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Tuesday, January 31, 2017

Estate Planning Laws | Enactment of New Law Reminds Us of the Importance of Estate Plan Reviews

Summary: Very little in life is unchanging. The relationships in our lives change through death, birth, marriage and divorce, among other things. The laws change through the passage and enactment of new bills. Whether it is a new law or a life-event change, it can have an impact on your estate plan. With periodic estate plan reviews, you can gain the peace-of-mind that comes from knowing that your plan remains optimized to function at its best possible level, even after taking into account all of the changes in the law and your life that have taken place. 

Back in late May 2016, Minnesota Governor Mark Dayton signed a bill into law. The signing probably was not headlines news, even in that state. But, for Minnesota pet owners, it was welcome news. With the governor's signature, Minnesota became the 50th and final state to recognize the legal validity of pet or animal trusts. Pet or animal trusts work similarly to most every other kind of trust. They allow an animal owner, whether the beneficiary is your pampered poodle or a working animal like a horse, to establish the trust agreement with that animal (or animals) as the beneficiary. The trust creator then names a trustee who manages the trust assets and the income from those assets for the benefit of that named beneficiary. With this kind of estate planning, you can ensure, not only that your animal will go to a loving home, but that the animal will have the financial resources he or she needs. 

Transfer on death deeds are a useful tool for some people who may desire to avoid probate but whose circumstances may dictate that a revocable living trust isn't right for them. These deeds work like the death beneficiary designations on your life insurance or other financial accounts. With proof of a valid transfer on death deed, along with evidence that you're the beneficiary and the previous owner has died, you can take immediate ownership of a piece of real property without requiring a probate process. More than half of the 50 states recognize these deeds. Missouri has had them since 1989. California, however, passed a new law and began recognizing them in 2016.

What do these sets of facts have in common? They are both reminders that the laws governing estate planning are not etched in stone. They change with some frequency. Some of the changes may be very minor. Others, like the creation of a new type of trust or new type of real estate deed, can be major. Regardless of whether a change created by a new law is minute or large-scale, any change can have an impact on your plan. 

A few years ago, Indiana law created a legally enforceable "Funeral Planning Directive." If you lived in Indiana and decisions like place of burial or cremation-versus-interment mattered to you, this change would be enormous to you. If, however, you had already created your Indiana estate plan before the new law passed and you thought that your were all finished with your estate planning, you might have had the potential of missing out on the benefits of this change in the law. The same is true if you, as a pet owner, had already created your Minnesota estate plan before May 2016 and ceased doing anything with your plan after you signed it.

A popular modern social media acronym is "FOMO," which is short for "fear of missing out." As someone with an estate plan, you should have FOMO -- fear of missing out on the benefits of potentially helpful changes in the law, or fear of missing out on having an optimized estate plan because you did not update your plan to account for shifts in the law or changes in your personal life. With periodic estate plan reviews, you need not have this fear, however. A routine estate plan review can help you identify life-event changes, such as marriages, divorces, deaths or births, which may indicate a need for an amendment to your plan. Reviews may also allow your estate planning team to notify you that a law has changed, and give you the opportunity to discuss with your estate planning attorney how these changes may impact your plan.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Friday, January 27, 2017

Revocable Living Trusts | How Your Living Trust Can Help Your Loved Ones 'Enjoy the Little Things'


Summary: Estate planning involves dealing with a variety of things. While you may associate the financial side of your estate planning with distributing large assets like your home, car or financial accounts, sometimes assets with much smaller dollar-values may mean the most to your loved ones. With proper and complete estate planning, you can ensure that your wishes and preferences about the distribution of your assets, both great and small, are known and can be followed.

When people think about estate planning, they often think first about the distribution of their assets. And, often, when they think about the distribution of their assets, they think first about the "big-ticket" items, like houses, vehicles, financial accounts, and so forth. However, sometimes those are not the assets that matter most to loved ones. Sometimes it is things with lesser amounts of dollar-value that may mean the most, and can generate the most happiness, or hostility, among your loved ones. That's why, when you create your estate plan, it is very important to ensure that, not only have you planned for the assets that have high dollar values, but also for those things that have high sentimental value.

