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Boulder Garfield County UT estate planning young adults

Estate Planning - Major Aspects of Personal Finance Management

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I had a potential client call me earlier in the week asking me if he needed a will. The caller wasn't married and had no children or grandchildren. He didn't own any real property. All of his bank accounts had payable on death beneficiaries and he owned minimal personal property. He had the perfect plan; nothing was going to pass through probate so he didn't think he needed a will.

Maybe he doesn't need a will. I didn't know exactly since self-help estate planning frequently leads to mistakes or property that doesn't have the proper designations. In this situation a will is prophylactic. It ensures that if a mistake is made or a beneficiary designation fails, that property passes to the intended recipient.

I turned the discussion from planning for death to what type of planning he had for his life. I asked if he had a power of attorney for finances. His answer was no. "Do you have an advanced health care directive (aka health care power of attorney)?" "No."

The lack of such planning concerned me since I knew he didn't have a significant other or children to care for him if he were unable to care for himself. What would happen to him if he had a stroke or suffered from dementia or Alzheimer's? Perhaps his siblings would step in to care for him - but how? They would have to spend his money to set up a conservatorship and guardianship or other court proceedings. These processes take time and money to set up and are expensive to administer.

To help deal with his finances he could execute a springing power of attorney for finances that would give a sibling or trusted relative the ability to manage his finances if he became incapacitated and unable to do so. It's called a springing power of attorney because it only becomes effective upon incapacity. The power of attorney can provide broad powers and sets forth detailed instructions concerning what the designated agent can and cannot do on the individual's behalf. More importantly, it would allow the caller to designate who he wanted to manage his finances - not a judge. Drafting and executing a power of attorney in this situation is relatively inexpensive when compared to the cost of setting up and maintaining a conservatorship.

In Oregon, an advance health care directive would assist the caller by designating a health care agent to make health care decisions on his behalf when he's unable to. It would potentially eliminate the need for guardianship proceedings. The representative can make decisions based on directions that are left in the directive. Among the decisions the representative can make is whether to withhold or remove life support, food or hydration. The advance heath care directive does not authorize euthanasia, assisted suicide or any overt action to end the person's life.

This example is a part of the problem with self-help planning. Although the caller was very thorough with his death planning he didn't give any thought to his life. In this caller's case, life planning was much more important than death planning, but he hadn't given it any thought.

Give us a call if you need additional information or to prepare your estate plan.

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Boulder Utah 9 estate planning pitfalls to avoid

Estate Planning: What to Think About Before Meeting Your Lawyer

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In my estate planning practice, it is not uncommon to meet with a new client who wants an estate plan prepared, but is a bit vague as to what should be included in that plan. Quite frequently, the initial conversation begins with the client saying something like, "I would like a will... or should I have a trust? Do I need anything else?" Actually, those are good questions to begin a discussion.

Most folks recognize that their estate plan should provide for the distribution of their assets upon their death. That, of course, is an essential element of an estate plan, but there is more to consider in a well-designed plan. Prior to meeting with your attorney for the first time you should also be thinking about such things as who you want to handle your affairs should you become incapacitated; whether you would want your doctor to keep you alive should you be near the point of death with little chance of recovery; who you want to have the authority to sign important legal papers for you if you are unavailable; and, who you would want to raise your children if you suddenly die. There is a wide variety of personal circumstances which impact estate planning, but let me offer the following as items you should consider even before you meet with a lawyer to discuss your own estate plan.

Should I have a will or a trust?

This is typically among the first questions posed by clients during an initial meeting. Many are aware that a trust will avoid probate, but that is true only if the trust is properly funded, meaning that all of their assets are transferred into the trust. Not every estate plan needs a trust, however, and it may not be necessary for you to incur the additional cost of having your lawyer prepare a trust, when a will is suitable for your needs. And, contrary to what some folks think, having a trust does not avoid estate taxes.

A trust may be the right choice for you, if it is unlikely that you will acquire more assets in the years ahead. What can often happen, however, is that folks will have a trust established and thereafter acquire new assets that they neglect to place in the trust. Then when they die the assets outside of the trust have to go through probate which defeats the intent of establishing a trust in the first place. So, before deciding upon a trust as the main element of your own estate plan, take some time to consider your future investment plans and major acquisitions.

There are some other advantages to a trust, which might make it the right choice for you. For example, should you become incapacitated, your trustee will be able to step in and manage your assets without having to seek a court appointed conservator. In that sense, a trust document is more all-encompassing and flexible than an ordinary will.

What else should I consider in my estate plan?

Estate planning isn't just about deciding who gets your wealth when you die. It is also about making decisions as to what you want to happen should you become seriously ill or incapacitated.

Every estate plan should include an advance directive, which used to be called a living will. This document allows you to appoint a health care representative to make health care decisions for you, including end of life decisions, when you are unable to do so.

Similarly, we recommend that you give a durable power of attorney to a family member or trusted friend in order to allow your appointed agent to manage your financial and business affairs when you are unavailable or otherwise incapacitated. A durable power of attorney remains in effect so long as you are alive and should provide that it will be effective even in the event of your incapacity.

What about my bank accounts, life insurance and investment accounts?

