to submit documentation to the probate court in order to start the proceedings.
  • Your executor must keep in contact with beneficiaries and alert them of their inheritances.  He or she will also have to notify creditors of your death.
  • Your executor will need to locate all of your assets.  It’s a good idea to provide some instruction to your executor ahead of time.  He or she will also have to carefully manage these assets during the process.
  • Your executor must attend all court appearances and follow the instructions that are outlined by the probate judge.  Your executor will be responsible for continuously reporting to the court.
  • Your executor must pay all expenses.  This includes past debts as well as estate expenses such as attorney fees and court costs.
  • Your executor must file and pay appropriate taxes.  He or she may need to get the help of a professional to ensure that the taxes are done correctly.
  • Your executor must distribute the assets to beneficiaries.  He or she will follow the instructions in the will and will be supervised by the probate court.

When choosing an executor for your estate, it’s important to understand the duties as well as the probate process.  You want to make sure that your executor is able to handle all of the duties so that your estate is handled with care.

If you have any questions about choosing an executor or understanding the probate process, consult with a qualified estate planning attorney.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

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When creating your will, you must appoint an executor to handle your estate’s affairs during the probate process. This person will be helping you and your loved ones in a number of ways. Are you unsure of the duties that your executor will face during the probate process?

Take a look at some of the information below to learn more. If you have any questions about probate or your executor’s duties, meet with an estate planning – probate attorney.

  • Your executor will be responsible for starting the probate process. He or she will need to submit documentation to the probate court in order to start the proceedings.
  • Your executor must keep in contact with beneficiaries and alert them of their inheritances. He or she will also have to notify creditors of your death.
  • Your executor will need to locate all of your assets. It’s a good idea to provide some instruction to your executor ahead of time. He or she will also have to carefully manage these assets during the process.
  • Your executor must attend all court appearances and follow the instructions that are outlined by the probate judge. Your executor will be responsible for continuously reporting to the court.
  • Your executor must pay all expenses. This includes past debts as well as estate expenses such as attorney fees and court costs.
  • Your executor must file and pay appropriate taxes. He or she may need to get the help of a professional to ensure that the taxes are done correctly.
  • Your executor must distribute the assets to beneficiaries. He or she will follow the instructions in the will and will be supervised by the probate court.

When choosing an executor for your estate, it’s important to understand the duties as well as the probate process. You want to make sure that your executor is able to handle all of the duties so that your estate is handled with care.

If you have any questions about choosing an executor or understanding the probate process, consult with a qualified estate planning attorney.