Should You Create a Living Trust?

Yes! And here are five good reasons why:

 

  1. Control

With a revocable living trust, you will retain control over your assets while alive and after you are deceased.  Other estate-planning documents, such as wills, only come into effect once you are deceased.  With a living trust, you control your assets now and in the future.  If, unfortunately, something were to happen to you that left you in a state where you could no longer control your own affairs (sickness for example), the living trust would direct a trustee (of your choosing) to speak and act on your behalf.  Without the living trust, there may be complicated court proceedings to determine who will be in control of your livelihood and affairs.  Worse, a court may appoint a person you do not want to control your health, assets, and affairs.

 

  1. Saving Money

Less of your hard-earned money will go toward paying court and attorney fees.  The state charges a fee for having to settle estates through the probate courts (there are additional fees as well).  You can avoid paying these higher fees by planning ahead and working with a trusted attorney to establish a living trust for a fraction of the cost.

 

  1. No Delays

Distribution of the estate assets to your beneficiaries (those heirs you have left the assets to) will occur upon your death without delay.  If you decide to use a will, (or worse, allow the state probate system to settle your estate), to distribute your assets, it could take as long as two years for the beneficiaries to receive their assets.  Again, by using a living trust, you can avoid the wait-time that usually occurs while the courts settle your affairs.  If you have a will, for example, that is disputed, there is no telling how long the court proceedings may take to settle the estate; those whom you care about most will have to wait in limbo without access to any of the assets until the courts have worked through the matter.

 

  1. Investment Flexibility

The trustee (the person you designate to take care of your affairs) will have the maximum flexibility to take the necessary action with your assets.  If there are potential investment opportunities that will increase the value of your portfolio, the trustee will have the necessary authority to buy or sell assets to get the most out of your money.  Other estate documents do not provide the same flexibility and you may lose potential money-making opportunities just because your estate document will not permit the trustee to make a timely investment.

 

  1. Easily Make Changes

A living trust provides you with the maximum flexibility to make desired changes to your estate plan.  If you decide you want to add or remove assets, or determine that you no longer desire your assets to be held in the trust, this can easily be done.  To amend or revoke a will, (or other estate instruments), is a more complicated process.  There is no telling what challenges life may throw your way next, the living trust will be your best tool to meet those challenges and secure what matters most.

Estate Planning Word Cloud

Wills – What They Cannot Do

Wills ensure that your wishes are known concerning how your estate is handled after your death. While they allow you to name beneficiaries, (among other functions), there are also matters that should not be included in your will.  Below are a few potential issues to be aware.

Property Matters

There are rules restricting the types of property that may be bequeathed in your will:

Joint Tenancy – If you own property jointly with someone else, you may not leave your part of it to a third party in the will. Your share automatically goes to the remaining joint tenant if s/he is still alive.

Life Insurance – Any proceeds of life insurance policies you have automatically go to the individual listed as the beneficiary. You may not leave those proceeds to another party in your will if the person is not named in the policy.

• Living Trust Property – If you have property already included in a living trust, you may not leave it to someone else in the will. If you want to change the beneficiaries of the living trust, you must alter the trust.

• Retirement Plans – IRAs, pensions, and 401(k)s generally have named beneficiaries. If you want to change this, you have to do it through the proper forms, not in your will.

• Other Beneficiary Property – If you have bank accounts, investments such as stocks and bonds, or any other property for which you have already named a beneficiary, you may not leave the property to a different person in the will.

Funeral Instructions

You may include your wishes or instructions for your funeral in the will; however, in some cases, the planning and burial occur before the will is read, meaning your wishes may not be known until after the ceremony. The best option is to discuss your wishes with your spouse or loved one and/or create a document especially for that purpose. This will ensure that your wishes are followed.

Gift Conditions

When you leave gifts in your will, you will want to avoid placing illegal conditions on them. For example, providing stipulations concerning marriage or divorce, or requiring a change in religious affiliation is illegal, and will not be honored by the courts. You may, however, place stipulations requiring college attendance, or how a particular property must be used, but these conditions must be specific and reasonable.

Special Needs Care

You should not leave instructions for the care of someone with special needs in your will. These instructions should be left in a trust to ensure that the person’s needs and management are handled properly. There are specific trusts designed to address these situations.

Pets

You may not leave property or money to a pet in your will, because animals are considered property under the law. Instead, choose a person to care for your pet and leave a corresponding amount to him or her. Many states allow trusts to be set up for animals, making the pet trust a good option.

