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The largest asset most people have is their family home. If a senior is in a situation where his or her long-term care insurance is exhausted and the other assets are used to pay for care, how does one protect the home from being taken? Long-term care insurance is important; however, it’s also critical to review and revise your financial and estate plans regularly as your situation changes, according to NJ 101.5’s article “Medicaid and protecting your home.” Speak with an experienced estate planning or elder care attorney to plan for your individual circumstances. You should also have your will, general power of attorney, advance health care directive or other estate planning documents reviewed or drafted. As far as how Medicaid works, it has both income and asset limitations that require a recipient to become impoverished to qualify. For Medicaid eligibility, your primary residence is exempt provided you or your spouse live in the house or intend to return to the house to reside. That said, Medicaid will have an automatic lien on any interest in a residence in your name equal to the amount of Medicaid funds you receive. The program will execute on that lien when the home sells or upon death—unless the recipient’s spouse remains an owner of the residence. To keep people from giving away their property to qualify for Medicaid, there’s a penalty for the transfer within five years of applying for Medicaid. The penalty is calculated by dividing the value of the assets transferred by the state’s Medicaid average monthly cost of a nursing home. The penalty period starts only after an individual enters a nursing home and would otherwise be eligible for Medicaid, not at the time of the transfer. During that time, Medicaid won’t pay for the nursing home. Private funds have to be used. There are exceptions for undue hardship but these are rare. One exception is for the transfer of a residence to a child who has lived in the home for at least two years before the applicant enters a care facility and who during that period provided the applicant with care and services that enabled that person to live at home. In that situation, the transfer of the house to the child doesn’t result in a penalty. The house won’t be subject to a Medicaid lien. Similarly, gifts and sales that are less than fair market value within five years of applying for Medicaid are subject to a penalty. But before a transfer is made, there are also income tax considerations which may significantly impact both the transferee and the applicant. If there is no mortgage, another option is a reverse mortgage, which lets you withdraw the equity in the property with the loan being paid back at death or once the property is permanently vacated. Medicaid is a complex and constantly changing area, so talk with an experienced elder law or Medicaid planning attorney who is current on all the rules that may impact your decisions. Reference: NJ 101.5 (September 12, 2016) “Medicaid and protecting your home” #Will #ElderCare #MedicaidPlanningLawyer #AdvanceHealthCareDirective #EstatePlanningAttorney #PowerofAttorney #ElderLaw

Estate plans have several components to help beneficiaries carry out the requests of the benefactor. You want to start tackling those components while you’re still healthy and of sound mind. In fact, a recent gobankingrates.com article, “Your Estate Planning Checklist: How to Create a Financially Sound Estate Plan,” sets out an estate planning checklist to help you start a solid estate plan. Sign a Power of Attorney. This lets you name a person you trust to make financial and legal decisions for you if you can’t for yourself. Without this, your loved ones will need to go to court to have someone appointed to manage your finances. Appoint a Durable Power of Attorney for Health Care. This document allows you to designate an individual to make medical decisions and to carry out your end-of-life care plan if you’re unable to do so yourself. Talk to an elder law attorney to help you with issues like funding nursing home care, what to do if you’ve outlived your retirement funds, and other needs of senior citizens. Draft a Living Will. This details the medical care you would want if you become unable to make your own health care decisions. Create Your Will. This is the first step to making certain that your wishes are executed. You’ll be able to name the people you want to receive your assets, as well as designate a guardian for any minor children. Draft a Living Trust. A trust allows you to transfer property to your heirs without going through probate. If you only have a will, any property that’s only in your name at your death will go through probate court to be distributed. A trust lets you specify when and how your heirs will receive assets, which is particularly helpful with minor children. Write Funeral or Memorial Instructions. This isn’t included in your will because wills often aren’t opened and read until weeks after your death! Use a separate document to describe the type of memorial service you’d like and whether you want to be buried or cremated. Also, make certain your friends and family know about your wishes—give them copies of this document or tell them where to find it. Make a List of Accounts and Documents. This should include all of your financial accounts, insurance