Reviewing your Insurance

Tuesday, October 6th, 2009

Some people don’t have the habit of reviewing their life insurance policies.  But bear in mind that an insurance could be a vital part of your financial strategy or estate plan.

You can buy a life insurance policy and make your spouse or children as beneficiaries.  Business owners can also use a buy-sell agreement funded with an attached life insurance so that surviving owners may buy the company’s interest in case of a deceased partner.  In the same token, key-person insurance assures business aid when one of the core employees passes away.

However, there is a downside to this.  Life insurance proceeds form part of your taxable estate and your beneficiaries may be heavily taxed when you pass away.  One alternative around this law would be to allow your children or other beneficiaries to own your policy.  You can give gifts to your kids for the acquisition of the insurance - it’s like pooling their money and buying the policy for you.  Another way you can remove the proceeds of your life insurance from your taxable estate is to get irrevocable life insurance trust.

Life insurance can help you build wealth.  It can also be useful for employee benefits, business continuation, education planning, retirement planning, and estate planning.

Tags: beneficiary, business, estate, estate plan, Estate Planning, law, life insurance, policy, tax, trust, wealth
Posted in Estate Planning, Family Trust | No Comments »

Estate Planning Dialogue

Friday, October 2nd, 2009

At times, discussions with family members and parents regarding estate planning may be stressful, emotional, and difficult.  However, the discomfort cannot compare to the pain felt in dying without implementing estate planning strategies.  When you rely on state governments to distribute your assets for you, your heirs may experience time delays and probate costs that may render them financially unstable.

So to ensure a life-changing and effective discussion, you must suggest a dialogue with your siblings or other concerned family members.  Arrange a convenient location and time, choose a comfortable setting, and of course, limit distractions.  It would also help to encourage an honest and open airing of goals and issues to stress that the discussion is very important.  Most definitely, everybody must implement an effective plan to serve the needs and wishes of all.

This is a very challenging task especially for the elderly parents who are initiating the discussion.  But this is needed to provide more control to the estate owner.  All issues must be discussed and understood by every family member.  They should also know the availability of legal documents including wills and trusts and use them as tools to have a successful discussion and ultimate peace of mind for everyone.

Tags: dialogue, discussion, elderly, Estate Planning, goals, owner, plan, probate, strategies, tools, trusts, Wills
Posted in Estate Planning | No Comments »

Estate Planning is for Children Too

Wednesday, September 30th, 2009

Do you know that when your children reach 18 years old, you will no longer be allowed to make medical decisions for them?  Actually, your right to see their medical records or speak to their doctor is no longer compulsory enforced.

Any parent has a fear of hearing that their child was involved in a medical emergency - whether it’s a physical catastrophe or a car accident, they would usually be notified or rushed into action.  However, under the law, your own 18-year old and above children need to name you as a health-care proxy first before you can have anything to say about their medical treatment.

Health-care proxies are documents allowing you to assign another person to make medical decisions for you if you’re unable to do it yourself.  Another document, called the living will, is a statement of medical wishes if you become ill.

Therefore, estate planning is not only for seniors.  Adult children should also have durable power of attorney as well as a health-care proxy too.  Since these are complicated documents, it’s best to speak to your family attorney.  If you don’t have one, just seek advice from any qualified estate planning attorney in your state.

Tags: adult, attorney, children, documents, Estate Planning, health-care proxy, law, living will, medical, parent, seniors, will
Posted in Estate Planning, Wills | No Comments »

Education Savings Plan in Estate Planning

Sunday, September 20th, 2009

Estate laws truly affect your assets.  Most of your assets constitute your estate when you pass away.  And since you know that an estate over $3.5 million will be taxed up to 45%, you may want to keep your estate below that level.  In order to do that, you can give gifts or acquire a 529 education savings plan.

Actually, this kind of education savings plan would allow you to select any relative or friend as your beneficiary.  That person is expected to incur education costs.  Moreover, the plan offers flexibility like for example; you can change the beneficiary any time, change investment elections, and make various contributions to the account.

You can choose from several 529 accounts that may be available in your state.  If you’re a resident of Ohio for instance, you can choose Ohio 529 plan and deduct your contributions from the state income tax.  Currently, IRS rules are allowing investors to make large lump sum contributions to the 529 plan.  In 2009 you can contribute up to $65,000 for individuals or $130,000 for couples.

So 529 education savings plan not only allows you to help your children grandchildren, nephews, nieces, and other loved ones from pursuing education, it would also allow you to qualify for tax deductions.  Seek advice from your estate planning attorney whether this strategy could be applied in your situation.

Tags: assets, attorney, education, estate, Estate Planning, laws, Ohio, plan, savings, strategy, tax deduction
Posted in Estate Planning | No Comments »

Farmers Exemption from Estate Taxes

Wednesday, August 19th, 2009

U.S. House of Representatives (H.R. 3524) recently introduced a bill that will exempt family farms from federal estate taxes if the farms will stay with their respective families.  The bill is called Family Farm Preservation Conservation Estate Tax Act.  It was assigned to the Committee of House Ways and Means after being introduced by (D-Colo) Rep. John Salazar and (D-Napa) Rep. Mike Thompson.

According to Laurel Brown, the spokeswoman of Thompson, “The bill would defer estate taxes on conserved and agricultural land indefinitely, so long as it still remains in the family - this ensures that nobody would have to sell the land just to pay for the estate taxes.  Then Murray said that “So many family farms have been struggling until now.  This bill will encourage farms to remain in the family’s possession.  There aren’t too many left.”

The law governing agricultural estate taxes is expiring next year.  It’s expected to be replaced by another law in 2011 that would tax families blending the levels of 2001 and 2002.  This level is hard for a lot of family farms, which are typically asset rich yet cash poor.

The new estate legislation was endorsed by 28 farm organizations including Western United Dairymen, Western Growers, California Association Winegrape Growers, and California Farm Bureau Federation.

Tags: agriculture, bill, estate, estate taxes, farms, federal, John Salazar, Laurel Brown, law, legislation, Mike Thompson, U.S. House of Representatives
Posted in Estate Planning | No Comments »

Change of Estate Tax Law

Wednesday, August 19th, 2009

Wealthy residents from Connecticut usually flee to Florida in avoiding the estate tax in the state.  But now, they don’t need to do that because there’s a new law (House Bill 6802) enacted on Sept. 8.  The law states that deaths occurring from January 1, 2010 onwards, as much as $3.5 million worth of estates and gifts will be exempt from tax.  This raised the threshold for taxable gifts and estates from the existing $2 million level.

In Connecticut today, when the estate is exactly $2 million, there will be no estate taxes paid.  However, an estate of $2,000,001 pays Connecticut $101,700 in taxes.  Fortunately, this will change beginning 2010.  The new legislation will not only increase the threshold exemption, it will also reduce the rates by 25%.  For instance, a $5.1 million estate which currently pays Connecticut $402,800 will only pay the state $130,200 if the death occurred after year-end. 

