Articles Posted in Asset Protection

Estate planning is not something that should be taken lightly, and understanding the gravity that comes with your estate planning decisions is an important part of creating a comprehensive estate plan. However, one of the most common problems with estate plans is that while they may accurately reflect your wishes, they don’t always reflect what your family thinks those wishes should be. That can leave them vulnerable to attack in court, which can cause unintended consequences for your assets. Aside from utilizing the services of an experienced estate planning attorney, there are some ways to avoid common issues that can give rise to litigation of an estate plan.

Pay Attention to Laws of Intestate Succession

Intestate succession laws help determine how a person’s assets are to be divided when they die if that person has no Will or their Will is found to be invalid. While you are certainly free to distribute your estate as you see fit, understanding the laws of intestate succession can help you distribute your estate in a way that will discourage Will contests because beneficiaries that stand to benefit little from having a Will invalidated will often think twice about doing so.

Estate planning is an important step in making sure your assets are secure and will be distributed according to your wishes when you die. It can be a complicated procedure, but an experienced New York estate planning attorney can help you make sure that your estate plan is comprehensive and in line with your particular wishes. However, it is important to remember that once you create an estate plan you should take steps to make sure it is secure and remember circumstances may arise that require you to revisit your estate plan and even possibly revise it.

Where should you keep your estate plan?

It is important to keep your estate plan in a secure location with limited access that will protect it from being damaged. Some individuals choose to use a safe deposit box at a bank while other choose a secure home safe option. If you elect to use a safe deposit box at a bank, it can sometimes be difficult to access that box if you pass away. This difficulty will prolong opening your estate and carrying out your wishes. However, safe deposit boxes do offer an extra layer of security for important documents within an estate plan.

The financial market is expansive and can change overnight. NextAvenue.org recently wrote about several important ways retirement is likely to change in 2017 that could impact millions of people and require you to engage in or reevaluate your estate planning. According to the article, several things you should pay attention to include:

Tax Cuts Are Likely

Tax laws are continuously changing, and the new administration has proposed some rather significant changes to the tax code. If these changes become a reality, it may important for people to look at investments like their IRA and convert it to a more tax-friendly asset, like a Roth IRA. This can help investors and those planning retirement accounts to take advantage of more favorable tax consequences that could help them keep more of their money in the long run.

All too often, unscrupulous people attempt to take advantage of others. This is especially common with elderly individuals. When this happens, it is known as elder financial abuse, and it can have a significant negative effect on your estate. Recently, USA Today reported on this growing problem by discussing testimony from a hearing before the U.S. Senate Committee on Aging. Below are important steps that you can take to protect yourself and your assets.

  1. Understand Risk Factors

When elderly people face cognitive impairment, this increases the risk that they will be taken advantage of. Additional risk factors include individuals that attempt to isolate an elderly person from their family, friends, or community. Doing so can put an elderly person at increased risk for elder financial abuse.

In a recent blog, we discussed pet owner’s options for naming their pets as beneficiaries in their wills. Another option for pet owners to provider for their pet after death is creating a pet trust. Pet trusts offer a wide variety of options to provide for the pet and can be used in conjunction with a will. Pet trusts are created during the grantor, in this case the pet owner’s, life, and can take effect immediately, or upon death of the grantor.

Unlike wills which leave interpreting some provisions up to the discretion of probate court, trusts are legally enforceable agreements that are carried out according to the provisions of the document. All the traditional rules of trust administration will be in effect for a pet trust as they are for any other trust. There will be a trustee named which will carry out the best interests of the maker of the trust and will be able to enforce the terms of the trust in court if necessary.

One feature of a pet trust that is distinct are the caretaking options. When establishing a pet trust, the maker can name who will take care of their pet in the event of incapacitation, who will have immediate custody upon your death, and how the animal is cared for.

Healthcare coverage has been an unsure and confusing issue for both young and elderly citizens over the past decade, with the potential to only become more complicated as a new president takes office. While laws have been amended throughout President Obama’s term to now allow young adults to remain covered under their parents insurance until they are 26 years old, there are no hard rules regarding whether parents can qualify under their adult childrens’ health insurance plans.

Narrow Exceptions To Covering Parents

There are limited situations in which an adult child could get their elderly or ailing parent covered under their company’s insurance provider, however, they must meet a number of requirements. Parents can be covered under their child’s insurance plan if they can qualify as a dependent and meet specific criteria. Dependents traditionally have been considered those children under the age of 26 who do not maintain coverage, spouses or domestic partners, however, parents can qualify generally if they meet the IRS definition of dependent upon their adult child.

Charitable contributions and gifts make up a large aspect of many estates. As with everything, there is a right way to give and a wrong way to give. Planning can help ensure that your gift is properly funded and distributed according to your wishes. This planning may include using qualified funds while you are living.

The 411 on QCDs

Individuals age 70 ½ or older are allowed under IRS rules to make direct charitable gifts from an IRA of up to $100,000 to public charities. These gifts are called qualified charitable distributions (QCDs) and are not required to report this distribution as taxable income on their federal income tax return. Historically, this tax break was voted upon and approved on an annual basis; as of 2015, it has been permanent.

Trusts are common estate planning tools in which a person can transfer ownership of assets to the trust. While this person is alive, they retain control over the assets in their life. Upon their death, the assets are distributed to the beneficiaries named in the trust.

While the Person is Alive

A revocable trust uses the social security number of the person who created the trust. A revocable trust does not have to file its own tax return. All income is, instead reported in the same manner as any other income on the tax return of the trust creator. People who jointly own a revocable trust, such as a married couple, both hold the power to revoke the trust. This means that either person’s social security number can be used. Couples who file tax returns separately must be careful. The person who reports the income on their personal tax returns should be the same as the person whose social security number is used.

When choosing the people you trust the most to serve as a part of your estate plan in any capacity, whether they be a family member, close friend or trusted individual in the community, it is important to understand the role that you are asking them to play. Serving as the executor of your estate, the trustee of your trust, as your healthcare representative or power of attorney is not a blessing. Making sure that the people you ask to fulfill these roles ahead of time understand that is crucial to ensuring that your estate plan is carried out effectively and to your wishes.

Managing Expectations

Many people feel that being chosen for one of these roles is a great honor. After all, being asked to serve as someone’s power of attorney or trustee means that there is a presence of trust in the relationship. After all, out of all the people who could have been chosen, out of all the people who could have been asked, you asked that specific person to handle your affairs.

There comes a time in many people’s lives when their adult children begin to help out with daily tasks. For some people this includes writing checks and paying bills. Many people begin to wonder if they should take steps to make being taken care of easier for their caregivers. In these cases, the question arises “why not just add your adult child to your bank account?”.

The Pros

The most obvious and powerful positive for adding an adult child to your bank account is ease of access. As joint owner, your child will be able to access funds from the account in order to assist you with bill paying and other financial matters.

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