The things that may matter to your loved one could be extremely varied and, sometimes, surprising. This aspect of estate planning can be a great way to begin a conversation about estate planning with your loved ones. As you prepare to create your estate plan, your children or other loved ones may be uncomfortable thinking about serving as your health care proxy, but might be more willing to discuss with you the tangible personal items that have always given them that "warm and fuzzy" feeling. 

This has a two-fold benefit: it gives you an opening to begin the conversation you need to have with your loved ones about your goals and objectives in terms of your estate planning, and it also gives you an opportunity, potentially, to discover things you did not know. Maybe you never knew how much your old rocking chair meant to your daughter. Or what a strong affinity your son had for that vintage-but-rusty toy fire truck you kept in the basement. If you have multiple loved ones who all cherish the same item, this conversation may give you the chance to take these "popular" items and reach an compromise agreeable to all regarding who gets what. By having this conversation, you can learn these things and be more prepared to complete your estate plan in full.

Once you're armed with this factual information, what should you do with it? If you have an estate plan with a revocable living trust, it may seem challenging to ensure that your tangible personal effects get to the destinations you want. After all, you may wonder... how you fund a bunch of Beanie Baby dolls into your trust? Fortunately, your trust has a way for you to ensure the correct destination for these personal effects. You can create what's called a "schedule," which is included as part of your trust agreement document. For many people, when they establish a revocable living trust, this schedule will be called "Schedule A." Regardless of what you name the schedule, it is the place where you can list assets that do not have deeds or titles or other written documents establishing ownership. Your Schedule A can include everything from your furniture to your china, crystal and silverware to antique toys to your baseball card collection. Depending on the type of asset you've listed in Schedule A, you may also want to write up a "Bill of Sale" from you to your trust. Your attorney can help you decide which assets, if any, require this step.  

A character from a popular 2009 zombie movie created several life rules that he passed on to viewers, including one that recommended to "enjoy the little things." In real life, sometimes it is the littlest things that create the biggest enjoyment. With a carefully thought out and complete estate plan, you can ensure that your goals will be achieved to the biggest extent possible.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Tuesday, January 24, 2017

Revocable Living Trusts | Using a Trust to Ensure You Have a Lasting Legacy



Summary: Including trusts in your estate plan can have many types of benefits. A revocable living trust may help you avoid the potential delays, expenses and stress that can arise from going through the probate administration process It can also be an invaluable tool in planning to protect yourself in the event that you become mentally incapacitated. Furthermore, your trust planning may help you create a more lasting legacy than you might otherwise enjoy with a will, as your trust may allow you control what happens to your wealth even after your initial beneficiaries have died.

If you are familiar with revocable living trusts, you likely know that they can help you avoid some of the potential drawbacks of probate administration. Depending on the laws and rules in your state of residence, probate can be time-consuming, expensive, stressful and largely devoid of privacy. Depending on the specifics of your situation, the benefits of avoiding these potential pitfalls, along with a trust's potential protective advantages when it comes to planning for mental incapacity, can be substantial.

What you may or may not know, however, is how your trust(s) can help you ensure that the legacy you leave behind is as durable and lasting as you'd want. Some celebrity estates from history offer useful examples. Before her death in 1962, Marilyn Monroe created an estate plan. Her will left most of her wealth to hear acting coach, Lee Strasberg. Beyond the business relationship, Monroe had a very close emotional and personal bond with both Strasberg and his second wife, Paula. Monroe's will requested that her acting coach distribute her belongings, "in his sole discretion, among my friends, colleagues and those to whom I am devoted." This, of course, meant that he had full and complete control over the belongings and they were part of his estate.

The acting coach died in 1982, 16 years after his wife, Paula, passed. Several years before his death, Strasberg married his third wife, Anna. Anna, who was 13 years younger than Monroe, never knew the famous actress but, after Anna's husband's death, the entirety of Monroe's possessions belonged to her. Susan Strasberg, who was the daughter of Lee and Paula, and a close personal friend of Monroe, received nothing. 

