Showing posts with label estate plan. Show all posts

Friday, January 4, 2019

Unprepared for a lifetime? If so, you lack a life (estate) plan

Man standing in front of a wall with images everywhere showing his lack of planning

Unprepared for a lifetime? If so, you lack a life (estate) plan

by Tom Alberts Jan 4, 2019

Summary: A comprehensive estate plan addresses many of the events and challenges that take place during one’s lifetime. Estate planning, meanwhile, remains a tough topic for people to consider and often is misunderstood as strictly dealing with issues involving death and wealth distribution.

Estate planning continues to get a bum rap.

For many people, it’s a low priority and depressing duty reserved for the old and dying. It’s an undertaking only for the rich, they wrongly reason. They’d prefer to avoid the subject.

In truth, estate planning is a lifetime process of being prepared for life. It’s about asserting control – in advance – of events that happen as life goes on. Despite its doom-and-gloom reputation, planning is much more about you while you’re living and how you wish to impact the lives of others.

The world of estate planning, its reputation notwithstanding, can be a happy place. It can soothe the sting of unforeseen events and eliminate the need to force loved ones to make difficult decisions on your behalf. By planning for your life, you can control decisions about your health care and finances ahead of time in case an accident, illness or tragedy leads to your incapacity or untimely demise. Those well-planned decisions can remove the agony of uncertainty, burdens on family and lack of control in times of a health crisis or loss of a loved one.

Indeed, the notion that estate planning is death-centric is a doomed proposition, experts agree.

“Gone are the days of planning for your death. It’s time to plan for your life,” says attorney and Forbes contributor Daniel Scott. “Rather than have a legal framework to protect and distribute your assets at death, you need a legal framework that propels you toward achieving your greatest success and living a happy, fulfilled life,” Scott says. “Instead of focusing on death, we need to focus on life and to view our jobs as advisers who navigate the legal road toward your happiness and human fulfillment. Otherwise, what’s the point?”

For bizjournals.com contributor Denise Bendele, a better term for estate planning is “lifetime planning.”

“Every day, thousands of people have unexpected accidents or health events. And death is not the only potential outcome,” Bendele says. “What if you survive? What if you are in a coma or are incapacitated? Can funds be accessed to ensure your bills are paid and your family fed? Can income tax returns be filed? Will your businesses continue to operate uninterrupted? Failure to plan can result in expensive and unintended consequences.”

Fear, however, leads to procrastination, according to a recent Caring.com survey on estate planning.

“Planning for a possible tragedy is an uncomfortable process that forces people to answer some tough questions,” Caring.com reports. Nearly a third of respondents believe that planning documents are needed only “for those with substantial wealth or complex finances.”

The survey found that 60% of adults in America lack a simple last will and testament, and only 36% of parents with children under age 18 have one. A will, which is just one of several recommended planning documents, has two primary functions (distributing assets and nominating guardians of minor children) and does nothing to address life events.

“It’s only unimportant until you need it, and then it’s too late because you don’t have it,” Penny Vance, fiduciary managing director at PNC Wealth Management, told Forbes.

Think of a lack of planning as distressing, not depressing, says Simple Money author and financial planner Tim Maurer.

“We avoid the discussion because it involves a topic we’d rather not consider, but while the probability of your imminent passing is low, the damage done from a lack of estate planning is so significant that it demands our immediate attention,” Maurer told CNBC.

Have you planned for life?

Fear may cause procrastination, but it’s also a factor that might motivate people to engage in life and estate planning.

Experts say there are four planning documents, at minimum, every adult should have in place: a will, an advance directive for health care, a health care power of attorney and a financial power of attorney. Those legal documents give your self-appointed representatives the authority to follow your instructions and act on your behalf regarding medical treatment, guardianship, care of minor children and management of your finances if you become incapacitated or terminally ill.

It also can be frightening to know that a mystery person or institution, appointed by a judge in a so-called “living probate” proceeding, could be empowered to make intimate health care and financial decisions on your behalf. Those who lack planning documents – such as powers of attorney or revocable living trusts that set forth their wishes in lieu of a judge’s orders – put themselves at risk of being placed under a court-imposed guardianship if they become incapacitated.