This means that you can now stop avoiding Connecticut in planning and establishing your residence.  State Rep. (R-149^th Dist.) Livvy Floren said, “These changes may be considered good step toward the right direction.”  So if you’re a resident of Connecticut or you have real property there, you might want to revisit and make current your estate plan with an attorney soon.  

Tags: attorney, Connecticut, estate plan, estate tax, Florida, gifts, law, Livvy Floren, state, wealthy
Posted in Estate Planning | No Comments »

USA Death and Taxes

Sunday, August 16th, 2009

In Canada, there is deemed disposition of the fair market value of your property.  The increase in value starting from the date of purchase up to the owner’s death is taxable as capital gain on the financial tax return.  On the other hand, the system in the U.S. works differently.  They impose an estate tax that’s levied on fair market value across all property owned on date of death instead of deemed disposition with potential tax liability.

The future of the U.S. estate tax is the most talked about issue today.  At the end of the year, the current regime would be expired.  This issue is critically important to two groups of people: Canadians owning a U.S. property and U.S. citizens that are living in Canada.  This U.S. tax applies to all citizens, even to those living in other countries.  It also covers non-U.S. citizens who died with properties in the U.S. (like stocks in U.S. companies or U.S. real estate).

Currently, U.S. citizens have a $3.5 million exemption from their estate.  However, non-citizens, such as Canadians owning U.S. assets, would only be entitled to pro-rated exemption under Canada-U.S. tax treaty.  This means that when you have a worldwide estate (like a Canadian home for instance) that would total below US$3.5 million, you don’t need to worry about taxes - for now at least.

Tags: Canada, citizens, death, estate, estate tax, financial tax fair market value, market value, property, tax, U.S.
Posted in Estate Planning | No Comments »

Future of Estate Taxes

Saturday, August 15th, 2009

Legislative gurus, estate attorneys, and financial planners are bustling about the estate tax’s future.  A lot of people already know that under the 2001 EGTRRA (Economic Growth and Tax Relief Reconciliation Act), federal estate tax changed almost annually for the past few years.  In fact, it’s most likely to phase out entirely next year but will come back in 2011 if things don’t change in Washington. 

Currently, estate tax exclusion rests at $3.5 million (for married couples, $7 million) and top tax rate is at 45%.  When federal estate tax goes back in 2011, the exclusion would drop back - $1 million for individuals and $2 million for married couples, with top tax rate rising to 55%.

Today, most experts would agree that estate taxes are here to stay considering that budgetary challenges occupy congress and the current administration.  Also, economic crisis is still underway.  Legislation has been introduced to keep exclusion at current levels and marry this exclusion to lifetime gift tax exemption. 

At this point, it’s still too early to tell the ultimate fate of the current proposal and all others that are bound to be proposed during the coming months.  In the meantime, those in the know solidly believe that it’s important to revisit your current estate plan as well as undertake proactive tax planning.

Tags: attorneys, EGTRRA, estate attorneys, estate plan, estate tax, federal, financial planners, legislation, legislative gurus, proposal, tax planning, Washington
Posted in Estate Planning | No Comments »

Boomers Retirement Plans

Friday, August 14th, 2009

Times have changed, and the priorities come along with it.  This is true for the seniors and baby boomers as well.  Today, it’s more essential than before to plan your future given the increasing financial abuse received by seniors from caregivers or loved ones and the tough economic times.

Until now, the preceding American generation had been better off economically compared to their parents due to their inheritance, thriving economy, and job opportunities.  However, recent times don’t seem to be well.  It would be a good bet if the boomers will inherit a single title from their parents.  And the boomer’s children may even get less.

All these mean that seniors and boomers need to develop a plan for life, due to possible incapacity and inevitable death.  This planning process does not only involve “estate planning” or “financial planning” but “life planning,” “death planning,” “burial planning,” “nursing home or long-term care planning,” and even “pet planning” as well.

Creating and implementing these plans would need a huge multidisciplinary effort coming from a qualified team of professionals.  Among others, see a lawyer to help you handle your assets and complete your plan in case of incapacity, disability, and death.

Tags: American, baby boomers, death, disability, Estate Planning, incapacity, lawyer, priorities, seniors
Posted in Estate Planning | No Comments »

Guide to Estate Planning

Monday, August 10th, 2009

Many would just watch their bills add up and portfolios dwindle.  Because of this, it’s very tempting to put off future planning.  However, experts caution that everybody needs to sit down in planning their estate.

According to the co-owner of a Seattle-based financial services practice called Sound Financial Partners, Debbie Whitlock, “Whether you’re debt-laden or wealthy, you should not just tell your loved ones how you want to handle your estate, you should put it into writing.”  Also, estate planning is not just about distributing cash.  It’s also making sure that your heirs don’t end up liable for all your debts.  In addition, you would prevent your loved ones from being saddled with funeral costs without hope of reimbursement, or sometimes it could take years of lengthy court process before they are reimbursed.

Planning for your estate could also be a way for you to determine what your life needs and goals are.  Do you want to ensure that your niece’s college education is paid for?  Or do you dream of giving a trust fund to your favorite charity?  Are you sure that you can still stay in your current house when your partner dies?  These are questions that can be answered with estate planning.

Tags: Debbie Whitlock, estate, estate plan, Estate Planning, goals, needs, planning, Sound Financial Partners, trust
Posted in Estate Planning | No Comments »

Never Ignore Estate Tax Planning

Monday, August 10th, 2009

At this point, a high percentage of Americans don’t need to worry about federal death tax.  Federal government allows tax-free exemption up to $3.5 million net worth for individuals and $7 million combined for married couples if they do some basic planning.  When they don’t have a basic estate plan, they could miss this full exemption and actually pay a seven-figure tax bill.

Currently, the federal law is hoping that in 2010, all states would pass this estate-tax-free.  However, off-the-record word from Congress says that there’s no way this law will survive 2009.  The states are re-evaluating their existing death tax rule.  There are some states that have no death tax, such as Florida.  While others, like Massachusetts or Connecticut have death taxes as high as 10% for a one million estate.

Therefore, it’s foolish to ignore the issue of estate tax.  Imagine people evading the local sales tax in their state, purchasing in another state, moaning about their annual income tax, yet doing nothing to plan for the largest tax they’ll ever pay?  It sounds ridiculous but it’s so common.

Ben Franklin may be right when he said “There are only two guarantees we have in life - death and taxes.”  And when death comes, taxes are voluntary.  Therefore, plan your estate wisely.