At this point, perhaps you're saying, "I don't plan to leave my wealth to my acting coach, so I don't really need this type of planning." That may not necessarily be true. Here's an example of how your goals can be thwarted, even if they are fairly straightforward and clearly stated in a will. Imagine a couple, John Doe and Carol Doe, who have three daughters. John and Carol each have wills that say, "100% of my estate to my spouse and, if my spouse has died, then all to my three daughters." John dies unexpectedly. Carol remarries a man named Mike who has three sons but, shortly thereafter, Carol dies. Her will says that her three daughters get 100% of her wealth (which includes the entirety of John's estate.) However, state law gives a surviving spouse the right to "elect against the will," which means that the surviving spouse can choose either the amount listed in the dead spouse's will or an amount spelled out in the state statutes. In some states, that's 50% of the dead spouse's probate estate. In other words, Mike could elect to take his spousal share, collect 50% of Carol's wealth and then transfer those assets to his sons, and it would all be perfectly legal. John would have, however indirectly and unintentionally, ended up leaving his daughters nothing and an inheritance of 50% to three people he did not even know (Mike's sons).

An estate plan with a trust (or trusts) could have created a different outcome for both fictional John and real-life Marilyn. So, how does it work? A trust will  include provisions that direct what will happen to the assets funded into it, in terms of distribution, and when those distributions should take place. You have the option of directing your successor trustee to make a full distribution of your wealth and closing the trust upon your death, or you can create instructions that will allow the trust to continue functioning. You may direct that an initial beneficiary can enjoy the trust's assets during his/her lifetime and then, after he/she dies, you can direct who should receive the wealth after that. In this way, you can minimize the chance of your wealth ending up belonging to complete strangers.

Engaging in this type of planning, as with any variety of planning, can trigger certain legal or tax implications. That's why, as with any type of estate plan, it is important to work an experienced professional who can carefully advise you of the benefits and drawbacks of each option available to you.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Friday, January 20, 2017

Estate Planning Mistakes | Planning to Ensure That Your Wishes Are Carried Out



Summary: In all areas of life, mistakes happen. A recent estate planning dispute in Michigan exemplifies this, as an overlooked property deed triggered a dispute that required a trial court and an appeals court to resolve. While your plan hopefully involves less complication and less litigation, the case is a useful reminder of the importance of engaging in comprehensive planning, which will contain safeguards to protect you even if you make mistakes in the estate planning process.

As part of their 1998 estate plan, Michigan couple Larry and Joy Hutchinson created a revocable living trust. Like many living trusts, the couple were the original trustees, and the trust's assets were to be for the benefit of the couple during their lives, then the survivor of the two after the first death. After both had died, the husband's three daughters (from another relationship) received what remained. 

Several years later, the husband's daughters discovered the trust's existence and launched a lawsuit accusing their stepmother of mismanaging the trust's assets. The two sides settled the case and, as part of that settlement, the wife was required to sell the family farm and another property, and the three children were to receive certain proceeds from those sales. The wife complied, selling both properties. 

What the children discovered after their stepmother's death, however, was that not all of the property rights had been sold. With regard to the farm, the legal rights to the surface had been sold, but no sale had ever been transacted regarding the farm's oil, gas and mineral rights, which were held under a separate deed. Upon making this discovery, the children asked a judge to distribute the mineral rights to them. The wife's executor opposed this request, arguing that the mineral rights should be considered a part of her probate estate.   

The dispute ultimately made its way through the court system, with both the trial court and the appeals court concluding that, because the settlement agreement made no explicit mention of the farm's mineral rights, then the agreement had impact on those mineral rights. That meant that the mineral rights remained the property of the trust and, according to the trusts's terms, should be distributed to the children under the provisions stated in the trust. 

While you may not own any real estate that also involves mineral rights, and hopefully your estate plan will not involve any instances of mismanagement of trust assets, there is still a lesson for many people in this case. Namely, the complicated process involved in resolving this couple's estate plan is a reminder of the high importance of a complete estate plan and regular estate plan reviews. This prolonged litigation erupted because the family farm's mineral rights were simply overlooked until after the wife's death.  Even if it is not mineral rights, there is always the possibility that, despite your best efforts, you may overlook or forget an asset (or assets) when you set out to fund the living trust in your estate plan. 

