Building Legacies that Last Estate Planning and Elder Law

Trust Basics

Bigstock-Financial-consultant-presents--14508974[2]When looking for estate planning advice people often see suggestions that they should create a trust. That is only helpful if they know what a trust is.

The Internet is full of estate planning advice most of which tends to suggest that people should get a trust. The benefits of doing so are often explained in detail.

Nevertheless, before people can get to the point where they can adequately assess the benefits of a trust for their own circumstances, they first need to know what a trust actually is.

That is not explained as often.

While it might seem obvious to some people, other people do not really know what a trust is. Recently, the Motley Fool discussed some of the basics in “What Is a Trust Fund?

A classic trust is very simple. Person A (the grantor) creates a legal entity and gives it assets that are managed by Person B (the trustee) for the benefit of Person C (the beneficiary). Those are the three basic elements of every trust.

They can be complicated. For example, a trust can have multiple Persons A, B or C. In some types of trusts a single individual can play more than one role. Despite those complications, the basic structure of the trust does not change.

While there are many different types of trusts, including family, revocable, irrevocable, and many more, they all follow the same pattern. Trusts are a way to pass assets on to beneficiaries in a way through which those assets are independently managed by a trustee.

If you would like to learn more about trusts and whether one is right for you, contact an estate planning attorney.

Reference: Motley Fool (Aug. 28, 2016) “What Is a Trust Fund?


Do You Really Need to Sell Your House to Afford a Nursing Home? Not With An Estate Plan

Bigstock-Senior-Couple-8161132[1]All too often when one spouse in a marriage needs nursing home care, the couple assumes that the only way they can pay for that care is to sell their home. That might not be the case.

Overall, Americans do a poor job of planning for their estates and making plans should they need long-term care in a nursing home. This is because so many Americans do not ever make any plans at all.

Of those that do, many choose to make their own plans and that is a mistake. Those who seek out professional planners normally have good plans.

For the many who have no plans or who have bad plans, they often receive a rude awakening when their spouse needs care in a nursing home. Many of these Americans do not think they have any other option but to sell the family home so the government will pay for the care under Medicaid.

However, that is not always the only option.

This issue was taken up recently by the Boston Globe in “Seniors have more options than selling their home.”

Before selling their homes to pay for nursing home care, seniors are advised to seek out the services of an elder law attorney. The attorney can assess the situation to determine what other options, if any, are available.  At Profit Law firm, during crisis planning, we will review the options to see if a trust, deed transfer or another option works.

The even better option is to plan ahead.

Get a professionally crafted estate plan that includes the possibility of long-term care in a nursing home. Doing so will make it far less likely that having a spouse go into a nursing home will necessitate selling the family home.  Call us for a consultation today.

Reference: Boston Globe (Aug. 20, 2016) “Seniors have more options than selling their home.”


You Can Plan for the Unexpected

Bigstock-Elder-Couple-With-Bills-3557267[1]Estate planning is one of the few things that you can do to legitimately plan ahead for the unexpected.

In most walks of life it is almost impossible to plan for the unexpected. Even when you can, it is often a waste of time. No offense to Doomsday preppers, for example, but it is almost impossible and most likely a waste of time to plan for the zombie apocalypse. The chances of such an event happening in our lifetime are exceedingly slim and we do not really know everything we would need to survive such a thing.

Even in business it is often difficult to plan for the unexpected. If a business person does not expect something to happen, it is a waste of resources to plan for it. It is usually better to spend those resources growing the business.

However, as WXOW points out in “Planning ahead for the unexpected with a will,” estate planning is different.

With estate planning we can plan for the unexpected and it will never be a complete waste of time. Most of us do not expect to die anytime soon, but we all know that we will die someday.

If you get an estate plan now, you have not wasted your time even if you do not pass away for decades. At some point the estate plan will be used. 

By estate planning long before you expect to need it, you hedge your bets just in case something unexpected does happen tomorrow, but you also plan for the inevitable.

Getting an estate plan does not have to be a difficult process.

If you hire a qualified estate planning attorney, then the attorney will do most of the heavy lifting. You can get an estate plan that will be good should you need it next week or sometime later this century.  Get a head start with Profit Law Firm, a law office that focuses on estate planning.

Reference: WXOW (Aug. 5, 2016) “Planning ahead for the unexpected with a will "


Lawsuit over a Dog’s Trust Fund

Bigstock-Elder-Couple-With-Bills-3557267[2]Pet trusts have become an increasingly popular way for pet owner’s to make sure that their pets are taken care after the owner passes away. As with other types of trusts, they too can lead to disputes as a New York case illustrates.

When Patricia Bowers passed away in 2010, the care of her dog, Winnie Pooh, was given over to her friend Virginia Hanlon. Bowers also left a $100,000 trust fund for the care of the animal.

Hanlon has filed a lawsuit claiming that she has received very little of that money.