Tags: Americans, Ben Franklin, death, death tax, estate plan, Estate Planning, estate tax, federal, law, tax
Posted in Estate Planning | No Comments »

Retirement and Tax Law Changes in 2010

Saturday, August 8th, 2009

This fall, advisers of people who are planning for retirement will hear changes in federal law which can have a huge impact when it comes to their financial plans.  According to a taxation and estate planning professor emeritus at Northwestern University Law School, Roy Adams, “Things that will happen in the succeeding months could cause the biggest changes in the estates and trusts fields.”  From estate tax to Roth IRA conversions, there’s a lot to consider on the horizon for individuals who will leave inheritance to their heirs or to charity, ensure continuation of their family business, and have enough retirement money.

Adams will explain these changes in his presentation at Minneapolis Convention Center on September 14.  At the heart of these changes is estate tax.  In one year, it’s scheduled to be repealed and in 2011, its 2000 version will be followed.  There will also be changes in gift tax and estate rules.  Therefore, these changes could have a huge impact on heirs and family-owned businesses as well as affect gift taxes and charitable contributions.

Furthermore, income limitation to convert 401(k) accounts, 403(b) accounts, and regular IRAs to Roth IRAs shall be removed in 2010 and will be opened up to wealthy individuals.  It is expected that many would want to capitalize on an opportunity like this.   

Tags: charitable, estate plan, estate tax, federal law, gift taxes, income, law, Minneapolis Convention Center, Northwestern University, retirement, Roy Adams, taxation, trusts
Posted in Estate Planning | No Comments »

Estate Planning Options

Thursday, August 6th, 2009

In Wisconsin Statutes, the Ch. 770 addition encourages more same-sex couples to have more options to estate planning.  However, attorneys say that there are still a lot of questions to answer.  Michelle T.L. Hernandez, an attorney for Krueger & Hernandez shares that she has been receiving several calls about this process ever since the application for domestic partner declarations have started on August 3.

Over 400 couples have already filed for declarations - this means that same-sex domestic partners may inherit assets pursuant to state intestacy statute.  They may also sue a wrongful death of a deceased partner.  Hernandez said that this niche is still small.  As more couples register, she expects an evaluation whether she would change their trusts, wills, and estate planning documents and incorporate the new law benefits.  “I think attorneys implementing plans for domestic partners as well as those handing partnership termination will find this new area to be a brand new and hot law.”

Many attorneys are now encouraging their clients to apply for this domestic partnership status.  Same-sex partners will find that the new law provides a few “unique” opportunities in estate planning that is not available to them before.  This includes the ability to obtain the partner’s property, vehicle, or home in the event of death.    

Tags: assets, attorneys, death, declarations, Estate Planning, Krueger & Hernandez, law, Michelle T.L. Hernandez, partnership, same-sex couples, Wisconsin
Posted in Estate Planning | No Comments »

Legislation Complicates Taxes and Estate Planning

Thursday, August 6th, 2009

Florida Bar requires Florida attorneys to report a certain number of CE (Continuing Education) credits each year.  Most teleconferences and online meetings cost around $100.  So it’s a treat when a sponsor, Regents Bank, came in and paid for a series of lectures from Cannon Financial’s Attorney Roy Adams.  The bank offered local attorneys the chance to attend free, meet their staff in trust department, and receive CE credits for two hours.

Adams is a well- respected and known by estate planning attorneys in the area of speaking every January at Heckerling Conference in Orlando.  The event is attended by over 2,000 attorneys.

One of the topics was the several pending estate tax legislation in Senate and the House.  Most people will not be subject now to estate tax but when the unified credit amount or lifetime exclusion is $3.5 million (less gifts made) per person, this may reduce the lifetime exclusion (it may also be $7 million for a couple if properly planned).  If the lifetime exclusion will be reduced to $1 million (which is already scheduled after 2010) and new legislation doesn’t change the existing law, there is no estate tax.

However, many legislators feel that eliminating estate tax (even for only a year) will greatly contribute to increase of federal deficit - this will eventually be paid back by the taxpayers in the future.

Tags: attorney, attorneys, Cannon Financial, CE, Estate Planning, estate tax, Florida, Heckerling Conference, legislators, Orlando, Regents Bank, Roy Adams
Posted in Estate Planning | No Comments »

Understand Estate Planning

Sunday, August 2nd, 2009

In spite of recent financial setbacks, a lot of people are claiming to be better off financially compared to five years ago.  That’s why when a group of financial expert asked novices in the investment arena what estate planning they have done in the past, they were surprised that there was no affirmative answer.  Most people looked perplexed and raised their eyebrows.  It seems that they’re confused whether the expert mean setting up a trust or drawing up a will.

The expert asked not to be named but he said “It’s very interesting to find out that most people have never heard of the estate planning concept.  And even those aware of it have not taken it seriously.  However, it’s going to be a very serious issue when people get richer.” 

Moreover, the director of Transcend Consulting, Kartik Jhaveri pointed out that “We’ve been trying to spread the concept so that a lot of people are aware of it, but we don’t get a lot of queries.”  Therefore, a wealth manager concluded that “People usually find estate planning difficult to grasp.  So it’s much better for us to talk about different concepts of financial planning (such as retirement planning) to explain things to people.”

Tags: estate plan, Estate Planning, financial, Kartik Jhaveri, Transcend Consulting, trust, wealth manager, will
Posted in Estate Planning | No Comments »

Transferring Real Estate Title

Saturday, August 1st, 2009

When you own property in another state, the only way that you can avoid probate proceedings is to prepare and record a new deed that will transfer the title to include joint owners.  These owners may be your beneficiaries such as your spouse and children.  You can also transfer the title to a revocable trust or to entities like partnerships, limited liability companies, and corporations.

When out-of-state real estate’s title is transferred to a trust, the title will not be held by an individual but by a trustee.  So even when the individual dies, the trust will still continue.  Same thing for transferring to an entity - it’s the entity that holds the real estate title and not the decedent.

While these are simple procedures, there are a few downsides to a joint ownership.  Any lease, mortgage, sale, or other transactions that involve the property require unanimous consent of every owner.  Another disadvantage is this: the interest of any joint tenant is exposed to creditors’ claims.

And if your property is a pied-a-terr in Paris or an island villa in Antigua, you need to consider estate tax systems and probate in foreign countries.  Therefore, your attorney needs to work with a lawyer in a foreign jurisdiction for proper coordination and inclusion of the property in your estate plan.   

Tags: attorney, estate plan, joint owners, lawyer, probate, property, revocable trust, tax systems, transfer title, trust, trustee
Posted in Estate Planning, Family Trust | No Comments »

Estate Plan for Faraway Real Estate

Saturday, August 1st, 2009

Do you have a condo in a ski country?  Maybe you have a house at any shore or a Florida time share?  So how much real estate do you have in several states?

No matter where your real estate is, your properties will be involved in your estate settlement unless you make some arrangements to your estate plan and avoid this complication.  Real estate law is a state law.  This means that only the courts in a particular state can have the authority in resolving issues about ownership and title of real estate property in that state.

