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Category: Estate Planning Attorney

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Tax Reform and People with Disabilities

Pexels-photo-265702Republican tax plans have some people with disabilities worried. For parents and grandparents of those people with disabilities, it suggests that a special needs trust is more important than ever.

The ramifications of the new Republican tax reform for individual Americans are still being assessed.

Some people will pay lower taxes, but a few will likely see their taxes increase. One group concerned about the new law was people with disabilities.

Not only will those with disabilities enjoy the standard deduction doubling under the Republican plan, but their taxes might decrease even further due to another provision. The plan includes a provision to lower the itemized deduction threshold for health care expenses in tax years 2017 and 2018. The new tax law lowers the deductibility threshold from 10% to 7.5% of adjusted gross income.

Not until 2019 will the threshold increase return back to 10% where it was pegged in 2016.

Accordingly, the fears expressed by The Hill in "Restructured tax code would unduly burden people with disabilities" did not come to pass.

There is something parents and grandparents of the disabled, as well as the disabled themselves, can do and that is create a special needs trust. These trusts do not ease anyone's tax burden but do allow people with special needs to have more income to help cover any increased taxes.

If you would like to learn more about special needs trusts, then talk to an estate planning attorney Bethesda Maryland for the details about setting one up.

The process is complicated and needs to be done in a particular way in order to work but an experienced attorney can help you with that.

Reference: The Hill (Nov. 24, 2017) "Restructured tax code would unduly burden people with disabilitie

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Moving to Another State and Your Estate Plan

I Website-photo-state-incentive-page[1]f you move to another state, you should review your estate plan to make sure that it will still work.

Americans often move from state to state, especially after they retire. The laws in most states are similar.  However, there are sometimes minor differences that can have a big impact on estate planning.

That leaves many people wondering whether an estate plan they drafted in one state, will still be valid if they move to another state. The answer is “maybe,” as The Times Herald discusses in "Moving can affect your financial planning."

Generally speaking, if a will you had drafted was valid in the state in which it was drafted at the time it was drafted, the other states will consider it to be valid.

Trusts are valid in every state,  since the state in which they were created always governs over the trust.

Most of the time your estate plan will be valid in your new state.  However, there can be some issues, especially if you purchase real estate in your new home state. Some states have particular rules about how real estate has to be handled.

You should also be aware that your new state could have tax laws that are different than your old state. Something you have done in your estate plan might still be legal and valid, but it might not be tax-wise.

At a minimum, you should visit an estate planning attorney in your new state and let the attorney review your estate plan.

The attorney can tell you whether you should do something different to adapt to the laws of your new state.

Reference: The Times Herald (Dec. 1, 2017) "Moving can affect your financial planning."

 

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Wealth Planners

MP900448494[1]Wealthy people have so many different advisors for different aspects of their lives, that it is often a good idea to hire someone who can coordinate all of them and keep them on the same page.

If you have a lot of money, it is likely that you pay a lot of people to manage various aspects of your wealth.

You have financial advisors. You have business consultants. You have accountants. You have estate planning attorneys. You have business attorneys. You have a lot more than that.

It can be difficult to keep all of your advisors coordinated and all working toward the same goals.

The advice you get from the different advisors can be contradictory.

While it is good to get a variety of opinions, it might be a good idea to hire someone to help you manage it all, as Forbes discusses in "Estate Planning For the Ultra Wealthy – The Role of A Family Wealth Advisor."

The idea is fairly simple.

Estate planning attorneys who have the expertise to plan how wealth can be transferred down within families for generations can also act as wealth planners. They coordinate the activities of all of the other advisors and make sure the wealthy client's ultimate estate planning goals are always kept in mind.

Estate planning attorneys can make sure that the other advisors are all working toward the one ultimate goal.

Not everyone needs a wealth planner.

Those that do would be well advised to talk to their estate planning attorneys about the benefits of having one.

Reference: Forbes (Aug. 29, 2017) "Estate Planning For the Ultra Wealthy – The Role of A Family Wealth Advisor."

 

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Duke’s Will to Be Unsealed

image from commons.wikimedia.orgThe Duke of Windsor's will has been sealed since his death in 1972. The will of the man once known as King Edward VIII has been ordered unsealed, so copyrights can be determined for a television show.

