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Estate Planning
Most estate planning clients want to avoid court interference through guardianship proceedings once they learn what it entails. A guardianship is a court proceeding during which your competency is questioned. It is expensive, time consuming, public, and stressful.
If the court determines that you are incapacitated, it will appoint a guardian to take over your finances. You have no control over who the court appoints and it may not be a family member. It might be a local attorney. Your assets will be eaten away by ongoing guardianship fees and court costs.
You can totally avoid guardianship proceedings, court interference, and losing control with a fully funded revocable living trust.
A trust is an agreement that you create; it’s really a set of instructions, explaining how you want your finances handled should you become incapacitated and when you die.
It’s imperative that you fund all of your assets into the trust and designate your trust as the beneficiary of your life insurance policies, retirement accounts, and annuities.
When you have a trust and have granted disability trustees authority to step into your shoes if you become incapacitated, court interference and the guardianship proceeding is avoided.
All assets that can be funded into the trust must be funded; the trust and your disability trustee only controls assets funded into the trust. Be sure to execute an up-to-date power of attorney in addition to your trust to handle any assets that can’t be funded such as retirement investments and qualified annuities.
RED FLAG: Never try to fund retirement accounts and qualified annuities because doing so will accelerate all the income tax due.
RED FLAG: Your power of attorney must specifically say that your agent has the power to deal with life insurance policies, retirement accounts, and annuities.
If you would like to avoid court interference and guardianship, execute and fund a revocable living trust and a power of attorney with the assistance of a qualified estate planning attorney.
If you’ve already handled your own estate planning affairs, you likely understand the importance of planning ahead and an up-to-date, comprehensive estate plan. What do you do if your parents haven’t created or updated their estate plan in years? It’s important to make sure that they have handled their affairs so that they can be in control of their future and your burden of assistance will be less. Take a look at the following information for advice on how to best help. If you have any questions, or if you’d like to help your parents begin your estate plan, contact an estate planning attorney.
- Explain what you have done to plan. You can make your parents feel more comfortable about planning by sharing your own experience. It can also prepare your parents for some of the decisions that they will need to make during the planning process. It’s a nice, soft way of broaching the issue.
- Recommend an estate planning attorney or offer to help find a great attorney. Your parents may be unsure about how to start the planning process. A good attorney will carefully walk your parents through the process. Working with an estate planning attorney makes the entire planning process easier and best ensures that your parents will have a quality plan that meets all of their needs.
- Offer to help as soon as possible. If your parents continue to put off their planning, they won’t be prepared for an emergency such as a medical emergency. Make sure that you begin offering assistance as soon as possible.
You can make a difference by assisting your parents with their estate planning affairs. You and your parents will feel increased peace of mind, knowing all the legal documents are in place just in case.
If you have any additional questions about how you can help your parents with their estate plan, consult with a qualified estate planning attorney.
Creating an estate plan doesn’t only have to include making difficult decisions. When creating your plan, you’re able to make choices for the future. This includes having the opportunity to have fun with some of your planning decisions. Take a look at the information below, to see how you can have some fun with your estate plan. If you have any additional questions, or if you’d like to begin creating your estate plan, contact an estate planning attorney.
- With your estate plan, you’re able to give to back to a favorite charity. This can be a great way to benefit an organization that you’ve always loved. Many people choose to give to an organization that has had an impact on their family or friends. This may include gifting to Susan G. Komen for the Cure or the American Cancer Society. If you choose to gift to charity, carefully consider an organization that is special to you.
- You may also choose to give to your loved ones in a special and meaningful way. Many people choose to leave assets for their loved ones so that they’re able to achieve their goals. You may decide to leave asset for a grandchild to attend college or for your daughter to fund her career ventures. This can be a great way for you to make an impact on your loved one’s lives while also leaving a special memory along with your gift.
Creating your estate plan doesn’t have to be an upsetting process. While you will be forced to make some difficult decisions, there are also many other things that you can do with your planning. If you have any questions about fun and creative things you can do, consult with a qualified estate planning attorney.
Every family is unique and should take the time to carefully consider their estate planning needs. Taking the time to understand your own family’s needs will allow you to have a better plan in place. Take a look at the following considerations, to see how you can improve your estate planning. If you have any questions, or if you’re ready to start your estate planning affairs, contact an estate planning attorney.
- Do you have young children? If so, you need to make sure that you have a plan in place for their protection. This includes choosing a guardian so they are always cared for (i.e. during any incapacity and after death.) You should also consider the assets that you leave behind (i.e. you may need life insurance.) You may want to utilize a trust so that you can ensure that the assets will be protected and used responsibly (i.e. minors can’t inherit outright and all beneficiaries need asset protection.)