Estate-Planning-and-Bitcoin

Estate Planning and Bitcoin

It’s still hard to say what will happen with bitcoin, the trendy digital currency that has been in the news the last few years. While it was getting a lot of media attention, it saw incredible increases in value, but eventually the market came crashing down, and now it’s difficult to predict how significant bitcoins will be in ten or twenty years. Whether or not bitcoin becomes the currency of the future like its supporters hope, the fact remains that bitcoins have value, and it may be useful to know how bitcoins would play into estate planning. Though this is still a new field, there are some general strategies and concepts we can rely on when integrating bitcoin into estate planning.

What is Bitcoin?

It may first be helpful if you know what bitcoin is. Though it was in and out of the news, many people still have a very bad understanding of it. Bitcoins are digital currency that can easily be converted to many real currencies including U.S. dollars and euros. Bitcoins are actually incredibly complex–encrypted code that is generated by computers. You can transfer real currency to an owner of a bitcoin, and then he will make a transfer of the code to your bitcoin wallet which has its own private key and address. All bitcoin exchanges are publicly recorded, which brings transparency to the system, but the system only records transactions. There is no way to track the senders and receivers of bitcoins, which has made it an interesting currency for those trafficking in illegal goods.

Though it is called a virtual currency, the truth is that there are very few companies that will accept bitcoin. Instead it must usually be converted into real currency if you want to use it. That is why many people consider it as more of a commodity and why the IRS now considers bitcoin as property.

Bitcoin and Estate Planning

Bitcoins like other assets are included in the owner’s estate, and if you’d like to distribute your bitcoins to a specific person, that should be arranged in a trust or a will. Bitcoins were designed to give users total anonymity and security, so unless you share the details with your family or financial advisors, it may become impossible for the inheritors to access your bitcoins. There is no bank that your family can call or visit, so it is very important that you inform others about your bitcoin investments and provide them with the details to access them after you’ve passed away. Bitcoin is unlike all other types of currencies, and if you decide to invest in bitcoin, you will need to make sure that your estate planning properly accounts for the differences between bitcoin and real currency.

Our attorneys are estate planning experts and can help you make arrangements, so that your family and loved ones are properly supported after you pass away. If you need help or have questions about estate planning, please feel free to call our office and schedule a consultation.

digital-estate-planning

Estate Planning and Digital Estates

One of the newest areas of estate planning is the distribution and management of the digital estate. This is actually so new that many people completely forget to include their digital estate into their estate planning, and this can create complications after they pass away. The digital estate includes all of your online accounts and activities. Though accounts to social media and forums may not be as useful or important, many people also maintain several financial accounts online, and if these are not properly transferred, it can be very difficult to get them transferred after death.

What is included in the Digital Estate?

Automatic Payments

: Many individuals pay for utilities, credit cards, loans, and other services completely online. If information and access to these online accounts isn’t shared, this can create financial problems and legal situations when payments stop being sent.

Social Media

: Facebook, Twitter, and Tumblr are just a few of the social media sites that people use. Family members may want to delete or deactivate these accounts once their loved one has passed away.

Emails

: A lot of important and private information is stored on email accounts. It’s important that these accounts can be secured and deleted.

Financial Services

: Many people have online accounts for their banks and credit cards. It could be a security risk to keep these accounts open and not monitor them regularly.

Medical Sites

: Some people may have accounts with their health insurance and doctors. These sites could store very private information over the web, and beneficiaries may want to get these accounts deleted or closed.

Other Online Content Sharing

: The deceased person may also have his own websites, Youtube and other video accounts, online storage of pictures, and storage of writing and other documents. If beneficiaries want access to this information, they need to make arrangements before the person dies.

What are the Benefits to Including the Digital Estate in Estate Planning?

One benefit is that it will give complete control over your digital accounts and information to someone. If accounts need to be deleted, or if the information needs to be accessed, it’s important that your beneficiaries know the usernames and passwords.

Arranging your digital estate can also be important for security reasons. All of this personal information online may be susceptible to identity theft or fraud. Removing private financial and medical records from the internet is a good way to minimize that risk. If you have to make several payments online, it is important that your beneficiaries can either continue to pay them or end the services. Otherwise this could create new problems.

Finally, if you don’t keep a record of your online accounts, it will be next to impossible for your beneficiaries to find them and access them. By putting this information in writing, you can be sure that they will know about all of your important online accounts.

If you are currently interested in estate planning, give us a call or schedule an appointment. Our firm can help you make arrangements, so that your loved ones are well taken care of after you have passed away.