It is considered one of the biggest acts of romantic love in modern history. King Edward VIII of England abdicated the throne in 1936, so he could marry a divorced American woman named Wallis Simpson.

His title changed from the king to the Duke of Windsor. He passed away in 1972.

The contents of his will were quickly sealed by the court and have never been made public, despite great public and historical interest in them. People are curious whether the will might shed any light on the man's decision to abdicate.

A court in the U.K. has now ruled that the will is to be unsealed as the Daily Mail reports in "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

The Duke's will is only to be unsealed for a limited purpose.

The writers of the Netflix show The Crown would like to use the duke's letters in their show. However, they first need to know who owns the copyrights to those letters, so they can get the necessary permissions to use them.

It is not likely the will's other details will be made public.

For a former king's will to be sealed, is probably a simple matter.

For other people, it is much more difficult since wills are generally a matter of public knowledge.

People who would like to keep their estates private, should see an estate planning attorney for more information about how to do that.

Reference: Daily Mail (Nov. 15, 2017) "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

 

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Using a Trust for Educational Funding

MP900442227[1]Educational costs have risen so high, that accumulating the money to pay for a child or grandchild to attend college can take years. There are a few different ways to do it.

You might have heard the nightmare stories about people with college degrees who end up owing more than a hundred thousand dollars to the government in student loans. That is becoming such a common scenario, that the majority of Americans now support the idea that public colleges should be tuition free.

However, tuition free college is probably not a realistic scenario in the near future.

Families who do not want their younger generations to have to pay back gigantic student loan debts are making plans to have parents and grandparents pay for school.

There are a couple of different options as the Wills, Trusts & Estates Prof Blog discussed in "Funding Education? Consider A Trust Instead of a 529 Plan."

A 529 plan is a great way for families to save for education.

It allows for tax-free investments for educational expenses. However, the investment opportunities can be somewhat limited and people can only sign up for plans that are made available from state governments.

People with more money would be better off using trusts for educational expenses.

With trusts there are more investment options and if the money is not needed for educational expenses, then it can more easily be used for other things.

If you would like to make paying for the education of future generations of your family part of your estate, then talk to an estate planning attorney about the best way to do that.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 16, 2017) "Funding Education? Consider A Trust Instead of a 529 Plan."

 

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Estate Planning Is Ongoing Process

MP900439295[1]It is not enough to get an estate plan once and leave it alone for all time. It needs to be constantly reviewed and updated to take account of changing circumstances.

Some people can get away with getting an estate plan once and never looking at it again. If someone never gets divorced, remarried, has more children or increases assets, then the first estate plan they get might be good enough for the rest of their lives.

This is true, even if that estate plan was written 50 years before the person passes away.

However, most people's lives are not that constant.

In fact, most people have significant changes in their lives as they get older.

When things change, then estate plans normally need to be changed as well, as Forbes discusses in "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

The more wealth that you have, the more often you will probably need to change your estate plan.

This is because your assets will grow, how you hold those assets will change and tax laws will also change.

Nevertheless, it is not just the wealthy who need to constantly review and update their estate plans.

Everyone should do so, whenever there is a significant change in their lives that should be reflected in an estate plan.

Examples of these changes include divorce, remarriage, a new child, a new higher paying job, a new grandchild and much more.

If you have not changed your estate plan recently, then take a look at it.

Ask yourself whether it still does what you want it to do, given all the changes in your life.

If the answer is no or even maybe not, then talk to an estate planning attorney.

Reference: Forbes (Sep. 6, 2017) "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

 

 

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Estate Planning Is Ongoing Process

MP900439295[1]It is not enough to get an estate plan once and leave it alone for all time. It needs to be constantly reviewed and updated to take account of changing circumstances.

Some people can get away with getting an estate plan once and never looking at it again. If someone never gets divorced, remarried, has more children or increases assets, then the first estate plan they get might be good enough for the rest of their lives.

This is true, even if that estate plan was written 50 years before the person passes away.

However, most people's lives are not that constant.

In fact, most people have significant changes in their lives as they get older.

When things change, then estate plans normally need to be changed as well, as Forbes discusses in "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

The more wealth that you have, the more often you will probably need to change your estate plan.

This is because your assets will grow, how you hold those assets will change and tax laws will also change.

Nevertheless, it is not just the wealthy who need to constantly review and update their estate plans.

