Articles Posted in Estate Planning

Even the most cautious and informed people sometimes end up making estate planning mistakes that result in unintended consequences for loved ones. A trust might have become outdated due to the introduction of new laws. Or, unforeseen life events might have left a person’s estate planning goals impossible. As a result, it is vital to understand that it is possible to remedy these problems. This article reviews some of the ways in which estate planning mistakes can be remedied.

Irrevocable Trusts Can Sometimes Be Revised

One of the hallmarks of irrevocable trusts is that they cannot be revoked. In some situations, however, these trusts can be modified. For example, the trust might allow the trustee or beneficiary to make modifications to the trust’s terms in certain situations.

If you have a pet, you likely have a plan for the pet in place in case you go on vacation or out of town. You might even have created an estate plan to designate a certain person to take care of the pet in case something unexpectedly happens to you. Many people, however, fail to create an estate plan to address a situation where they become incapacitated and no longer able to take care of the pet. As a result, this article reviews some helpful strategies to follow when planning for the care of your pet when you are no longer able to do so.

Realize the Importance of Adequate Planning

The best place to begin planning for your pet is with an understanding of what would happen to the animal if you did not have an adequate insurance plan in place. The likely result is that a court would appoint someone to make decisions on your behalf. This individual would subsequently be authorized to make decisions for the care of your pet. Unless you trust this person to do what is right with the animal, there is always a chance that the individual might decide that it is in your best interest to get rid of the animal. Consequently, it is a good idea to create an estate plan to make sure that the animal receives adequate care.

A 401(k) rollover occurs when a person directs the transfer of the money in their retirement account to a new plan or IRA. The most common period when people decide to rollover 401(k) is when they either change jobs or retire. One of the most substantial challenges in rolling over a 401(k) is deciding whether it’s a good idea for you. If you make a bad choice, you can end up facing some substantial obstacles like running out of funds and not being able to afford daily living expenses.

Options besides Rolling Over a 401(k)

One of the most important things about 401(k) rollover is understanding that it is not your only option. Besides a 401(k) rollover, some of the other options that you might consider include: directly rolling over a 401(k) to a new employer’s 401(k) or not transferring a 401(k) to an IRA but leaving the old 401(k) in place. The best estate planning advisors will be able to tell you what strategy will work best in your situation.

Estate planning is a complex process. For many people, estate planning is overwhelming and results in many unanticipated costs. For other people, it is frightening to accept that they too will one day pass away. Despite how you might feel about estate planning, there are several important estate planning documents that every person should have including an advance healthcare directive. Health care directives play an important role in allowing a person to specify their choices for caregivers in case of illness or mental incapacity. In some cases, these directives also contain instructions about a person’s body should be handled following death. While they play an important role, statistics reveal that a large number of people are still deciding to not include advance healthcare directives in their estate plans. This article takes a brief look at why these directives are important as well as recommends some steps in creating one.

The Growing Importance of Advance Health Care Directives

Trusts and wills have existed for centuries, but health care directives are a new type of estate planning document. These documents first appeared in 1976, but by 1992 all 50 states had laws allowing advance healthcare directives. One of the reasons why advance healthcare directives have grown substantially in number is that they allow us to have certain control over certain issues related to estate administration and our death. One key feature that many health care directives feature is the ability to choose a third-party to act as an agent in case you become incapacitated. Besides making decisions while you are incapacitated, an agent will often also make sure that your wishes are carried out after your death.

There are some surprising conclusions that people reach after creating an estate plan. For example, after putting the finishing touches on estate planning documents, some parents discover that they do not want to pass on an inheritance to the couple’s children. This is often not because the children have done anything wrong, but rather because the children are in a place where they can now take care of themselves and the parents decide their inheritance would do better if passed on to the surrounding community. This article reviews some important pieces of advice that you should remember in case you find yourself in such an estate planning situation.

Remember Your Assets Are Yours

Deciding to not leave your estate to your children is a divisive document. Some parties will argue on both sides of things. Despite this debate, however, it is important to remember that your assets are yours and that you can do whatever you want with them. This is true regardless of whoever criticizes your choices. If you have strong reasons for not passing your inheritance onto your children, this is the only thing that should influence your decision.

Estate planning is difficult, but for loved ones with special needs, the process can be particularly challenging. Besides worrying about the type of care your loved one will receive, you are likely overwhelmed with many other questions including who will manage finances and whether the person will be able to receive benefits without being disqualified from receiving government assistance. Fortunately, there a variety of strategies to protect your loved one including ABLE accounts and special needs trust. While it can be tempting to view these two accounts as similar, there are some substantial differences between the two.

The Role of ABLE Accounts

Relative newcomers on the estate planning scene, ABLE accounts allow individuals with disabilities a way to save some assets without interfering with eligibility with government assistance programs like Medicaid and Supplemental Security Income. A person is permitted to have only one ABLE account and if assets in the account exceed $100,000, this excess will count towards that individual’s $2,000 resources limit for SSI eligibility. 

If you’ve been asked to help a loved one manage their assets, you likely know that there are many complex issues to consider. One question that many people in this situation are often left wondering is whether it is better to be added to a bank account as a joint account holder or if it is better to establish a separate estate account. While it can be quicker and often easier to simply add a person as a joint account holder, the joint account will also be left the sole account holder after the loved one’s death. 

The alternative is to open an estate account which will be responsible for paying bills associated with the deceased person’s estate. This article reviews just some of the most substantial advantages that people realize by opening estate accounts. 

# 1 – Reduced Risk Exists with Estate Accounts

Stretch IRAs refer to an estate planning strategy that was utilized to extend the tax-deferred status of an inherited IRA when it passed to a non-spouse beneficiary. Stretched IRAs allowed for continued tax-deferred growth. The SECURE Act, which was passed by the Senate on December 19, 2019, however, will end stretch IRAs. 

The most direct impact of this legislation is that it will change how IRAs are administered beginning January 1, 2020, by both eliminating the maximum age at which a person can make contributions to a traditional IRA. This change will also delay the starting date for required maximum distributions from age 70 and a half to 72. It is important for everyone who plans on utilizing an IRA to understand how the changes that will likely occur as a result of the SECURE Act.

Changing Landscapes

If you finally wrote your estate plan in 2019, you likely know just how difficult it can be to sit down and write an estate plan. Even after creating these documents, there are still several  obstacles that can occur and prevent you from achieving your estate planning goals. As a result, this article takes a brief look at some of the estate planning mistakes that you should be careful to avoid as the year comes to an end.

# 1 – Not Understanding Your Estate Plan

Some people don’t both to read and review the terms of estate planning documents after they’ve been created by an attorney. Other people let their spouses take care of estate planning and merely sign where is necessary. Not knowing the terms of what you are signing can lead to many serious estate planning challenges. While you need not be able to call up estate planning laws by code number, you should still understand the basics of how your estate plan will work.

Creating an estate plan is not easy. That’s just one of the many reasons why people delay planning for the future. One of the common challenges that people must solve is deciding who to appoint as a personal representative/trustee. Pick incorrectly and there is a substantial risk that the goals you have for your trust might not be fully achieved. The individual that you ultimately select to perform this role must be honest, but also a good communicator and diligent. If you’ve decided to appoint multiple trustees, you also need to make sure that all trustees get along together. This article reviews some of the important qualities that you should make sure that a candidate meets when selecting a trustee. 

Understand what a Trustee’s Job Involves

Before selecting a trustee, it is a wise idea to make sure that the individual is okay with the various tasks that a trustee must perform. The tasks involved with the job include:

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