Estate Planning Horror Stories

Most people don’t spend enough time thinking about estate planning, or think they are too young to worry about estate planning, so they never get around to it. The truth is that estate planning is an essential tool to help you distribute your assets and reduce disputes among your family once you have passed away. Not providing legal arrangements can become a devastating and painful mistake for your spouse and children afterwards. Here are some common and famous examples of what can happen when you don’t arrange proper estate planning.

Example #1: Second Wife Doesn’t Get Along With Sons

The father wants to pass on everything to his sons and creates a living trust for his sons but does not transfer his new residence into the trust. After he dies, the wife takes the residence as the surviving joint tenant. The wife also takes possession of bank accounts and retirement accounts for which he forgot to change the name of the beneficiary. The sons and the wife are now fighting over control of assets. Some of the property within the residence was explicitly given to the sons, but the wife will not allow them on the property. This situation creates a costly legal dispute.

Example #2: Mother and Disabled Daughter

The mother dies and does not create any type of trust or will. The disabled daughter receives all of her assets, including retirement accounts, because she is named as the beneficiary. These assets make the daughter ineligible for her disability and government healthcare benefits. The daughter does not know what to do, doesn’t take the required disbursements from the retirement accounts, and starts accumulating government tax penalties. Her attorney has to petition the court to set up a special needs trust to help her manage the assets.

Example #3: Chief Justice Warren Burger Writes His Own Will

The chief justice makes several mistakes in his will, and his estate ends up having to go to probate. During the lengthy probate process, his family pays additional taxes and fees that add up to hundreds of thousands of dollars.

Example #4: Elvis Presley Does Not Establish an Estate Plan

This is actually one of the most famous celebrity estate planning failures. He does not make proper legal arrangements to distribute his estate, so that a large amount of his assets must go through a probate process. Because of the lengthy and expensive process, his estate is reduced by over 70%. His family pays millions of dollars in taxes, fees, and legal costs.

Even if you think it is too early to set up your estate plan, you should start looking into your options now. As you can see, there are countless examples of what can happen if you don’t make the proper arrangements while you still have time. Our attorneys can help explain the common ways to distribute your estate and can help you write your estate planning documents. If you are interested in creating a will or establishing a trust, give us a call today.

How-to-Conduct-Estate-Planning-in-Blended-Families

How to Conduct Estate Planning in Blended Families

As you probably already know, divorce is no longer rare and almost a norm for American families. Often after divorces, one or both of the spouses will remarry. In some cases, they marry people who have also been divorced and have children from previous marriages. These new families–consisting of children from past marriages, also known as blended families–are becoming more and more common. Although estate planning is recommended for all types of families when there are significant assets to distribute, it is perhaps most important for blended families.

Every situation is different, but it can sometimes be awkward when dividing resources between your biological children and your spouse’s children from another marriage. It’s best to be clear and open with everyone about how assets will be divided, and to have it all in writing, so that everyone can be on the same page.

In addition, you should take extra care in how assets will be distributed after you die. Though some estate plan arrangements distribute assets first to the spouse and then later to the children, if you have a blended family, you may want to do it differently. It could cause anxiety among your biological children if they are afraid that your spouse will amend the estate plan after you die to distribute the assets to his or her children instead. Like many estate planning concerns, the best way to address this is to plan ahead. Here are a few tips to help you arrange your estate in blended families.

Establish Trusts

Like mentioned, if you leave your spouse completely in control of assets, this may create anxiety in your children and difficult situations later on. It is better to establish trusts, so that your children and your spouse understand how assets will be divided after your death. You might want to establish separate trusts for your children or other chosen beneficiaries. You can make your spouse the beneficiary until they come of age, or you can distribute the trusts directly.

Share Financial Information

When you come from separate marriages, both of you have probably already amassed a fair amount of assets, including IRAs, properties, and other types of investments. It’s a good idea to share information about all your financial investments, so that if something happens to you, your new spouse will be able to track and manage everything.

Check Beneficiary Names

When you enter into a new marriage, you should double check beneficiary names on all your insurance policies and retirement accounts. Some may still be in the name of your former spouse. This is a good opportunity to designate assets to your adult children, or you can make your new spouse the beneficiary.

Plan Ahead

It can be really helpful to get trusts and other arrangements in order before the wedding. This way both spouses can guarantee that their assets will be distributed correctly.
If you need assistance with estate planning, our attorneys can help. Give us a call today to schedule a meeting.

Navigating-Estate-Planning-as-a-US-Expat

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.

quiet trust

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 specialize in helping individuals safeguard their assets and arrange how their assets will be distributed to their loved ones.

what-does-an-executor-do

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.

power-of-attorney

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.

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