Failure to plan can leave the decision of guardianship in the hands of a stranger who doesn’t know you, your intentions or your family. In many well-documented cases, a lack of planning has led to the nightmare of unscrupulous guardians having total control over an individual’s most basic day-to-day freedoms. The guardian, not the ward, has final say on all matters from food and clothing choices to spending money and visiting family and friends.

While lack of control is one negative aspect about living probate, lack of privacy is another major disadvantage of the process. Guardianship proceedings are a matter of public record in which details about your assets and medical condition are available for anyone to see, including nosy neighbors, meddling outsiders and financial predators.

A revocable living trust is another way to ensure that you or your representative manage your assets, not an unknown agent of the probate court. Trusts have many purposes. One is to control and safeguard property and assets during your lifetime. As owner and grantor of a living trust, you appoint one or moresuccessor trustees to seamlessly manage the assets of the trust on your behalf – according to your detailed instructions – in the event of your incapacitationor demise. Your trust and power of attorney instructions can be as specific as necessary to give you control over how your assets are used for your livingarrangements, health care and other needs.

Those who lack even a simple last will and testament should dread a lack of control that looms in their future. The assets of those who die without a will are distributed under state intestacy laws based on a predetermined hierarchy of blood relatives. A court – not you – decides who administers the estate and who gets what. Your legacy is determined by state law, not your own personal liberty or preferences.

When should I update my estate plan?

Estate planning has a lifecycle of its own. Planning documents need to reflect changes in life as time goes on. Legal paperwork and other documents should be reviewed regularly and adjusted.

Whenever there’s a change in the family dynamic or a major life event, plans need to be updated, emphasizes Kansas-based estate planning attorney Kyle Krull. “Consequently, you should regard your life and estate plan as a lifetime process, not as a one-and-done event.”

Here are 10 common changes in life or activities that Krull says could necessitate revisions of planning documents:

Marriage remarriage or divorce.
Death of a spouse.
A substantial change in estate size.
Death or incapacity of an executor, trustee or guardian.
Move to another state.
Acquisition of property in another state.
Birth or adoption of a child or grandchild
Change in beneficiary attitudes
Change in insurability for life insurance
Financial irresponsibility of a child

“Life and estate planning is about much more than an after-death plan for the distribution of your earthly things,” Krull advises. Instead, he says, your focus should be planning to protect yourself, your loved ones and your assets “whether you are healthy, incapacitated or deceased.”

How can I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life’s contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

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:
Legacy Assurance Plan
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
info@legacyassuranceplan.com (email)
#legacyassuranceplan@assuranceplan

Monday, October 8, 2018

Without regular reviews of your estate plan, here’s how a ‘paperwork nightmare’ could ruin your legacy

Without regular reviews of your estate plan, here’s how a ‘paperwork nightmare’ could ruin your legacy

by Tom Alberts Oct 8, 2018

Summary: The experience of a Missouri man who nearly lost his home in a tax sale because of a planning oversight – a failure to review and update documents – provides a valuable lesson. Life events such as a family member with special needs, deaths of loved ones, illness, incapacity, marriage, births and divorce require that you make sure your plans are adjusted accordingly. As life goes on, planning documents – such as your will, trust, beneficiary designations and powers of attorney among them – should be revised as necessary by a qualified attorney. Otherwise, you could wind up like the guy in St. Louis who had to fight to stay in his residence and off the streets.

A “paperwork nightmare” nearly cost a Missouri man his home of more than five decades, according to a TV news report in St. Louis.

It’s a dreadful estate planning slip-up that could happen to anyone.

“His story will have you double-checking some important paperwork all of us should be filling out,” says the report that aired Oct. 1, 2018. The story highlights an important lesson about unforeseen life events and how they can lead to devastating estate-planning blunders.

The camera focuses on the original 1963 certificate of title for the property, a modest home in suburban St. Louis. The yellowing document shows the property was clear of liens and encumbrances – other than the $8,000 mortgage at the time – and that no taxes were owed when the title was issued.

Donald Eckhard, 56, has lived in the quaint red-brick home in a quiet neighborhood since he was 2. Donald tells the interviewer he’s considered “not of legal mind” because of a brain injury he suffered as a teenager. His status as a special-needs adult, he says, leaves him between “a rock and a hard place” when it comes to managing his own affairs.