A complete estate plan will help you be prepared in any scenario. If you have a living trust, your complete estate plan will also have a "pour-over" will, which will protect you against forgotten assets. Your pour-over will will take assets left out of your trust and transfer them into your trust, where they, like the rest of your wealth, can be distributed according to the terms in your trust. Also, this is a reminder of the benefit of estate plan "check-up". A check-up can be an excellent time to review everything involved with the carrying out of your estate planning goals. Anyone can potentially forget to fund an asset. A check-up is just one more opportunity to look at your plan and potentially identify and correct such an oversight.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Tuesday, January 17, 2017

Get The Most Out of Your Estate Plan | Engage in Lots of Communication

Summary: Your estate plan will reflect some of the most intensely personal decisions you will ever make. However, the "final product" that goes does on paper in your documents is often one born of an in-depth interactive process, possibly involving many people, including you, your estate planning attorney and your loved ones (especially those designated to make decisions on your behalf.) As with any process like this, one of the main keys to achieving optimal success is communication, in order to ensure everyone is "on the same page" and that your true wishes will be carried out when the time comes.   

When you decide to begin the process of planning your estate, there are lots of decisions you'll have to make. For many people, among the first to leap to mind are decisions about the distribution of their wealth. While these decisions are extremely important, there are many more choices that have to be made in establishing a complete estate plan. Sometimes, some of the most difficult choices to make involve planning for your incapacity and end-of-life care.

Whether you are making financial decisions or personal ones, it is extremely important to communicate freely and fully with your estate planning attorney. Your attorney will, in the course of the estate planning process, be seeking to combine his/her knowledge of the law with the factual information you provide in order to put them together and make recommendations about what kind of plan works best for you. The only way your attorney can provide you with the best service is if you are candid and forthcoming. Holding information back will only impair your attorney's ability to give you a plan that best reflects your goals. Say, for example, that you have a deep and profound aversion to the idea of living while in a permanent vegetative state. It is important that you share information like this with your attorney, even if you know that your loved ones might disapprove.
Speaking of those loved ones, it is vital that you communicate your personal medical and healthcare decision making perspectives with them, too. If you are selecting one (or more) of your loved ones to serve as your agent (also sometimes called a "proxy"), then you should be sure to communicate carefully with those loved ones. If order for them to do the best possible job as your agent, and being a voice for what you want done, it is essential that they know exactly what you want and why you made the choices you did. By completely understanding your goals and the reasons for them, your loved ones can more effectively carry out your objectives. You should also communicate with those loved ones who will not be serving as your agent in any decision making capacity. Sometimes, one of the biggest enemies of a successful estate plan is surprise on the part of a relative or other loved one. Surprises can often trigger emotional responses that can lead to long-term family strife or even litigation challenging your wishes. Short-circuit that possibility by making sure none of your loved ones are surprised about your goals.   

For many families, this communication can be difficult. While it is often challenging to face one's own mortality, it can often be even more painful to face the mortality of a loved one, so this conversation maybe more challenging for your loved ones than for you. Nevertheless, it is a necessary one to have. (Your attorney probably won't mind if you use him/her as an excuse if you need to tell your loved ones, "I don't enjoy this either, but my lawyer says I need to talk to you about this without procrastinating.") However you go about it, do whatever it takes to have this discussion. 

Finally, but perhaps most importantly, you need to communicate with yourself. This is something you'll do before communicating with anyone else. Decide which things matter to you... and which don't. At what threshold would you want to discontinue medical treatment designed to extend your life... when you stop recognizing your loved ones? When you can no longer get around independently? When you're in severe pain all the time? For each person, the answers to these questions are different. It is important to get a clear handle on your own preferences first and then move forward with planning.  

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Friday, January 13, 2017

Estate Planning Documents | Their Care and Protection

Summary: In many professions and industries, there are what's called "best practices," or the optimal way of doing things. There are "best practices" in planning your estate, too. These includes getting a well-thought out plan in place without procrastinating, making sure you have a plan to review your documents in the future for possible changes requiring adjustments in your plan and having a plan for keeping your physical legal documents safe. This plan involves two vital pieces, including picking a proper location and communicating that information to the people who will need to access your documents in the future. 

Planning for the security of your estate planning documents is extremely important, although often overlooked. You may think you've done it all. Crossed all the i's. Dotted all the t's. You've gone out, identified your estate planning goals and objectives, obtained a well-thought out set of legal documents that meets those goals and you've even established a plan for giving your estate plan periodic reviews in the future in case any changes are needed.

However, there is one more thing you do as part of your estate planning process, which is making sure that physical, original plan documents are sufficiently safe. As an introductory note, be aware that you should always keep the original copies of each of your estate planning documents, including your will, powers of attorney, living will and any trusts, in your own possession. 