So if you’re a Pennsylvania resident and you own a Florida condo, your estate settlement will require Pennsylvania domiciliary probate and a Florida ancillary probate when you pass away.  Take note that ancillary probate is always required in each state wherever you own real property.

The simplest way to eliminate the probate proceedings requirement is to title the real estate in joint names of your intended beneficiaries (probably with your spouse and children).  This is a simple device which means that in the event of your death, the real property will automatically pass to the joint owners without any probate proceeding requirement.

Tags: beneficiaries, courts, Estate Planning, Florida, owners, Pennsylvania, probate proceedings, real estate
Posted in Estate Planning | No Comments »

Transferring Business Assets to Children

Thursday, July 30th, 2009

There are several methods for business owners to transfer ownership or assets to their children without the high cost of federal gift tax.  Some methods would include providing numerous money transfers until the exclusion limit, setting up family limited partnership, and setting up a family trust that will receive transferred assets.  A business owner like you should know when would be the right timing to step out of your family business.  Here are some tools you can use:

*Buy-sell agreement - this is a legal contract prearranging your business sale interest with a willing buyer.

*Outright sell - you can receive cash and use it to maintain your lifestyle through selling your business interest to any of your family members

*Grantor retained annuity trusts (GRAT) - a sophisticated succession tool in business which uses irrevocable trusts to transfer assets while at the same time retaining a specific income payment for a particular set of time.

*Private annuities - sale of property wherein the buyer makes an unsecured promise that they will make periodic payments to the seller for the rest of his or her life.

*Family limited partnerships - when you transfer ownership of your business to this partnership, control of general partnership interest will still be with you and you can gift this interest to your family members.

Tags: assets, business owners, buy-sell agreement, family limited partnerships, family trusts, famly business, federal gift tax, GRAT, outright sell, private annuities, trust
Posted in Estate Planning, Family Trust | No Comments »

Are there Expiration Dates for Estate Plans?

Monday, July 27th, 2009

There is no expiration for estate plans.  However, major life events should prompt you to review your plan and make sure that your wishes are still enforced.  Examples of these common life events include purchase of a home, death of a loved one, birth of a child, divorce, or marriage.

If you’re married, there are certain considerations that you should think about in creating an estate plan.  First, you would need revision of your trust to include your existing spouse.  Also, you may acquire a power of attorney for managing your finances if ever you’re incapacitated or unable to manage any of your financial affairs.  Therefore, a well-rounded estate plan must include a power of attorney for health care which appoints a trusted individual (typically your spouse) to make medical decisions if you’re unable to do so yourself.

While for remarriage, you need to revise your will or trust immediately.  Any gift to your ex-spouse may not be valid.  So how will the court decide who to give it to?  Therefore, you should make this change yourself so that you’re sure to carry out your wishes when you pass away.  Same goes to your children.  Appointing a guardian for the minor ones would protect them even when you’re gone.

Tags: attorney, estate plans, expiration, married, power of attorney, remarriage, trust, will
Posted in Estate Planning, Family Trust, Wills | No Comments »

Estate Planning for Ranchers and Farmers

Monday, July 27th, 2009

When your family is engaged in agriculture, you have certain considerations to think of. You should consider if you will qualify for valuation deductions, divide the land into separate parcels, or make a charitable donation.

Practically, subdividing the land to give to children can raise both legal and practical questions. Legal questions include the minimum acreage requirements (whether it can be subdivided into parcels), deed of trusts (whether there are existing encumbrances that will affect future financing), and possible latent contaminations on lots that might become a responsibility to be cleaned up by your heirs.

Practical questions, on the other hand, include the dependability to water (or whether it’s feasible to subdivide the land), one part is locked (or access to roads), and distribution of electricity (or access to utilities). In addition, division of mineral rights and differing values should also be factored into your estate plan.

Finally, estate planning for ranchers and farmers (including vineyard owners) also involve business succession similar to closely held business families. This usually entails life insurance and buy-sell agreements. Moreover, predators, creditors, protecting children’s inheritance against divorce, Medi-Cal planning, and blended families’ estate planning may also be involved here.

Tags: agriculture, deed of trusts, Estate Planning, heirs, legal, parcels, practical
Posted in Estate Planning | No Comments »

Five Key Estate Planning Documents

Saturday, July 25th, 2009

Avoiding the creation of an estate plan may be due to dismissal of subjects such as taxes, incapacity, and death.  However, the fact still remains that you need to protect your wealth and your loved ones when you’re gone.  So here are five documents that you need to have while you’re still active:

*Will - these are simple instructions to distribute your assets to the beneficiaries after death.  You need to appoint an executor who will designate your assets, while you need to designate a guardian for minor children.

*Durable Power of Attorney (POA) - power of attorney is simply a legal document that will name another person who will act legally on your behalf.  A regular POA terminates upon a person’s disability or death.  However a durable POA will continue beyond disability and will only terminate upon death.

*Health Care POA - same as durable POA but it will authorize someone to decide for you in medical situations in case you’re unable to do so.

*Living Will - expresses your intentions for use of life-sustaining measures in a terminal illness.

*Revocable Living Trust - a type of trust that is often used in estate plans.  When you transfer assets to a revocable trust, your beneficiaries will receive the income or principal according to the terms of the trust.

Creating an estate plan will not be an overwhelming task if you work with experienced professionals such as a CPA, financial advisor, and an attorney,

Tags: attorney, death, estate plan, legal, power of attorney, revocable living trust, wealth, will
Posted in Estate Planning, Family Trust, Wills | No Comments »

Create your Estate Plan Today

Saturday, July 25th, 2009

Better Business Bureau reminds people that estate planning is not just for the wealthy.  They advise consumers to create an estate plan if they have something of value to pass on to their loved ones after death.  According to surveys, 55% of adults don’t want to set up an estate plan because either they don’t want to think of dying or they believe that they don’t have any assets to pass on.

However, if you don’t give your final instructions, nobody would know where your money should go or how will your children be taken cared of.  Do you want to leave these important decisions to the state?  If not, it’s important to create an estate plan and ensure that your wishes will be followed.

Creating an estate plan may be simple if you just draft a will.  But it can also be complex when you’re trying to set up a trust or a living will.  A will is something that you create to allocate your assets and establish guardianship of your children.  On the other hand, a living trust could set up conditions to distribute your assets while reducing inheritance taxes and avoiding probate.  Finally, a living will communicates a person’s desire for lifesaving measures in case there’s mental incapacity to decide on an emergency medical situation.  To help you draft these important documents, make sure that you consult an estate planning attorney.

Tags: attorney, Better Business Bureau, estate plan, estate planning attorney, living trust, living will, wealthy, will
Posted in Estate Planning, Family Trust, Wills | No Comments »

Deal with Estate Taxes: Plan Ahead

Thursday, July 23rd, 2009

The golden rule in estate planning is: “Do it before you need it.”  Prudence actually suggests that we plan ahead because only a few people know when death can fall upon us.