Recently, a letter from the collector of revenue arrived in the mail, and its message was serious. It was a stunning notice: The property had been sold because of delinquent taxes, and the purchaser sought possession of the property. Donald owed three years of back taxes and penalties.

When Donald’s father died in 1991, his mother, Mary, established a living trust to support Donald financially after her eventual death. Mary, who died about three years ago, had nominated her sister, Donald’s Aunt Sarah, as her successor trustee, giving Sarah responsibility to take over management of Donald’s financial affairs. One of Aunt Sarah’s obligations as successor trustee for her special-needs nephew was to pay his property taxes.

An unexpected life event, however, prevented Aunt Sarah from conducting her fiduciary duties, putting Donald at risk of losing the only home he has ever known. Aunt Sarah developed Alzheimer’s disease.

A family friend learned of Donald’s plight and reached out to help. Meanwhile, the deadline to pay the back taxes and penalties to redeem the property quickly approached. That’s when the friend contacted the TV station for assistance.

Where would he go if he lost his home? “The street I guess,” Donald tells a reporter. Part of the legacy Donald’s mother left behind was a home and financial support for her son. Now, her plan and his support were in serious jeopardy.

Even though Donald only collects $490 monthly in disability income, he doesn’t lack resources to pay his tax bill. Because Donald requires someone to manage his financial affairs, he was unable to access bank accounts in his name that hold the proceeds of his inheritance. The problem: Aunt Sarah and Donald’s mother failed to nominate a successor trustee for Donald, and there was no living person assigned to handle his finances.

Unfortunately, by the time Aunt Sarah became ill with dementia, it was too late for a family discussion and to update the estate plan and transfer her duties. As a result, Donald’s trust funds were inaccessible to him – or anyone else – and the taxes went unpaid. Delinquent taxes led to the tax sale, potentially driving a man into homelessness over a paperwork nightmare.

The good news is that the helpful friend contacted a qualified attorney to investigate Donald’s situation. The lawyer was able to petition the court to serve as Donald’s trustee. The back taxes were paid before the deadline, and Donald was able to remain in his home. It was a close call and a tangible example of why proper planning and reviews are required to avoid a document-driven disaster.

Are you prepared for unexpected life events?

You’ve made a significant achievement if you have a comprehensive estate plan with a last will and testament, a revocable living trust, powers of attorney for health care and finances, an advance health care directive, appropriate beneficiary designations for financial accounts and insurance policies as well as funding strategies to deal with the possibility of long-term care.

But problems arise when those carefully crafted plans get hidden in a filing cabinet somewhere, out of sight and out of mind, ignored and neglected. Unexpected life events can upend even the best-laid plans that are out-of-date and not revised to keep up with the times.

In Donald’s case, his mother’s estate planning oversight – not planning for incapacity and not naming an alternate successor trustee to handle Donald’s affairs – was easily avoidable. Her mistake is an example why it’s important to review and update your will, trust, powers of attorney, advance health care directive and beneficiary designations regularly and following major life events. The law requires modifications to your plan be done while you are of sound mind. Before you become seriously ill or incapacitated, you should utilize important estate planning tools that protect your interests, honor your intentions and manage your health care and finances. For example, your trust can be structured so that your successor trustee and your hand-picked agents with powers of attorney can oversee your affairs and meet your obligations to others if you wind up in a situation like Aunt Sarah and Donald.

If there is a new member of the family, the death of a loved one or the acquisition or disposition of a significant asset, it’s time to review and amend provisions of your will, trust and other documents as necessary. A new baby means there’s a new beneficiary with a new universe of considerations. You may want to establish a trust to address a child’s special needs (like Donald’s), future education and financial well-being. You can appoint successor trustees and alternates to manage the trust in your absence and clearly state your intentions in the trust document.

Perhaps you’ve recently discovered a future beneficiary of your trust has gambling issues, a substance abuse problem or just a huge hole in his pocket. You may want to add spendthrift safeguards in the language of your trust document. Maybe potential heirs are being sued or face legal judgments. Their future inheritance could be exposed to a successful claimant unless a trust is properly revised. A blended marriage or complicated divorce among any of your beneficiaries is another reason to review and update your plans.

