Insurance might not be the first thing that springs to mind when someone mentions estate planning. We tend to associate estate planning with Wills, Trusts, and taxes more than with declaration pages and policy terms. However, insurance serves two important estate planning functions, and without it, your plan might not be performing to its potential. The core purpose of insurance is to reduce risk, protecting your bank account and preserving your estate in the face of unexpected catastrophe. … [Read more...] about Insurance: The Missing Link in Your Estate Plan?
Why Your Trust Shouldn’t be Short and Sweet
You've just returned from your estate planning attorney's office with a draft of your new Trust. As you read through the document, the first thing you notice is how long it is. You're not rich or famous. Does it really take pages and pages of legal jargon to accomplish your intentions for your estate? You've seen do-it-yourself Trust kits online, and they look like they're only a few pages long. A short and sweet Trust might be easier to read through, but it is likely not an adequate foundation … [Read more...] about Why Your Trust Shouldn’t be Short and Sweet
Tax Breaks for the Sandwich Generation
As our population ages, many of us find ourselves in a role we never quite anticipated: we’re serving as caregivers for our elderly parents while still raising children of our own. The emotional burden is one that most of us accept with grace and love. The financial challenges, on the other hand, can be a little harder to overcome. That’s why it’s important to know when you can claim your aging or ill parent as a dependent for income tax purposes. 50 Percent: The Magic Number If, during the … [Read more...] about Tax Breaks for the Sandwich Generation
Trusts and Income Tax: Who Pays?
Trusts are an incredibly useful estate planning tool, and they’re becoming ever more popular. But, as Trusts gain popularity, a question comes up more and more often: who pays the income tax on a Trust? It seems like a simple inquiry, but the answer can be hard to pin down. As a matter of fact, sometimes even lawyers don’t know. So, who does pay the income tax on a Trust? Here is the answer, in a nutshell: Grantor Trust The first step in figuring out who is responsible for the income tax … [Read more...] about Trusts and Income Tax: Who Pays?
A Quick Guide for Basis
The word basis can have a lot of different meanings. When we’re talking about taxes, though, it has one very specific definition. Basis is the yardstick used by the Internal Revenue Service to determine how much tax you pay on an asset when you sell or otherwise dispose of it. Sell property for more than your basis, and you have a gain that might result in a tax bill. Sell property for less than your basis, and you may be able to claim a tax loss. To determine your basis in an asset, you have … [Read more...] about A Quick Guide for Basis
Avoid These Four Asset Protection Pitfalls
If you have creditors, you should consider which asset protection strategies might be right for you. Asset protection is the shielding of your property from creditors, potential creditors, and others. While most people don’t realize it, the estate planning process includes a number of opportunities for you to use asset protection strategies to protect yourself and your loved ones. Here are four asset protection pitfalls you can avoid with estate planning: Ignoring Medicaid Planning. As … [Read more...] about Avoid These Four Asset Protection Pitfalls
Moving? Don’t Forget to Review Your Estate Plan
A move brings with it a sense of expectation, excitement, and maybe a little trepidation. Whether you’re moving across town or across the country, there are countless plans to be made and there’s a lot of work to be done. Although your Will or Trust might be the last thing on your mind at this busy moment in your life, a move is actually an ideal time to review and update your estate plan. Here are the things you should take a look at: Will and Trust You should review your Will and/or your … [Read more...] about Moving? Don’t Forget to Review Your Estate Plan
Expecting the Unexpected
Has your life turned out exactly as you expected? Most of us would answer this question with a resounding “No!” For better or for worse, plans change, surprises arise, and we adapt. Maybe you chose a career that is completely different from the one you envisioned for yourself back in college. Perhaps your children chose very different paths in life than you would have picked for them. Flexibility is essential in dealing with life’s curveballs, and it is also one of the keys to an effective … [Read more...] about Expecting the Unexpected
The Accidental Spouse
John Ober may or may not have thought he was married, but a Montana court certainly believed he was – and the fact that he was married determined what happened to his estate. John Ober and Selma Klein had a long-term live-in relationship which lasted for many years. John proposed to Selma in 1987, but they never applied for a marriage license and never had a marriage ceremony. They kept filing tax returns as single individuals, and Selma, who had been married before, continued to collect … [Read more...] about The Accidental Spouse
I Have an Estate Plan: Do I Still Need My Attorney?
Your estate plan is prepared. Your Living Trust is in place and properly funded, you have a Pour-Over Will just in case, and your incapacity plan is ready and waiting in the event you need it. Is it time to part ways with your attorney? Not at all! In fact, your relationship with your estate planning attorney has just started, and here's why: Your Estate Plan Should Be Reviewed and Updated Regularly Peoples' lives change, and their estate plans should be adjusted accordingly. Every two to … [Read more...] about I Have an Estate Plan: Do I Still Need My Attorney?