In Oregon, there may be some last-minute opportunities for the residents despite its imposition of death tax on top of federal estate tax.  When federal estate tax exemption has been scheduled to dramatically increase, many states including Oregan became nervous since the federal exemption 10 years ago was $600,000 with 55% top marginal tax rate on the excess.  Simply put, the feds collect a large tax from a decedent’s estate - this includes taxable gifts that are made by decedents, and then, throws a portion back in state credit form.

Most states simply accept this “throwback” by imposing tax on its residents - this is the exact amount of credit permitted by feds.  However, when the feds have lowered the rates and increased exemption (currently $3.5 million and 45% flat tax rate), the state credit was also phased out.  Oregon reacted by simply enacting its death tax.  In other words, if the gross estate of the decedent exceeds $1 million (fixed Oregon exemption today), the excess will be taxed by the state.

Tags: decedent, Estate Planning, estate tax, feds, Oregon, plan, tax
Posted in Estate Planning | No Comments »

Blended Families’ Estate Planning

Wednesday, July 22nd, 2009

Richard Barnes witnessed the negative effects of a poor estate planning.  The families are upset, frustrated, and confused - they are forever shattered by it.

Even more confusing are those people in blended families - those families formed from second or third marriages - these are more difficult and precarious situations.  Barnes said that there are no instruction manuals for second marriages, and this time, you need to deal with new in-laws and step-children.

Amidst a larger cast of individuals, renewed estate planning could clarify your wishes.  This renewed estate planning could purchase additional life insurance, update a will dealing with prior relationships and reflect the current dynamics of new ones, etc.  Therefore, you need to learn various things such as dealing with heirlooms, how to select the best lawyer, etc.

Barnes further added, “It’s not just another marriage.  Somehow, it would seem that there are numerous challenges and geometric progression of personalities from first to second marriages.  There is a large amount of emotional issues surrounding people in second marriages.  And if clients would not think of these things (especially what to do with the properties and estate), there would be adversarial impact.  Only planning ahead would make it right.”

Tags: blended families, Estate Planning, lawyer, marriage, Richard Barnes, second marriage
Posted in Estate Planning | No Comments »

Jackson’s Movie Deal may strengthen his Estate

Monday, July 20th, 2009

Business executive John McClain and attorney John Branca are talking with AEG Live, the exclusive promoter of Michael Jackson’s supposed London concerts.  The late Jackson was preparing for these concerts before his sudden death on June 25; nevertheless, the videotape of his rehearsals could still be used to create a DVD or movie that would be sold to millions of fans.

Reportedly, Sony will pay $50-$60 million for the footage and this agreement would be announced any day from now.  Legal experts are saying that this deal could strengthen McClain and Branca’s control of Jackson’s estate, since they’re proving to the judge that they have the acumen in handling Jackson’s business.

At stake here is the control of King of Pop’s estate that is believed to be $200 million net of his $500 million debt.  Initially, Katherine Jackson, his 79-year-old mother was given temporary control; however, a 2002 will that Jackson signed have surfaced naming McClain and Branca as executors.  Therefore, a judge temporarily transferred control to them while the attorneys of Katherine Jackson are discussing to challenge their appointment.

The hearing is set for August 3.  Moreover, an attorney expert in legal matters including wills said that McClain and Branca clearly have an advantage since Jackson nominated them as executors in his will.    

Tags: AEG Live, attorney, attorneys, estate, John Branca, John McClain, Katherine Jackson, King of Pop, legal, Michael Jackson, Sony, will, Wills
Posted in Estate Planning, Wills | No Comments »

Estate of McNair in Limbo

Monday, July 20th, 2009

Former quarterback of Tennessee Titans, Steve McNair, left no will.  As a result, one of his son’s family (the one born before his marriage), was laying claim to their inheritance.  This could set up one lengthy legal battle.

David Callahan, Nashville attorney of Mechelle McNair (Steve’s wife), said that she’s determining the net worth of her husband.  A probate court judge in Davidson County granted her 60 days to complete this process as a response to her emergency petition.

The probate court filing states that the heirs are Mechelle McNair and her sons Trenton, 6, and Tyler, 11.  However, she can’t confirm whether the other two older sons of her husband are actually his.  Her husband died suddenly as he was shot on July 4 by a woman he was dating.

Steve McNair’s oldest son is Steven McNair Jr., Oak Grove High’s senior star wide receiver while his second son is Steven O’Brian McNair, 15-year old.  Cotina Feazell, the mother of Steven McNair Jr. did not find any records that the quarterback completed any estate planning or set up trust funds.

Attorneys say that even if the other women were not married to McNair, his sons are still eligible to the inheritance under state law.  There might be certain blood tests or other issues but all they need to do is hire an attorney to make a claim.

Tags: attorney, court, David Callahan, Estate Planning, inheritance, law, legal, probate, son, Steve McNair, Tennessee Titans, trust funds, will
Posted in Estate Planning, Wills | No Comments »

Draft an Advance Directive to be Prepared

Saturday, July 18th, 2009

Nobody would like to spend time mulling over their death.  However, it’s important to create an advance estate plan that will give you control over any situation when the time comes that you can’t voice your opinion anymore.  Estate planning attorneys’ advice: “You can’t change the fact that you will die.  And if you have the legal paperwork properly filed, you’re just showing that you respect the people you are leaving behind - you’re not putting them through stress and emotional turmoil than necessary.”

Fortunately today, anyone can draft an advance estate plan, which is a legal document specifying the things you want to happen when you’re no longer able to provide consent.  Aside from the distribution of your assets to beneficiaries, these advance directives would typically cover the situations you want when medical staff would attempt to revive you or the kind of life support you prefer to be put on.

At age 25, maybe you would want them to revive you at full blast (even hit you with lightning if possible) but at age 95, you may have a different perspective since you would not want to reach 100 years old hooked to these machines.  Therefore, advanced directives such as these would legally allow you to specify these things before the actual emergency situation when you’ll be unable to give directions yourself.  

Tags: assets, attorney, attorneys, beneficiaries, death, directives, emergency, estate plan, Estate Planning, legal, legal paperwork
Posted in Estate Planning | No Comments »

Help Parents Manage Finances and Leave a Legacy

Thursday, July 16th, 2009

You’re very fortunate if your parents are still living.  However, it’s time for you to assist them on some areas of their life, more specifically on financial issues.  In fact, it’s imperative for you to be involved with them on these two things: managing finances on their retirement as well as leaving a legacy.

When your parents don’t initiate conversations on these things, it’s better if you start talking to them about it.  Who knows, you might find them willing to discuss these things with you more than you thought.  Encourage your parents to seek the help of an estate planning attorney to identify several ways on how they could pass their assets to the next generation.