policies, and contact information for any professionals you work with—like attorneys, accountants, brokers, and financial planners. Make copies of your estate planning documents, the mortgage or deed to your house, and titles to cars and other property. Keep the list and documents in a safe location, like a home safe or safety deposit box. Make sure to let family members know where it’s located in the event something unexpected happens. Create a Care Plan for Your Pet. Selecting a beneficiary for your pet is an important decision. You’ll want to be sure you have a good fit, as well as a back-up person. To have control over the care of your pet and how the money you earmark for that care will be spent, ask an estate planning attorney to create a detailed trust. This will let you to state your wishes in detail—from the food your pet likes to veterinarian information and health care philosophies. Organize Your Social Media Accounts and Digital Assets. This means your digital music library and social media profiles for Facebook, Twitter, and LinkedIn. The answer for what to do with your social media accounts and digital assets isn’t black and white. Because of various laws, it might not be legal to log on with your loved one’s password to view his or her email or access his or her banking records. Terms of use and laws in this area change frequently, so be aware of updates that could affect your account and your estate plan. Review the Plan Yearly. An estate plan isn’t something you do once and never look at again. As your personal circumstances and state and federal laws concerning estate taxes change, you need to review your plan annually to ensure it will still work. Be sure to work with a qualified estate planning attorney to make sure that the estate plan will foster your goals. Reference: gobankingrates.com (June 22, 2016) “Your Estate Planning Checklist: How to Create a Financially Sound Estate Plan” #Guardianship #EstatePlanningLawyer #Pets #Probate #DigitalAssets #Inheritance #LivingWill #PowerofAttorney #Wills #LivingTrust #ElderLawAttorney #Trusts #estateplanning

The challenge of helping aging parents is a most common issue. For example, a man’s father, who recently was diagnosed with dementia, couldn’t remember where his money or financial records were kept. That makes for a gut-wrenching situation, trying to locate important documents while caring for an ailing father. Have that tough conversation now and concentrate on the top areas of your parents’ well-being. It will help alleviate the administrative and emotional burden of caring for them. Parents should to be reassured that you’re not trying to take control of their lives or take advantage of them. Begin the conversation early—that’s best for the long-term interests of the whole family. With that in mind, NASDAQ’s article, “Long-Term Care and Wealth Planning for Aging Parents,” points out some of the most important financial issues, decisions and plans to discuss with your parents: Consider a living trust. In addition to a will, your family may also benefit from creating a living trust to designate which beneficiaries will inherit the assets. The difference between a trust and a will is that assets included in a properly-executed living trust will not be part of the probate process. A living trust may be a bit more expensive to create than a will, but it will let your parents do wise tax and estate planning to protect their wealth. This definitely requires the expertise of an experienced estate planning attorney. Plan for possible long-term care. It’s not too early to start planning for long-term care. The U.S. Department of Health and Human Services says that there’s about a 70% chance that a 65-year-old will need some type of long-term care at some point. In fact, some will require long-term care for more than five years. Consider housing options. It’s critical to discuss housing options with your parents and what they would want to do in the event they can no longer live without aid in their own home. Figure out transportation needs. If your parents are having trouble with remembering things, they may no longer be able to drive safely. What’s the plan for when they can no longer drive themselves? Talk to your parents. Research shows that many adult children and their parents frequently are not on the same page with money issues. Some folks have difficulty talking about who’ll make financial decisions on behalf of parents if they no longer have the ability to handle their money safely, and others disagree on what role children should play in the care of their parents. Despite being somewhat uncomfortable, a conversation with your parents about their health and wealth as they age is very important. You can show your parents that you have their best interests at heart and can avoid some future conflict and challenges. Reference: NASDAQ (August 10, 2016) “Long-Term Care and Wealth Planning for Aging Parents” #ElderCare #LivingTrust #LongTermCarePlanning

