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Tag: Estate Planning

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Protect Your Greatest Asset

3538871771_3a3cbb1eb8_zWhen people think about estate planning, they normally think about possessions and money. They think that estate planning is all about deciding who gets what possessions and who will inherit their money.

For some people, this is not something that they care about too much. They think it is of no importance to them what happens to their money. After all, they will not be around to spend it or to see who does, so why bother with it too much?

Estate planning, however, is about much more than that, as NJ Biz recently discussed in “Why haven’t you protected your greatest asset?”

The most important thing you have is your family, especially if you have minor children. Estate planning is about protecting them.

Yes, most of the focus is on possessions and money. However, the point of estate planning is to decide the best way to leave your possessions and money to your family.

It is about making sure that your family is cared for after you pass away.

When you plan your estate, you can make sure that your assets can be used by your family to meet its needs.

If you have minor children, then estate planning is also about making sure that a responsible person takes care of them and handles the assets for the children, until they are old enough to do so for themselves.

You need to plan for your family. Think about them as the reason for estate planning, instead of just thinking about it as a way to deal
with your possessions and money.

Reference: NJ Biz (Oct. 9, 2017) “Why haven’t you protected your greatest asset?”

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Wills Must Go through Probate

Last willIt is not always clear how mistaken estate planning beliefs get started. It usually happens on the Internet
with people seeking out legal advice from often bad sources.

Sometimes, it starts with a television show or movie that has played loose with the law.

Regardless of how mistaken beliefs start, it is important to make sure that you do not believe any of
them.

One that more people believe than might be expected, is that wills do not have to go through probate.

That is just wrong, as TC Palm discussed in “Common misconceptions about wills and trusts.”

This idea probably got its start, because in some states if an estate is small enough, then it does not have
to go through probate. Usually, these are very small estates with very few assets.

Someone with good intentions probably had a relative or friend who passed away with few assets and
as a consequence, the will did not have to go through probate.

However, most wills do have to go through probate. They need to be submitted to the court and
approved.

The probate court then oversees the administration of the estate as conducted by the executor or
personal representative.

If you want your estate to avoid probate, what you need is not a will.

Instead you need to use other estate planning instruments, such as trusts.

Trusts do not have to go through probate in almost all cases. If you would like to get one, schedule an
appointment with an estate planning attorney.

Reference: TC Palm (Oct. 5, 2017) “Common misconceptions about wills and trusts.”

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Little Things That Cause Estate Problems

Bigstock-Extended-Family-Relaxing-On-So-13907567When families fight over estates, it is not always over things of great importance. They often fight over the little things.

Much of the discussion about how to avoid family feuds over estates focuses on major items. The focus is on making sure that everyone gets his or her fair share of the estate's wealth, so they will be satisfied and not challenge the estate.

That is an important discussion, but little items of personal property can also be a problem, as CNBC discusses in "7 Ways that cheap Tweety Bird figurine can screw up your estate."

Potential problems include:

• Items that do not have great monetary value can still have great sentimental value to family members. If two people want the same item, it can be difficult to resolve that dispute.

• Do not tell anyone verbally they can have a piece of personal property without putting that in writing in your estate plan. If other people want the same item, the person you want to have it will have no way of proving that you said they could have it.

• Do not just let your family divide all your assets between themselves when you pass away. It is most likely that they will fight over who gets what.

• Even if you have given someone access to a safety deposit box and told them they can have the contents after you pass away, you still need to make that official in your estate plan.

• Make sure that any unusual items have been planned for, such as digital media accounts and frequent flyer rewards.

• Items regulated by the government can be complicated. You should plan accordingly.

• Your executor will need to have the authority to change the locks on your door. You would be surprised how often people simply walk in and help themselves to items that they want.

Reference: CNBC (Oct. 10, 2017) "7 Ways that cheap Tweety Bird figurine can screw up your estate."

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There Is Not Time to Do It Later

TEREUy1vSfuSu8LzTop3_IMG_2538Most people do not think something bad is going to happen to them any time in the near future.

Healthy people have this belief that they will be able to continue with their lives without any problems.

They do not think they will have an accident. They do not think they will get seriously ill. They know these things could happen, but believing that they are imminent is paranoia.

The problem with this thinking is that it leads people to put off estate planning. People put off their initial estate planning, but they also put off making necessary changes to the estate plans they already have.

The latter can be as big of a problem, as the former the Sunshine Daily Coast reports in “Fix your will before it’s too late.”

What is the problem with putting off making necessary changes to an estate plan? Once you have a plan that is the one a court will follow, until you change it.

If you have stated in your will that someone should inherit your property and you change your mind for whatever reason, the change has no legal effect until you actually create a new will.

If something happens to you before you create that new will, then the person you do not want to inherit the property actually will.

It is never a good idea to procrastinate in any area of estate planning.

Instead of putting things off, see an estate planning attorney as soon as the needs arises.

Reference: Sunshine Coast Daily (Oct. 2, 2017) “Fix your will before it’s too late.”