Careful estate planning should include a review of all of your assets, including checking the beneficiary designations you have listed in your retirement plan and in regard to your investment and bank accounts. With such beneficiary designations, these assets will be transferred outside of the probate process to those persons you have previously designated as beneficiaries on these accounts. It is important that you review your beneficiary designations to ensure that your choice of beneficiaries is in accordance with your current intentions as to disposition of your estate.

A thorough review of your portfolio and consideration of the issues described above before meeting with your estate planning attorney will allow you to realize the maximum benefit from your meeting. It will also help your attorney to focus his or her discussion with you on aspects of the process that are most relevant to your goals and needs.

© Call today for your free initial consultation.

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Bluffdale Utah County UT estate planning 5 year lookback

Estate Planning: Fun For The Entire Family

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To many, estate planning may seem like a process that only the rich have to deal with. You may believe that unless you have a large amount of money, property, or land, you do not have an "estate". In fact, anyone who has anything to his or her name, whether it is a car, a house, land, bank account, or merely a few heirloom possessions, has an estate. Estate planning is designed to give you the chance to have your property and possessions passed on to the people that you wish to have them, instead of leaving the decision up to the state. Without planning, your property could possibly be passed on to certain people or in a certain way that you do not approve of.

Don't Let the Courts Control Your Estate

Creating a will through estate planning allows you to communicate your wishes to your family even after you are gone. A will is a legal document that specifies who you would like to leave your property to. These people are your beneficiaries. It also allows you to specify how you would like your property to be passed on. Perhaps you always expected that you would give your house to your daughter, who lives close by. Or maybe you intend to pass on your treasured tools and garage equipment to your nephew who is a mechanic. You may have already made promises to loved ones to pass on some of your treasured belongings once you pass away.

While you may have made promises to relatives or communicated all of your intentions to your spouse or children, without a will your words of intent will not carry any weight. When you pass away with no will, the court will divide your property according to state intestacy laws. This means that your property may be divided among your spouse, children, and other family members without any regard for your specific wishes, because there was no written proof of what you wanted. It may just be a major misunderstanding on your part, but to the loved ones to whom you made promises, it may seem like scorn and betrayal. They may be left behind thinking that you didn't care enough about them to take the time to write a will.

How a Probate Lawyer Can Help

Don't let your promises and intentions to your family go unfulfilled. Consider talking to a probate lawyer about how you can draft a valid will and protect your estate and personal wishes. A probate lawyer can walk you through the process of drafting a will, creating trusts, taking care of outstanding debts, dealing with greedy or disagreeable relatives, and more. An experienced probate lawyer can serve as your legal advisor to ensure that your intentions are communicated properly and that your property is passed on according to your wishes.

For More Information

To learn more about estate planning and protecting your property from state intestacy, please visit us or give us a call today.

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Bluffdale Utah estate planning lawyer

Estate Planning - It's Just As Much Life As It Is Death Planning

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If you're reading this article, it's probably not for entertainment value. And if you're reading for entertainment, then you're either a masochist or you're actually interested in what I have to say. It could be both, I guess. Whatever the reason, estate planning is an important topic, regardless of your station in life.

So what does it mean to have an estate plan? The better question is: why does it matter? This is not easy stuff. It deals with death and dying and the future. Of course, nobody wants to think about this stuff. But unfortunately, it's the pink elephant in the room. And it's not all that bad, actually.

Generally, an estate plan is a set of instructions that spell out how your property should be managed and distributed during your life and after death. The attorney (yours truly) is basically a conduit that channels your wishes onto paper in a way that make sense and have the most effect. Okay, maybe it's not that simple, but this should give you some idea. The estate plan should be a reflection of your life and vision. And don't confuse the word "estate" with a gated 8000 square foot villa with your initials on the entry gate. Your estate is all that you own in real estate and other assets.

At one point or another, most of us who own property think about what will happen to our property when we die. We think about stuff like, "Who will get my 1984 Honda Civic?" That's a legitimate concern. Nobody is going to want it, but the concern is no less legitimate. But what if you become disabled? And what happens when you get old and feeble minded? There may come a time where we will live out our lives without sufficient mental and/or physical capacity to manage our own affairs. Look, we all know or knew someone who started to "lose it." We can all remember thinking this or saying something like, "hey, is it me, or is Uncle Joe beginning to lose it?"

Enter the estate plan. The estate plan deals with the management of your property and financial affairs. There are two main types of estate plans: one is built around a Will and the other around a Revocable Living Trust. Each has it pros and cons. But as long as you have your wits about you, you can always make changes to the plan along the way. That being said, it's important to have an estate plan in place now because you don't know when you might become the "Uncle Joe."

THE WILL

A Will is the most common document used to specify how an estate should be handled after death. The person or entity designated to receive your property under the Will is called a Beneficiary. The person whose property is to be disposed by the Will is the Testator or Testatrix.

Like a Trust, the Will can set out different instructions, such as who gets certain property or who will be the guardian of Testator's minor child in the event that no parent is alive. It can be used to disinherit someone. It can set conditions on inheritance, such as the requirement that the Beneficiary first reach the age or 25 or graduate from college.

And then there's the dreaded P word - PROBATE. There's no getting around it. When a person dies and leaves property in a Will, probate is the legal proceeding that is used to wind up his or her legal and financial affairs. It's best described as a court-supervised process by where assets are gathered, valued, and distributed according to the Testator's last wishes as stated in the Will.

