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Selecting the right trustee to administer your estate is a crucial part of ensuring that your assets are distributed according to your wishes and that your estate is settled correctly. While many people can and should put a great deal of thought into selecting a trustee to administer their estate, the process of selecting a trustee often stops there. Whether a trustee is a financial institution, attorney, or close family friend, you need to include a mechanism to remove that trustee if the need to do so arises. An experienced estate planning attorney can help you design this type of mechanism, which could help your loved ones avoid the often-lengthy legal process of removing a trustee in the absence of formal instructions.

When can a trustee be removed?

There are many reasons you may wish to revise your estate’s trustee. Perhaps you originally selected a family member that has become estranged because of divorce. You may have selected a sibling that has predeceased you. If you nominated a financial institution, it could have been bought out by another company that you don’t want to deal with. Whatever the reason for wanting to remove a trustee, New York law states that the following constitute some legal reasons for a court to remove a trustee:

When people think of estate planning, they do not automatically think of utilizing retirement planning strategies to maximize their estate’s potential. However, there are many benefits available during retirement that can have a significant impact on how you plan your estate. One such vehicle that can allow for more comprehensive estate planning is a Roth IRA. Roth IRAs are a type of retirement savings account similar to a traditional IRA but with some very important differences that could be beneficial to you. CNN Money provides an explanation of the differences between the two types of accounts, and some of the benefits of Roth IRAs that could be applicable to your estate are discussed below.

Benefits of a Roth IRA

The main benefit of a Roth IRA is that it is funded with after-tax dollars. In other words, the money you put into it has already been taxed. That means that money invested into the account can grow tax free and you do not have to pay taxes on the money you withdraw from it at retirement. There are, however, potential tax penalties associated with unqualified early distributions that an experienced estate planning attorney can help you understand.

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.

Comprehensive estate planning is a deeply personal process. There are so many different factors to consider, and working with an experienced estate planning attorney can help streamline the process and ensure that you explore all of the aspects of estate planning that pertain to you. One of the most difficult parts of comprehensive estate planning is selecting a guardian for your minor children if both parents should become deceased or incapacitated at the same time, leaving neither able to care for any shared children. As difficult as the process can be, it is extremely important to undertake it so that the best interests of your children are provided for in a worst-case scenario. The following are some tips in approaching the guardian selection process and provide some important considerations for you to remember when selecting a guardian, and an experienced estate planning attorney can help you with the process.

  1.     Choose Compatible People

Most people put a great deal of planning and thought into how they choose to parent. It is important for your peace of mind as well as your children’s well-being that you select individuals that share a similar parenting style and outlook. If academics are important in your household, make sure that they are also important to prospective guardians. Additionally, making sure that individuals you are considering as guardians are ready to undertake the responsibility that comes with it is extremely important.

As we remind our clients, tax concerns are a major part of a comprehensive estate planning strategy. Anticipating the potential tax consequences related to your estate as well as those that might arise prior to, during, or after the disposition of your assets is an integral part of making sure your loved ones don’t inherit a significant tax burden that limits the amount of assets you pass to them. For some individuals, private annuities may offer a way to avoid the high costs of estate taxes, gift taxes, and other taxes related to estate planning.

The Benefits of Private Annuities

Basically, private annuities can be used to help reduce your potential estate tax liability while avoiding the gift tax and securing a steady stream of income for the grantor. They are termed “private” because they are privately structured rather than created by some commercial entity. A private annuity allows the individual to essentially transfer that asset to the heir in exchange for lifetime payments for the property. As the person receiving the property will be paying the grantor for it, private annuities typically count as a sale instead of as a gift of property.

Estate planning is heavily dependent upon the law both at the time of planning and at a person’s time of death. The law is constantly changing, especially laws that impact estate planning. That is why it is crucial to make sure that you work with an experienced estate planning attorney that can help you stay abreast of changes in the law that could affect your estate plan. Recently, such a change occurred regarding the estate tax and lien releases.

What is an estate tax lien?

