Estate Planning Archives - Page 10 of 13

Estate Planning

Clear Counsel Law Group / Estate Planning

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Navigating Estate Planning as a US Expat

The expat life is certainly a unique one. Living in different cultures for long periods of your life offers distinct and significant challenges. At the same time, many expats love the international life and wouldn’t dream of settling down permanently back in their home country. In addition to cultural and linguistic challenges, many expats also face complex financial challenges.

Estate planning in particular can be very confusing when you are trying to figure out how your assets will be transferred and taxed once you pass away. In many cases, it is a good idea to get some of your estate planning done before you leave the United States. This will make things much less complicated later on when you’re living in a foreign country. It is not always possible to do this, and in that case you will need help from attorneys to arrange your estate correctly and legally. Here are a few things to keep in mind as you begin your estate planning as an expatriate.

Double Taxation

One of the chief concerns about expat estate planning is dealing with double taxation of inheritance. Some people move to countries with no estate taxes in the hope that they can avoid paying any taxes at all. Unfortunately, if you and your family remain US citizens, your estate will likely still be subject to tax. You should check if there is a double taxation treaty with the United States for the country you live in. Not every country has a treaty with the U.S., but most of these treaties will allow you to avoid paying estate tax in the foreign country as long as you pay it in the United States.

Inheritance Laws

Always remember to review the inheritance laws in the country where you are living. In some countries, assets will be transferred to the spouse, but in other countries they will go to the children. Keep this in mind as you do your estate planning, so that everything is distributed correctly after death.

Foreign Life Insurance

Buying life insurance in another country can also be very tricky. Some insurance policies may not conform to the life insurance rules in the U.S. This may cause them to be taxed unfairly or unexpectedly when you pass away. The interaction between foreign life insurance policies and U.S. law can be extremely complex, so you will want to get the assistance of an attorney to help you make the right decisions.

Trusts

Although you may think your trusts are incredibly secure, the way they are distributed and taxed can be affected by the country you live in and the country where they were established. You need to make sure you understand the laws of the land, so that your estate planning is completed in a way that won’t give your loved ones added problems after you pass on.

If you are interested in estate planning or you are looking to make changes to your current arrangements, give us a call. Our attorneys have years of experience in estate planning and can make sure your assets are distributed fairly and correctly.

What is a Quiet Trust, and How Will It Help Your Estate Plan?

A lot of parents with substantial assets worry about how those assets will be distributed and used by their children. That is one of the reasons why many choose to establish trusts. Another large concern is how the assets or the existence of a trust may affect the way a child acts or behaves financially.

For this reason, more and more people are establishing a quiet trust. Though some states require that you inform beneficiaries about their trusts, there are also many states where parents can establish quiet trusts that do not have to be reported to the beneficiaries.

A quiet trust functions the same way a normal trust does. The only difference is that the language in the trust document specifically states that the beneficiary will not be notified about the trust or its assets.

Like other trusts, the trustee will be responsible for managing and administering the trust.

It is also possible to create a trust wherein some beneficiaries are notified of the trust’s existence and others are not. By including quiet trust provisions into a discretionary trust, you will have total control over which beneficiaries are notified about the trust and when they will be notified.

Why Create a Quiet Trust?

There is actually a number of reasons to keep trust information away from the beneficiaries.

One of the main reasons is that many people do not believe their children are financially responsible and are worried that knowing they have a trust will actually make them even less responsible.

In fact, only one-third of wealthy parents have fully disclosed their wealth to their children.

That is because they want to make sure their children learn financial responsibility. If a child or teenager knows that there is a large trust in his name, it may cause him to develop the wrong types of character traits.

Safety is an Important Consideration

Another reason is concern for privacy and safety. If a beneficiary has a large trust in his name and others find out about it, he may become a target for financial exploitation and fraud.

By keeping the trust quiet, you will reduce the risk that others will try to take advantage of your child beneficiary.

This can also reduce the risk of your beneficiary becoming involved in frivolous lawsuits or identity theft. You can structure the trust so that your children are notified once they have reached an age where they can better protect the assets from others.

Some people also choose to create quiet trusts if they are giving non-voting interests in the family business to the beneficiary. If the trust wasn’t quiet, the beneficiary may start requesting input and information regarding the business.

Keeping the trust quiet will keep your beneficiary’s involvement limited until you pass away.