- Do you have a family member with special needs? You will likely want to make sure that the assets that you leave for your loved one are protected. You can use special planning techniques so that you’re able to contribute to your loved one’s care without sacrificing his or her ability to take advantage of Government benefits.
- Do you have a family member who is unable to manage his or her finances? You can utilize estate planning techniques that allow you to protect the assets that you leave behind. This can ensure that the assets are used for the right reason, and that your loved one is able to benefit in the right ways.
These are considerations that you will want to think through. An estate planning attorney can work with you to fully understand your family’s needs. You will be able to have the perfect plan in place for your entire family.
It’s important to take the time to handle your estate planning, so all of your needs are met throughout life. Many people put off their planning because of fears or because they feel they don’t have enough time. It’s essential to plan as soon as possible. Take a look at the information below, to better understand the 5 reasons to begin planning.
Plan for future expenses. With an estate plan, you’re able to plan for future expenses. This may include proper retirement planning, college planning, or it may also include purchasing long term care insurance. This can help you have a plan in place so that you don’t have to stress about future needs and expenses. Without a plan, you may live a life full of worry, and may be forced to spend a lot more money on your needs.
Have a greater peace of mind. By creating your plan, you will be able to eliminate some of the fears about the future. Having a plan in place gives you greater peace of mind, and allows your loved ones to feel fewer anxieties about the future. With a plan in place, your loved ones will know that you have handled the important responsibility of planning and that their needs will always be met.
Have control over how your assets are distributed. With a plan, you’re able to have full control over your assets and how they’re distributed. You may choose to give your assets to your loved ones, or you may even choose to donate to a charity or other special cause. Many people enjoy planning out how their assets will be distributed. If you don’t have a plan in place, you have no say in this important matter. Instead, your state’s laws will determine how your affairs are handled.
Now is the time to create your plan! If you have any questions, or if you’d like to begin your estate planning, consult with a qualified estate planning attorney.
Many people put off their estate planning because of the fears that they have. These fears should not stop you from doing your important planning tasks. Not having a plan in place will mean that you and your family are unprepared for the future. Take a look at the information below to better understand some common fears. If you have any questions about the planning process, or if you’d like to begin your estate planning, contact an estate planning attorney.
- I’m afraid that estate planning is too expensive. While creating your estate plan is an investment, it should not keep you from planning. It’s beneficial to work with an experienced attorney so that you have a plan that meets your individual needs. Know that you will be investing in your future and that any tax related advice is tax deductible on your 1040!
- I don’t want to think about death. No one likes to think about illness, disability, or death. Unfortunately, these are topics that must be discussed during your planning. Know that by including these difficult issues in your planning, you will be making steps so that you and your family are prepared for the unexpected.
- The planning process is too difficult and confusing. With the help of an attorney, you will be able to accomplish all or most of your estate planning goals. Estate planning can be difficult to do on your own, but if you work with an experienced attorney, you will feel more comfortable. Your attorney will walk you throughout all aspects of your plan so that you understand your options and decisions.
Don’t let estate planning scare you. Take the time to handle your affairs so that you’re able to be prepared for all of life’s difficulties and blessings. If you have any questions about your estate planning needs, or if you’d like 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.
When creating your estate plan, it’s a good idea to discuss your wishes and goals with your loved ones. Doing so will explain your actions and can limit conflicts in the future. Take a look at the information below to better understand the importance of communicating with your loved ones about your estate planning choices.
Many people don’t take the time to explain their actions after creating an estate plan. This can lead to family disagreements that may last a lifetime. Take a look at the following example:
When creating their estate plan, Eric and Janet decided to leave their assets to their adult children, unequally. This did so because they felt that each child had different needs. They wanted each child to benefit in a unique way. Several years later, Eric and Janet died within a few months of each other. After they both died, the children continuously fought with one another because each child felt that their inheritances had been unfair. This led to great conflict and created a lifelong problem between siblings.
If Eric and Janet had taken the time to discuss their decisions with their children, there may have been less anger and confusion when they died. If you’re making a choice that you feel may be questioned, it’s probably a good idea to thoroughly explain your intentions. Remember that money equals love in the eyes of all human beings, whether we can admit it or not.
Many family disagreements occur after the death of a loved one. This is often because of how affairs were handled after the death or how inheritances were received. Take the time to carefully consider your planning choices and decide if it would be beneficial to discuss your choices with your family. It usually is.
If you have any questions about communication your estate plan to your loved ones, consult with a qualified estate planning attorney.
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.