Both running a successful business and having a successful marriage require commitment and hard work. Operating a business as a married couple can present its share of challenges, but being devoted to one another as spouses and as business partners can bring higher levels of accountability and trust to the business. If you and your spouse can find ways to balance your work and personal lives, owning a business together can make your relationship even more rewarding. The potential for blurred lines in a couple-owned business makes it crucial that the business relationship be treated professionally from the start. Before embarking on a new business venture, you and your spouse should have a solid understanding of what each of you brings to the venture, how to divide responsibilities, and what type of business entity you will form. Have proper written agreements in place to ensure that mechanisms exist to deal fairly and legally with any problems that may arise. Choice of Business Entity for Married Couples Family-owned businesses are common in the United States. The term “mom-and-pop” business is not always meant literally, but there are approximately 1.5 million businesses run by married couples nationwide. For the couple who shares everything—including a business—you probably have a good idea of how your skill sets overlap and complement each other. This is a good first step for evaluating the type of business structure that you should have. If you plan on both being owners and taking part in the day-to-day management of the business, a partnership, limited liability company (LLC), or corporation might make sense. One or both spouses can be managers of the business if they have an active role in its day-to-day functions. Business Entity Tax Implications The type of business entity you choose has important tax implications. Specific questions about ownership structure and taxation should be discussed with an attorney, but in general the following rules apply: Sole proprietorships, partnerships, LLCs, and S corporations are pass-through businesses . This means that they are not subject to corporate income tax. Instead, profits from the business “pass through” to owners and are taxed at the individual level. If you and your spouse jointly own a pass-through business, you will each report your share of the business’s income on your individual tax return (e.g., 50 percent each if you co-own the business equally) and pay the appropriate amount of income tax. In addition, you will pay self-employment taxes on business income (i.e., Social Security and Medicare taxes). If one spouse owns the business and the other spouse is an employee of the business, the owner pays income tax and self-employment tax, and the spouse who is an employee pays income taxes according to their salary. In addition, the owner spouse pays the employer portion of the Social Security and Medicare taxes of the employee. Another distinction is that employee income taxes are automatically withheld from paychecks, while self-employed business owners must pay quarterly state and federal estimated income taxes. Failure to pay estimated taxes can result in penalties. A business co-owned by a married couple is treated as a partnership for federal tax purposes unless there has been an election to be taxed as an S or C corporation. However, under Internal Revenue Service (IRS) rules, a married couple conducting a qualified joint venture can file their business taxes on separate Schedule C forms. In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), special IRS rules may allow an LLC jointly owned by a married couple to be treated as a disregarded entity for federal tax purposes. In other words, they do not have to treat their business as a partnership. Rather, for tax purposes, the IRS will treat the business as a single-member LLC that is not separate from its owners. Couple-Owned Business Contracts When starting a business with a spouse, it may be tempting to rely on the trust you have built in your marriage to weather any storms. But if the marriage struggles or falls apart, this will inevitably affect the business. And even during good times, it is best to have everything in writing. Depending on the type of business you form, make sure you have an agreement—such as a partnership agreement or an LLC operating agreement—that spells out the management structure, the process for dissolving or leaving the company, indemnification, ownership percentage, and the process for adding new members. You might also consider a separate buy-sell agreement that details how to deal with the sale or buyout of a spouse’s ownership interest. This could come into play during a divorce, the untimely passing of a spouse, or if one of you simply wants to get out of the business. If you are not co-owners, and one of you is an employee, you will need a contract that stipulates job duties, pay and benefits, how and when the employment relationship can be ended, the dispute resolution process, and other employment terms. It may be initially uncomfortable to treat your spouse as a business partner complete with contractual obligations. But clear written rules for the business are a signal that you are both taking the business seriously. Your marriage is a contract, after all. Contracts are just a way to ensure that the parties are on the same page and equally committed. To keep your business above board and professional, consider working with an attorney who can advise you on business entity structure, taxation issues, and contracts. A neutral and knowledgeable business attorney can provide a third-party perspective that sets up you and your spouse for long-term business success. Please give our office a call at (281) 218-0880 or schedule online here .