If you are interested in arranging a trust, our firm can help. Give us a call today and we can schedule an appointment. Our attorneys love helping individuals safeguard their assets and arrange how their assets will be distributed to their loved ones.

Estate Planning / Trusts - 04/22/2015

What Does an Executor Do?

One of the things that you will need to learn about when it comes to estate planning would be the role of the executor. When you write out a will, you will need to appoint someone to this position, so it is something you will need to consider very carefully. You will want to name the right person for the duty, and that means understanding what that job is in the first place.

The basic definition of an executor is someone who is responsible for probating the estate should something happen to you. There are essentially three duties that the executor you choose will be responsible for.

Identifying Assets

When the executor has taken the oath to be responsible for your estate, they will have access to your property and assets as well as any records covering these things. The executor will need to sort out this information and identify all assets, providing an inventory to the courts. Additionally, the executor will need to move all accounts out of your name and into the name of the estate.

Pay Expenses

In addition to identifying those assets, the executor will need to take over paying debts as well as taxes. If there was anything owed when something happened to you, then the executor will be responsible for ensuring that your estate pays these things. The debts will not become the personal responsibility of the executor, but will be a part of the estate instead.

Distribution of Assets

Finally, whatever assets are left after debts have been paid will need to be distributed according to your will. The executor has the responsibility of ensuring all the parameters of your will have been met and that assets go where they should based on what you wanted.

Choosing an Executor

Keep in mind that you want to choose someone you feel you could trust to work as an executor. The person you choose will have to devote some time and work to doing the job properly. Some of the other things you will want to consider when choosing an executor will include:

Picking someone you can trust, first and foremost
Considering someone good with finances
Thinking of someone who will be fair

You want someone you can depend on to handle things the way you would have wanted.

When you write your will, it would be a good idea to ensure the executor is compensated for their time as well. You could choose to write them out of the will, but since you are putting your whole estate in their hands, it wouldn’t make a lot of sense to do that.

It’s important that you understand the role of an executor. That way, you will find it much easier to make the right decisions for your own estate. So, when you speak with an attorney about your own estate planning, make sure you have taken the time to consider what an executor does and then, you will be able to choose the right person for the job.

Estate Planning / Probate - 04/10/2015

What Is Power of Attorney?

When you make the decision to start planning your estate, there is much more that will go into this process than just creating a will. People don’t realize all of the many different layers of estate planning. By hiring a quality attorney to handle the process, that lawyer will be able to walk you through the details. However, it certainly helps if you already have an idea of what to expect and what the different aspects will entail.

For example, one thing that you will need to do is assign a power of attorney. However, that will be very hard to do if you don’t know what this person is or what they do. There are actually two different types of power of attorney: financial and healthcare.

• Financial power of attorney puts decision making power in someone else’s hands when it comes to your finances.
• Healthcare power of attorney or healthcare proxy will allow someone else to make your healthcare decisions for you if you are incapacitated.

In either case, what this person is able to do depends solely on you. You have the right to go through all of the different types of decisions they may need to make and determine if you want to give that power to someone else.

When It Works

For the most part, the power of attorney will start the moment you sign the documents with a lawyer. Usually, they are set up to stop working if you are incapacitated, however. This may defeat the purpose, though, so you will need to discuss this with your attorney and find out how to name someone responsible if you are no longer able to make decisions for yourself.

Choosing Power of Attorney

In most cases, you will want to name someone you know and trust to have power of attorney for you. That often means a loved one. However, that doesn’t have to be the case depending on your own situation. You have the right to choose anyone you like. No matter what, you need to make sure that you trust them. Whether you are naming a financial or healthcare power of attorney, this person will have a great deal of power in your life and you will want to make the right choices.

Once you have decided who you would like to have power of attorney, you will need to talk with them first. This is a big responsibility and you certainly don’t want to just spring it on them. So, discuss this with them and ensure they are open to working in this capacity for you. If they are, then you can have the documents drawn up.

There are many parts to estate planning that you may not fully understand. However, knowing more about them will certainly help before you meet with an attorney. It will ensure you aren’t surprised by anything that comes up. You will need to appoint power of attorney, so this is definitely something you should take the time and better understand before you see your attorney for estate planning.

