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Month: July 2019

How can an estate plan help me?

How can an estate plan help me?

Do you know how your life will be divided after your death? Who will your estate go to Who will look after your children? With an estate plan you decide. You are in control of your family’s security in the event that something tragic should happen. Now perhaps you are a little foggy with some of the fundamental ideas associated with estate planning. Let’s start at the beginning.

According to Merriam-Webster’s Dictionary of Law estate planning is:
The arranging for the disposition and management of one’s estate at death through the use of wills, trusts, insurance policies, and other device

Your estate is everything you own, your assets and liabilities. This includes things such as your house, account in your name, your insurance policies, and vehicles. The problem with dying without an effective estate plan is that even if your property is distributed to the proper people, a process known as “probate court” may cost your heirs up to 10% of your assets net value. Also you must take any children that you are the legal guardian of into consideration. If you do not have an estate plan it may be probate court that decides who looks after them after them after you are gone.

You don’t want to let this happen to you and your family. You need an estate plan. Now, in order to start estate planning you are going to need to look into the following options: living wills, revocable living trusts.

A living will is a document in which you can spell out where all of your assets will be going. You may also modify this document at anytime. You are the one in control. This is a great way to avoid probate court.

A living trust allows you to name a person who will handle all of your legal affairs after you pass away. Your trust may either be revocable or irrevocable. Revocable means that, just like a living will, you can modify it at any time. However, in an irrevocable living trust you do not have the ability to change it.

Having an estate plan can help your family avoid many hardships after your passing. Don’t let your whole life fall into the wrong hands. Take control. Make an estate plan today.

Trust funds guide

Trust funds guide

A Trust is perhaps the best channel to keep your money and other assets safe and secure for your future generations. It is a lawful creation that isolates your money for specific reasons.

A trust is beneficial even when the grantor is alive and after his death. A grantor, settler or donor is the person who is responsible for settling the trust. Trust funds can be set up by single or a group of individuals. There are always some reasons behind forming a trust. These reasons vary from persons to persons. Besides the grantor, there is or are trustees. These trustees are appointed by the grantor and they take care that the trust is functioning according to the will or wish of the grantor.

The first and the foremost benefit of a trust is the tax saving. A trust can protect the grantor from paying huge taxes and claims. Money kept in abeyance in the form of a trust can be helpful in your old age when you take retirement, when your children need money for higher studies or for the secure future of your spouse or when you plan to do a venture in business etc. The money enveloped in the name of trust is exempted from taxes like the estate tax and the like. The tax subsidy actually varies with the kind of trust you have formed.

Types of Trusts

• If a person is alive and forming a trust then such a trust is called a living trust. Every trust including the Living trusts can be bisected to form the- Irrevocable and Revocable trusts. The former are those where the statements cannot be altered by the grantor during his lifetime and even after that once legally formulated and the in the revocable trusts the settler can change his statements even after they are legally penned down once till the time he lives. For instance a trust set up by parents that provides for their minor children in case any problem grips them. Both these types of trusts revocable as well as irrevocable have their positive and negative aspects.

• There is also the Life Insurance Trust that ensures some kind of financial safety for the survivors in case something happens to the donor. A life insurance trust fund is better than a simple life insurance policy because of the tax exemption. The trust fund is not subject to the cumbersome Estate Tax while when the beneficiaries receive the policy money it is supplemented with this tax. Again there are pros and cons associated with both, it is recommended to take the advise of an attorney before reaching any conclusions.

• Bypass Trust is formed by a couple. When either of the spouses die, the estate is transferred to the other and is taxed and when they both die, it is taxed again.

• Spendthrift Trust- is a trust that allows you the opportunity to let only those people benefit of the money that you think are worthy enough. In simple terms via this trust you can safeguard funds for the individuals you like, no one else can claim them.

• Living Children’s Trust- is the trust to ensure a bright future for your kids. The grantor can add clauses in it like the child will get the funds only when he turns a major etc. and till then the guardian (usually parents of the child) he appoints will take care of the children and the trust fund.

• Charitable Trust Funds- the best philanthropic idea to help the destitute throughout your lifetime and even after your death.

Once you make your mind which trust to go for, make some profound thinking as to who will be its beneficiaries and at what time, about the trustee, what exactly are the terms and conditions, the taxes by the State, should the trust be revocable or not and so forth. After all a trust is your lifetime investment…you need not take any chances!

The Advantages Of Living Wills And Living Trusts

The Advantages Of Living Wills And Living Trusts

Planning for the future basically involves a number of benefits. For one, it prepares you and your family for the inevitable. Aside from that, it allows you to formulate your decisions level-headedly.

Then again, it is not unlikely for the task to become too emotionally charged at times, which makes it all the more fitting to get it done with a sound mind. But before you proceed with putting things in order ahead of time, it would certainly be a good idea to be familiar with the advantages of living wills and living trusts.

Living Wills

A living will contains instructions concerning your health care preferences in black and white. Your immediate family members, as well as your health care provider, will refer to these directives if you’re incapable of making or expressing your decisions about medical treatment. Anyone who has reached the legal age of 18 – or 19, in certain states – may draw up his or her own living will, provided that he or she is also of sound mind.

