We’ve put together a collection of estate planning tips for you and your family.  If you’re like most people, there will be at least one thing on this list that you haven’t thought of yet.  Others will serve as a gentle reminder to take action.

1.  You need to name temporary guardians so that someone is authorized to care for your children in the event you are disabled (temporarily or permanently) and unable to care for them yourself.

After all, your will, appointing permanent guardians, isn’t effective until you actually die.  Alternate documents are availablt to fill the void left in most estate plans.

2.  Even your 18 year old needs an estate plan.  Everyone age 18 or older needs his or her own estate plan. It need not be complex, but incapacity and death are not reserved for the elderly.

3.  You can set up a trust for the care of your pet.  Otherwise, your pet may be put in a shelter or euthanized.

4.  You can pay medical expenses and tuition directly to a provider without incurring any gift tax or having to file a gift tax return.

5.  “Love letters” from a parent or grandparent to a child are the most treasured of inheritances.  Jot down some words of wisdom and/or love.

6.  You can protect your child’s inheritance from divorce, bankruptcy, and lawsuits by wrapping the gift in an asset protection trust or other protective planning devices.

7.  You can deduct (for federal income tax purposes) the portion of your estate planning legal fee attributable to tax planning.

8.  Estate planning is not a lone ranger sport.  With your permission, your estate planning attorney can coordinate efforts with your financial advisor, insurance professional, and CPA.

9.  You should update your estate plan if you move to another state.

10.  Even if you don’t have a federally taxable estate today, the laws may change and your assets may grow.  It may be prudent to have tax provisions in your estate plan now.

If you have questions about any of these tips, consult with an experienced and qualified estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Periodically, sit down and reevaluate your need for life insurance.  It’s often an essential part of an estate plan.

Life insurance can be used to:

• Replace income
• Fund a business buy – sell agreement
• Create an estate
• Pay federal estate taxes
• Equalize an estate
• Provide an inheritance for a child not in the family business

General life insurance tips:

• Only pay premiums that won’t take food off your table.  If you are insurance poor, you’ll end up dropping it.
• Term insurance is the least expensive way to purchase a large amount of insurance.
• Whole life insurance is the purchase of a term policy with an added investment.
• If an irrevocable life insurance trust owns your insurance, the proceeds will not be included in your estate for federal estate tax purposes.

Income replacement is the most common reason for purchasing life insurance so here are some applicable tips:

• Make sure that there is adequate insurance to replace your income as well as the services you provide to your family (i.e. child care, cooking, transportation, lawn mowing, accounting, and the like.)
• With objective professional advice, determine how much insurance you need.  One approach is to add up all the immediate and short term expenses that would occur if you died.  Then figure out how much you would have to invest at a 4% after tax return to replace your income.
• Be sure that there is adequate insurance if both you and your spouse die and your family members or friends need to step in to raise your minor children.  Most guardians cannot take on the financial burden of more children.

If you have questions about why you may need life insurance, consult with an experienced, qualified estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

One of the best parts of an estate planning attorney’s job is answering client questions.  It’s an essential part of the estate planning process so we’ve outlined some of your questions below.  This is part II in our three part estate planning question series.

Do I have to leave my children an inheritance?

No, even minor children are not legally entitled to an inheritance.

Many would argue that there is a moral obligation to leave funds for the care of minor children.  If you choose not to ensure funds for the care of minor children, they may be placed into foster care.

How can I show my children that I love them after I die?

Ah, there are many ways to show your children you love them.

First of all, ensure that there are adequate funds for their care.

Then, both love letters, explaining how your child has affected your life, and sentimental gifts will be treasured for a lifetime and, likely, passed down to your grandchildren.

I want to stay in control of my finances?

A fully funded revocable living trust will keep you in control.  So long as you are alive and well, you remain in management of day to day finances and business affairs.

If you become disabled and when you die, you remain in control of your finances by leaving specific instructions regarding how you want your finances to be handled.  You also hand pick trustees to follow your instructions.

Can I protect the inheritance I give to my children?

Yes, if you give the inheritance in a asset protected trust.  Do not give the inheritance outright or include terms that mandate distributions at specific times.

In addition, be sure to insist that if your child is serving as trustee of his or her own trust, your child serves with a co-trustee.

Be sure to bring all of your estate planning questions to an experienced, qualified estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Have you considered investing in a college savings plan, such as what is commonly called a “529 plan”?  If you’re like most people, you want to help contribute to your child’s education by saving for his or her many college expenses.  It can be stressful committing to the best savings plan so that you’re able to reach your goals.  With the right plan, you can benefit greatly while investing in your child’s future. Take a look at the information below to learn the benefits of a college savings plan for your child.

What are some of the benefits?

• Many plans allow you to make a small monthly contribution.  This makes it possible to save for your child’s future, even if you have a small budget.
• Many plans can be taken advantage of even if you live out of state.  This allows you to find the best possible plan for your needs.
• Some college savings plans allow you to prepay for the cost of an education.  This allows your child to go to school knowing that his or her expenses will be fully funded.
• Most plans have a variety of tax benefits so that you’re able to save more of your hard earned money.
• With many different investment options to choose from, you’re able to be as risky or as conservative as you want.
• The funds in these accounts allow you to pay for a variety of college expenses, so you can help your child in a number of ways.
• You’re able to take advantage of easy ways to contribute such as payroll deductions and automatic withdrawals.

Before investing in your child’s future, take the time to carefully plan so that you’re reaching your goals more easily.  If you have any questions about selecting a college savings plan, consult with a qualified estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.