Probate proceedings are held in Superior Court for the county in which the Testator lived. The Executor (the person who administers the estate) is responsible for protecting a deceased person's property until all debts and taxes have been paid, and seeing that what's left is transferred to those who are entitled to it. Their job includes making an inventory of the estate's assets, locating creditors, paying bills, filing tax returns, and managing the estate assets. Finally, when this is all done, a petition is filed with the court requesting a distribution to the Beneficiaries. The whole process can take many months and sometimes years to complete.

As you can imagine, probate can also be very expensive. The Probate Code sets the maximum amount that attorneys and personal representatives (i.e. executors, administrators, etc.) can charge. As of 2016, the fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000. On top of that, a probate referee is appointed to appraise all of the non-cash items. This person usually takes one percent of the total assets appraised. All of this can add up very quickly. Although it's safe to say that most of us will probably not die with an estate valued at $15 million, the probate process can easily reduce the size of the estate by tens of thousands of dollars.

And of course there's the privacy issue, or lack thereof. When a Will is admitted to probate it becomes a matter of public record, including the details of what your assets are and who's in line to get them. Some may have legitimate reasons for following the probate matter, like a beneficiary's creditor who's looking to collect. Other unscrupulous types may want to know who to bamboozle.

THE REVOCABLE LIVING TRUST

A Living Trust is established with a document, usually a Declaration of Trust or a Trust Agreement. It's basically a relationship whereby property (real or personal, tangible or intangible) is held by one party for the benefit of another. A Living Trust conventionally arises when property is transferred to a separate Trustee to hold for the Beneficiary. However, that's not always necessary.

The person creating the Living Trust is called the Settlor or Trustor (these are synonymous). The Settlor appoints a Trustee to manage the Trust assets. The Trusee holds legal title to property for the benefit of another, also known as the Beneficiary. Although the Beneficiary does not own legal title to the property, he or she is said to own beneficial title. So you can imagine that the Trustee cannot do anything with the property that does not benefit the Beneficiary, like sell some off and pocket the money. It may be easier to think about a Trust like a Corporation. The Trustee is the CEO and the Beneficiaries are the shareholders. And it's not uncommon for Trustee to also be a Beneficiary, although it's advisable that a Co-Trustee be named as well.

A Living Trust should usually be accompanied by a Last Will and Testament, also known as a "pour-over will." The Will should say that property that is outside of the Trust is to be distributed to the Trustee of the Trust when the Testator dies. As long as the property outside of the Trust is valued at less than $100,000, probate can be avoided. The benefit is that property not previously placed in the Trust will get "poured" into it. Even if the property exceeds $100,000 and has to go through probate, it will eventually be distributed according to the instructions of the deceased instead of being distributed according to California law. It may also be a good idea to name the same person to be both the Executor of the Will and the Trustee of the Trust, since he or she will dealing with the same property.

WHAT DOES THIS ALL MEAN?

So what's the point of all of this mumbo jumbo? Well, just that it's easy to overlook the necessity of a proper estate plan. A Living Trust helps to protect you, your assets, and those people and/or entities who you want to leave your assets to when you're gone.

A good reason to create a Living Trust is to keep your estate plan private. Unlike a Will and probate, the Living Trust is a private contract between you (the Settlor) and the Trustee. It does not need to be filed with the county. The only way it can become public is if a dispute arises and someone files a lawsuit, which is possible.

Another major benefit of a Living Trust is that it has the ability to protect you in the event that you become disabled. The Trust can specify how your incapacity should be determined, how you should be taken care of if you're deemed disabled, and who will be able to manage your property if you can't. A Living Trust is written so that your Trustee can automatically jump into the driver's seat if you become ill or incapacitated. This will keep you and your property outside of court-supervised guardianship or conservatorship. The more you can keep the court out of your life and affairs, the better.

A Living Trust also allows you to dispense with your property in the manner that you choose. For example, many families have a child who has or had some problems in life. This may range from physical challenges to addiction to partying in Las Vegas with prostitutes every weekend. A Living Trust can provide for financial support to others without giving them direct control of the trust property.

Finally, a Living Trust makes it possible to avoid having to go through probate. How? It's simple - the property is titled in the name of the Trust when you die. Your Trust does not check out just because you do. Only those assets that are titled in your name at the time of death go through probate.

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Bluffdale Salt Lake County UT subchapter s estate planning

Estate Planning - Consider Your Options Before it is Too Late

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Appropriate estate planning can only be possible with proper appreciation of the major aspects involved in personal finance management process. Efficient estate planning attorney makes it a point realizing these aspects perfectly while making the plan.

Appropriate estate planning involves understanding various aspects of personal finance management well. Multiple aspects of such financial management are involved in the estate planning process. An efficient attorney therefore will always look at these aspects before preparing the estate management. People who are looking for inheritance, insurance and property transfer managements with efficiency will find understanding these aspects extremely useful for the purpose of preparing an all comprehensive estate planning.

Setting goals is extremely essential for preparing the perfect plan. Without the goals clearly determined it may not be possible to prepare plan that would meet all the requirements of the client. Retirement plans are examples of such goal setting. One could plan buying a house for residence after retirement at 25% of the gross income while keeping the residual portion of the income away for future investments, maintenance of the family, and other pursuits. People who are concerned with setting up multiple goals at one time may obtain the assistance of professional expert trust planning attorney that would balance the financial planning with goals set by the client for benefit optimization.