There are many options for properly securing your documents. If you get more peace of mind from having your documents in a secure facility, you should look into a safe deposit box at a bank or other financial institution. On the other hand, if you feel safer with your documents in your home, you should make certain that you store them in a place that is safe from any kind of disaster, such as a fireproof box or a safe. Your documents need to be able withstand disasters that might reasonably befall your home, such as fire damage, wind damage or water damage. Some people even choose to take their estate planning documents and binder, place them in an air-tight, water-tight sealed bag or other container, and store them in their freezer. This options is not as outlandish as it may seem on the surface, because freezers are one of the most fire-resistant containers in any house, and thieves are unlikely to go through your freezer if they break into your home.

Regardless of whether you choose a safe deposit box, a fireproof box, your freezer or some other option, an essential task once you've selected a location and stored your documents is communication. Your need to communicate where you've stored your plan documents with those people you've named in your plan (such as successor trustees, executors, attorneys-in-fact or agents under your living will) who will need to access those documents at some future point. Of course, one person who may need to access these documents in the future is you. You may need, for example, to check your living trust document because you've just bought or sold a car. Whatever the reason, you may want to communicate this location information to a trusted relative, friend or neighbor so that they can help you find your documents if you should forget where you stored them. 

Like so many things in estate planning, the key is planning and communication. First, establish a plan for keeping your documents safe and, second, make sure that you've sufficiently communicated that plan to the people who will need this information at some point.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan


Tuesday, January 10, 2017

Irrevocable Trusts | Their Role in Your Estate Plan



Summary: Estate plans include many different pieces. Most include wills, powers of attorney and living wills. Many also include revocable living trusts, especially if one of your goals is avoiding probate. However, another tool available is the irrevocable trust. There are many situations where an irrevocable trust can be beneficial and, depending on your needs and your goals, looking into the uses and advantages of these trusts may be worth your while.

If you are familiar with the use of trusts in estate planning, chance are that you are aware of revocable living trusts. These trusts can be very helpful to many people. If you want to avoid the potential delays, expenses and stress of the probate administration process, then a revocable living trust may be a worthwhile component of your estate plan. Additionally, if you are interested in planning to minimize the chance of having an unwanted conservatorship filed over you and your assets, then a living trust may be beneficial in this regard, as well, as living trusts allow for the transfer of the management of your wealth from you to the person you chose when you created your trust, not someone that a judge picks.    

However, revocable living trusts are not the only worthwhile type of trust when it comes to estate planning. While revocable trusts allow you to maintain total control over the assets in them, in some circumstances, this degree of control is a drawback instead of an advantage. For these situations, there is the irrevocable trust. Irrevocable trusts can help you with planning for death taxes. If you think you may be facing a federal estate tax liability, there are various trust options out there to help. One is the irrevocable life insurance trust (ILIT). In this situation, you can purchase a life insurance policy that is owned and held by the ILIT. The death benefit proceeds from a policy held by your ILIT do not count as part of your gross estate when it comes to calculating estate taxes, whereas if the policy was held in your name instead of a trust, the proceeds would count toward your total estate, meaning you'd have a greater estate tax bill.

Another area where irrevocable trusts can help is if you have a child with special needs. Many people with special needs often rely upon government benefit programs that impose, as an eligibility requirement, a needs-based standard for qualification. If you leave money outright to your child with special needs, this could result in your child being financially disqualified to continue receiving benefits. Assets placed in a properly structured irrevocable special needs trust, however, do not qualify as assets controlled by the person with special needs and will not trigger a disqualification.

While the use of irrevocable trusts in planning for death taxes or for children with special needs is somewhat well known, there are still other, often less well known, circumstances where an irrevocable trust can help you. One example is if you have a child or grandchild for whom you are saving money for college. In some states, if someone gets a legal judgment against you, that creditor can seize the money in the 529 college savings account you've put away for your child or grandchild's education. However, if you set up an irrevocable trust with the college savings plans owned by the trustee whom you named to manage the trust, then that money is generally protected from judgment creditors.

These are, of course, only a few example of how irrevocable trusts can help meet some specialized needs within estate planning. There are many more ways that irrevocable trusts may possibly be a useful piece in your estate planning puzzle. Your estate planning attorney can help you determine what tools you need to achieve your goals in the best way possible.     

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
@assuranceplan
#legacyassuranceplan