The messy legal dispute over the mental health of media mogul Sumner Redstone is an example of the growing trend of litigation that raises the issue of the competency of the elderly. As The Wall Street Journal notes in “Redstone Case Spotlights Rise in Competency Litigation,” usually beneficiaries wait until after a person has passed away to challenge a will or trust. However, with longer life spans and more accumulated wealth among the aging, impatient family members and friends have increasingly tried to get the money before death. This has fueled disputes. Redstone is the 92-year-old controlling shareholder of Viacom, Inc. and CBS Corp. His longtime companion, Manuela Herzer, sued in November to challenge the competency of Redstone after he removed her as his health-care agent and kicked her out of his mansion. The two sides are discussing a settlement, so preparations for trial have been suspended. Dementia is a concern in many of these cases, with 5.3 million Americans—most over 65—living with Alzheimer’s disease. The Alzheimer’s Association expects that number to rise in coming years. Many of these battles hinge on whether an aging person had the capacity to decide important personal and financial issues—like selling a house or changing a will—or whether anyone may have exerted undue influence over the decision. While there’s no uniform competency test, some are used more frequently in court—such as asking patients to do tasks like count backward from 100 by seven, draw a clock showing a certain time, and name as many words as possible starting with a certain letter. Doctors will ask patients about current and historical events, to name their children, and how they handle daily tasks. In addition, it can be difficult to find geriatric specialists to administer the tests. In such cases, general practitioners must conduct them, and they may not be familiar with the nuances of someone’s abilities. Inexperienced judges can present other problems—like when judges who aren’t lawyers rule on probate matters or states assign probate cases to general civil judges. In Redstone’s case, like many others, the situation is even more complicated because the judge has to decide whether someone had decision-making power at the time of a certain event in the past. While the elderly may not always be able to fend off legal challenges like Redstone tried to do, they can get a doctor’s evaluation at the time key financial documents are signed or other important decisions are made. Reference: The Wall Street Journal (April 12, 2016) “ Redstone Case Spotlights Rise in Competency Litigation” #AssetProtection #Incapacity #ProbateCourt #Inheritance #Dementia #Wills #Trusts #ElderLaw #estateplanning

May is here, and in addition to celebrating the arrival of spring, this month has been designated as Older American’s Month and National Elder Law Month. The theme for Older Americans Month is “Blaze a Trail,” which is exactly what advocates for older adults and their families are doing. The (Carlisle, PA) Sentinel’s article, “Elder Care: Elder law vs. elder care,” says that if you open any telephone book or do a search online, a number of attorneys will advertise the practice of elder law—often thought of as estate planning (wills and powers of attorney) and estate administration (the execution of a will and management of the financial affairs of a person who has passed away). Many times we hear about difficult situations, resolved into neat packages that are each tied with a bow. These are the result of a plan that implements care coordination services in addition to traditional legal services. In many situations, creative thinking and planning by qualified elder law attorneys who are familiar with healthcare and support providers achieves these best possible outcomes. Flexibility and cooperation by service providers is an essential element in achieving success. When obtaining appropriate care is combined with legal and health system knowledge, most family situations involving seniors that don’t fit neatly into a category can be sorted through and resolved by an experienced legal professional. Stress is reduced, and everyone will be as comfortable as possible with the result. Call it elder law or elder care, it often takes both to help seniors blaze a trail in their senior years. Reference: The (Carlisle, PA) Sentinel (April 27, 2016) “Elder Care: Elder law vs. elder care” #ElderLaw #LongTermCarePlanning #PayingforaNursingHome

New Hampshire will soon have a full-time lawyer to investigate and prosecute crimes against the elderly, according to a story posted on fosters.com, “NH to strengthen elder protections.” The Governor’s Executive Council voted to accept a $130,000 federal grant to fund a state Elder Abuse Protection Bureau. This new unit will be charged with the investigation and prosecution of elder abuse cases and will be a part of the Attorney General’s Consumer Protection Bureau. The grant money will be used to pay for a temporary full-time prosecutor whose job it will be to focus on crimes and abuse against the elderly. The new prosecutor will be partnered with a victim-witness specialist, which will form—as the state says—”a unit solely dedicated to elder abuse.” The unit will also provide educational outreach to elder groups regarding the prevention and/or reporting of fraud and other forms of abuse and neglect. The state had been looking for money to do this work, and it’s become more important since the passage last year of a new chapter in the state’s criminal code making financial exploitation of elderly, disabled and impaired people a felony. The state says part of the new effort will be to partner with home healthcare workers, Meals on Wheels drivers, and bank tellers to get their help in watching for abuse. Seniors can be reticent to report abuse—especially when it’s relatives who are victimizing them—because they don’t want to get their kin in trouble. One provision of the new law states that if a perpetrator knew the seniors didn’t have the mental faculties to agree to change their will or otherwise give away their assets, then the perpetrator cannot claim it was a “gift” as a defense. Reference: fosters.com (April 10, 2016) “NH to strengthen elder protections” #ElderAbuse #ElderLaw