Goals that the client set up for achievement could either be long or short term. In any case setting such financial goals help direct planning. Processes like these involve adequate assessment of the financial and all other aspects of the estate and resources of the estate owner. Experienced and professional estate planning attorney would take care to prepare simplified versions of all the financial statements and legal documents so that there is no room for any confusion in the minds of the clients involved. Ordinarily balance sheets and income statements would be a couple of financial documents that helps the proper assessment of the estate to be planned.

Despite best goal setting and near perfect assessments by the estate lawyer proficient in these deals, best results could only accrue with perfect execution of the plans. One has to be careful about it.

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Blanding San Juan County UT estate planning 2nd marriage

Estate Planning - Why Should I Care?

estate planning portfolio

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If you're reading this article, it's probably not for entertainment value. And if you're reading for entertainment, then you're either a masochist or you're actually interested in what I have to say. It could be both, I guess. Whatever the reason, estate planning is an important topic, regardless of your station in life.

So what does it mean to have an estate plan? The better question is: why does it matter? This is not easy stuff. It deals with death and dying and the future. Of course, nobody wants to think about this stuff. But unfortunately, it's the pink elephant in the room. And it's not all that bad, actually.

Generally, an estate plan is a set of instructions that spell out how your property should be managed and distributed during your life and after death. The attorney (yours truly) is basically a conduit that channels your wishes onto paper in a way that make sense and have the most effect. Okay, maybe it's not that simple, but this should give you some idea. The estate plan should be a reflection of your life and vision. And don't confuse the word "estate" with a gated 8000 square foot villa with your initials on the entry gate. Your estate is all that you own in real estate and other assets.

At one point or another, most of us who own property think about what will happen to our property when we die. We think about stuff like, "Who will get my 1984 Honda Civic?" That's a legitimate concern. Nobody is going to want it, but the concern is no less legitimate. But what if you become disabled? And what happens when you get old and feeble minded? There may come a time where we will live out our lives without sufficient mental and/or physical capacity to manage our own affairs. Look, we all know or knew someone who started to "lose it." We can all remember thinking this or saying something like, "hey, is it me, or is Uncle Joe beginning to lose it?"

Enter the estate plan. The estate plan deals with the management of your property and financial affairs. There are two main types of estate plans: one is built around a Will and the other around a Revocable Living Trust. Each has it pros and cons. But as long as you have your wits about you, you can always make changes to the plan along the way. That being said, it's important to have an estate plan in place now because you don't know when you might become the "Uncle Joe."

THE WILL

A Will is the most common document used to specify how an estate should be handled after death. The person or entity designated to receive your property under the Will is called a Beneficiary. The person whose property is to be disposed by the Will is the Testator or Testatrix.

Like a Trust, the Will can set out different instructions, such as who gets certain property or who will be the guardian of Testator's minor child in the event that no parent is alive. It can be used to disinherit someone. It can set conditions on inheritance, such as the requirement that the Beneficiary first reach the age or 25 or graduate from college.

And then there's the dreaded P word - PROBATE. There's no getting around it. When a person dies and leaves property in a Will, probate is the legal proceeding that is used to wind up his or her legal and financial affairs. It's best described as a court-supervised process by where assets are gathered, valued, and distributed according to the Testator's last wishes as stated in the Will.

Probate proceedings are held in Superior Court for the county in which the Testator lived. The Executor (the person who administers the estate) is responsible for protecting a deceased person's property until all debts and taxes have been paid, and seeing that what's left is transferred to those who are entitled to it. Their job includes making an inventory of the estate's assets, locating creditors, paying bills, filing tax returns, and managing the estate assets. Finally, when this is all done, a petition is filed with the court requesting a distribution to the Beneficiaries. The whole process can take many months and sometimes years to complete.

As you can imagine, probate can also be very expensive. The Probate Code sets the maximum amount that attorneys and personal representatives (i.e. executors, administrators, etc.) can charge. As of 2016, the fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000. On top of that, a probate referee is appointed to appraise all of the non-cash items. This person usually takes one percent of the total assets appraised. All of this can add up very quickly. Although it's safe to say that most of us will probably not die with an estate valued at $15 million, the probate process can easily reduce the size of the estate by tens of thousands of dollars.

And of course there's the privacy issue, or lack thereof. When a Will is admitted to probate it becomes a matter of public record, including the details of what your assets are and who's in line to get them. Some may have legitimate reasons for following the probate matter, like a beneficiary's creditor who's looking to collect. Other unscrupulous types may want to know who to bamboozle.

THE REVOCABLE LIVING TRUST

A Living Trust is established with a document, usually a Declaration of Trust or a Trust Agreement. It's basically a relationship whereby property (real or personal, tangible or intangible) is held by one party for the benefit of another. A Living Trust conventionally arises when property is transferred to a separate Trustee to hold for the Beneficiary. However, that's not always necessary.