Moreover, you may want to suggest that they check on beneficiaries designations of their qualified plans (such as IRAs, 401ks, etc.) or life insurance contracts. Maybe the family picture changed in the last couple of years, and they are really intending to change the designations.  They should take action now before it’s too late.

While it’s important for your parents to deal with legacy issues, they may still have numerous years ahead of them.  Therefore, you can also start discussing about their investments, savings, assets, and so on.  This kind of knowledge would be very helpful if you would become involved in distributing or managing their resources.

Tags: assets, attorney, estate planning attorney, finances, legacy, parents, plans, resources, retirement
Posted in Estate Planning | No Comments »

Include your Pets in Estate Planning

Tuesday, July 14th, 2009

When people head out of town for a week-long or month-long vacation, they make arrangements for their pet such as how they will be fed or taken cared of.  According to an attorney, Carol Wessels, “Many of my clients would simply trust another family member to take care of the pet.  However, they don’t realize that taking care of pets can be a huge responsibility.”

Since the United States is a nation full of animal lovers, Wessels predicted that the law practitioners’ interest in this particular estate law area will likely grow.  She added that pets will be better off if their owners think about their well-being too, and in advanced, so that they will be taken cared of when something unexpected happens.  This is because oftentimes, the surviving family members are taken aback with bills for food or veterinarians that these pets need.

Today, about one-third of sophisticated estate planners have pet trusts that will allow the pet owner to appoint a human beneficiary tasked to take care of the pet in the event of the owner’s death.  The conditions of the trust may state that the trustee can allocate money to this beneficiary as long as he or she is taking good care of the pet.

Tags: animal lovers, Carol Wessels, Estate Planning, law, pet, trust, trustee, United States
Posted in Estate Planning | No Comments »

Judge Finds Widow Lacks Merit to Sue

Sunday, July 12th, 2009

A Manhattan judge ruled that a widow’s claim for a $9 million malpractice suit for her husband’s attorneys have no merit.  Marilyn Shafer, Supreme Court Justice, ruled that there was no privity between Jean Sorenson Leff, the widow, and Richard Cunningham and William Bush, the attorneys.

Shafer discounted the argument of Leff that occasional interactions between her and the attorneys, which includes her own will preparation, created an attorney-client relationship with regards to her husband’s estate planning.  Shafer wrote that “even if the plaintiff has a subjective belief of an attorney-client relationship, it’s not enough evidence that there is one.”

Due to this, a question was raised on who can sue for malpractice in New York when the attorneys make mistakes in estate planning.  The chair of wills and estates department for Schlesinger Gannon & Lazetera answered, “New York is one of the very few states left with privity doctrine.  Only the decedent has the privity and the right to sue - not even the executor or administrator of the estate could charge malpractice to the attorneys.  Fortunately, more and more states are moving to abandon that doctrine.”

Tags: attorney-client relationship, attorneys, Jean Sorenson Leff, malpractice, Manhattan, Marilyn Shafer, New York, privity, Richard Cunningham, Supreme Court Justice, William Bush
Posted in Estate Planning, Wills | No Comments »

Attorney-Client Relationship in Estate Planning

Sunday, July 12th, 2009

Sometimes, elderly clients would come to attorneys to draft an estate plan.  But these clients often had their caregivers or children with them.  It may be reasonable because these clients rely on their companions to express what they want and to make sure that the attorney is somebody they can trust.

However, some attorneys would want to meet the client alone to discuss major decisions.  These are the reasons why:

• -An estate planning attorney is required to confidentially and faithfully serve the client’s interest only.  Because of this, the attorney must meet the client alone to ensure that confidential information will not be known to anyone else (unless the client gives permission).
• .
• -When the meeting is held in confidence, the attorney would more likely get personal with the client to understand their desires and circumstances.  If anyone is in the room (say the children), other people might be the one to take charge of succeeding discussions and it might prevent the client from saying something confidential.  Therefore, a confidential meeting would definitely protect the client and enable the attorney to uncover the true wishes.
• .
• -Finally, the attorney should be satisfied of the mental capacity of the client.  The elderly should still have the ability to understand and communicate the instructions clearly.  Also, clients need to act out of free will without any “undue influence.”

Tags: attorney-client relationship, attorneys, confidential, elderly clients, estate plan, estate planning attorney, free will
Posted in Estate Planning | No Comments »

Create Financial Plan for Happy Future

Saturday, July 11th, 2009

There are only a few people who actively plan for their financial success. Some may expect it or hope for it, but only one out of five people actually have a written plan on how they want their financial lives to work out. This is according to the recent financial literacy survey of Retirement Commission.

Author Arun Abey says that “drawing a financial plan may be a minority occupation. However, aside from being purely financial, it would also bring you a sense of wellbeing.” She further said that there’s a feeling of control and high satisfactory rating for people with a financial plan – it doesn’t matter if they’re simple wage earners or a rich accountant.

So, financial planning may also give us a notion of happiness and satisfies us as individuals. If you want to experience the same sense of purpose, you may go to financial planners or estate planning attorneys. When you go to them, you will be asked to fill out a statement of your insurances, debts, assets, and income. Generally, your adviser will also ask you about the household budget and the regular things that you’re spending on. Other estate planning details, such as family trust or will should also be included.

Tags: Arun Abey, attorneys, Estate planning attorneys, Family Trust, financial literacy, financial plan, financial planning, Retirement Commission, will
Posted in Estate Planning, Family Trust, Wills | No Comments »

Surprisingly Disinherited

Friday, July 10th, 2009

Kari Kennedy’s father died and she was crushed emotionally.  But when she found out that Liv, her dad’s ex-wife inherited more than $400,000, she got the biggest surprise of her life.  Liv and her dad had been divorced for many years.  In fact, she has a copy of their divorce decree which says that Liv is waiving all her rights to any retirement plan.

It may sound impossible but it’s true.  Estate planning looks so simple but it’s filled with pitfalls and landmines.  So if you failed to change the beneficiary in your retirement plan or insurance form your true heirs cannot contest it if you accidentally pass away.  In the above example, the law governing qualified retirement plans triumphs over the divorce decree.

This happens all the time.  Well-meaning individuals don’t change their beneficiary forms frequently and not willing to spend any money in hiring an estate-planning attorney.  They also forget that the results can be very disastrous.

Therefore, estate planning attorneys recommend that everyone should review all assets that they own - each legal document, trust, will, real estate titles, insurance policy, annuity, IRA, and retirement plan.  If you do this regularly, you’ll be sure that the inheritors of your belongings will be according to your wishes.

Tags: attorney, Divorce, Estate Planning, estate planning attorney, Kari Kennedy, legal document, retirement plan
Posted in Estate Planning | No Comments »

Your Final Arrangements

Wednesday, July 8th, 2009

Recently, Indiana took another stab to address uncertainty in the final arrangements of a person.  It was mandated that starting July 1, any person may execute an FPD (Funeral Planning Declaration).  When you execute an FPD, you can nominate anyone to be a “designee” - this person will carry out your final instructions.