She claims that the estate executor, Harriet Harkavy, is intentionally saving the money that is supposed to go for the dog’s care so Harkavy can donate it to charity and win points within her social circle. Bowers also states that a check for an emergency veterinary bill bounced, but that she was later reimbursed with a valid check.

The UPI reported this story in “Lawsuit filed in New York over handling of dachshund's $100,000 trust fund.” For her part, Harkavy claims that Hanlon has received everything she is entitled to under the terms of the trust.

What this case illustrates is that trusts for pets need to be treated just like any other trust and other estate planning documents. It is important that everyone involved who has authority is on the same page and will be able to work out their differences.

Ultimately, the trustee must also be someone who inspires trust in the beneficiaries. If not, then disagreements are likely to lead to expensive and unnecessary lawsuits, which are the very things that good estate plans are designed to avoid.

Reference: UPI (Aug. 1, 2016) “Lawsuit filed in New York over handling of dachshund's $100,000 trust fund.”


Estate Planning for Ranchers

Bigstock-Extended-Family-Outside-Modern-13915094[1]If you own a ranch, then having an estate plan is essential to making sure that it stays in your family. Getting a plan does not have to be as complicated as you might think it is.

Some of the most important legal documents a rancher can have are the documents that make up the rancher’s estate plan. They are the documents that determine how the ranch will be passed on to the next generation or whether it will have to be sold.

Despite this, many ranchers put off getting estate plans, if they get them at all.

That is unfortunate because estate planning does not have to be very difficult for ranchers if they break the process down into simple steps, as the Huntsville Item explains in “Estate planning and the family ranch.”

The steps are:

  • Start a conversation with your family about what to do with the ranch after you pass away. This will help determine which of your relatives might want a stake in the ranch and make sure that everyone in the family is on the same page.
  • After talking with your family, decide what your objectives are for the ranch and what you would like to see happen to it.
  • Gather all of your important financial documents.
  • Choose an experienced estate planning attorney that you are comfortable with and have the attorney draw up an estate plan that meets your objectives.
  • After your estate plan is complete, make sure that you keep it updated whenever circumstances change.

A qualified estate planning attorney can help you keep the ranch in the family or otherwise pass without a hitch.

Reference: Huntsville Item (July 31, 2016) “Estate planning and the family ranch.”

Last Minute Estate Planning

If you have avoided getting an estate plan and are now facing the prospect of death, it might not be too late for you to get a Maryland estate plan that protects the interests of your family.

Ideally, you should get an estate plan long before you become terminally ill. However, not everyone really thinks about the prospect of their own death until it is imminent and that is somewhat understandable. When faced with the prospect of death do not assume you do not still have time to get an estate plan.

There is still be time to do some planning to help your family, consult Profit Law Firm to find out how.

Recently, NASDAQ listed some estate planning tips for people in that situation in “6 Estate Planning Tips for Those Approaching Death,” including:

  • Make sure to get powers of attorney in place so when you become incapacitated someone else will be legally able to handle your affairs.
  • Come up with a plan for your estate to avoid probate with the help of a Maryland estate planning attorney and make sure all of your assets are titled appropriately.
  • You may want to consider swapping assets for capital gains tax purposes, but only do so after talking to your attorney to make sure you do everything correctly.
  • It might be a good time to make donations to charities you support.
  • Review any life insurance policies you have to make sure the beneficiary designations are still appropriate.
  • Talk to your attorney about the best strategies to avoid income and estate taxes for your family. This could include avoiding income in respect of decedent issues.

Reference: NASDAQ (July 26, 2016) “6 Estate Planning Tips for Those Approaching Death,”


You Cannot Avoid Paying for Maryland Estate Planning

Bigstock-Extended-Family-Outside-Modern-13915094[1]You might think that you do not really need an estate plan so there is no point in spending money to get a proper one drawn up. However, that just means that your estate will have to pay more later to do the planning that you did not do.

Estate planning is never free. If you go to an experienced Maryland estate planning attorney, then you have to pay for the attorney’s time to create a proper estate plan for you. Some people would rather not pay, so they do not get estate plans. Instead, they expect that their family and the courts will be able to easily handle everything after they pass away.

In reality, they actually will “pay” for an estate plan, as the Green Bay Press-Gazette points out in “Estate planning: Pay now or pay later.”

The truth is that it is far more expensive not to have an estate plan than to have one. If you have to pay Maryland estate taxes because you did not have a Maryland estate planning attorney, you will pay much more in taxes than you would have ever paid the attorney. If your estate has to hire an attorney to sort out your affairs after you pass away and go to court to get a judge’s approval for everything, then that is going to cost a lot more than going to an attorney and getting an estate plan.

Not having an estate can cost your estate in other ways as well. For example, you may have to pay a higher estate tax bill and miss out on the best, cheapest ways to transfer wealth from one generation to another.

