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Saturday, October 24, 2015

Legacy Assurance Plan Article: Creating An Estate Plan to Reflect Your Moral and Ethical Values


Summary: For many, our moral and ethical views are some of the strongest perspectives we hold. Your estate plan is one method for living your faith and/or values. Trusts can possibly provide significant benefits as you use your estate plan to aid a person or entity in the furtherance of a religious or charitable mission. You can ensure that your end of life decisions reflect your values by careful planning with regard to your living will and healthcare power of attorney.

The decisions you make in your estate plan are a part of the reflection of who you are. One way to demonstrate your values is through estate planning. These decisions can go well beyond just remembering a values-based charity in the distribution of your assets, but can impact a wide range of elements of your plan.

One straightforward way to bestow this benefit is through including a distribution in your will or living trust that goes directly to the cause of your choice. You might choose to help a church, a church-connected charitable organization or a religious educational institution. Others might prefer to demonstrate their values by benefiting a philanthropic entity that is not tied to any religious organization.

However, you also have other options available, as well. Special trusts, called charitable remainder trusts and charitable lead trusts, may allow you to further the cause of your favorite religious or secular charity while also reducing your tax obligations. Charitable lead trusts can lower your current taxable income, while charitable remainder trusts can lower your potential capital gains tax obligations. For this reason, a charitable remainder trust may be especially useful if you have a charity you wish to aid and you have assets that have appreciated substantially since you bought them (such as real estate or stocks.) It is important that the IRS recognize the charity your wish to benefit, otherwise you may lose the tax-related benefits of your trust.

There are other ways to reflect your values in your plan. You can make some (or all) of the distributions from your living trust or will conditional on the beneficiary making certain choices or acting in a way consistent with your values. For example, you could make a cash distribution to a loved one conditional or his/her pursuing a religious education or you could distribute a piece of real estate to a beneficiary on the condition that the property be used only for the furtherance of a religious mission. You can also instruct that beneficiaries not use the assets they receive from you for anything that contradicts your values. Utilization of an incentive trust (or trusts) may be helpful if you want to incorporate such goals into your plan. 

Finally, if you have strong views, based in your religious or ethical foundations, regarding end of life decisions, it is important to plan for those positions to be followed. You should communicate your preferences to your estate planning attorney and your loved ones, and when choosing an agent to act on your behalf under the power of your living will or healthcare power of attorney, you should strongly consider selecting someone who shares your perspectives and values regarding end of life decisions.

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)




Friday, October 16, 2015

Legacy Assurance Plan Article: Making Estate Plans or Plan Amendments When Faced With Grave Illness


Summary: Many people make the mistake of thinking that they have an unlimited time on this earth. Others are directly faced with the knowledge that their remaining time is very limited. For those in this latter group, they should act swiftly to make sure that they have an estate plan in place and that it is properly updated. They should not let their grave illness stop them from planning, as proof of serious physical illness alone is not enough to constitute an unsound mental state that would invalidate any plans (or plan changes) they make.

Being near the end of one's life can prompt a variety of reactions. For many people, one reaction they experience is a strong desire to put their estate affairs in order. For anyone in this position, this is an urge worth following. Courts have recognized that, even if you are gravely physically ill, you can still make or change an estate plan as long as you have a sound mental state. A challenge to your estate plan based solely upon your physical illness will not succeed in overturning the plan you put down in your estate documents.
 
One recent case exploring these issues came from Maryland and involved the estate plan of a man named Eugene Zook. Mr. Zook created a living trust in 2007. That trust called for his assets to be distributed, upon his death, to his three children -- a fairly typical plan for a parent. The next year, Mr. Zook returned to his lawyer's office. He was seriously ill as a result of cancer. Mr. Zook wanted to (and did) amend his trust. Mr. Zook's amended trust named his daughter, Susan, as trustee and placed the 1/3 shared of another daughter, Mary, into a special trust that would pay out Mary's share in 20 payments over a period of 10 years. This kind of arrangement, often called a "spendthrift trust," can be very useful for beneficiaries who are not good with money or have complicated legal situations that would make receiving large sums of money all at once potentially harmful.

22 days after he signed the trust amendment, Mr. Zook died. Shortly thereafter, Mary sued to invalidate the 2008 amendment to her father's trust. She argued to the court that her father was not of sound mind when he signed the amendment document. The court rejected this challenge. The only proof that Mary had to offer the court was Mr. Zook's cancer. The court's ruling made it clear that evidence of grave physical illness like cancer alone is not enough to show that a person is not of sound enough mind to make or change an estate plan.

Being seriously or gravely ill, even if you know you are seriously or gravely ill, is not a barrier by itself to making, or changing, an estate plan. To the contrary, if you have your mental faculties, you should act very swiftly to make sure that you have a plan in place and that your plan is correctly updated. That way, you can be certain that your loved ones will know what your objectives are for your estate. With that accomplished, you can be sure that the legacy you leave is exactly what you wanted.

Summary: Many people make the mistake of thinking that they have an unlimited time on this earth. Others are directly faced with the knowledge that their remaining time is very limited. For those in this latter group, they should act swiftly to make sure that they have an estate plan in place and that it is properly updated. They should not let their grave illness stop them from planning, as proof of serious physical illness alone is not enough to constitute an unsound mental state that would invalidate any plans (or plan changes) they make.