Paperwork is vitally important. That’s especially true for trusts. For a trust to be valid, transferred assets must be fully “funded” into it. The documentation must be in order, reviewed and updated to reflect life’s changes. When transferring ownership of an asset into a trust, the complexity of the procedures varies. For example, to merely open a checking account for a trust, banks usually require copies of the trust instructions, the notarized signature page, amendments, a description of trustee powers and the list of beneficiaries. Formalities need to be followed for the host of other assets – savings and retirement accounts, real estate, stocks, bonds and other investments among them.

Conclusion

Fortunately, membership with Legacy Assurance Plan provides valuable resources and guidance to develop comprehensive estate plans that take life’s contingencies into consideration and leave a positive impact for generations to come. Periodic reviews are part of the important services Legacy Assurance Plan offers. There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come.

Saturday, July 21, 2018

Some new faces in the family? Time to rethink your estate plan

Some new faces in the family?
Time to rethink your estate plan

by Tom Alberts July 21, 2018

Summary: Adoptions create special considerations for families when it comes to estate planning. Intestate succession laws require that the adoption process be finalized before children can establish inheritance rights with their non-biological families. Other situations, such as same-sex marriage and advances in reproductive technology, require modern-day families to make sure their children are considered rightful heirs.

Sometimes, families expand in nontraditional ways through adoption or when stepchildren become part of a blended household.

While the addition of an adopted child or the welcoming of a stepchild into a newly formed family can be a reason to celebrate, those events also require re-evaluating your estate plan.

Intestate succession laws in the United States determine who inherits property when someone dies without a last will and testament. Those laws, many of which were initially written a century ago, take a traditional approach to defining the family unit.

Traditional legal definitions for words like “child,”“issue” and “heir” don’t always fit in a society that has made unimagined advances in reproductive technology and whose relationships have diversified widely from the nuclear families familiar to our top-hat wearing forefathers. But many estate plans continue to use those terms to determine inheritance.

As a result, it’s important that wills and trusts are created with modern families in mind. It’s also critical that those legal documents employ the proper terminology to protect your legacy and your heirs – whether they are children adopted by same-sex couples or offspring conceived in test tubes or by a surrogate mother.

State laws of descent and distribution generally refer to “child” as first generation only. “Issues” are defined as lineal descendants of the same bloodline. An “heir” is someone who either was conceived by or birthed by the individual who has died or is the child of such an heir.

In the law books, a relationship by “blood” is the common thread that ties together the rights of inheritance, but there are important exceptions. Modern families, however, are very often not limited to such “blood” relationships.

Intestate succession laws generally treat adopted and biological children equally as long as the adoption process – which can take months to years to complete – is finalized. A child with an adoption that is still in progress has not secured inheritance rights and must be named in a will or trust of an adoptive parent or parents to be protected as a beneficiary.

Also keep in mind that stepchildren don’t have rights of inheritance under a new stepparent unless the new stepparent legally adopts them.

Adoption by a new stepparent, however, can impact the child’s ability to inherit from their biological parents and biological relatives. Basically, it’s one or the other – the child is either the rightful heir of the biological parent or the adoptive parent. The children’s inheritance rights are linked to the adoptive parents and severed from the birth parents once an adoption is official.

ARE YOU IN A ‘MODERN FAMILY?’

A different scenario arises in second-parent or co-parent adoptions, which often take place when an unmarried person adopts a partner’s children without termination of the other partner’s parental rights. In some states, according to the National Center for Lesbian Rights, the second-parent adoption procedure can be utilized by same-sex parents. Other states limit or prohibit adoption by unmarried LGBT individuals and couples.

Married same-sex couples, however, have the same adoption rights as traditional couples, the organization says, but caution is urged.

“It is legally advisable for non-biological parents to get an adoption or parentage judgment to ensure that their parental rights are fully protected no matter where they move or travel to, even if they are married, in a civil union, or a registered domestic partnership,” the NCLR advises.

Advances in reproductive technology and the legal acceptance of same-sex marriage have made second-parent adoptions an important part of estate planning.

Consider the situation involving Lyndsey D’Arcangelo of New York, who wrote a commentary for NBC News about her experience with second-parent adoption as a same-sex parent. In D’Arcangelo’s case, her wife gave birth to a child via artificial insemination.

Despite their legal same-sex marriage, D’Arcangelo was left off the birth certificate as the baby’s legal parent.