Internal Revenue Code 6324 says that a federal estate tax lien is put in place on the day a person passes away. This allows taxable assets to be determined, at which point property may become subject to an assessment lien until such time as any taxes due are paid in full. What this means is that the executor of a person’s estate, or the people responsible for the disposition of the deceased person’s property, cannot dispose of real property until it is discharged from either the estate tax lien or the assessment tax lien. If you try to dispose of any real property prior to it being discharged, the buyer of the property will be unable to take the property free and clear of any liens that may be placed on it. This could cause unexpected delays and other issues related to the disposition of property within an estate. By placing such liens, the Internal Revenue Service is able to ensure that any taxes due to it by the deceased or as part of the deceased’s estate are actually paid.

Many individuals want to make sure that part of their estate is dedicated to their favorite charitable causes, and many make the move to guarantee this during their lifetime. There are several ways to do this. Some individuals may consider structuring an endowment while other may choose deferred gifts or planned giving. Another vehicle to ensure your charitable wishes are carried out can include the creation of a private foundation. However, for some people, the best option for charitable donations during one’s lifetime and after might be to create a donor advised fund.

The Basics of a Donor Advised Fund

When we give to various charities, their tax status allows us to take advantage of a tax deduction. However, in order for our donations to qualify as tax deductible, the organization must typically be registered as what is known as a 501(c)(3) organization. These types of organizations must comply with certain rules established by the IRS, including restricted political and legislative activity while following other important guidelines. The IRS defines a donor advised fund as a fund or account that is maintained and operated by a 501(c)(3) organization known as the sponsoring organization.

Almost every post, we remind people that estate planning is a comprehensive undertaking that has many different options that can be tailored for individual needs. Experienced estate planning attorneys can help clients understand the role that different option can play in the estate planning process. Another vehicle that can provide individuals and their loved ones with financial security is long-term care insurance. With the growing cost of medical care and the average life expectancy of people reaching 65 today at approximately 85 years of age, high healthcare costs can become a severe drain on a family’s financial resources. However, planning for the cost of long-term medical care can help you maintain the bulk of your estate to distribute to your heirs as you see fit.

What Is Long-Term Care Insurance?

Long-term care insurance not only protects your heirs from the expenses associated with caring for elderly family members, but can also help you prepare for the costs of caring for your aging family members. The purpose of long-term care insurance is to help offset the costs of long-term care that can come with age. For instance, caring for an aging family member that has developed cognitive impairments such as Alzheimer’s disease can sometimes require a daytime visiting nurse while you and your family are at work and/or school, or even around-the-clock medical care in a nursing home facility.

Estate planning is a complex process that involves a great deal of attention to detail. However, truly comprehensive estate planning goes beyond creating a Last Will and Testament or even a trust and includes things like understanding how debt will affect your estate once you die. The best way to avoid the negative effects of debt on your estate is, of course, to avoid debt. However, that is often impossible to do today. In fact, according to sources cited by a recent Yahoo! Finance article around 73 percent of Americans have outstanding debt when they die with an average debt of $62,000 per person. As such, it is important to understand your debt as well as how to manage it appropriately to minimize any potential financial burden such debt could cost your loved ones.

Different Types of Debt

There are several different types of debt, and understanding the differences between them as well as how each type will affect you can help you understand how to manage them. The first type of debt is secured debt. Secured debt is debt that has been guaranteed by some type of collateral. This allows lenders to provide better interest rates on secured debt because a default on such debt typically awards the collateral to the lender. The most common examples of secured debt include residences and vehicles.

Estate planning should be a lifelong process. It is never too early to start the estate planning process, even with minimal assets at a younger age. Once you have a comprehensive estate planning framework in place, it is important to update it as life events change your circumstances. Much like your life is always evolving, so should your estate plan. It must be reviewed on a regular basis to ensure it is up-to-date and continues to comply with changes in laws governing it. When you put this much time and effort into such an important component of protecting your loved ones, it is important to ensure there are mechanisms in place to protect it. The following suggestions, adapted from a recent article from CNBC, can help you ensure your estate plan is secure.

Pre-Paid, Pre-Planned Funerals

When a loved one passes away, it can be an extremely difficult experience. One of the most difficult parts of the grieving process is trying to make funeral arrangements while grieving, and funeral expenses can often be very high. By pre-paying for your funeral arrangements, you can spare your family from the unexpected costs related to funeral expenses while also saving yourself money by locking in prices before they grow over time. Pre-planning your funeral arrangements allows you to ensure that your wishes for your funeral are carried out and help your family avoid stressful decisions during the grieving process.

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