Actually getting an estate plan for most people is much easier and cheaper than you probably assume it is. There is no reason not to go ahead and get one, especially since not doing so will just cost your family more money later.  Consult Profit Law Firm about creating a Maryland estate plan and save money on Maryland estate taxes.

Yes, you do tend to get what you pay for.

Reference: Green Bay Press-Gazette (Aug. 1, 2016) “Estate planning: Pay now or pay later.”


Avoiding Estate Mistakes

Bigstock-Elder-Couple-With-Bills-3557267[1]If you do not have an Maryland estate plan or have a bad plan, then it is likely that your loved ones will have a more difficult time than necessary inheriting your wealth. Fortunately, for most people getting a good Maryland estate plan is easier than they often think.

One of the many reasons people in Maryland put off planning for their estates is that they imagine it is much more difficult to do than it really is. For most people a good Maryland estate plan follows a simple formula. They need to decide who they want to inherit their property, hire an experienced Maryland estate planning attorney and have the appropriate documents drawn up.

Recently, Kiplinger wrote about four steps to take in “4 Strategies to Avoid an Estate-Planning Mishap.”

They include:

  • Get a basic will that details who you want to have your property and what they should have.
  • Create a living trust and put your most important assets in it. With a trust in place most of your estate will not need to go through probate after you pass away, which makes things much easier on your family.
  • Make sure all of your financial accounts are properly titled. Some you might want to put in your new trust. For others you can make them payable on death so they will automatically go to a person of your designation after you pass away.
  • Consider getting a life insurance policy. If your family is in need of cash after you pass away, they will have access to it through the life insurance benefit. This is a good way to make sure that your family has what it needs while waiting for your estate to be legally settled.

A qualified Maryland estate planning attorney can help you design – and implement –  a Maryland estate plan appropriate for your unique circumstances.

Reference: Kiplinger (Aug. 2016) “4 Strategies to Avoid an Estate-Planning Mishap.”


Estate Planning and the Family Farm

Bigstock-Extended-Family-Outside-Modern-13915094[1]Like any other business owner, farmers need to carefully plan how the farm will be passed on to heirs. However, farmers do have some unique estate planning issues to consider.

In the eyes of the law, a farm is just a type of business. Like any other business, it can be passed to other people when the current owner passes away. However, estate planning for farms often has issues that are not as much of a concern for other types of businesses. Most farms have a lot of valuable assets, such as land and equipment, which could add up to an estate tax liability. However, farms often do not have the liquid assets to easily pay those taxes. Ohio’s County Journal and Ohio Ag Net recently discussed some ways to plan for this problem in “Estate planning for farmers: Providing for liquidity concerns,” including:

  • Develop a plan to build up liquid assets that can be made available to the estate after the farmer passes away. This can be as simple as investing farm income in securities.
  • Life insurance can be purchased to provide cash to beneficiaries.
  • If the farm is held in partnership or as a corporation, then creating buy-sell agreements with other owners to purchase an individual’s ownership stake upon death can provide money for the deceased’s estate.
  • The likelihood of the farm estate having to pay the estate tax can be reduced during the farmer’s life in several different ways, including creating a gifting plan with the help of an attorney and selling off older equipment that is no longer needed.

An experienced estate planning attorney can help you to create a plan specific for your farm.

Reference: Ohio’s County Journal and Ohio Ag Net (July 19, 2016) “Estate planning for farmers: Providing for liquidity concerns

Is a Trust Appropriate?

Bigstock-Financial-consultant-presents--14508974[1]Wills and trusts are the two pillars of estate planning and determining how assets will be passed on to future generations. You need to know whether or not you need one, the other or both.

The two main ways that people pass their assets to their heirs are through a will and through a trust. They both serve the same basic function of transferring assets—but in very different ways. Wills normally go though probate court while trusts are handled privately. It is important to know if you need one or the other. For wills, that is a simple question to answer. Everyone needs a will. Even if you have a trust, you will need a will to deal with any assets inadvertently or intentionally left out of the trust. Trusts are more complicated. Recently, the Brainerd Dispatch discussed some considerations about whether a trust is necessary in the article, “Commentary: When does it make sense to add a trust to your estate plan?” Things to consider include:

  • Privacy – Wills are normally made available to the public, but most trusts can be kept private. If you do not want other people to know the details of your estate, then a trust is what you need.
  • Property in Multiple States – If you have property in more than one state, then a trust might be best. Otherwise, your estate may have to be probated in each state to deal with the property.
  • Control – Trusts can offer you much greater control over how your heirs will inherit your assets.
  • Charity – Trusts are generally a better tool for giving part of your estate to charity. If set up properly, you can even get a tax break now, keep control of your assets and have the assets go to charity after you pass away.

For help determining what is necessary for your situation, consult an estate planning attorney.  For  consultation on your situation contact Profit Law Firm, PLLC.

Reference: Brainerd Dispatch (July 23, 2016) “Commentary: When does it make sense to add a trust to your estate plan?