A recent article in The Aiken (SC) Standard, “Seniors, don’t get ripped off,” tells of a retired high school teacher’s husband who—at age 82—was trying to protect his investments. Unfortunately, he was duped into purchasing an equity indexed annuity product that was totally unsuitable for his situation. The insurance agent actually convinced the man to combine the funds from an IRA with non-qualified assets and lump them all together into a single investment. When he did this, he was hit with a surrender penalty to move money out of an existing annuity. The agent assured him that he’d make up the loss with “bonus interest.” Co-mingling qualified assets with non-qualified monies is illegal and subjected this man and his family to tax penalties. This story ends on a happy note because an experienced and forthright insurance agent was later able to straighten out the mess and get the man’s money back without any problems. The first agent complained that the corrections cost him more than $30,000 in potential commissions. There’s plenty of financial chicanery that targets seniors. One reason is that older Americans are more apt to have the means to purchase a financial product than younger folks. That, along with many seniors being more polite and trusting, often makes them marks for schemes by unscrupulous sales reps pushing inappropriate insurance and other financial products. Many seniors fail to report such fraudulent activity because they either don’t know where to turn or they’re embarrassed about their actions. Still worse—frequently, seniors are unaware that they’ve been taken. That said, here are some important points to keep in mind: Visit www.finra.org/investors/finra-securities-helpline-seniors if you believe you’ve been misled by a financial adviser or life insurance salesperson. If you are talking with a salesperson of a financial product, consult with a family member and an elder law attorney, and ask them both to join the presentation. If the salesperson proposes a specific product, get all of the details in writing and review them later. Don’t be pressured into making any decision alone. Since unscrupulous salespersons typically dislike questions, get complete answers to your questions. Don’t sign anything you don’t fully understand. Don’t get taken! Take your time and bring reinforcements with you to help make these decisions. Reference: Aiken (SC) Standard (January 16, 2016) “Seniors, don’t get ripped off” #HoustonElderAbuse #HoustonFinancialAbuse #Insurance

With so much information about estate planning readily available on the internet, some individuals may find it convenient to download a form document such as a will. This can be a costly mistake, however, because a will that is poorly drafted, improperly executed, or does not follow applicable laws may be invalidated by the court. The surest way to protect your assets and loved ones is to work with the right estate planning attorney. In this meantime, this article is a brief discussion of invalid wills. Beware of Invalid Wills The leading reasons a will may be invalid include: Improper Execution — An improperly executed will may be deemed invalid. Generally,  the document must be signed by the testator (the person making the will) and Texas requires a will (not holographic) to be witnessed by two individuals (not named as beneficiaries) in front of a notary. Lack of Testamentary Capacity — The testator must be able to understand the reason for making the will and also know the extent of estate property. Someone who is not in the right state of mind due to a mental impairment or physical condition, or who is incapable of understanding the will for any other reason, may be deemed to lack testamentary capacity. Undue Influence/Fraud —  Undue influence can occur when a beneficiary, caregiver or another person with an interest in the estate pressures the testator in creating or revising a will. Fraud can occur when the testator is provided with a number of documents to sign at the same time while being unaware that he or she is executing a will. Poor Drafting — A will must contain specific provisions to the effect that it is intended to be a will and the testator understands the reason for making it. The will must also clearly state how the estate property is to be managed and distributed. Finally, an executor must also be designated to carry out the instructions of the testator. Replacement by a Subsequent Will — Although wills should be updated to reflect the changes that occur over a lifetime — marriage, having children, acquiring property, divorce, remarriage, retirement — a will contest may arise when the distribution plan is significantly changed or there are changes to the beneficiary designations. Why This Matters A well-conceived will can help to protect your assets and ensure the beneficiaries receive the inheritance you had planned for them. By taking shortcuts, using a form document or making other costly mistakes, your estate may wind up in an expensive, lengthy court battle. By working with an experienced estate planning attorney , however, you will have peace of mind knowing your estate will be properly managed and your last wishes will be carried out.

