March 1, 2018October 25, 2023

Trusts May Be The Answer: When Minors are Your Heirs

If you think it is likely your heirs will be minors would when you pass away, it is best to do so differently than you would leave assets for adults.

If you have minor children, grandchildren or other relatives you want to include in your estate plan you should do so, because if you leave assets only to their parents, they might spend everything before the minors can inherit it.

You could also simply write provisions in your will, so the minors receive certain assets or a portion of your estate. However, that does not work in the same way leaving assets in a will to adults does. The probate court will have to hold hearings and determine who the best adult is to be in charge of handling those assets on behalf of the minors, until they come of age.

This can be inefficient and, unless you have left special instructions in the will, the person appointed by the court might not be the same person you would have appointed. There is a better way to leave assets to minors as the Times Herald-Record discussed in “Proper legal planning for minor beneficiaries.”

The better option is to create a trust and to fund the trust with the assets you would like to leave for the minors. You can appoint a trustee of your own choosing to administer the assets for the benefit of the minors. You also can leave instructions about how and when the assets are to be distributed for the children. That does not have to be the moment they reach the age of majority.

If you would like to leave part of your estate to minors, then talk to an estate planning attorney about creating a trust to do so.

Reference: Times Herald-Record (Feb. 1, 2018) “Proper legal planning for minor beneficiaries.”

February 20, 2018

An Easy but Bad Way to Avoid Probate

If you own a home, then there is a very simple thing that you can do to make it so that your home will not have to go through probate after you pass away. Do not do it though.

Many people are certain that they must avoid probate at all costs for their estates after they pass away. That is not always true. It depends on the size of an estate and the specifics of the probate process in your state of residence.

Whether it is true or false, the perception is an important one. The best way to know if probate will be burdensome for your estate, is to visit an estate planning attorney.

Some people don’t visit an estate planning attorney. However, they decide that their home is their most valuable asset and they put a child's name on the deed. This will make it, so the home does not have to go through probate after they pass away. It will automatically go to the child on the deed.

It works to avoid probate but it is almost always a very bad idea, as My Prime Time News discussed in "Deeds and Probate Avoidance."

The problem is that by putting a child's name on the deed, the home becomes an asset for the child. Any creditors the child has, can put a lien on the loan.

It also has the potential for adverse capital gains tax consequences for the child, should the home be sold after you pass away. This is an example that shows that this method of probate avoidance may actually cost your heirs a lot of taxes.

A much better idea to avoid probate is to visit an estate planning attorney and ask about putting your home in a trust.

Reference: My Prime Time News (Jan. 29, 2018) "Deeds and Probate Avoidance."

Estate Planning, Probate, Trusts

February 19, 2018

Planning for Your Horses

If you have horses, then you can plan for them in your estate just like you would plan for any other property. However, since horses are not exactly like other types of property, you might want to consider treating them differently.

People who own horses tend to think of those horses as some of the most important things in their lives. The horses often represent valuable investments and require large sums to maintain.

For many people, the horses are also considered part of the family and just as important as any other pet. Sometimes they are considered just as important as human relatives. However, under the law, horses and other pets are personal property.

Horses are no different legally than a car. You cannot leave an inheritance to your horses, so they can simply take care of themselves after you pass away. Traditionally, estate law did not allow for anything other than leaving the horses to an heir as property.

Another option exists today as Newsmax discusses in "Equestrian Legacy Planning Through Trusts."

You can now set up a trust for the benefit of your horses. You can put assets into the trust and leave directions for how those assets are to be used to take care of your horses.

A trustee can then be appointed to make sure your wishes are carried out, when you are no longer around to care for your horses. This will ensure that there is a legally enforceable way for you to make sure that the horses are cared for as you want.

If you would like to get a trust for your horses or any other pet, visit an estate planning attorney.

Reference: Newsmax (Jan. 17, 2018) "Equestrian Legacy Planning Through Trusts."

January 15, 2018

New Tax Law Creates New Advantages

It might be wise to take a fresh look at your estate plan for new options.

Many estate plans will need to be changed to take advantage of the new tax laws, according to the Wills, Trusts & Estates Prof Blog in "A Gift from the New Tax Act: Kill That Trust."

One of the key changes for estate planning purposes, is that the estate tax exemption has been doubled.

Thais means people with estate plans that created trusts for the sole purpose of limiting their estate tax exposure may want to revisit their plans. They might now be better off revising those trusts or even getting rid of them altogether.

An estate law attorney can advise you on creating an estate plan that fits your unique circumstances and may include a trust or dealing with the doubling of the estate law exemption.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 26, 2017) "A Gift from the New Tax Act: Kill That Trust."

December 29, 2017

Moving to Another State and Your Estate Plan

I 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."

November 1, 2017March 7, 2023

Wills Must Go through Probate

It 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.”

October 26, 2017February 27, 2023

Everyone Can Get a Trust

Most 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.”

October 19, 2017March 7, 2023

Wills Need Probate

How wills actually work, is not understood by everyone.

Many people think that if something is written down in a will, then everything is settled. They think all that is required is for the beneficiary to show the will to whoever is holding the property the beneficiary is to inherit.

That is not the way it works at all.

Unfortunately, the misperception is common.

In fact, estate attorneys are used to hearing this from people named in wills, who think it all works that way and are upset when they discover that it does not.

The Times Herald recently discussed this in “Wills won’t work without probate.”

A will is only a bunch of words on paper that have no real legal authority, until the will is filed with a
probate court.

The court must then agree to accept the will as representing the valid wishes of the deceased.

Once that is done, the probate court appoints a personal representative for the estate.

That personal representative is then charged with carrying out the directives in the will, under the
supervision of the court.

This can result in a long and often expensive process.

It depends on the size of the estate, the ability of the personal representative and whether there are any
challenges to the estate.

Of course, this can all usually be avoided by speaking to an estate planning attorney about getting a
trust instead of a will.

Reference: The Times Herald (Sep. 22, 2017) “Wills won’t work without probate.”

September 1, 2017October 25, 2023

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.

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.”

July 21, 2017

Do You Need a Trust?

One of the biggest questions in estate planning today, is whether a trust is the best option for your family.

If you were to conduct a representative poll of middle class Americans about the best way to plan for your estate, it is almost certain that the majority of respondents would suggest getting a living trust.

It is the first piece of advice you will find almost anywhere you look for estate planning information. The reason for that is complex.

One reason is that many internet companies who sell trust creation documents have been very active in pushing the benefits of trusts to get more customers. Trusts are also often the best estate planning option for people.

Nevertheless, the key is to determine what the best estate planning option is for you personally, not for society generally, as Madison.com points out in "Is a Living Trust Right for You and Your Family?."

Trusts do have many benefits over wills.

Trusts do not have to go through probate and, therefore, are not subject to the commonly cited costs and delays associated with probate.

Trust provisions do not have to be made public, as most wills do. Trusts are also a great way to control what your heirs might do with their inheritances, but “testamentary trusts” under wills do so as well.

If you really want to know whether you should get a trust, the best thing to do is to ask an estate planning attorney. Tell the attorney what your needs are and let the attorney suggest the best ways to meet those needs.

Reference: Madison.com (June 27, 2017) "Is a Living Trust Right for You and Your Family?."

Building Legacies that Last Estate Planning and Elder Law

Tag: Trusts