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Everyone Can Get a Trust

TrustsMost people probably first learned about trusts in a history class.

The idea of trusts is often introduced when we study the presidency of Teddy Roosevelt. He is famous for speaking out against the trusts of his day and beginning to break them up.

The trusts being talked about in history, were the vehicles of extremely wealthy people that were used to hold their assets. The biggest trusts had immense economic power and near full control over some industries.

Because of this history, people often still think of trusts as things that very wealthy people get and use.

However, trusts are now for everyone, as the Times Herald-Record discusses in “Trusts are no longer just for the wealthy.”

There are all kinds of trusts available today. They can be created for many different purposes.

Trusts can be used to make inheritances in blended families less contentious. They can also be used to hold inheritances for minor children. Trusts can be as simple as being nothing more than a convenient way to avoid the potentially costly and time-consuming probate process.

Because trusts are so versatile, almost anyone can benefit from a trust.

If you would like to know how you might personally benefit from getting one, talk to an estate planning attorney about your needs and what types of trusts can help meet those needs.

Reference: Times Herald-Record (Sep. 28, 2017) “Trusts are no longer just for the wealthy.”

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2018 Estate Tax Exemption Projections

TaxesThe IRS has not yet announced what the 2018 estate tax exemption will be. However, expert analysts think there will be some slightly good news for wealthy people.

They predict that the exemption should increase to $5.6 million for a single person and more than $11 million for married couples.

At the same time, they predict that the annual gift tax exemption should also increase to about $15,000, as Forbes reported in “Estate Tax Exemption To Top $11 Million Per Couple in 2018.”

This should give wealthy people and their estate planning attorneys a little bit more flexibility, as they attempt to shrink estates to below the threshold.

While most people who might be affected by this exemption increase would prefer to see the estate tax repealed entirely, that is increasingly looking like it will not happen this year.

Congress has turned its attention to tax reform, but getting anything passed could be a long process and will likely continue into next year.

Repealing the estate tax is also controversial. If Democratic votes are needed to pass tax reform legislation, that might take the estate tax off the table.

If you have questions about your estate and how it might have an impact on the estate tax, then you should see an experienced estate planning attorney in your area.

Reference: Forbes (Sep. 15, 2017) “Estate Tax Exemption To Top $11 Million Per Couple in 2018.”

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Same-Sex Couples Estate Planning

Same sexWhen the Supreme Court ruled that same-sex couples have a Constitutional right to get married, many problems those couples faced were finally resolved. For the first time, gay couples had legal protections in case one of them passed away.

The laws of intestate succession would protect them, in case they did not have an estate plan.

Couples were also given more rights to information about the health of the other, so they could assist in the treatment plan if one or the other of them got seriously ill.

However, not all potential estate planning issues for same-sex couples are fully resolved, as Cleveland Jewish News discusses in "Same-sex couples could face estate planning road blocks."

One of the biggest problems remains child custody.

Prior to legalizing same-sex marriage, it was not normally allowed for both partners in a same-sex relationship to be put on the birth certificate of a newborn.

This has important implications for any children born prior to the Supreme Court's decision.

The automatic right of custody of children in the event the spouse whose name is on the birth certificate passes away, cannot be assumed for the other spouse.

Of course, this is an ever bigger problem for same-sex couples who have chosen not to get married. They still have all of the other potential issues that existed previously.

It is extremely important that same-sex couples see an estate planning attorney.

The law is more favorable than it used to be, but it is not yet perfect at protecting their rights.

Reference: Cleveland Jewish News (Sep. 9, 2017) "Same-sex couples could face estate planning road blocks."

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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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Trusts Are Cheaper Than Wills

If you are looking to save money on your estate plan, then you might think that you should get a will  since they are cheaper to get than a trust. However, trusts are actually cheaper overall. MP900403058[1]

Estate planning can be expensive for some people. Estate planning attorneys do not always come cheap and not everyone thinks they can afford to hire one.

In most cases, a will is less expensive to get than a trust.  This is because trusts normally require more of the attorney’s time to draft. This leads many people to get wills to save time and money.

The problem with is that a will is more expensive overall than a trust, as the Times Herald-Record explained in “Trusts will cost you less at settlement time.”

When someone passes away, someone must then administer either the will or the trust to make sure that property is distributed as the deceased directed.

Using a will requires going to probate court and having an executor, who can charge for the service, go through the process of administering the estate.

On the other hand, using a trust means that a trustee, who can also charge for the service, is required to distribute everything.

The trustee normally does not have to go to court, which makes it a much faster process. The speed means that the trustee may charge much less overall.

In the end, the trustee may be a lot cheaper than any money that might have been saved by getting a will instead of a trust.

When getting an estate plan created, it is important to use the instruments that work best for your situation. Do not be afraid to get a trust because of the initial expense.

It just may be cheaper in the long run.

Reference: Times Herald-Record (August 2, 2017) “Trusts will cost you less at settlement time.”