The person creating the Living Trust is called the Settlor or Trustor (these are synonymous). The Settlor appoints a Trustee to manage the Trust assets. The Trusee holds legal title to property for the benefit of another, also known as the Beneficiary. Although the Beneficiary does not own legal title to the property, he or she is said to own beneficial title. So you can imagine that the Trustee cannot do anything with the property that does not benefit the Beneficiary, like sell some off and pocket the money. It may be easier to think about a Trust like a Corporation. The Trustee is the CEO and the Beneficiaries are the shareholders. And it's not uncommon for Trustee to also be a Beneficiary, although it's advisable that a Co-Trustee be named as well.

A Living Trust should usually be accompanied by a Last Will and Testament, also known as a "pour-over will." The Will should say that property that is outside of the Trust is to be distributed to the Trustee of the Trust when the Testator dies. As long as the property outside of the Trust is valued at less than $100,000, probate can be avoided. The benefit is that property not previously placed in the Trust will get "poured" into it. Even if the property exceeds $100,000 and has to go through probate, it will eventually be distributed according to the instructions of the deceased instead of being distributed according to California law. It may also be a good idea to name the same person to be both the Executor of the Will and the Trustee of the Trust, since he or she will dealing with the same property.

WHAT DOES THIS ALL MEAN?

So what's the point of all of this mumbo jumbo? Well, just that it's easy to overlook the necessity of a proper estate plan. A Living Trust helps to protect you, your assets, and those people and/or entities who you want to leave your assets to when you're gone.

A good reason to create a Living Trust is to keep your estate plan private. Unlike a Will and probate, the Living Trust is a private contract between you (the Settlor) and the Trustee. It does not need to be filed with the county. The only way it can become public is if a dispute arises and someone files a lawsuit, which is possible.

Another major benefit of a Living Trust is that it has the ability to protect you in the event that you become disabled. The Trust can specify how your incapacity should be determined, how you should be taken care of if you're deemed disabled, and who will be able to manage your property if you can't. A Living Trust is written so that your Trustee can automatically jump into the driver's seat if you become ill or incapacitated. This will keep you and your property outside of court-supervised guardianship or conservatorship. The more you can keep the court out of your life and affairs, the better.

A Living Trust also allows you to dispense with your property in the manner that you choose. For example, many families have a child who has or had some problems in life. This may range from physical challenges to addiction to partying in Las Vegas with prostitutes every weekend. A Living Trust can provide for financial support to others without giving them direct control of the trust property.

Finally, a Living Trust makes it possible to avoid having to go through probate. How? It's simple - the property is titled in the name of the Trust when you die. Your Trust does not check out just because you do. Only those assets that are titled in your name at the time of death go through probate.

Go Forward

Do you want a Free Initial Consultation with an Estate Planning Lawyer?

Call 1-800-564-2707 today.

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Blanding Utah estate planning expert

Levels of Estate Planning

estate planning for the 99 percent

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If you're reading this article, it's probably not for entertainment value. And if you're reading for entertainment, then you're either a masochist or you're actually interested in what I have to say. It could be both, I guess. Whatever the reason, estate planning is an important topic, regardless of your station in life.

So what does it mean to have an estate plan? The better question is: why does it matter? This is not easy stuff. It deals with death and dying and the future. Of course, nobody wants to think about this stuff. But unfortunately, it's the pink elephant in the room. And it's not all that bad, actually.

Generally, an estate plan is a set of instructions that spell out how your property should be managed and distributed during your life and after death. The attorney (yours truly) is basically a conduit that channels your wishes onto paper in a way that make sense and have the most effect. Okay, maybe it's not that simple, but this should give you some idea. The estate plan should be a reflection of your life and vision. And don't confuse the word "estate" with a gated 8000 square foot villa with your initials on the entry gate. Your estate is all that you own in real estate and other assets.

At one point or another, most of us who own property think about what will happen to our property when we die. We think about stuff like, "Who will get my 1984 Honda Civic?" That's a legitimate concern. Nobody is going to want it, but the concern is no less legitimate. But what if you become disabled? And what happens when you get old and feeble minded? There may come a time where we will live out our lives without sufficient mental and/or physical capacity to manage our own affairs. Look, we all know or knew someone who started to "lose it." We can all remember thinking this or saying something like, "hey, is it me, or is Uncle Joe beginning to lose it?"

Enter the estate plan. The estate plan deals with the management of your property and financial affairs. There are two main types of estate plans: one is built around a Will and the other around a Revocable Living Trust. Each has it pros and cons. But as long as you have your wits about you, you can always make changes to the plan along the way. That being said, it's important to have an estate plan in place now because you don't know when you might become the "Uncle Joe."

THE WILL

A Will is the most common document used to specify how an estate should be handled after death. The person or entity designated to receive your property under the Will is called a Beneficiary. The person whose property is to be disposed by the Will is the Testator or Testatrix.

Like a Trust, the Will can set out different instructions, such as who gets certain property or who will be the guardian of Testator's minor child in the event that no parent is alive. It can be used to disinherit someone. It can set conditions on inheritance, such as the requirement that the Beneficiary first reach the age or 25 or graduate from college.

And then there's the dreaded P word - PROBATE. There's no getting around it. When a person dies and leaves property in a Will, probate is the legal proceeding that is used to wind up his or her legal and financial affairs. It's best described as a court-supervised process by where assets are gathered, valued, and distributed according to the Testator's last wishes as stated in the Will.