The form is so easy and simple to understand.  In your FPD, you can leave instructions regarding grave memorial, ceremonial services, funeral, entombment, cremation, and burial.

The traditional way that you can plan final arrangements is through a will.  Unfortunately, some beneficiaries don’t know where the will is; and in some case, the deceased was already buried when they’ve found it. 

Another common way is to preplan by going to a funeral home.  This means that you make decisions based on a field expert’s guidance.  But who wants to go to a funeral home to begin planning?  The reality is that people think it’s creepy to discuss an estate plan in a funeral home.

Truly, one of the most difficult parts of estate planning would involve final arrangements.  These issues could also become complicated if there are mixed families, second spouses, or the members of the family just won’t get along.

Tags: estate plan, Estate Planning, final arrangements, FPD, funeral home, Indiana, instructions, preplan, will
Posted in Estate Planning | No Comments »

Make Estate Planning Your First Step after Divorce

Monday, July 6th, 2009

The last thing that people want to do after a divorce is to consult another attorney.  But regardless of your age and whether you have kids or not, it’s important to consult legal and financial experts to ensure that your financial plans and estate are updated in terms of reflecting your new circumstances.

So if you’re not working with an estate planning attorney or financial consultant during your divorce, it’s time for you to do it now.  A financial planner will look at your finances. Your expenses as a new single individual can grow unexpectedly; a financial planning professional helps you compare strategies and review your new savings and spending needs.

Also, talk with an attorney that has numerous experiences in real estate.  If you plan to remarry one day and you have kids, make sure that your specific assets will go to them (guaranteed) when you die.  This is because some cases happen when the ex-spouse may automatically gain full control of assets earmarked for your kids.  Of course you don’t want this to happen - that’s why you must plan for it legally.

If your children are still minors, it would also be wise to plan the guardianship for them.  Especially when there are wealth issues that’ll only become effective when they reach adulthood, it’s critical to establish a solid and efficient legal structure to distribute those assets.

Tags: attorney, Divorce, estate, Estate Planning, estate planning attorney, experts, financial, financial planner, legal, minors, plans
Posted in Estate Planning | No Comments »

Avoid Inheritance Tax on Proceeds of Life Insurance

Saturday, July 4th, 2009

Generally, life insurance proceeds aren’t subject to Indiana Inheritance Tax.  An exception to this rule occurs when proceeds are payable to the estate of the descendant, either because the estate was named as beneficiary or the deceased failed to name any beneficiary.

A few months ago, however, the list server of Indiana Probate Bar was actively discussing this fact - Indiana’s DOR (Department of Revenue) was taking expanded interoperation of the section in the code authorizing an inheritance tax on the proceeds of life insurance.

Apparently, DOR decided that if the life insurance proceeds are payable to one’s trust, then this trust is authorized to pay debts or administrative expenses of the decedent, and the proceeds would be subject to Inheritance Tax.

However, the code should not be interpreted that way.  The schedule B of Indiana Inheritance Tax Return - the only place that lists life insurance proceeds which says that “life insurance is payable to estate.”  Armed with this, many attorneys take the position that life insurance are not required to be filed on Inheritance Tax return and be subjected to Inheritance tax unless the proceeds are payable to one’s estate.

Tags: attorneys, DOR, estate, Indiana, inheritance tax, life insurance, proceeds
Posted in Estate Planning | No Comments »

Estate Planning Aided by Key Documents

Thursday, July 2nd, 2009

Tenise Owens, Troy Bank’s trust officer was a keynote speaker at Healthy Woman seminar.  She said, “Everyone over 19 years old should have a will.  Advanced medical directives, a will with instruction letter, and a strong power of attorney are the key documents needed by each person before the need arises.”

She further revealed that, “The state will be very happy to distribute the money for you if you don’t have a will.”  She calls estate planning as the people’s “financial health” and outlined the pros and cons of having a durable power of attorney.  “We highly recommend that people go to their own attorneys and draw up their will.  You would definitely want someone standing behind you if people will challenge your will.  Therefore, downloading a will from the internet just won’t do,” she revealed.

Powers of attorney may be changed.  She urged the group in keeping the financial institution informed of the revisions.  She shared “We keep the copies of powers of attorney on file - we consider it a binding document unless we’re otherwise notified.”

When someone dies, many people typically go to financial institutions and expect to transact their business with a power of attorney.  However, she said, “A power of attorney would become null and void after a person’s death.  That’s when a ‘will’ would come into play.”

Tags: attorneys, Estate Planning, Healthy Woman seminar, power of attorney, Tenise Owens, Troy Bank, trust officer, will
Posted in Estate Planning | No Comments »

Celebrity Estate Planning

Wednesday, July 1st, 2009

With so many celebrities passing away recently - Karl Malden, David Carradine, Farrah Fawcett, and Michael Jackson - there’s been a lot of talk about lack of proper estate planning.  Some celebrities who passed away without even planning their estate are Elvis, Anna Nicole Smith, Jerry Garcia, and Heath Ledger.

Apparently, Michael Jackson did some planning; however, his documents were not updated for more than 7 (seven) years.  So it goes to show that when celebrities neglect this very important step, then there are dreadful consequences.

You might be thinking that you don’t have an estate to protect like them and you probably don’t need estate planning.  But be informed that whatever size your estate is, it does not excuse you from executing an estate plan.  Simply put, it’s a plan that will ensure your family’s financial needs are met after you die.

So if you own a home (whether mortgaged or not), a business, or any other asset (such as insurance policies), you need an estate plan.  Certainly if you have children, you would want to ensure a bright future for them even after you’re gone.  The only way to do this is to dust off your documents and review them to see and decide on the beneficiaries of your assets.  It would be better if you speak to an estate planning attorney to seek help in taking care of this.

Tags: beneficiaries, celebrities, estate, estate plan, Estate Planning, estate planning attorney, Michael Jackson
Posted in Estate Planning | No Comments »

Jackson’s Mother Asked to Administer His Estate

Sunday, June 28th, 2009

The mother of Michael Jackson, Katherine Jackson, asked a Superior Court judge in Los Angeles to name her as administrator of the estate belonging to his late son so that she can ensure that the beneficiaries would be his two children.

According to the court filing, Jackson’s parents think that he died without any valid will.  Joe Jackson, the late singer’s father, supported Katherine in her petition.  The court documents also state that Katherine Jackson “has intentions to marshal the assets of the descendant just for the three children’s exclusive use, after expenses of administration and payment of debts.”

Mitchell Beckloff, Superior Court Judge, granted the request for Katherine to assume temporary guardianship of the children; however, didn’t immediately accept her request to be the estate administrator.

