Articles Posted in Wills

In today’s day and age, identity theft is all too common a problem. In fact, the news is often filled with horror stories related to identity theft. Identity theft is a serious problem that can wreak havoc on your life, and it can also have a significant impact on your estate plan. The following information can help you start to understand the potential effects of identity theft on your estate plan.

Access to Private Information

Wills, powers of attorney, healthcare proxies, and other estate planning documents contain very personal information. Not only do some documents have your social security number, but they could also contain other sensitive financial information, too. It is extremely important to safeguard these documents to prevent such information from slipping into the wrong hands. For instance, if someone were to gain access to this type of personal information they could potentially open up credit cards in the name of the deceased individual or even file a final tax return in their name before heirs have a chance to do so.

Nobody likes thinking about serious illness, especially a serious illness that could lead to death. Unfortunately, such illnesses can cause massive financial difficulties for friends and loved ones which can in turn significantly deplete the assets you had been planning to leave to your heirs. The moral of the story is that, no matter your age, it is never too early to start planning for the potential need for end-of-life care. The following tips are adapted from a recent article on this topic found in USA Today, and they may provide you with some important concepts to consider when thinking about healthcare issues.

Be Explicit About Your Wishes

Telling people in passing how you hope to be cared for in case of serious illness is important, but it isn’t necessarily always enough. It is important to write down your wishes and be explicit about how you wish your health care to be handled. You should also work with your estate planning attorney to create documents such as health care proxy nominations and/or a living will that express your healthcare wishes in detail.

Most individuals recognize the importance of comprehensive estate planning, although they may still choose to avoid it. One important part of your estate plan is your power of attorney (“POA”). Basically, a POA is a document that nominates an individual to make legal decisions for you in the event that you are unable to do so for yourself. You can choose the extent of the decision-making power you vest in the individual you have chosen by working together with an experienced estate planning attorney to determine how to best represent your goals. However, it is important to be aware of some of the pitfalls that could weaken your POA. According to a recent article from Forbes, the following tips may help you do just that.

Use an Experienced Estate Planning Attorney

Too many people decide to cut corners by using any number of online forms and legal information available for download. However, these forms are not tailored to a client’s individual needs, nor do they help you understand important aspects about making sure your POA and other estate planning documents meet the needs you have expressed. Designing your POA and other estate planning documents with an experienced estate planning attorney can help you make sure that your estate plan complies with the law. This can save you and your loved ones time, money, and stress down the line. With something as important as estate planning, you want to be sure that you

Comprehensive estate planning can be an extremely complicated process for an individual. This is even more true when the individual owns a business. The owners of closely held businesses own businesses with a limited number of shareholders and the stock in such businesses is not regularly traded publicly. While this type of business can provide many benefits for business owners, it can also create issues when one of the business owner dies. However, structuring a buy-sell agreement for a closely held business can help make estate planning easier when it comes to your interest in such a business.

Redemption Agreements

With a redemption agreement, the company itself purchases a life insurance policy on the various owners of the company. When one of those owners die, the sole owner of the life insurance policy – in this case, the company – will receive the benefits of the life insurance policy and can buy back the deceased shareholder’s shares. There are some potentially negative tax consequences for this type of arrangement, including the possibility of the business to be subject to the current corporate alternative minimum tax on the proceeds from the life insurance policy.

If you have assets that will likely appreciate in value, including property that provides income or stocks that demonstrate growth potential, there are ways you can plan accordingly to help you avoid severe tax consequences that might otherwise be related to retaining these assets or allowing them to become part of your general estate.

Two potential vehicles for you to explore are grantor retained annuity trusts (GRATs) and grantor retained unitrusts (GRUTs). With both of these options, you retain an interest in the income from assets placed in the trust. While there are taxes associated with each of these, they may be less costly than other options depending on your individual circumstances.

The Basics

A growing family often includes children. Sometimes, children come with special needs that need to be attended to throughout their lives. These special needs can include physical, mental, emotional, and/or developmental disabilities. When such needs arise, they can cost a great deal of money on a regular basis. A common concern parents or family members of individuals with special needs often have is how those individuals with special needs will be taken care of later in lifer when parents or family members have passed on. For these families, a special needs trust might be the answer.

An Introduction to Special Needs Trusts

A special needs trust is a trust established to address the long term needs of an individual with a disability that may require lifelong care. Many individuals with disabilities may qualify for state benefits and assistance to help offset the cost of long-term medical care and other costs that may arise. If the parents or family members of a person with special needs were to leave assets to the person with special needs, the inheritance may cause the individual to lose benefits provided by the state because the inheritance could cause their income to surpass the level under which a person is eligible for state benefits.

Sometimes after setting up a trust, circumstances occur that change our goals for that trust. Recently, we wrote about how to fix a broken trust which occurs when a trust no longer serves the purpose for which it was established. However, a broken trust is not always the only reason a trust might need to be modified. Depending on the circumstances surrounding your trust, there are several factors to consider when deciding whether or not to move a trust.

Common Reasons to Move a Trust

One of the most common reasons for creating a trust is to take advantage of more favorable tax consequences related to trusts. As such, one of the most common reasons to want to move a trust is to take advantage of more favorable tax-related trust laws in another state. Some other reasons for moving a trust might include:

With a new year comes many new changes. Now that we are already almost a quarter of the way into 2017, it’s important to look at the many options you have in the coming year to create a more comprehensive and up-to-date estate plan. Recently, we have written about ways to take care of your estate plan and important factors to keep in mind when making estate planning decisions. Below are some specific areas that you may want to consider regarding estate planning throughout the year.

  1. Review Documentation

Are all your documents complete? Are they signed where they need to be signed and placed in a secure location? An experienced estate planning attorney will review your estate planning documents for accuracy and to ensure they comply with the law, but you should be sure any additional documents – like insurance forms and beneficiary designations – are complete.

While serious illness and death are certainly difficult topics of conversation, they are nevertheless extremely important. If you do not express your wishes regarding healthcare in situations where you cannot make such decisions yourself, choices about your care will often be left to family members. When a loved one becomes too ill to make decisions about their care, there are many questions that arise about medications, procedures, and other treatment options. That’s why it is extremely important for you to communicate your wishes to those close to you.

Not only does doing so help to ensure that your specific wishes for your healthcare are carried out, but it can also provide a great deal of relief for family members that may have otherwise had to make such decisions on their own. However, while talking about such things is important, you may also want to include options like a living will and healthcare proxy as part of a comprehensive estate plan to legally memorialize your wishes. The following information may help you decide if one or both options is right for you.

What is a living will?

There can be a lot of confusing terms involved in comprehensive estate planning. Estate plans are meant to be individual and flexible, and a New York estate planning attorney can provide you with a variety of options that help you create a plan that works for you and your wishes. One option that an estate planning attorney might present is a revocable trust, sometimes referred to as a living trust or a revocable living trust. The following provides some basic information about what these trusts are and how they operate.

What is a revocable trust?

Trusts are agreements between you and a third party in which you allow the third party, often referred to as a trustee, to hold assets for your beneficiaries. There are a variety of different kinds of trusts that each have different nuances that may work best for you. However, revocable trusts are often used in estate planning. A revocable trust is a trust you can create during your lifetime that may help you manage and protect your assets if you become ill or incapacitated. The American Bar Association notes that you may name yourself as trustee while also selecting a co-trustee, should you choose to do so. As the name states, revocable trusts can usually be created to be revoked or changed as you see fit. Revocable trusts should not be confused with irrevocable trusts which have distinct characteristics, especially related to taxes.

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