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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


Friday, January 6, 2017

Excluding Children of Your Estate Plan | How to Go About -- and Not Go About it!

Summary: The reasons a person might choose to leave a child nothing as part of their estate plan are as varied as the people who make these decisions. However, regardless of the specific factors leading up to them, these decisions are often very personal and often the result of careful thought. If you are in this situation, it is essential that you promptly establish an estate plan and make sure that you have well-thought out documents to memorialize your objectives. It is important to ensure that your estate planning documents are written in such a way that they will be able to carry out these goals and not get defeated by legal pitfalls.

A very recent case, and another one a few years old, deal with a potentially tricky, but also very important issue, which is the very wide degree of control each person has regarding who will, and who will not, receive their wealth when they die. Sometimes the reasons a parent makes this decision is financial. Perhaps a child is very rich in comparison to her siblings, leaving the parents to conclude that the siblings need that wealth more than their rich sister. Or, in the alternative, perhaps a child has struggled financially during the parents' lifetimes and the parents have supported that child with gifts of wealth that they did not give to their other children, leaving the parents to distribute their estate among the children who did receive assistance during their lifetimes.

Other times, though, the reasons are not about financial issues, but are more personal. This occurred in Illinois a few years ago where four of Max and Erla Feinberg's five grandchildren, who each had received nothing, challenged their grandparents' estate plan. The four challengers argued that they were excluded because they chose to marry non-Jewish spouses and that such an estate plan violated Illinois law. In a very recent New Jersey case, the scenario was reversed. A daughter, who was the sole surviving heir of her parents, challenged the will of her father that left his entire estate to various religious charities. She claimed that her Catholic parents disinherited her because she chose to date (and later marry) a Jewish man.

In both cases, the estate plan contests failed. In each case, the precise wording of the estate planning documents was key to the courts' decisions to reject the contests. It is important to understand that the law significantly limits what's called "dead hand" control, which is an attempt to dictate the future behavior of your beneficiaries. If the parents or grandparents' estate plans had made inheritance or disinheritance explicitly contingent upon a beneficiary's decision to marry (or not to marry) a person of a particular faith, the challenges might have succeeded. Because the plans were precisely  worded to avoid such statements, the legal challenges did not succeed. The Illinois court concluded that the the Jewish grandparents' plan did not disinherit the four grandchildren for marrying non-Jewish people. The documents' wording indicated that the grandparents merely rewarded the one grandchild who "embraced the values" that the grandparents cherished. In the New Jersey case, the Catholic father's will was enforceable because it explicitly stated that he disinherited his daughter due to her alleged selfishness, manipulation, cruelty, abusiveness and vindictiveness, making no mention of the son-in-law or his religion.

For a lot of people, their personal reasons for disinheriting their children may be simpler. For example, a child may fail to continue maintaining a relationship with the parents. Regardless of the reason, both the Illinois and the New Jersey case highlight the importance of well-thought out plan documents. The daughter in the New Jersey case lost her contest because the father's will stated reasons for his decision that were unrelated to the son-in-law's religion so, in that case, the inclusion of language explaining the father's reasoning helped defeat the contest. In other cases, however, including too much explanation regarding your reasoning for disinheriting a close relative may actually provide added avenues of attack for your plan challenger. The key is to include exactly the right amount, and right type, of explanatory language. With the help of a knowledgeable estate planning attorney, you can craft a plan that honors all of your goals and objectives while minimizing the risk of a successful challenge by a disgruntled relative.   

 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 3, 2017

Estate Plan Review | New IRS Regulations Serve as a Important Reminder for Regular Estate Plan Reviews

Summary: In August 2016, the U.S. Internal Revenue Service proposed new regulations that could have a dramatic impact on the estate plans of a certain group of people. Whether you are or are not in the group of people who might possibly be affected by these changes in the statutes and regulations, the proposed change is instructive in that it reminds everyone of the importance of periodic estate plan reviews. By reviewing your estate plan regularly, you can be sure that your plan remains optimized based upon the current state of the law, even after changes are enacted.  

The proposed new IRS regulations would affect a specific section of Internal Revenue Code (Section 2704) that can have a role in certain estate plans. The new regulations, if they are enacted without additional changes, would diminish the effectiveness of certain tools used in estate plans geared toward reducing or eliminating death tax obligations.

For people who have estates large enough to exceed to the federal estate tax exemption amount, planning to avoid or minimize the impact of federal estate taxes is an important part of estate planning. In order to plan to avoid or minimize these taxes, estate planning professionals and their clients have used various mechanisms. For families that have planned using LLCs or family limited partnerships, the new regulations would "permanently and profoundly change estate planning," according to the National Law Journal.

Of course it is possible that your first reaction might be, "I don't have an LLC or a FLP... why should I care?" The reason comes down to one thing... options. In estate planning, there are often multiple different vehicles available to get you to where you want to go, regardless of what your individual estate planning destination is. Your estate planning attorney can help by taking the facts about you and your estate, alongside your goals and objectives, and analyzing them in terms of the relatives benefits and drawbacks of each estate planning tool available to you. A substantial change in the IRS regulations governing death taxes and estate planning may alter what type of planning vehicle is best for you.

You might also find yourself thinking, "I'm not rich... I shouldn't have to worry about federal estate taxes, should I?" While the current federal estate tax exclusions are relatively high, that doesn't necessarily mean that only rich people potentially face federal estate tax obligations when they die. In some situations, small business owners and family farmers could find their estates over the limit and their loved ones left with a hefty estate tax bill after they die.