So far, a will made by Michael Jackson to find out his wishes for the care of his estate and children has not surfaced yet.  Although Jackson’s funeral is still now in its planning stages, Joe, his father, said that his late son would not want to be buried at the Neverland Ranch, which is the sprawling playground that the entertainer built in Santa Barbara County’s rolling hills.

Tags: court, estate, estate administrator, Joe Jackson, judge, Katherine Jackson, Los Angeles, Michael Jackson, Neverland Ranch, Santa Barbara, singer, Superior Court
Posted in Estate Planning | No Comments »

Estate Planning Process

Saturday, June 27th, 2009

Business succession planning should address the continuity and transfer of tangible assets such as equipment and land.  This also includes intangible assets such as people and culture.  Aggressive succession planning encourages transfer of farm or business to the next generation before the death of its owners.

Estate planning is essential because it prevents liquidation of your assets to cover tax liabilities.  It’s an ongoing process of expressing, designing, refining, and adopting the programs, structures, and documents needed to achieve the continuity objectives of your family business.  In addition, it requires communication, refinement, and continual review of necessary plans and transfer to your vendors, key personnel, partners, and family who’ll be affected by your loss.

The process must accomplish three goals:

• *Establish plans for continuity of family assets or family business
• *Initiates transfer of assets to charities and family members prior to death
• *Upon death, completes transfer of assets with minimum administrative hassle and cost, according to your wishes

Be careful to avoid estate planning complexities that often arise out of unfocused objectives, dysfunctional relationships, and special family circumstances.  To protect the rights of your beneficiaries or descendants, hire an estate planning lawyer who will be the executor of your estate.

Tags: assets, business succession, Estate Planning, estate planning lawyer, executor, family business, lawyer, tax liabilities
Posted in Estate Planning | No Comments »

Alternative Lifestyles Estate Planning

Wednesday, June 24th, 2009

When you say “alternative lifestyle,” it encompasses anything except a legal union of man and woman as a husband and a wife.  But whether you know how to use this term or not, estate planning’s surrounding laws are still predicated on specific family structure.  In many cases, that family structure doesn’t exist, that’s why particular attention needs to be given to estate planning.

For instance, the existing federal estate tax system is allowing unlimited marital deduction coming from estate taxes.  Simply put, even if you’re as rich as Bill Gates, there’s no federal estate tax when you leave all your money to your surviving spouse.

Because federal definition of marriage says that “it’s a legal union between a man and a woman as one husband and wife,” you need to make a different planning technique because unlimited marital deduction isn’t available to you.

Moreover, state and federal laws have default provisions and there are certain rights granted automatically to a spouse.  So if you don’t have a spouse, no one will have those automatic rights.

Estate planning may be difficult for many people.  However, you need to take a very active role to determine your estate plan so that you can make the decision to pass on your estate to the right person when you’re gone.  It’s best to seek the help of estate planning attorneys to assist you.

Tags: alternative lifestyle, attorneys, Estate Planning, Estate planning attorneys, federal estate tax system, marriage
Posted in Estate Planning | No Comments »

Make Sure You Have the Right Estate Plan

Monday, June 22nd, 2009

There was once a lady who recently lost her husband.  She is in the midst of settling his affairs but the problem is that she’s having trouble cashing a check from the insurance company because it’s payable to a trust.  However, she claims that they don’t have a trust in place.

After reviewing the check and a pile of papers, the Indiana Bar member, senior trust officer and vice president of First National Bank, Christopher W. Yugo, indeed found a joint trust amendment which changed the trustees.  The amendment was signed by the lady and her husband but she swore that she never met an attorney.

As Yugo probed deeper, he realized that the couple sought the assistance of a financial planner for their estate plan.  Then, the planner took the information to one attorney who prepared the necessary documents.  In the end, the documents were returned to the planner who probably did his best to execute the plan while ignoring the implications of unauthorized law practice.

You can learn two things from this story.  First, be careful who you approach for estate planning advice.  It’s always critical for you to meet with an attorney before executing an estate plan.  Second, it’s important to have a basic knowledge of estate planning.  Furthermore, don’t hesitate to ask a lot of questions to your attorney so that you’ll understand every detail of your estate plan.

Tags: attorney, Christopher W. Yugo, estate plan, Estate Planning, financial planner, trust, trust amendment, trustees
Posted in Estate Planning | No Comments »

Critical Factors in Estate Planning Process

Saturday, June 20th, 2009

The nature of your various assets and how you are holding title to those assets are critical factors in your estate planning process.  Before you change title (or take title) to an asset, you have to understand the consequences of your proposed change.  Seek the help of your estate planning lawyer to advise you on:

• *Separate property and community property - if you’re a registered domestic partner or you’re married, the assets that you or your domestic partner earns are part of a community property. However, you can also continue to own separate property. These may be property that you own prior to marriage. Also, inheritance or gifts received during the partnership may be considered separate as well. Community property can be converted to separate property (and vice versa) through a written agreement.
• .
• *Tenants-in-common - for example, several people own property and a co-tenant (co-owner) dies, then the co-tenant’s property interest would pass on to the beneficiaries named in the will.
• .
• *Joint tenancy with survivorship right - single or married co-owners that own property can hold title as joint tenants with survivorship right. Therefore, if one tenant dies, the property would pass on to the surviving tenant overriding the will of the deceased person.
• .
• *Community property with survivorship right - typically, married people would hold title to property by passing it to the surviving spouse in the event that the other party would die. This would also pass on without any influence of the will created by the deceased person.

Tags: assets, community property, Estate Planning, estate planning lawyer, gifts, inheritance, separate property
Posted in Estate Planning | No Comments »

What is Estate Planning?

Thursday, June 18th, 2009

It’s important to have an “estate plan” in place no matter how much your net worth is.  Such plan will ensure that your financial goals are met and your family gets your assets after you pass away.

Several elements of an estate plan include: a will, living will or a health-care proxy (sometimes called medical power of attorney), and power of attorney assignment.  For some people, it would also make sense to have a “trust.”  However, you have to be mindful of both state and federal laws governing estates.  That is why it’s important to consult an attorney for your estate planning.

A good place to start is to take inventory of your assets.  These consist of your business interests, real estate properties, insurance policies, retirement savings, and other investments.  Answer these three questions?

1. 1. Who will inherit your assets?
2. 2. If ever you’re incapacitated, who do you want to handle your financial affairs?
3. 3. If you’re unable to make decisions yourself, who do you want to make medical decisions for you?

Remember that everybody needs an estate plan and it’s not just for the wealthy.  Inheritance can sometimes be a loaded issue.  So by being clear on your intentions, you can help dispel potential conflicts when you’re gone.

Tags: assets, attorney, estate plan, health-care proxy, inheritance, laws, living will, power of attorney, trust, will
Posted in Estate Planning | No Comments »