Estate Planning / Trusts - 04/08/2015

Why You Need a Will

There are actually numerous different parts of estate planning, but arguably, the one basic thing you absolutely should do if you do nothing else would be putting together a last will and testament. This is considered very basic, and it is vitally important no matter your age. If you are unsure of why it is so important, here are a few reasons why everyone needs a will.

You Decide on Things

If you don’t have a will, then you will have absolutely no control over things that happen involving your estate and your belongings. Someone else will make the decisions, and things may not go the way that you would have wanted. By writing out your will, you are in control and you can be as specific as possible. That means you can decide on every little thing and ensure that all of your belongings in the estate go where you want them to.

Your Minor Children Will Be Cared For

If you have children, it becomes even more important that you have a will because this document will discuss what happens with those children. Without a will, the court will determine what happens with your children and that could include a family member or even foster care. Your will should include very specific details on where your children should go and who should take care of them if something happens to you.

This Will Avoid Lengthy Probate for Your Family

When there is no will present, your estate will go through the probate process and that can take a very long time. In fact, it could take years, and that could put a serious financial burden on your family. When you have a will that has been properly drawn up, you can avoid this very long process. Everything will be expedited and this will ensure your whole estate gets completed much quicker, which will save your surviving family members a big headache.

You Can Choose to Disinherit People

Finally, there may be cases when you wish to disinherit people. There could be different reasons for this, but what you must remember is that you won’t be able to do this if you don’t have a will. Without the document, you will have no control over who gets a part of your estate, and that could include people you didn’t want receiving anything. By choosing to put together a will, you will be able to pick and choose specifically who will receive part of your estate and who will not.

Having a will is the most basic element of estate planning. You should consider it vital even if you don’t do anything else. So, even if you don’t necessarily want to deal with the idea that something could happen to you, it is something that you must face. Ensure that you have the proper estate planning attorney to help you draw up this document as well. That way, you will know that everything is properly in place. Then, even if something bad were to happen, you will know that your family and estate is properly looked after.

Estate Planning / Probate - 04/03/2015

Understanding Your Role as an Executor

Discovering that someone close to you has named you as the executor of their estate can be overwhelming, and downright frightening to some. If you know that, though flattered, you absolutely do not want the responsibility, you can always make the decision to decline to accept the role. The following information will give you a better understanding of being an executor, as well as what you will need to do.

Serving as Executor

Each state has its own laws regarding executorship, especially if you will have to go through the probate process in the court system. Most states disallow anyone with a felony conviction to take on the role, and there may be specific laws governing out of state executors as well. If you are unsure whether you meet the requirements, you should consult an attorney or your local county office.

Your Role as Executor

It’s important to understand that most small estates do not require an executor, and you won’t need to handle funds, property, or assets that transfer to a beneficiary, or beneficiaries, according to the will. If you are named for a large estate, the following may be required of you:

• Attorney – While you don’t need a lawyer, if you are dealing with a significant estate, high estate taxes, or if you are concerned that there may be inheritors that will have disputes, you may want to hire one to help you with the process. You also have the option to hire the attorney to handle all of it for you if you would like to do so.
• The Will – You will need to file the will, and ask for confirmation that you are the representative of the estate from the probate court in the correct area.
• Notification – You will need to let beneficiaries know when the proceedings will occur, and inform creditors and government agencies of the death.
• Manage Assets – This means you will have to secure all assets pertaining to the estate, and determine whether anything will need to be sold.
• Banking – You will have to open an account for all monies that are received by the estate, such as dividends, pay, and other income.
• Handle Expenses – You will have to make sure that any mortgage payments, taxes, utilities, insurance premiums, and other expenses are paid as required.
• Handle Debts – You will have to make sure that creditors are aware of when the proceedings for probate are scheduled to allow them to make their claims.

Your final job in your executor role will be to handle the disbursement of assets to the appropriate beneficiaries and claimants. When that is complete, you will then ask the courts to close the estate.

Being an executor can be somewhat demanding, and if it becomes too much you can resign by notifying the courts, and giving them a record of what you have accomplished so far. Keep in mind that you can always hand the reins over to a lawyer if you don’t feel comfortable resigning. With a proper understanding of the requirements or the help of a qualified Estate Planning Attorney, you should be able to discharge your duties as the executor.