Probate proceedings are held in Superior Court for the county in which the Testator lived. The Executor (the person who administers the estate) is responsible for protecting a deceased person's property until all debts and taxes have been paid, and seeing that what's left is transferred to those who are entitled to it. Their job includes making an inventory of the estate's assets, locating creditors, paying bills, filing tax returns, and managing the estate assets. Finally, when this is all done, a petition is filed with the court requesting a distribution to the Beneficiaries. The whole process can take many months and sometimes years to complete.

As you can imagine, probate can also be very expensive. The Probate Code sets the maximum amount that attorneys and personal representatives (i.e. executors, administrators, etc.) can charge. As of 2016, the fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000. On top of that, a probate referee is appointed to appraise all of the non-cash items. This person usually takes one percent of the total assets appraised. All of this can add up very quickly. Although it's safe to say that most of us will probably not die with an estate valued at $15 million, the probate process can easily reduce the size of the estate by tens of thousands of dollars.

And of course there's the privacy issue, or lack thereof. When a Will is admitted to probate it becomes a matter of public record, including the details of what your assets are and who's in line to get them. Some may have legitimate reasons for following the probate matter, like a beneficiary's creditor who's looking to collect. Other unscrupulous types may want to know who to bamboozle.

THE REVOCABLE LIVING TRUST

A Living Trust is established with a document, usually a Declaration of Trust or a Trust Agreement. It's basically a relationship whereby property (real or personal, tangible or intangible) is held by one party for the benefit of another. A Living Trust conventionally arises when property is transferred to a separate Trustee to hold for the Beneficiary. However, that's not always necessary.

The person creating the Living Trust is called the Settlor or Trustor (these are synonymous). The Settlor appoints a Trustee to manage the Trust assets. The Trusee holds legal title to property for the benefit of another, also known as the Beneficiary. Although the Beneficiary does not own legal title to the property, he or she is said to own beneficial title. So you can imagine that the Trustee cannot do anything with the property that does not benefit the Beneficiary, like sell some off and pocket the money. It may be easier to think about a Trust like a Corporation. The Trustee is the CEO and the Beneficiaries are the shareholders. And it's not uncommon for Trustee to also be a Beneficiary, although it's advisable that a Co-Trustee be named as well.

A Living Trust should usually be accompanied by a Last Will and Testament, also known as a "pour-over will." The Will should say that property that is outside of the Trust is to be distributed to the Trustee of the Trust when the Testator dies. As long as the property outside of the Trust is valued at less than $100,000, probate can be avoided. The benefit is that property not previously placed in the Trust will get "poured" into it. Even if the property exceeds $100,000 and has to go through probate, it will eventually be distributed according to the instructions of the deceased instead of being distributed according to California law. It may also be a good idea to name the same person to be both the Executor of the Will and the Trustee of the Trust, since he or she will dealing with the same property.

WHAT DOES THIS ALL MEAN?

So what's the point of all of this mumbo jumbo? Well, just that it's easy to overlook the necessity of a proper estate plan. A Living Trust helps to protect you, your assets, and those people and/or entities who you want to leave your assets to when you're gone.

A good reason to create a Living Trust is to keep your estate plan private. Unlike a Will and probate, the Living Trust is a private contract between you (the Settlor) and the Trustee. It does not need to be filed with the county. The only way it can become public is if a dispute arises and someone files a lawsuit, which is possible.

Another major benefit of a Living Trust is that it has the ability to protect you in the event that you become disabled. The Trust can specify how your incapacity should be determined, how you should be taken care of if you're deemed disabled, and who will be able to manage your property if you can't. A Living Trust is written so that your Trustee can automatically jump into the driver's seat if you become ill or incapacitated. This will keep you and your property outside of court-supervised guardianship or conservatorship. The more you can keep the court out of your life and affairs, the better.

A Living Trust also allows you to dispense with your property in the manner that you choose. For example, many families have a child who has or had some problems in life. This may range from physical challenges to addiction to partying in Las Vegas with prostitutes every weekend. A Living Trust can provide for financial support to others without giving them direct control of the trust property.

Finally, a Living Trust makes it possible to avoid having to go through probate. How? It's simple - the property is titled in the name of the Trust when you die. Your Trust does not check out just because you do. Only those assets that are titled in your name at the time of death go through probate.

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Big Water Kane County Utah power estate planning

Estate Planning: Fun For The Entire Family

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Appropriate estate planning can only be possible with proper appreciation of the major aspects involved in personal finance management process. Efficient estate planning attorney makes it a point realizing these aspects perfectly while making the plan.

Appropriate estate planning involves understanding various aspects of personal finance management well. Multiple aspects of such financial management are involved in the estate planning process. An efficient attorney therefore will always look at these aspects before preparing the estate management. People who are looking for inheritance, insurance and property transfer managements with efficiency will find understanding these aspects extremely useful for the purpose of preparing an all comprehensive estate planning.

Setting goals is extremely essential for preparing the perfect plan. Without the goals clearly determined it may not be possible to prepare plan that would meet all the requirements of the client. Retirement plans are examples of such goal setting. One could plan buying a house for residence after retirement at 25% of the gross income while keeping the residual portion of the income away for future investments, maintenance of the family, and other pursuits. People who are concerned with setting up multiple goals at one time may obtain the assistance of professional expert trust planning attorney that would balance the financial planning with goals set by the client for benefit optimization.

