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Tag: Chevy Chase Estate Planning Attorney

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Advice for Widows and Widowers

MP900442402It is not easy losing a spouse.  However, widows and widowers do not have to let dealing with financial issues overwhelm them.

When people anticipate that their spouse will pass away, they often have a very difficult time handling everything afterwards. The grief that comes with the loss can make other things seem overwhelming, even for those people who have thought ahead and made careful plans. Things are also much worse when a spouse passes away unexpectedly.

If the deceased spouse was the one who handled most of the financial issues for the couple, things can get even more difficult. However, widows and widowers should not let financial issues bother them too much, as the Green Bay Press Gazette explains in “Financial planning tips for navigating loss of a loved one.”

The truth is that most financial decisions are not nearly as urgent or important as they are often made out to be. Widows and widowers do not have to make any financial decisions, until they are forced to do so. They should not make those decisions before. They should put off as much as they can, until they have had a chance to properly mourn the loss of a spouse.

Financial decisions do not have to be made alone either. If an attorney is helping with the estate administration, the attorney can make sure that all necessary estate financial matters are taken care of and suggest a professional to help with other things.

Things do go much better for widows and widowers, when the deceased spouse has made proper estate planning arrangements. Having an estate plan will greatly help your spouse, if something happens to you. Learn about the fundamentals of estate planning for Profit Law Firm.

Reference: Green Bay Press Gazette (March 9, 2018) “Financial planning tips for navigating loss of a loved one.”

 

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IRA Inheritance Options

Bigstock-Senior-Couple-8161132Deciding who should inherit your retirement account is an important part of estate planning. You have several options that are available.

When many people pass away, they will still have a lot of money in their individual retirement accounts for a beneficiary to inherit. It is important to decide who that beneficiary will be, in a way that fits your overall estate plan.  Contact an estate planning attorney to figure this out.

The IRA can be used to balance out other bequests and can be used to enhance other estate planning goals. Depending on what you decide to do, there are various tax implications, which Morningstar recently discussed in “Who Should Inherit Your IRA?”

Options include:

  • Spouse – If your spouse is the beneficiary, he or she can roll your IRA into their own. However, it might not make sense to designate a spouse, if they are nearing the age of having to take required minimum distributions and will not need the money.
  • Child or Grandchild – If they inherit the IRA, then they can stretch the benefits out over their own lifetimes. However, as a practical matter, few do so because they need the money.
  • Charity – Your estate can get a tax deduction, if you leave your IRA to a charity. It can be complicated, so get expert advice before filing out a beneficiary designation form.
  • Your estate – There is not much benefit to naming your estate as the beneficiary. However, if you cannot decide on another option, you can do so.
  • A trust – Ordinarily, there is no benefit to leaving your IRA to a trust. However, if the beneficiary would otherwise be a minor child or unable to manage their finances, it might be necessary to do so.

Reference: Morningstar (March 2, 2018) “Who Should Inherit Your IRA?”

 

 

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Treating Children Equally When One Is Not Responsible

MP900390083 (1)Most parents want to treat all their children the same in their estate plans. That can be difficult, when one of the children is not very responsible with financial matters.

Every parent with multiple children knows that despite being raised the same, they all turn out differently. They have different abilities and often very different attitudes about things.

Children also have different levels of financial responsibility.  Nevertheless, most parents do want to leave all their children an equal inheritance and they do not want to offend one of them by treating them differently than the others. This was the dilemma of a woman who recently wrote into Market Watch for advice in "My son is responsible, my daughter is in debt — how do I split my estate?"

A common way to do this is to create an estate plan that limits how the trust assets can be used. Provisions can be written into the trust, so an irresponsible child cannot waste any money received on frivolous things. This is unlikely to offend any responsible children, if they use the money in reasonable ways.

Not all families are the same. The best way to get an estate plan that covers your unique family situation, is to visit with an estate planning attorney. Let the attorney develop the best way to distribute your estate, given the needs of your family.

Reference: Market Watch (Feb. 16, 2018) "My son is responsible, my daughter is in debt — how do I split my estate?"

 

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Revoking a Trust

Irish-handsPeople commonly wonder if they can revoke a trust that they no longer like and if they can have more than one trust. The answer is not a simple yes or no.

A reader recently asked a NWI Times column “Can an individual establish more than one trust?” It seems that the reader was curious whether he could have more than one trust and if creating a second trust would automatically revoke the first one.

These are common questions because most people are more familiar with the law of wills than of trusts. A person cannot have more than one will and creating a new will is an automatic revocation of any previous wills. Trusts do not work like that.

It is possible for a person to have more than one trust. It is not uncommon when people want to accomplish different things with different trusts. However, the assets put into the trusts cannot be the same and most people have no reason to have more than one trust. What most people seek to accomplish with a trust, can best be done with only one.

Whether and how a trust can be revoked, depends on what type of trust it is. Some trusts are created to be revocable at any time, but an attorney should create the trust.

Other trusts are created to be irrevocable. Sometimes they can be revoked but there are often tax penalties for doing so. It is usually advisable to amend an irrevocable trust where and how state law allows.

If you have questions about a trust you have created, it would be best to consider meeting with an estate planning attorney.  Profit Law Firm has estate planning attorneys with meeting locations in Chevy Chase, Greenbelt, and the District of Columbia.

Reference: NWI Times (Feb. 18, 2018) “Can an individual establish more than one trust?”