Before we address the specific subject we are going to focus on in this post, we will provide some general background information about the benefits of living trusts. You Retain Control A lot of people assume that you surrender personal control of assets that you convey into any type of trust. The whole idea is to allow a trustee to manage the assets, right? This is true when it comes to irrevocable trusts, and people use these trusts because they want to surrender incidents of ownership … [Read more...] about Do You Need a Will If You Have a Living Trust?
We were told all along that the colder weather would usher in a resurgence of the novel coronavirus, and we have reached that point. Estate planning attorneys always emphasize the fact that anything can happen at any time under ordinary circumstances. People understand this, but far too many of them embrace the “this will never happen to me” mantra. The pandemic has painted a very stark picture that is unavoidable. You can be perfectly healthy on one day and find yourself in the intensive … [Read more...] about Pandemic Shows Importance of Advance Planning
One of the most commonly held misconceptions about estate planning is the idea that you can no longer access or control assets that you convey into a trust. There is some truth in this, because there are irrevocable trusts, and you cannot act as the trustee if you establish this type of trust. However, the revocable living trust is in a different category. You can rescind the trust after the fact, and you can act as the trustee and the beneficiary while you are alive and well. Let’s look … [Read more...] about Why Would You Use a Trust Instead of a Will?
People often make estate planning errors that yield negative consequences. In this post, we are going to look at three of these common mistakes in an effort to raise awareness. Do-It-Yourself Estate Planning The websites that sell generic, boilerplate legal documents contend that you can plan your own estate using their worksheets and downloads. This can seem like a simple, affordable solution, but there are reasons why you may want to consider before you go this route. There are various … [Read more...] about Avoid These Three Estate Planning Mistakes
When you are planning your estate, you may decide that you would like to provide educational opportunities for younger members of the family. This can be the greatest gift of all because you are giving them the ability to achieve their full potential as human beings. 529 Savings Plans A 529 savings plan is the ideal approach for many people. The structure is similar to the Roth individual retirement account. You contribute into the account after you have paid taxes on the income. The growth … [Read more...] about An Overview of 529 Plans
When you’re deciding to whom to leave assets, most people choose their children or other descendants. However, you also need to decide on the “contingent remainder” beneficiary. In other words, who should get your assets if all your other beneficiaries are gone. Read on to learn more about this often-confusing concept. … [Read more...] about What’s an “Atom Bomb” or “Contingent Remainder” Beneficiary?
When you’re deciding how your assets should be divided at death, sometimes dividing them equally is the appropriate choice. But, sometimes it’s not. Fair isn’t always equal or vice versa. Read on to learn more, including how to avoid a challenge if you choose an unequal division among your children. … [Read more...] about Fair Isn’t Always Equal and Vice Versa
The two different types of individual retirement accounts that are widely utilized are the traditional IRA and the Roth individual retirement account. There are similarities between them, but there is one major difference, and we look at the details in this post. Traditional Account Rules You make contributions into a traditional account before you pay taxes on the earnings. This is beneficial in the near term, because the contributions reduce your taxable income. On the flipside, … [Read more...] about Do IRA Beneficiaries Pay Taxes on Distributions?
If your estate is very valuable, you have to be concerned about estate taxes. We are going to take a look at tax efficiency strategies, but first, we will explain the parameters so you know what you are up against. Federal Transfer Taxes The estate tax was repealed for 2010 due to provisions contained in the Bush era tax cuts. In 2011, a new piece of tax legislation went into effect that set the estate tax exclusion at $5 million. That figure adjusted for inflation was retained through the … [Read more...] about How Can I Reduce Estate Tax Exposure?
The President’s bout with COVID-19 demonstrates the importance of keeping planning current. A Health Care Power of Attorney appoints someone to make decisions for you if you’re not able to do so for yourself. An Advance Directive expresses your wishes regarding end-of-life decisions. Read on to learn more. … [Read more...] about Staying Current is Especially Important in the Pandemic – Part 2