Goals that the client set up for achievement could either be long or short term. In any case setting such financial goals help direct planning. Processes like these involve adequate assessment of the financial and all other aspects of the estate and resources of the estate owner. Experienced and professional estate planning attorney would take care to prepare simplified versions of all the financial statements and legal documents so that there is no room for any confusion in the minds of the clients involved. Ordinarily balance sheets and income statements would be a couple of financial documents that helps the proper assessment of the estate to be planned.

Despite best goal setting and near perfect assessments by the estate lawyer proficient in these deals, best results could only accrue with perfect execution of the plans. One has to be careful about it.

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Big Water Utah estate planning in your 30s

Estate Planning - It's Just As Much Life As It Is Death Planning

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The five levels of estate planning is a systematic approach for explaining estate planning in a way that you can easily follow. Which of the five levels you need to complete is based on your particular objectives and circumstances.

Level One: The Basic Plan

The situation for level one planning is that you have no will or living trust in place, or your existing will or living trust is outdated or inadequate. The objectives for this type of planning are to:

reduce or eliminate estate taxes;
avoid the cost, delays and publicity associated with probate in the event of death or incapacity; and
protect heirs from their inability, their disability, their creditors and their predators, including ex-spouses.

To accomplish these objectives, you would use a pour-over will, a revocable living trust that allocates a married person's estate between a credit shelter trust and a marital trust, general powers of attorney for financial matters and durable powers of attorney for health care and living wills.

Level Two: The Irrevocable Life Insurance Trust (ILIT)

The situation for level two planning is that your estate is projected to be greater than the estate-tax exemption. In any event, you can make cash gifts to an ILIT using your $13,000/$26,000 annual gift-tax exclusion per beneficiary.

Level Three: Family Limited Partnerships

The situation for level three planning is that you have a projected estate-tax liability that exceeds the life insurance purchased in level two. If your $1 million gift-tax exemption ($2 million for married couples) is used to make lifetime gifts, the gifted property and all future appreciation and income on that property are removed from your estate.

More people would be willing to make gifts to their children if they could continue to manage the gifted property. A family limited partnership (FLP) or a family limited liability company (FLLC) can play a valuable role in this situation. You would typically be the general partner or manager and in that capacity, continue to manage the FLP or FLLC's assets. You can even take a reasonable management fee for your services as the general partner or manager. Moreover, by gifting FLP or FLLC interests to an ILIT, the FLP or FLLC's income can be used to pay premiums, thereby freeing up your $13,000 / $26,000 annual gift-tax exclusion for other types of gifts.

Level Four: Qualified Personal Residence Trusts and Grantor Retained Annuity Trusts

The situation for level four planning is the additional need to reduce your estate after your $1 million/$2 million gift-tax exemption has been used. Although paying gift taxes is less expensive than paying estate taxes, most people do not want to pay gift taxes. There are several techniques to make substantial gifts to children and grandchildren without paying significant gift taxes.

One technique is a qualified personal residence trust (QPRT). A QPRT allows you to transfer a residence or vacation home to a trust for the benefit of your children, while retaining the right to use the residence for a term of years. By retaining the right to occupy the residence, the value of the remainder interest is reduced, along with the taxable gift.

Another technique is a grantor retained annuity (GRAT). A GRAT is similar to a QPRT. The typical GRAT is funded with income-producing property such as subchapter S stock or FLP or FLLC interests. The GRAT pays you a fixed annuity for a specified term of years. Because of the retained annuity, the gift to the remaindermen (your children) is substantially less than the current value of the property.

Both QPRTs and GRATs can be designed with terms long enough to reduce the value of the remainder interest passing to your children to a nominal amount or even to zero. However, if you do not survive the stated term, the property is included in your estate. Therefore, it is recommended that an ILIT be funded as a "hedge" against your death prior to the end of the stated term.

Level Five: The Zero Estate-Tax Plan

Level five planning is a desire to "disinherit" the IRS. The strategy combines gifts of life insurance with gifts to charity. For example, take a married couple, both age 55, with a $20 million estate. Assume that there is neither growth nor depletion of the assets and that both spouses die in a year when the estate-tax exemption is $3.5 million, and the top estate-tax rate is 45%.

With the typical marital credit shelter trust, when the first spouse dies, $3.5 million is allocated to the credit shelter trust and $16.5 million to the marital trust. No federal estate tax is due. However, at the surviving spouse's death, the estate tax due is $5.85 million. The net result is that the children inherit only $14.15 million.

With the zero estate-tax plan, the ILIT (with generation-skipping provisions) is funded with a $13 million second-to-die life insurance policy. These gifts reduce the estate value to $18 million. In addition, the couple's living trusts each leave $3.5 million (the amount exempt from estate taxes) to their children upon the surviving spouse's death. The balance of their estate ($11 million) passes to a public charity or private foundation-estate-tax free. To summarize, the zero estate-tax plan delivers $20 million (i.e., $13 million from the ILIT and $7 million from the living trusts) to the children instead of $14.15 million; the charity receives $11 million instead of nothing; and the IRS receives nothing, instead of $5.85 million.

In summary, with some advanced planning, it is possible to reduce estate taxes, avoid probate, set forth your wishes, and protect your heirs from creditors, ex-spouses and estate taxes. Remember, every year taxes change so if you need estate tax help, call us today to speak with an estate attorney.