Even if you are not rich, not a small business owner, not a farmer and generally unlikely to have an estate tax obligation when you die, the proposed new IRS regulations still serve as an important warning to you when it comes to estate planning. Many things that could impact your estate plan can potentially change in quick fashion. One of these possibilities is changes to the law. Changes in the applicable laws or regulations may fundamentally alter the analysis regarding what works best for you in terms of estate planning. If you make the mistake of simply executing a plan and never reviewing it, you may end up with a plan designed to function under a legal landscape that no longer exists by the time of your death.

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, December 30, 2016

Estate Planning | Famed Coach's Tragic Death and the Lessons It Imparts to Everyone

Summary: When Hall-of-Fame basketball coach Pat Summitt died in June 2016, her family, friends and players grieved a lost loved one and sports fans honored a lost legend. However, the coach's premature death has served some good, in terms of both raising awareness about Alzheimer's disease and imparting estate planning knowledge to everyone -- namely, that estate planning is not just for the elderly and planning for incapacity is important for everyone, regardless of age and health

In the Spring of 2011, Pat Summitt's University of Tennessee women's basketball team completed another season undefeated in conference play and earned a Number-1 seed in the NCAA basketball tournament. Summitt, the winningest coach in NCAA basketball history, was 58. The following August, she announced that she had early-onset Alzheimer's disease and retired from coaching after only one more season. By June 2016, Summitt had died at the age of 64. Summitt's battle with the disease and death at an early age remind us both how little we (including medical experts) really know about Alzheimer's and how important it is to get a complete estate plan in place without procrastination. 

Your estate plan can do so much more than just distribute your assets after you die. While that is an important and integral part of any estate plan (as it allows you to assert control over your legacy rather than leaving it up to your state's intestacy laws,) there are other major benefits of a well-thought out plan, too. One of these is planning for incapacity. With people living longer than ever, the chances that you will need to have a plan in place for your mental incapacity are greater than ever. 

Whether you experience Alzheimer's or other forms of dementia, you can retain a form of control over your wealth and yourself, even after a loss of capacity, through a proper and complete estate plan. A power of attorney for financial matters can allow you to designate the person you want to make decisions governing your wealth and assets. (You can also plan for the financial management aspect of incapacity by using a revocable living trust, as your trust can allow for seamless transition of the management of funded assets from you to the successor trustee you designate.) Additionally, your advance directive and your power of attorney for healthcare can ensure that, if you cannot make decisions for yourself regarding your person and your medical care, the person you named will step in to do that.   

Additionally, Summitt's death from Alzheimer's-related complications at the young age of 64 highlights the importance of not waiting to get your plan in place. As Popular Science magazine pointed out shortly after Summitt's death, "doctors and researchers still don't completely understand what causes" Alzheimer's. Given this lack of understanding, doctors cannot forecast who will get the disease, including who will encounter the early-onset variety like Coach Summitt did. In other words, just as life can be fleeting and come to an end unexpectedly and prematurely, the same can happen with one's mental capacity. The best way to ensure that you are prepared and protected against the potential pitfalls of Alzheimer's, dementia or other conditions that cause lost mental capacity is to execute a complete plan and begin that process right away.    

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, December 27, 2016

Estate Planning | Protect Your Children, Even After Your Death

Summary: Most parents spend a lifetime worrying about, planning and strategizing ways to care for their children and enhance those children's well-being to the maximum extent possible. One way you can enhance your ability to provide for your children is through estate planning. With a thorough and well-designed estate plan in place, you can serve as a provider for (and protector of) your children, even after you die.   

When most people begin thinking about creating an estate plan, they usually start by contemplating how they will distribute their assets after they die. For a lot of people, setting up this system of distribution usually centers around their children. Many distribution schemes involve executing a will that divides up one's assets, in equal fractions, to each of that person's children. For some, people, this is a completely appropriate way to plan for the distribution of their wealth. For others, though, more planning may be in order to ensure that all of their goals and objectives are met.

There are a lot of circumstances where you might want to consider using a different distribution plan other than "to my children, in equal parts, immediately upon my death." For these special circumstances, utilizing a trust or trusts as part of your planning may provide clear added benefits. One situation where this is true is if one or more of your children have special needs. Many people with special needs receive benefits from needs-based government programs. A large, or perhaps even modest, inheritance may result in the government declaring that your child no longer meets the financial qualifications for these types of programs, which may cut your child off from benefits upon which he/she has come to rely. Trust planning can help avert this disaster. With a properly crafted and executed special needs trust, you can still include your child with special needs in your estate plan distribution, while doing so in a way that will not cause the government to declare your child ineligible to continue receiving his/her benefits.   

Another variety of trust planning that can benefit some families is the "spendthrift" trust. Some people who are loosely familiar with spendthrift trusts, or at least the word "spendthrift," may associate this type of planning with children who have problems in their lives, such as gambling addictions, drug/alcohol abuse problems, creditor issues, maybe a failing marriage with a money-hungry spouse... or just a notoriously terrible ability at managing money. Without a doubt, these situations are ones where a spendthrift trust may be able to help. But the possible circumstances where this type of planning are beneficial are not limited to those scenarios. Many parents may think that it is in their child (or children)'s best interests not to receive a large lump-sum of inheritance at a young age. A parent may desire that, even though their children are responsible and free of issues like addictions, divorces or lawsuits, the children not receive all of their distributions until they've reached milestones like graduating college, turning 25 or 30, or getting married. 

In any of the situation outlines above, you can accomplish your goals through trust planning. You can choose the event that will trigger a partial (or final) distribution to each child. You can also give the trust's trustee as much or as little discretion as you desire in terms of making certain decisions, like whether to give a child a portion of his/her distribution in advance of the timetable laid out in the trust. When it comes to spendthrift planning or special needs planning, just like most other types of estate planning, there are a wealth of tools available to your estate planning attorney to make sure your plan does exactly what you want on precisely the timetable you desire.


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