“In same-sex couples, where only one member of the couple can donate biological material at a time by default, the legal status of the non-biological parent is in question,” D’Arcangelo writes. “In New York State, the non-biological parent in every same-sex couple that conceives via in vitro must go through a second-parent adoption if both parents want legal rights to that child.”

In other cases, second-parent adoptions can enable a child to be adopted by a stepparent or another adult while preserving ties to existing birth parents. Often, the intention is to create a new parental relationship while preserving ones that previously existed. Such an adoption would require consent of the birth parents.

Estate planning also is critical for unmarried couples who want the nonparent to have custody should the parent die or become incapacitated or if nonparents want children to inherit from them. A parent in an unmarried relationship can grant power-of-attorney authority in a will that allows the nonparent to act in the child’s behalf if the parent is incapacitated.

In those situations, experts suggest both partners should change their wills. The parent’s will would name the partner as guardian; the nonparent’s will would list property to be left to the child as a beneficiary. It’s also recommended that you name a guardian familiar with your family’s needs and circumstances and clearly state your intentions in your will and in a living trust. Also, the creation of a trust may be a good option to protect an adopted child’s interests and ensure assets benefit the child, experts say.

Adopted children also present other considerations for parents. For example, parents may want to include special provisions in wills and trusts when a foreign-born child is adopted. Parents can provide for an adopted child to visit his or her native country and be exposed to native culture.

WHO WILL TAKE CARE OF YOUR CHILD?

Keep in mind that adopted children are no different from biological children when it comes to considering a supplemental-needs trust for youngsters with disabilities. Parents also should ponder the multitude of life’s scenarios that can arise. For example: What if both parents die at the same time in a car accident?

The nomination of a guardian in one’s will can deal with such a tragedy and other unforeseen situations.

“It’s better to nominate an individual as a personal guardian; if you name a couple and they split up, what happens to the child? Be sure to consult with the person you name to be sure he or she wants the job, and name an alternative guardian in case your first choice should have a change of heart or die before the child is grown,” according to the American Bar Association.

A property guardian is another appointment to consider making in a will, the ABA says. Generally, the property guardian is the same person as the personal guardian.

“You can appoint two different people to manage the child’s money and personal affairs, but be aware that conflicts can arise if you split authority this way,” the ABA advises. One exception may be if the property guardian lacks financial expertise, a separate guardian for personal and financial affairs could be considered.

There are several other factors and real-life situations to consider concerning adoptions and estate planning. Fortunately, membership in Legacy Assurance Plan, which educates its members on a variety of estate planning options and provides access to numerous resources to achieve planning objectives, can assist families in making important decisions that improve lives for the next generation and beyond.

Monday, February 26, 2018

Choosing Successor Trustees for Your Living Trust

Summary: A living trust can be a powerful part of your estate plan. Making sure you select the right people to serve as your successor trustees is a vital part of giving you an optimized estate plan. Whether you name people to act individual or as a group is something you should decide based upon the relative strengths of each person and the ability of the group to work together.

President Theodore Roosevelt once said that, “Nothing in the world is worth having or worth doing unless it means effort.” This is true of estate planning. Anything worth doing, and an estate plan is definitely worth doing, is worth expending the effort to do right. That will mean taking the time to weigh your options carefully and make several very important decisions.

Once you’ve decided to get a plan, you’ll have to decide what type of plan meets your need. If you have decided to avail yourself to the benefits of avoiding probate, then you will have to make several more decisions about your living trust. One of the most important decisions you’ll need to make about your living trust is who will serve as your successor trustees.

First off, you’ll need to decide how many people you want to serve as your successor trustees. It is generally a good idea to make sure that your trust has more than one successor trustee named in it. With too few successor trustees named, you run the risk that, at the time that you need a successor trustee to step in and begin managing your trust assets, everyone you’ve named will be dead or otherwise unable to serve. It is generally a good idea to make sure that have at least one successor trustee and one alternate successor trustee.

Next, you will have to decide who is best suited to perform this task. Being a successor trustee is not just an honorary designation, it is a real position with real responsibilities. It will be important for you to make sure that you name someone who has the time, the knowledge and/or experiences, and the willingness to carry out the tasks of a trustee faithfully. It is important not to name someone simply because they are a close relative (like a child.)