TO THE EXTENT THIS WEBSITE CONTAINS TAX MATTERS, IT IS NOT INTENDED OR WRITTEN TO BE USED AND CANNOT BE USED BY A TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER, ACCORDING TO CIRCULAR 230.

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Estate Planning: What to Think About Before Meeting Your Lawyer

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The five levels of estate planning is a systematic approach for explaining estate planning in a way that you can easily follow. Which of the five levels you need to complete is based on your particular objectives and circumstances.

Level One: The Basic Plan

The situation for level one planning is that you have no will or living trust in place, or your existing will or living trust is outdated or inadequate. The objectives for this type of planning are to:

reduce or eliminate estate taxes;
avoid the cost, delays and publicity associated with probate in the event of death or incapacity; and
protect heirs from their inability, their disability, their creditors and their predators, including ex-spouses.

To accomplish these objectives, you would use a pour-over will, a revocable living trust that allocates a married person's estate between a credit shelter trust and a marital trust, general powers of attorney for financial matters and durable powers of attorney for health care and living wills.

Level Two: The Irrevocable Life Insurance Trust (ILIT)

The situation for level two planning is that your estate is projected to be greater than the estate-tax exemption. In any event, you can make cash gifts to an ILIT using your $13,000/$26,000 annual gift-tax exclusion per beneficiary.

Level Three: Family Limited Partnerships

The situation for level three planning is that you have a projected estate-tax liability that exceeds the life insurance purchased in level two. If your $1 million gift-tax exemption ($2 million for married couples) is used to make lifetime gifts, the gifted property and all future appreciation and income on that property are removed from your estate.

More people would be willing to make gifts to their children if they could continue to manage the gifted property. A family limited partnership (FLP) or a family limited liability company (FLLC) can play a valuable role in this situation. You would typically be the general partner or manager and in that capacity, continue to manage the FLP or FLLC's assets. You can even take a reasonable management fee for your services as the general partner or manager. Moreover, by gifting FLP or FLLC interests to an ILIT, the FLP or FLLC's income can be used to pay premiums, thereby freeing up your $13,000 / $26,000 annual gift-tax exclusion for other types of gifts.

Level Four: Qualified Personal Residence Trusts and Grantor Retained Annuity Trusts

The situation for level four planning is the additional need to reduce your estate after your $1 million/$2 million gift-tax exemption has been used. Although paying gift taxes is less expensive than paying estate taxes, most people do not want to pay gift taxes. There are several techniques to make substantial gifts to children and grandchildren without paying significant gift taxes.

One technique is a qualified personal residence trust (QPRT). A QPRT allows you to transfer a residence or vacation home to a trust for the benefit of your children, while retaining the right to use the residence for a term of years. By retaining the right to occupy the residence, the value of the remainder interest is reduced, along with the taxable gift.

Another technique is a grantor retained annuity (GRAT). A GRAT is similar to a QPRT. The typical GRAT is funded with income-producing property such as subchapter S stock or FLP or FLLC interests. The GRAT pays you a fixed annuity for a specified term of years. Because of the retained annuity, the gift to the remaindermen (your children) is substantially less than the current value of the property.

Both QPRTs and GRATs can be designed with terms long enough to reduce the value of the remainder interest passing to your children to a nominal amount or even to zero. However, if you do not survive the stated term, the property is included in your estate. Therefore, it is recommended that an ILIT be funded as a "hedge" against your death prior to the end of the stated term.

Level Five: The Zero Estate-Tax Plan

Level five planning is a desire to "disinherit" the IRS. The strategy combines gifts of life insurance with gifts to charity. For example, take a married couple, both age 55, with a $20 million estate. Assume that there is neither growth nor depletion of the assets and that both spouses die in a year when the estate-tax exemption is $3.5 million, and the top estate-tax rate is 45%.

With the typical marital credit shelter trust, when the first spouse dies, $3.5 million is allocated to the credit shelter trust and $16.5 million to the marital trust. No federal estate tax is due. However, at the surviving spouse's death, the estate tax due is $5.85 million. The net result is that the children inherit only $14.15 million.

With the zero estate-tax plan, the ILIT (with generation-skipping provisions) is funded with a $13 million second-to-die life insurance policy. These gifts reduce the estate value to $18 million. In addition, the couple's living trusts each leave $3.5 million (the amount exempt from estate taxes) to their children upon the surviving spouse's death. The balance of their estate ($11 million) passes to a public charity or private foundation-estate-tax free. To summarize, the zero estate-tax plan delivers $20 million (i.e., $13 million from the ILIT and $7 million from the living trusts) to the children instead of $14.15 million; the charity receives $11 million instead of nothing; and the IRS receives nothing, instead of $5.85 million.

In summary, with some advanced planning, it is possible to reduce estate taxes, avoid probate, set forth your wishes, and protect your heirs from creditors, ex-spouses and estate taxes. Remember, every year taxes change so if you need estate tax help, call us today to speak with an estate attorney.

TO THE EXTENT THIS WEBSITE CONTAINS TAX MATTERS, IT IS NOT INTENDED OR WRITTEN TO BE USED AND CANNOT BE USED BY A TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER, ACCORDING TO CIRCULAR 230.

Go Forward

Do you want a Free Initial Consultation with an Estate Planning Lawyer?

Call 1-800-564-2707 today.

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