Are you a homeowner looking for ways to protect your property and ensure its smooth transfer to your heirs? Putting your house in a trust may be the game-changer you are looking for. Trusts are legal arrangements that allow you to transfer ownership of your assets, including real estate, to a trustee who manages them on behalf of your beneficiaries. There are several reasons why putting your house in a trust can benefit you and your loved ones. For one, it can help you avoid probate and other legal hassles arising after your death. It can also protect your property from creditors and lawsuits, maintain control over it during your lifetime, ensure privacy and confidentiality, and ensure it passes smoothly and efficiently to your heirs. In this article, our Houston estate planning attorneys will explore these benefits in more detail so you can decide whether putting your house in a trust is right for you. Avoiding Probate and Estate Taxes If you don’t want to deal with the headache of the probate court or other legal obstacles, putting your house in a trust can save you time and money in the long run. When you pass away, your property will avoid the lengthy and costly probate process by being transferred directly to your beneficiaries through the trust agreement. This means that your loved ones won’t have to wait for months or even years before they can inherit what’s rightfully theirs. Additionally, by setting up an irrevocable trust , you may be able to reduce the size of your taxable estate and eliminate estate taxes after you pass away. If you have acquired any form of wealth, estate tax planning is an important aspect of sound financial planning. This is just one of many tax-saving strategies that can help you reduce the estate taxes owed upon your passing. Protecting Your Assets From Creditors and Lawsuits Although some may think it is unnecessary, shielding your assets from creditors and lawsuits can save you from financial ruin. Putting your house in an irrevocable trust is one way to protect yourself from potential legal battles that could leave you stripped of your hard-earned assets. A property trust allows you to transfer ownership of your home to the trust document, which then becomes its legal owner. This means that if someone sues you or attempts to collect a debt, they cannot go after the property because it technically does not belong to you anymore. Maintaining Control Over Your Property When you create a living trust, you transfer ownership from yourself to the trust. However, since you can be both the trustee and beneficiary of the trust on a revocable trust , you will still have complete control over your property. The terms of the trust allow for flexibility in managing your property even if you become incapacitated or pass away. The main benefit of putting your house into a trust is that it ensures that your wishes for distributing your assets are carried out according to the terms of the trust. Additionally, by designating someone as the trustee of the trust, they will be legally obligated to manage it based on its terms, even if circumstances change in the future. If needed, changes can be made to the trust as well, with proper legal guidance and documentation. Ensuring Privacy and Confidentiality If you value keeping your personal affairs under lock and key, putting your property into a trust can be like locking it in a safe. One of the most significant benefits of placing your home or vacation home in a trust is ensuring privacy and confidentiality. By doing so, you can keep sensitive information out of the public record, such as the value of your assets or who will receive them upon your passing. A trust is one way to ensure that your assets are distributed according to your state’s laws without attracting unwanted attention from outsiders. Moreover, if you have concerns about family members contesting your last will and testament or probate proceedings, a revocable trust becomes irrevocable upon death and is very hard to contest. Passing Your Property to Your Heirs Smoothly and Efficiently Passing on your property to your loved ones doesn’t have to be a headache; putting it in a trust can make the process smoother and more efficient. By putting assets such as your home into a trust, you’re essentially transferring ownership of the property to the trust itself. This means that when you pass away, there is no need for your heirs to go through probate court, which can be a lengthy and expensive process. Instead, the trustee of the trust will simply transfer ownership of the property to your chosen beneficiary according to your estate plan. One big advantage of putting your home in a revocable living trust is that it ensures that the transfer of ownership happens quickly and smoothly after you die. The successor trustee named in the trust agreement takes over management of the trust’s assets upon your death or incapacity. They can distribute those assets according to the instructions you provided without any necessary legal proceedings. Can You Place a Mortgaged Property in a Trust? Yes, you can place a homestead mortgaged property in a trust, specifically a revocable trust or living trust. The process involves creating a trust document or trust agreement that outlines the terms of the trust and naming a trustee who will manage the property. The main benefit of putting a house into a trust is that it can avoid the probate court process and ensure that the property is distributed according to your state’s laws. Some people also choose to put their vacation home or other assets in a trust. However, as with anything, there are pros and cons of putting property in a trust, and it is important to consult an attorney to create a trust that meets your needs. Work With an Experienced Estate Planning Attorney To Put Your House in a Trust When creating a trust for your property, having the right legal guidance can make all the difference. One of the major benefits of communication with an attorney is gaining a better understanding of how trusts work and what type would best suit your needs. A lawyer can guide you through choosing the right trustee, setting up provisions for beneficiaries, and ensuring that your assets are protected from creditors or lawsuits. By working with an experienced estate planning attorney at Your Legacy Legal Care , you can have peace of mind knowing that your wishes will be carried out following state laws and regulations. We can help you decide on the type of trust that’s best for you, assist you with putting property in the trust, and help you make changes as needed. Contact us today for a consultation.