Estate Planning / Probate - 03/23/2015

Understanding Estate Taxes

When it comes to estate planning, many people worry about the estate taxes that their loved ones will have to pay. The reality is, most people simply don’t have to worry about this due to the overall value of their estate. Regardless of how much you think your estate is worth, it is important to understand how both federal and state taxes may affect those who receive your inheritance.

Estate, Gift, and GST Taxes

You should also be aware of what the types of taxes are that may apply to your estate.
• Estate Tax – This is a tax that is applied to the net amount of your estate. It is determined by combining the values of any cash, real estate, trusts, securities, annuities, assets, and business interests that make up your estate. Most estates do not meet the required value, which for 2015 is $5,430,000, and as such would not be required to file a tax return on the estate.
• Gift Tax – This tax is applied to any transfers of property that are made from one person to another, without the giver receiving anything in return. This tax may also apply in situations where items are sold for considerably less value than their actual worth. There are two separate gift taxes:
• Lifetime – This is the amount of gifts that are untaxed throughout your life, which is currently at $5.43 million.
• Annual – The annual gift tax is applied to gifts that total for than $14,000 in 2015.
• GSTT – The generation-skipping transfer tax was put in place to prevent people from leaving large amounts to grandchildren and other subsequently removed generations to avoid paying taxes. If the amount meets the set limits, the heir will be required to pay the taxes.

Federal Estate Taxes

Few people are actually required to pay federal gift, estate, or generation-skipping taxes due to the high thresholds required for the value of the estate. For 2015, the exemption limit is $5.43 million. This means that the value of your estate or any gifts made during your lifetime combined cannot exceed this amount without requiring the taxes to be paid. However, gifts that are made to education or medical providers, as well as transfers from one spouse to another, are not taxed.

State Estate Taxes

Even if your estate does not meet the requirements for federal estate taxes, it may meet the limits set by individual states. There are currently 19 states along with the District of Columbia that have state death taxes. The amounts of these taxes, and their requirements, change frequently, so it is always a good idea to verify the taxation limit of your estate each year to ensure that you plan accordingly.

State and federal estate taxes can be difficult to figure, and for the federal lifetime gift tax, it can require close monitoring of your finances each year. If you are trying to plan your estate and you meet the federal or state limits, you should consider contacting an attorney to ensure you manage your inheritance and trust designations properly.

Estate Planning - 03/20/2015

Important Estate Planning Information for Unmarried Partners

While estate planning is one of those things that many think is reserved for those who are entering their golden years, this just isn’t true. In fact, holding on to this belief can have serious consequences for your loved ones if you pass on unexpectedly. One situation in which estate planning is vitally important, no matter what your age, is if you have a life partner to whom you are not legally married.

Life Partnerships

Life partnerships are those in which two people have made an informal agreement to remain with each other for life, even though there is no legal documentation. For the purposes of estate planning, neither partner has any rights over the other’s property or end of life decisions unless there is a registered domestic partnership or civil union depending on the state in which you live. If you are in a life partnership at the time of your death, and you have not made a will, your surviving partner will not be legally entitled to anything you owned or that was considered your property. Instead, everything will go to your living relatives. In cases of medical incapacitation, the same rule applies – your partner will not be able to speak or make decisions on your behalf.

Make a Will

There are many who don’t consider writing a will because they don’t want to consider their future death. If you are in a domestic partnership, and you want to leave your property to your significant other, you must create a will – regardless of your age. The unfortunate truth is that accidents happen, and you have to protect those you love. If you own property that you want to make sure goes to your partner, you need to take the time to consider estate planning.

Children

If you have any children at the time of your death, their fate will be left to the courts if you don’t have a will. By appointing guardianship, you will make sure they can stay with your partner. There are extenuating circumstances in which your appointment may be overruled by the courts, but this generally only occurs in situations where your partner or appointed guardian is deemed unfit to raise your children.

Titled Documents and Beneficiaries

If you own a home or car, the best way to make sure they go to your partner is by purchasing them in both of your names. However, you can also will these titled items in your will if there is some reason that you don’t want both names on the document. You will also want to make sure any retirement investments or bank accounts are included in your will, and that you have filed a beneficiary designation so you can ensure they go to your partner or whomever else you choose.

By taking the proper steps to estate planning now, you will be able to make sure your domestic partner receives the assets you intended for them to have upon your death. If you have any questions, make sure to contact an estate planning attorney in your area.

