Dec 012016
 

I recently found the article linked below encouraging everyone to have a will.  I thought it was an interesting and valuable read, and highly recommend it.

While the author suggests using an online resource as an option, I discourage doing so.  The online will making software does not provide legal advice, and may not accurately or sufficiently address your personal needs and estate planning goals.  While hiring an attorney may cost more, in the long-term it is worth it to ensure everything is done correctly.

http://www.nextavenue.org/americans-ostrich-approach-estate-planning/

 

 December 1, 2016  Posted by at 4:47 pm No Responses »
Nov 132015
 

I recently wrote a guest post at creditforums.com about the basics of estate planning.  You can see that post here.

As I have mentioned before, it is important to have an estate plan regardless of whether you have a taxable estate.  And most people do not have a taxable estate under the current tax laws.  For 2015 each individual has an exclusion amount of $5.43 million.  That means that assets up to that amount are not subject to Federal estate tax.  In 2016 that exclusion amount is increasing to $5.45 million.

However, there are a lot of considerations in estate planning beyond the tax consequences.  The article at creditforums.com provides a great, simple explanation of why estate planning should be done.

 November 13, 2015  Posted by at 1:59 pm No Responses »
Sep 282015
 

There are a variety of trusts available as estate planning tools.  The two most common trusts for basic estate planning are testamentary trusts and revocable trusts.

Testamentary Trusts

A testamentary trust is a trust that is created by a will.  While the will sets forth the terms of the trust, including beneficiaries, trustees and distribution terms, the trust does not exist until the will is executed.  This type of trust is often used when leaving a bequest to a minor, thereby allowing the grantor to establish the requirements for the minor to receive the trust assets.

Revocable Trusts

A revocable trust, also referred to as a living trust, is created by an individual for their own benefit during their life.  It can be changed or terminated by the grantor at any time during the grantor’s life.  The grantor also has the authority to add and remove assets from the trust at will.  Revocable trusts will set forth what happens to the assets upon the grantor’s death, similar to a will.  It can also create new trusts upon the grantor’s death.  Assets held in a revocable trust are not part of an individual’s probate estate, and therefore pass more easily to the named beneficiaries.

These high-level explanations show some of the basic differences between testamentary trusts and revocable trusts.  There are a lot more considerations to take into account when determining the best way to structure an estate plan.  Please consult an estate planning attorney to assist you in setting up your plan, to ensure all of your needs are met.

 September 28, 2015  Posted by at 2:40 pm No Responses »
Nov 062014
 

There are a lot of do-it-yourself legal websites available.  And they are very appealing to a lot of people.  You can create an LLC for $159, or draft a Will for $99.  So, why should you hire an attorney when you can do it simply and easily, and for a lot less money?  Your situation is simple, isn’t it?

A website provides no personalized service.  There is no one advising you, based on your situation and your circumstances.  And no two people or families are the same.  There are different needs and different goals when it comes to estate planning.

An estate planning attorney will sit down with you and discuss your goals, similar to a financial planner.  A “simple” situation may be more complex that you think.  Do you have fiscally irresponsible parents that may need to be taken care of financially in the event something happens to you?  But you also want to make sure your children receive the bulk of your assets?

A website will not help you decide the best person to serve as your Executor, nor will it encourage you to name an alternate.  A website cannot help you work through a variety of situations.

What about the unique needs of blended families?  A married couple who each entered a marriage with children, who then have more children together, will have planning needs that cannot easily equate to a formula found on a website.  Custody and guardianship are concerns.  There are also financial concerns to ensure everyone’s needs are met.

The internet has made our lives much easier.  However, easy is not always the best method.

 November 6, 2014  Posted by at 5:33 pm No Responses »
Jul 302014
 

I am often asked what the difference is between an Executor, a Trustee, a Guardian.  I’m going to do my best to provide an easy-to-understand explanation of each of these important roles.

Executor

The Executor is the person who literally executes your will.  This means that anything needing to be filed with the court is filed.  All the distributions are directed to the correct beneficiaries.  In the event one or more beneficiary is a trust, then this will involve working with the designated Trustee to establish the trust.  In more complex situations, it is recommended that the Executor work with an attorney who focuses on estate administration and probate.

Trustee

If there are any trusts created by your will, then you will likely need to designate a Trustee.  This is a person or institution who is responsible for managing the assets of the trust, and making sure all distributions are made in accordance with the terms set forth in the trust.  When selecting an individual, I often recommend choosing someone who is financially savvy.

There are different opinions on whether it is better to have an individual or an institution to serve as Trustee.  I generally recommend selecting an individual.  If that person is not comfortable managing the money, they always have the option to hire a money manager or financial planner to assist them.  However, when it comes to discretionary distributions, I find the personal relationship maintained with an individual Trustee is more beneficial.

Guardian

The Guardian is the person you are selecting to raise your children.  Your children will be living with this person (or people), and become a part of their family.  I find that selection of the Guardian is often the most difficult decision in the estate planning process, especially for people who do not have close family members upon whom they can rely.

I am often asked if the Guardian and Trustee can be the same person.  The answer is yes.  However, you may not want the same person taking on both roles.  You may select someone for Guardian whose values you share, and who you believe who do the best job of taking care of your children, but this person may not make the best financial decisions.  In that case, having a different person as Trustee will serve to protect the assets.

These three roles are all very different responsibilities, but each one is important when planning.  Take your time, discuss your options with your spouse, and ask your estate planner to assist.  While it is important to have a will, you should never designate people to take on any of these roles unless you are confident that is the person you want in that position.

 July 30, 2014  Posted by at 11:21 am No Responses »