Which estate planning tool should you use—a Will or a Trust? The decision rests mainly on your personal circumstances. Do you have many assets to pass to heirs? Will your family be agreeable to your distribution plan or will they likely object? Will all your beneficiaries be able to responsibly manage an inheritance? Do you care if your assets and distribution plan become public? These are some of the questions you will need to answer with your attorney to determine which estate planning tool is best for your situation. Let’s take a quick look at both instruments and compare their features.
• Best used for uncomplicated estate plans;
• Can be prepared quickly and relatively inexpensively;
• Can contain Trust and tax provisions;
• No built-in protections for incapacity;
• Requires the expense and time of a probate to pass titled property or enact Testamentary Trust provisions;
• Requires a minimum of 6 months to settle; on average takes 9-12 months; the more complex the estate the more time before distribution occurs;
• Will and all probate documents, including asset inventories, are available for public viewing; If beneficiaries or heirs file a complaint or challenge the terms of the Will, all Court documents are available to the public.
• Can be used for simple or complicated estate plans;
• Great for individuals who wish to maintain privacy;
Financial abuse of elderly individuals is a criminal offense. Not only does this crime steal older adults of their assets, in some cases due to the drain on their assets, it steals their independence.
If you see signs of fraud, theft, or misuse of a person’s resources or credit, you should be on alert. If you suspect a person is using undue influence to gain control of a senior citizen’s assets or property, contact authorities with your concerns.
There are ways you can protect yourself or an aging loved one from fraudsters.
How To Protect Yourself As A Senior Citizen?
1. Meet with your estate planning attorney and financial adviser or tax professional to create an estate plan that protects your assets and provides for your loved ones after your death. If you feel unduly pressured by friends or family members to gift them money or other assets, your attorney can prepare a trust based estate plan that will protect your assets from these uninvited requests, but still provide for all of your personal needs and expenses.
2. Select a trusted person or financial institution to act as your agent in the event you become incapacitated and need assistance with paying bills, taxes and making other financial decisions. If you name a family member or friend, you may want to consider naming two (2) individuals to share the responsibility as a way to create a checks and balances system. You should have a legal document known as a Durable General Power of Attorney prepared by your attorney to appoint someone to act as your agent. This Power of Attorney will hold an individual legally responsible for any financial misconduct committed by them while acting as your agent.
3. All financial information such as receipts, bank statements and unused credit cards should be shredded before being thrown away.
4. Never, EVER, provide your personal information, including your Social Security Number, or any financial information over the telephone unless you initiated the call and you have verified that the other party is
If you own income-producing property, one of the ever-present concerns you face is the possibility of being sued by a tenant. If you own the income-producing property individually (not in and LLC or corporation), personal assets, such as your home and other investments could be subject to the Court judgment, should you be found guilty in the lawsuit. Additionally, have you considered what will happen when you die? Will your family fight over your home, vacation home, or investments properties?
If you haven’t taken the necessary steps to protect your assets from lawsuits or probate, you or your heirs could face a nightmare of legal fees and court dates. Two commonly used tools to protect real estate assets include limited liability companies (LLC) and trusts:
LLC: In a nutshell, an LLC protects your personal assets from lawsuits or claims that results from your ownership of assets in the LLC (in this case, real estate). You must comply with Kansas LLC laws in order to receive those protections, but with the assistance of an experienced attorney, this is easily accomplished. Your attorney should prepare the LLC formation documents, file your LLC with the State and advise you on your compliance duties with the State. Formation documents should at least include: Limited Liability Articles of Organization and an Operating Agreement detailing who the members are and what their
After working in the estate planning field for more than 20 years, we've seen several common omissions in estate plans drafted by inexperienced attorneys or online computer-generated forms. Those omissions include a failure to consider: tax planning, incapacity, divorce, spendthrift beneficiaries, beneficiaries with substance abuse issues, or the possibility of a beneficiary receiving government benefits. To protect your beneficiaries and help keep your assets safe, here are some reasons why you should consider addressing these topics in your estate plan:
Federal Gift and Estate Taxes
Federal Gift and Estate Tax is a tax on the wealth you accumulated or transferred during your lifetime. This tax typically is paid during the probate of your estate or administration of your trust. Too often we’ve seen clients pay more taxes than necessary because simple tax planning language was omitted in their estate plans. After a thorough review of your assets and consideration of your life circumstances, a good attorney will recognize if there is a need for special tax protection language in your estate plan. This language easily can be added to your estate plan and will protect your beneficiaries from hefty and unnecessary taxation.
Having a will is the most basic step you can take in planning your estate. Without this document in place at your death, your State law dictates how to divide your material possessions, who will care for your minor children (in the absence of a surviving spouse), what age those children will receive access to their inheritance, and who will be responsible for selling or distributing your items of value. Despite these facts, nearly six in 10 adults in the U. S. still do not have a will, according to a 2017 Caring.com survey conducted by Princeton Survey Research Associates International.
According to the survey, 78% of millennials (ages 18-36), 64% of those ages 37 to 52 (Generation X) and over 40% of those ages 53 to 71 do not have a will. The problem, according to Megan L. McCann, estate planning attorney and partner at Davis & McCann, P. A., likely centers around two facts: One, young adults rarely consider the possibility of death and two, many people assume they have insufficient assets to require estate planning.
The end of any year is a busy time with holidays and family obligations. However, it also is a good time to take stock in your personal and professional life and plan for any adjustments you need to make for 2019.
If you already have an estate plan in place, take this time to review the beneficiaries that you named in your Trust or Will. Have there been any marriages, divorces, or births in the past year that require a change to your estate planning documents? It also is advisable to review the beneficiaries named on your insurance policies, 401(k), IRA, bank accounts, and other financial assets.
If you’ve purchased or inherited a new house, car, mineral rights, etc. in 2018, your estate plan should include those items. If not accounted for in your estate planning documents, you could unintentionally create a probate action upon your death. Similarly, if you have sold an asset, be sure your estate plan has been adjusted accordingly.
NEWS YOU CAN USE
Davis & McCann, P. A.,