Everyone should do so, whenever there is a significant change in their lives that should be reflected in an estate plan.

Examples of these changes include divorce, remarriage, a new child, a new higher paying job, a new grandchild and much more.

If you have not changed your estate plan recently, then take a look at it.

Ask yourself whether it still does what you want it to do, given all the changes in your life.

If the answer is no or even maybe not, then talk to an estate planning attorney.

Reference: Forbes (Sep. 6, 2017) "Why Continuous Estate Planning Is Essential For the Rich and Super-Rich."

 

 

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Update Your Estate Plan

man and women shake hands over a laptopIf you do not continuously update your estate plan, then it will not be as effective as you want it to be.

After people get an estate plan, the last thing many of them want to do again, is to go back to the estate planning attorney and make changes.

It can be expensive to do so and it takes time away from other things. It also forces people to think again about their own deaths.

This leads people to think that if they have already gotten an estate plan, then at least they have something. They believe that they do not need to make regular changes,  since they will always have time when they are older to change their plans to account for everything that has changed since they first got estate plans.

However, that is a bad idea as Market Watch reports in “There’s no time like the present to update your estate plan.”

The biggest issue is that you might not have as much time to update your estate plan as you think. Even the most cautious person with the healthiest habits in the world, can never know what might happen to him.

You do not have time to wait to update your estate plan to take changing circumstances into account. It is important to make changes to your estate plan, when those changes first become necessary.

If you do not continuously update your estate plan, then you risk leaving your family in a bad position when you pass away. They are the ones who will have to deal with anything that might have made sense once, but that no longer does.

Reference: Market Watch (August 7, 2017) “There’s no time like the present to update your estate plan.”

 

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Beneficiary Planning

Large Mixed Race FamilyWho you make the beneficiaries of your retirement accounts, can have major implications for your estate.

When you first signed up for a retirement account, you might not have thought about all the details that were presented to you. This is especially true, if you were given retirement account forms along with a large stack of other papers by a human resources person when you started a new job.

One of the items you would have filled out on the forms was an account beneficiary.  If you were to pass away, this beneficiary would then receive the assets in the account.

At the time, you might not have thought too deeply about who you designated as that beneficiary. However, it is important that you do think about it when you are making your estate plans, as Morningstar pointed out in “Do’s and Don’ts for Beneficiary Designations.”

There are actually many things to consider when naming beneficiaries on retirement accounts.

For example, different beneficiaries are treated differently for tax purposes and in how they can use the account.

Another thing to consider is your designated beneficiary, who will receive the account automatically and has no obligation to share with other people, even if you tell them they should. Therefore, if you have three children and name only one of them as a beneficiary, then you might not want to split the rest of your assets evenly between all three children.

The best thing to do is to talk to your estate planning attorney about your beneficiary designations and let the attorney help you determine the best options for them, as part of your overall estate plan.

Reference: Morningstar (July 23, 2017) “Do’s and Don’ts for Beneficiary Designations.”

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Yes, Estate Planning Is for You

No matter who you are, how much money you have, or any other factor, estate planning is something you should do.

Everyone who has ever worked in an estate planning attorney’s office, has experienced the following scenario at least once. It is likely they have experienced it dozens and even hundreds of times.

The phone rings and the person who works in the estate planning attorney’s office picks it up. The person on the other end of the line immediately launches into a very long story about their life situation. They talk about their family, their job, their bank accounts and perhaps what their retirement plans are.

All of this information the employee dutifully tries to jot down on a notepad.  However, the reality is that the employee does not need to do that, because the employee knows the question that is eventually coming and the answer to that question.

The question is “Do I need to have an estate plan?”

The answer, as the Casper Star Tribune recently pointed out in “Estate planning is for everyone,” is “Yes.”

Indeed, the answer to that question is always “Yes.”  It’s not just “Yes” because the estate planning attorney’s office is a business that needs people to get estate plans to stay open.

Everyone really does need an estate plan.

It does not matter how much money a person has. It does not matter whether a person has any other family members. It does not matter if the only thing the caller has is the proverbial dime to put in a pay phone to make the call. The answer is “Yes”, because everyone deserves to have a say in how anything they do have, will be distributed to others after they pass away.

The way to do that is by getting an estate plan.

Reference: Casper Star Tribune (June 30, 2017) “Estate planning is for everyone.“