The biggest advantage of making a living will is that it allows you to voice out your preferences on the subject of life support measures and other medical treatment options. Even though your family and friends may not hold the same philosophy about the matter, the creation of such a legal document gives you an opportunity to confer with them and explain your choices.

You also get the chance to justify how your morals and values influenced your decisions. This furnishes them with a better insight into what you would ultimately want to come about in such difficult situations.

Without a living will, your immediate family members could face the possibility of paying large hospital bills. Aside from that, your savings account could also be used up to the point of bankruptcy.

So, in a way, the creation of a living will makes it possible for you to safeguard your family from the additional burden of searching for financial resources to pay for your hospital confinement and medical treatment – provided that the chances of recovering from your condition are very slim.

On top of the financial encumbrance, living wills also take away the likelihood of disagreements when trying to reach a consensus about your medical treatment. So instead of fighting against each other to determine what’s best for you, your family can concentrate more on accepting the inevitability of death.

Living Trusts

A living trust is a legally binding arrangement that places all your assets in a trust. More often than not, the grantor or creator also serves as the trustee. Although, you may also appoint another person or institution to act as one in case you lose interest in the duty or become incapacitated to fulfill your obligations.

Speaking of its advantages, a living trust allows you to manage your properties for the purpose of generating profits for your beneficiaries. In addition, it makes it possible for you to conserve or look after your assets’ growth.

Another obvious advantages of living trusts are the probability of reducing estate taxes and controlling the administration or use of the assets long after the grantor has departed from the world of the living. These legal documents also offer protection for the beneficiaries against creditors.

The advantages of living wills and living trusts are indeed numerous. So before its too late, safeguard yourself and your family from the harsh reality of the inevitable and from the fact that things could turn out real bad without proper planning.

Take Your Pick: Living Wills Or Living Trusts

Take Your Pick: Living Wills Or Living Trusts

Nobody can really tell what the future holds. Because of this fact, a lot of people have taken measures to make sure that things will turn out as smoothly as possible.

If you want to jump right onto the same bandwagon, then you better be equipped with the right knowledge prior to making that decision. Living wills or living trusts can provide you with that much-needed preparation but you certainly need to learn about these legal documents before you could actually take your pick.

Living Wills Vs. Living Trusts

If you want to know which legal document is more appropriate for you, you first need to find out the coverage of living wills or living trusts. Since they’re both legally binding, every adult person should almost certainly know how each could be of assistance to them in the future. In order to properly pick your choice, you have to know their differences.

A living will is a legal document that discloses a person’s wishes concerning health care. Its contents will only be effective once the maker falls into an incapacitated state wherein he or she is no longer capable of conveying his or her decisions.

The directives contained within it usually indicate one’s desires not to receive treatment or be kept alive by means of artificial life support measures.

Once you’re in an incapacitated condition, your family will have to make all the health care decisions for you. Aside from that, they will have to put up with the financial burden of your hospitalization. By restricting medical treatment, a living will could keep a tight rein on hospital expenses that could use up or even totally exhaust all your family’s remaining funds.

On the other hand, a living trust – also known as inter vivos trust – is a legally binding document that is drawn up for the purpose of controlling ownership to a person’s assets in his or her entire lifetime, and for allocating those properties after death.

The creator or the grantor may also appoint a trustee who will implement the terms indicated in the living trust in case he or she becomes incapacitated or unwilling to perform the duty.

In comparison to a will, the grantor does not necessarily have to pass away for the living trust to take effect. As the name implies, this legal document is effective during the creator’s lifetime.

A living trust however is only recommended for people who own a considerable amount of assets and finances. In other words, the necessity to create one is largely dependent on your circumstances, financially speaking.

If still haven’t decided which type of legal to choose, you might as well pick both for as long as the two are applicable to your needs and circumstances.

The obvious similarity is in the financial aspect. Living wills make it possible for you to save your family from all the trouble of paying for enormous hospital bills, provided that your medical condition appears to be beyond any possibility of recovery. On the other hand, living trusts lay emphasis on the need to properly manage your assets according to your preferences.

On the whole, living wills or living trusts make it possible for you to put things in order while you still can. Also, both legal documents allow you to prepare for the inevitable and the unknown.

Why Probate?

Why Probate?

Why Probate?
Nobody voluntarily chooses probate. People are too busy or preoccupied with health or other issues to plan. They pass away without a living trust and their heirs—-usually their children—- find that they can’t sell Mom or Dad’s house without a court order or can’t transfer Mom or Dad’s bank account without court approval. Even with a will, they may be forced to file a probate proceeding.
Alternatives to Probate
Because probate is expensive and time consuming, a responsible attorney first tries to determine if there is an alternative to probate. In California, the most common alternatives to probate are a Spousal Property Petition (if there is a surviving spouse) or a small estate transfer (if the value of the estate is less than $100,000). If these and other alternatives to probate are unavailable, then the only recourse for the decedent’s heirs is to file a probate proceeding.
Cost of Probate
Attorney’s fees and costs are set by law in California and are based upon the value of the estate. Here is the statutory fee schedule in California:
4% of the first $100,000
3% of the next $100,000