Estate Planning - 03/16/2015

Implications of Dying Without a Will

Each state has different laws that govern what happens if a person dies “intestate” or without a will. Dying without a will gives the state power over your assets and the distribution of said assets. Normally, the distribution of the assets is given to the spouse and children of the deceased or to another family member. The state’s distribution is based upon the estimation of how most people would divide their wealth in the event of death.

The problem with letting the government rule where your assets go after you die is that, most likely, they will not follow what would have been your wishes. Perhaps you’d like to leave a piece of property to your sibling. The state will probably not do this. If you’d like full control of where your assets will go when you pass away, estate planning is essential.

What Is a Will and Why Should You Care?

A will is a document that states how a person’s assets and personal properties are to be distributed in the event that the person dies. In a will, you can choose exactly who gets what. However, keep in mind there’s a circumstance called forced heirship laws, which protect the rights of spouses and sometimes children from being disinherited. In some states, there are spousal rights of election laws, which allow a living spouse to receive a portion of the interest in your estate, no matter what your will says.

Wills range from very simple to very complex. Tax objectives and family goals are taken into consideration when writing a will. The simplest forms of wills spell out the distribution of assets. Other wills may also specify who would care for a child in case the parent dies, which minimizes the state’s involvement in your child’s care. A will can also appoint a trustee to manage your property funding, as well as an executor of your estate.

The most important benefit of having a will is that you can distribute assets to people that the state would not give anything to if you die without a will. For example, in a will you can benefit godchildren, stepchildren, a friend, or donate to charity.

How to Get a Will

A qualified lawyer can help you create your will and will make sure it conforms to the laws of your state. Once the will is formulated, it must be signed in front of a witness. In some states, it’s required that the will be notarized.

Wills can be amended. This amendment is called a codicil. A codicil is signed with the same formalities as the original will. A qualified attorney must also handle codicils to make sure they have legal standing in order to avoid any issues in the future. One final note on wills: If you own joint property with someone else as joint tenants with right of survivorship, the property will be automatically passed directly to the joint owner upon your death and is not going to be part of your will.

Estate Planning - 03/13/2015

Facts About Estate Planning in the United States

Nearly all people have an estate, although most people think they don’t. An estate comprises everything a person owns, including vehicles, real estate, checking accounts, savings accounts, furniture, investments, life insurance policies, etc. Some estates are larger than others, but the fact of the matter is, you cannot take your estate with you when you pass away.

In order to make sure your desires for your belongings are considered once you die, you need to hire an estate planning professional to set up your will and other documents. These will lay out instructions on how you want your estate handled. You also want to pay the least amount of taxes and legal fees possible in the process.

Planning Ahead

Estate planning is precisely the plan you make ahead of time, stating who will get your belongings after you pass away. It also entails instructions about who would care for you if you have a severe medical condition like a coma and cannot make decisions for yourself.

Estate plans also include information on who will be the legal guardians of any minor children you leave behind, who will provide for your spouse and kids, who your business will be transferred to, and more. Estate plans can be updated as life situations change. Everyone should consider estate planning.

Most people think about estate planning after becoming a certain age, for example, when reaching retirement age. However, it’s impossible to know when someone will die. An accident or illness can happen to anybody, at any age. Thus, there is a need to plan for the uncertain future as soon as possible.

A huge percentage of the population does not plan ahead, because they do not believe they have enough assets to make it worth it. However, estate planning is for people of all social classes. Oftentimes, the ones who have small estates should consider estate planning more than the wealthy.

Consequences of Not Planning Ahead

Individuals who are too busy or careless to plan ahead are probably not aware that the state would take over their assets in the event of their passing if there is no will in place. If you become disabled and your name is on the title of your assets, a court appointee is the only person allowed to sign for you. In that case, the court will take full control of all your assets, not your family. Assets in this case are very hard to recover, and the process can be hugely time consuming.

In the event of the death of someone without an estate plan, probate laws decide how the assets will be distributed. Oftentimes, this means the spouses and children of the deceased all receive a share of the wealth. If there are minor kids, then inheritances will be controlled by the state as well.

The biggest benefit of estate planning is peace of mind. All people--married, widowed, divorced, or single--should consider estate planning to ensure the wealth they leave behind is distributed according to their wishes.

Estate Planning - 03/11/2015

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