Another thing you’ll need to consider is whether or not to have multiple people serve as co-trustees. Having multiple co-trustees serving together has both its positive and negative sides. On the positive side, having more than one person reduces the possibility of misconduct. A sole successor trustee has more unfettered access and control, and therefore more ability to commit misconduct. On the other hand, having multiple co-trustees can increase the possibility of disagreement and, potentially, gridlock. If you, for example, name your four children as your co-trustees and a majority of the four cannot agree, then action cannot be taken.

What should you take away from all this? You know the people in your life best. You know whether your children can work together effectively and cooperatively. You know whether you have someone in your life whom you can trust to manage the assets of your trust after you cannot. With your input, an experienced estate planning attorney can help you make sure that you have the lineup of successor trustees you need to make sure than your plan continues to function smoothly even after you cannot manage it yourself.

This article written and published by:

Legacy Assurance Plan

8039 Cooper Creek Blvd

University Park, Florida 34201

844.306.5272 (Phone)

info@legacyassuranceplan.com (email)

@assuranceplan

#legacyassuranceplan

Click Below To See Other Legacy Assurance Plan Related Sites:

https://www.facebook.com/legacyassuranceplan

http://legacyassuranceplan.tumblr.com/

https://twitter.com/AssurancePlan

https://www.linkedin.com/company/legacy-assurance-plan?trk=biz-companies-cym

https://plus.google.com/u/0/b/108736377719628241578/

https://www.youtube.com/channel/UCx9HBYFIYdohfnrfW_XRkIQ

Monday, February 19, 2018

Business Owners | Plan Today to Help Ensure the Continuity of Your Business Tomorrow

Summary: If you are a small business owner, you may have spent your entire adult life sweating and slaving, brainstorming and stressing about ensuring that your business not only survives, but flourishes. For some, the historical legacy of that business may cover even more than your lifetime, possible spanning multiple generations. With all that effort, ingenuity, care and tradition on the line, why take a chance of letting everything fall into chaos when you pass? By planning ahead through proper estate planning, you can ensure that everything you’ve worked a lifetime building will continue to grow after you’ve gone just as it has during your years.

Successful business people have many traits in common. If you’re a business owner, chances are very high that you’re passionate about what you’ve built, you’re highly self-motivated and you have keen sense of vision. All of these traits should make you very driven to ensure that you get an estate plan and that the estate plan you acquire includes components in it that will protect your business from the drag of uncertainty and instability that could plague your business in the weeks and months after your death if you don’t plan.

With a proper estate plan, you can have confidence that your business (whether it’s a retail/service business or another type of endeavor like farming) will avoid this “doomsday” scenario of chaos after you die. A proper estate plan can help you protect your business in so many ways. In terms of the time period following your death, your plan can ensure that your wishes and preferences will be honored.

Your estate plan can include a succession plan that dictates what should happen to the ownership of your business after you die. There are many businesses where an owner or co-owner might want to dictate what happens to his/her ownership interest after death. Perhaps your business is co-owned by a small group of people. Alternately, perhaps you are a sole owner but you have a key employee you’d like to take over the business after you die. Either way, without proper planning, your ownership interest could pass in ways you don’t want. Your business could, for example, go to your child who, while responsible and loyal, has no familiarity or interest in your business. This could cause disorder, instability and harm to your business.

However, through proper estate planning, you can facilitate your goals and minimize the risk of problems. You can create what’s called a “buy-sell” agreement, which can facilitate the continuation of your business in various ways. Whether you want your ownership to pass to a new owner or to your existing co-owners, a buy-sell agreement can assist with that. Additionally, just like with your personal estate planning, trusts and insurance can help with your business-related estate planning. A life insurance policy placed inside an irrevocable life insurance trust, for example, can be one useful way to addressing liquidity issues that might otherwise exist when it comes time for the people you want to purchase your ownership stake.

Other trusts can also be helpful. If, for example, you want to transfer your interest to your children while at the same time retaining an income for yourself, this can be accomplished with trusts like the grantor retained annuity trust (GRAT) or the grantor retained unitrust (GRUT.) While those names may sound intimidating, they simply represent tools in your estate planning attorney’s toolbox that can make sure that both your individual and business are realized in the most efficient and beneficial way possible, facilitating the succession plan you desire while also maintaining your personal financial stability.