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)

Sunday, October 11, 2015

Legacy Assurance Plan : Funding Your Revocable Living Trust: Knowing What NOT to Put into Your Trust

Summary: The sum of your estate is much more than just your real estate, financial accounts and other large assets. It also includes many items without ownership titles or deeds that may hold great financial worth or sentimental value. Regardless of an item’s dollar value, if it is important to you, you will want to make sure that it is addressed in your estate plan. With a proper set of estate planning documents with complete instructions in them, both you and the person you’ve selected to manage your estate after your death can have the peace of mind of knowing that the things that mattered to you will go to the people you wanted to receive them.

This time of year is often called the “season of giving.” People seek to bring joy to loved ones by giving presents they love. One variety of such gift might be a new addition to a favorite collection of items, or perhaps a beautiful antique. As you consider your holiday gift-giving ideas this season, it is worth your while to remember that few gifts are more powerful than a gift left to a loved one in your estate. With that in mind, it is worthwhile to take time to make sure that your valuables are properly planned for in the event of your death.

Items of personal property can be easy to overlook sometimes while addressing estate planning, as one focuses on dealing with large items such as homes, vehicles and financial accounts. However, these smaller items often hold great value (whether monetary, sentimental or both,) so it is important to plan for them, especially to ensure that they pass to the person who will cherish them as much as you have.



If your estate plan includes a revocable living trust, planning for these assets works a little different than your large assets. Whereas you house, car or bank account can be funded into your trust by transferring their deeds/titles of ownership over to the name of your trust, funding items that do not have title documents (which can include the family silverware/china to jewelry to antiques) is accomplished using something called “Schedule A.” Schedule A is part of your trust where you list specific items that you are transferring into your trust.

Of course, the use of your Schedule A is not limited to antiques, collectibles or keepsakes. You can also use it to transfer many household items, such as furnishings or electronics (for example, a computer or furniture.) It is important to make sure that you update your Schedule A regularly to make sure that its list of contents is up-to-date and reflects everything without titles that you want to distribute through your trust.   

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Once you’ve fully filled out your Schedule A, the next step for planning for these assets works much the same as if you have a plan that uses a will as the main document for distributing your assets. You simply include a specific paragraph (or paragraphs) stating whom you want to receive each of these assets. As with Schedule A, it is important to make sure to review this part of your plan routinely to make certain that want is in your plan documents reflects what your current goals are. 

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)

Friday, October 2, 2015

Legacy Assurance Plan : Communication and Clarity and Keys to a Successful Estate Plan

Summary: Many things go into making an estate plan succeed. One element is good communication, especially with your loved ones who will be beneficiaries of your plan, along with those who will serve in fiduciary roles like trustees and executors. Another element is having clarity of vision regarding the objectives of your plan, such that you do not find the actions you wish to take in contradiction with (and prohibited by) the planning documents you have in place. 

As the holidays fast approach, many people will visit jewelry stores to explore gift ideas. Anyone shopping for diamond jewelry likely either knows, or will be educated, about the "four c's of diamonds." This is a shorthand phrase for the cut, clarity, color and carat weight of the jewel. There are no "four c's of estate planning," but two c's are definitely essential. They are clarity in your documents and communication with your loved ones.

A recent court case from Michigan points what can go wrong with estate plans sometimes, even with good starts to the planning process. Joseph Brooks established a trust for the benefit of his wife, Edwina, and funded it with $467,000. The trust assets were to be used for Edwina's "health, support or maintenance" during her lifetime. When she died, the remaining assets within the trust were to go to Edwina's son, Charles Walker, and three grandchildren (who were not Charles's children.) Brooks made himself the trustee of the trust.

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During her lifetime, Edwina's trust paid more than $360,000 to finance the educations of the three grandchildren and more than $50,000 to a local Baptist church. Charles, displeased with these payments, sued Joseph, taking the case all the way to the Michigan Court of Appeals, where Charles eventually won. Why was he victorious? Because, according to the court, while paying for the grandkids' graduate degrees and giving a large gift to the church might make Edwina feel good, these payments could not be considered to help Edwina's "health, support or maintenance."  

Communication gaps may have existed within this family. If Joseph meant to allow Edwina to help the church and the grandchildren, he should have communicated this so that the trust agreement could have been written to permit such gifts. It might also have been helpful to communicate this to Charles, as advance communication with loved ones can sometimes stave off lawsuits that would otherwise arise from a beneficiary's surprise and dismay.

On the other hand, it is possible that this plan suffered from problems with another "c", that being clarity with regard to the objectives of the plan. Joseph clearly seemed to begin the estate planning process with the goal of creating a trust that would provide for Edwina's well-being during her lifetime. Only if funds remained in the trust after Edwina died would others, like the grandchildren, receive the benefit of the assets. Nevertheless, after discussing the gifts with Edwina, Joseph made the payments to the church and the grandchildren. In short, by writing the checks to the grandchildren and the church, Joseph as trustee breached his duty to the trust he created. Joseph the trustee and Joseph the trust creator seemed not to be "on the same page."

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