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A REVOCABLE LIVING TRUST CAN BE RIGHT FOR YOU

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In the last post you learned that probate does not have to be scary if you have an experienced estate planning attorney assist you in making your estate plan. However, that does not mean that your heirs will necessarily have to go through probate if you hire an attorney. In some cases, a revocable living trust is a good option for an estate plan. Property that passes to your heirs through a revocable living trust does not have to go through the probate process.

A living trust is not necessarily a special type of trust. “Living” merely refers to any trust created during the grantor’s life as opposed to a testamentary trust that is created in a will. Living trusts can be revocable, which means that the grantor can dissolve the trust during his or her life.

You can put many different types of assets into a revocable living trust and have them pass to your heirs upon your death. However, you need to make sure that you set up the trust properly. The way the trust is designed can have tax consequences for you and your heirs. Different trust arrangements are better or worse in different circumstances. A trust attorney can help you to determine what the best type of revocable living trust is for both you and your heirs.

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Many people share a common belief that probate should be avoided at all costs, so instead of hiring an attorney to come up with an estate plan they devise their own schemes. For example, most people know that if two people are on a real estate deed as joint tenants, when one person passes away the entire property automatically passes to the surviving joint tenant. As a result of this knowledge, some people will make the mistake of adding their children as joint tenants in their home.

Adding children to to your property as joint tenants might work out in some cases. However, what might happen if your children have debts they cannot pay? You might find yourself involved in costly litigation to keep your children’s creditors from making a claim against your home. This litigation could be a lot more time-consuming and costly than probate. If your children owe money to a government agency, it’s almost guaranteed to be more expensive than probate.

Experienced estate planning attorneys have many methods of ensuring that your property passes to the people you want it to. Sometimes, those methods will include probate as a necessity. However, an attorney can and will plan your estate and draft the appropriate documents in a way that makes the probate process as painless for your heirs as possible. Probate only needs to be scary if you don’t have an experienced estate attorney working for you.

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Parents of children with disabilities lost an important and influential advocate when Nina Eaton passed away on March 30th. An estate planning attorney can only do so much to help protect the interests of your special needs child. People like Eaton take up the slack and help provide a solid legal and cultural framework so that children born with disabilities lead rich and fulfilling lives.

Eaton was an original founder of the United Cerebral Palsy Association, which began here in New York as the Cerebral Palsy Association of New York. Together with other parents of children with cerebral palsy, Eaton used the organization to advocate and obtain the vital social services that their children needed. Eaton continued to be an important advocate for children with cerebral policy throughout her life and served on the Board of Trustees for the United Cerebral Policy Association well into her 90s.

We normally use this space to educate readers about an important aspect of estate planning. It would be remiss to not acknowledge that estate planning to provide for the care of special needs children is what it is today, in part, because of people like Nina Eaton. Children with special needs and their families need more people like Nina Eaton.

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If you have a blended family, it’s important that you have an estate planning attorney craft your estate plan rather than using a simple form Will to divide your assets based on percentages. Blended families are those that have children from multiple marriages and they have unique dynamics for which you should account in your estate plan. This will help avoid conflicts after you pass away.

When you leave a simple Will that bestows an inheritance on your natural children based on percentages, you leave open the possibility that the children will fight about who gets what specific assets. That’s bad enough. When you add step-children into the mix, it can get even worse. This could especially be a problem if your natural children and step-children did not grow up together. You may want to provide for your entire blended family and it is your right to do so. However, you should be careful to provide for them in a way that minimizes conflict.

The best way you can provide for your family, whether it’s blended or not, is to speak to an estate planning attorney. Every family is different and needs different things. An estate planning attorney can help you in making sure that you do what is right for your family.

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If you have young children, it is important that you name someone to be the guardian of the children in the event that you pass away. To do this, you need to make a Will. An estate planning attorney can help you make a Will. However, you need to choose an appropriate guardian. Here are a few tips.

The most important thing is to pick someone who is responsible and willing to serve as guardian. You want someone you know who will raise your children appropriately. That might be a family member or it might be someone else. You should also speak to that person ahead of time and make sure that he or she is willing to raise your children if anything should happen to you.

In most cases, the court will appoint the person you designate to be the guardian. However, sometimes the court might have a good reason not to. Because of something you do not know about, the person you chose might not be an appropriate person to raise your children. For this reason, you might want to also consider appointing a backup guardian. That is someone the court can appoint if the first person cannot be the guardian.

An estate planning attorney can create a Will that designates your choice for a guardian of your minor children and your backup choice.

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If gifting is part of your overall estate plan, you may want to consider speaking with your attorney about the best way to do so this year and in future years. The law is subject to change in the future. In fact, President Obama has proposed lowering the exclusion limit for the gift tax starting in 2013.

Currently, you can give up $5,120,000 during your lifetime without being subject to the gift tax. There is a limit of $13,000 per year to any individual. If the law remains the same, then the lifetime exclusion will become $1,000,000 in 2013. President Obama has proposed an exclusion limit of $3,500,000 beginning in 2013. While the exact number is subject to change before any law is passed, it seems likely that the lifetime exclusion will be less after this year. That means that if you have a long-term gifting plan in place, you should revisit it to make sure that it does not rely on the 2012 limit.

Visit your estate planning attorney to discuss your gifting plan and whether you need to change it in anticipation of a change in the law. You may wish to gift more than previously planned in 2012 or it might be better to rework your estate plan to rely on less gifting. Your attorney can help you determine the best option for you.

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In most cases, it is a good idea to store your important estate plan documents in a secure safety deposit box at the bank. This protects your documents from loss or theft. However, if you leave your will in a safety deposit box, you need to make special arrangements with the bank.

Even after you pass away, the bank will not let anyone else into your safety deposit box without a court order of some type. Normally, this means that the executor of your estate presents the bank with letters testamentary and the bank allows the executor access to the safety deposit box. This can present a problem, however, as to become an executor and receive letters testamentary from the court, the original will must be presented to the court first. If the court knows about the safety deposit box and has reason to believe that your will is in it, this problem can be overcome by a court order.

If you do leave your original will in a safety deposit box, you should make arrangements with your bank to allow someone else access to the box in the event of your death. This will eliminate the need for a court order. You might also want to consider storing your will elsewhere. Most estate planning attorneys will store their clients’ wills to prevent this problem completely.

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If you have paid life insurance premiums for years, the last thing you want to happen is for the insurance company to receive a windfall after your death instead of paying out to your beneficiaries. However, if your beneficiaries do not know about the policy, they will not know to make a claim. For this reason, part of your estate plan should include some way of letting your beneficiaries know about your life insurance policy.

New York’s Department of Financial Services strongly encourages insurers to check their unpaid premiums databases against the Social Security Administration’s records in an attempt to find unclaimed life insurance benefits that should be paid out. However, it might take months or even years for the insurance company to notice that you have passed away and that it needs to locate your beneficiaries. In the meantime, your spouse and children will not have the benefit of the life insurance policy you paid for.

You should reference all of your life insurance policies somewhere in your overall estate plan documents so that the people who need to know can tell your beneficiaries where to make a claim. It is also a good idea to store the policy information in the same place that you keep your other estate plan documents. At a minimum, make sure that your will’s executor will know about the life insurance policies as quickly as possible.

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Today is the 24th annual American Diabetes Association Alert Day. Take the Diabetes Risk Test to find out if you are at risk for developing type 2 diabetes:

http://www.diabetes.org/diabetes-basics/prevention/diabetes-risk-test/?utm_source=WWW&utm_medium=ContentPage&utm_content=risk-test&utm_campaign=ALERT