This article written and published by:

Legacy Assurance Plan

8039 Cooper Creek Blvd

University Park, Florida 34201

844.306.5272 (Phone)

info@legacyassuranceplan.com (email)

@assuranceplan

#legacyassuranceplan

Click Below To See Other Legacy Assurance Plan Related Sites:

https://www.facebook.com/legacyassuranceplan

http://legacyassuranceplan.tumblr.com/

https://twitter.com/AssurancePlan

https://www.linkedin.com/company/legacy-assurance-plan?trk=biz-companies-cym

https://plus.google.com/u/0/b/108736377719628241578/

https://www.youtube.com/channel/UCx9HBYFIYdohfnrfW_XRkIQ

Friday, February 9, 2018

How Court Cases Can Offer Lessons in ‘What Not to Do’ in Estate Planning

Summary: Others’ estate plans, especially those published in legal opinions, can be very instructive. They can, in a lot of circumstances, offer very helpful lessons in what NOT to do when it comes to estate planning. Whether it is a plan that is less than complete, the absence of any plan at all or a plan that has documents that are in conflict with one another, the stories of others’ problems that end up in court can help remind you to make sure that you have a plan that is complete, consistent and optimized to meet your needs.

When court cases are published in the law books, they help judges in future cases to make decisions that follow the precedents established by those cases that came before. Estate planning court cases serve an even greater benefit. Many estate planning court cases can provide valuable lessons to anyone who has created, or is considering creating, an estate plan. While some cases involve plans that worked well, unfortunately a lot of cases are the result of planning gone wrong. Much like some TV shows teach viewers what NOT to do when it comes to anything from cooking to home design to clothing choices, a lot of estate planning rulings are the “what NOT to do” stories of estate plans that went awry.

Take, for example, the estate of Leeanna, a woman who lived in the Tacoma, Washington area. Leeanna had four children and a husband, Jim, all of whom survived her when she died in 2012. When Leeanna died, there was uncertainty about whether or not she had created a valid estate plan prior to her death. The woman’s daughter, Heather, went to court asking a judge to make a legal determination and pronouncement that Leeanna died intestate (meaning that she had no valid estate plan.)

Whether or not Leeanna died intestate or not mattered a great deal because of the nature of the assets that Leeanna owned. In addition to the things Leeanna owned in Washington, there was the family home in Cabo San Lucas, Mexico. After Leeanna’s death, Jim sought to sell the Mexican property. Under the Mexican rules of intestate succession and heirship (meaning the system for distributing assets in estates with no valid estate plans controlling them,) property distributes to a deceased person’s children. So, if Leeanna died with no plan (as Heather maintained,) then Heather and her siblings owned the place in Cabo, Jim had no legal right to that property and he could not sell the home.

Jim argued to the court that it didn’t matter whether or not his wife had a will. According to Jim, both he and Leeanna signed a community property agreement. In some states like Washington, there exists the option of signing something called a community property agreement, which can serve as means for avoiding probate. This document can say that all of a person’s assets are community property, which means that all of the property goes directly to the surviving spouse upon the death of the first spouse. Jim’s argument was that he and Leeanna had such an agreement so, upon her death, he owned everything, including the Cabo San Lucas property.

Eventually the case wound through the legal system and all the way to the state Court of Appeals, with Heather receiving an unfavorable ruling. While it is possible that the result was the one that Leeanna would have wanted, the path taken to go that point was something that was less than ideal.

The case of Leeanna’s estate is a reminder of two key things when it comes to estate planning. The first is the vital importance of making sure that all of your documents work toward the same goal. While this woman may have had only the community property agreement, most complete plans involve multiple estate planning documents. If you have a document like a community property agreement (if your state allows them) and you have a will and you have a living trust, for example, is essential that you review these documents periodically to make sure that they are maintained in a way that they will work together harmoniously to achieve your objectives.

The second is the importance of making sure that you have a complete plan tailored for your needs. If you are someone who owns property in multiple states (or multiple countries,) you may very possibly be someone who would obtain a larger-than-normal benefit from avoiding probate. For example, if you have property in multiple states, you might be someone who would derive a very high benefit from an estate plan that includes a living trust. By working with experienced legal counsel, you can get a plan that will help your family reduce delays, stress and expenses after you’re gone.