Many folks assume that trust funds are only for the rich, however, people in all types of economic circumstances may see a benefit from them. A trust fund is a special legal arrangement that lets a benefactor arrange for certain assets to go to someone else. Motley Fool’s recent article, “Navigating the World of Trust Funds: Your Quick Guide,” explains that there are various types of trust funds that can serve as useful estate-planning tools. Here’s a rundown of revocable or irrevocable trusts, credit shelter trusts, generation-skipping trusts, and qualified personal-residence trusts. Revocable Trusts Also known as a revocable living trust, this trust lets you manage your trust during your lifetime. In creating the trust, you can name yourself as the trustee in charge of overseeing its assets. This lets you move assets in and out of the trust as you want or even terminate the trust if your circumstances change. There’s a good deal of flexibility, and a major benefit is that they have the ability to bypass probate. Depending on where you live, probate can be lengthy and expensive. A revocable trust can also reduce the estate tax burden on your beneficiaries. Irrevocable Trusts This is the opposite of a revocable trust. It can’t be altered or terminated without the consent of the trustee and the trust’s beneficiaries (and perhaps a judge). When you place assets into an irrevocable trust, you may no longer have any rights to them. The big benefit is saving money on estate taxes. When you transfer assets into an irrevocable trust, they’re no longer yours and are excluded from your estate’s value for tax purposes. Also, trust assets may be more difficult to access by creditors or anyone who initiates a lawsuit against you. And if you hold assets that you think will really appreciate over time, you can transfer those assets into the trust to remove them from your taxable estate and ensure that any future appreciation on them isn’t subject to estate taxes. It’s a serious long-term commitment and may be a good option if you have a larger estate. Credit Shelter Trusts This trust can help wealthy married couples lower their estate taxes by maximizing federal and state exemptions. If you set up a credit shelter trust, the assets in that trust will be transferred to your beneficiaries upon your death, but your spouse can keep his or her rights to the assets contained in the trust for the rest of his or her life. Ultimately, however, those assets won’t be counted as part of your spouse’s estate. This helps your family take advantage of available tax exemptions. With portability, this trust may not be as useful as it once was. Portability lets the first spouse who dies transfer his or her assets along with the “unused” estate tax exclusion amount to the surviving spouse, who can then apply this enhanced exclusion amount in his or her own estate. Generation-Skipping Trusts This trust is established for the benefit of your grandchildren, as opposed to your children. These trusts are used to avoid estate taxes: if your children inherit your estate directly, then the value of your estate is added to the value of their estate and this could potentially trigger estate taxes when they die. By skipping your children’s generation you may be able to transfer more assets to your family than to the IRS over the long term. The generation-skipping trust is subject to taxes, but it can be structured to reduce estate taxes, allowing affluent families to preserve their wealth for future generations. A big advantage of generation-skipping trusts is that they can help avoid generation-skipping transfer tax. Qualified Personal Residence Trusts This trust lets you leave your home to your beneficiaries and decrease your estate taxes. You can transfer your property by deed into the trust while retaining the right to live there for a certain period of time. Once that’s over, your beneficiaries can inherit your home, paying taxes on the value of the home at the time of the deed transfer. A qualified personal residence trust can be useful in locking in a lower value for gift tax purposes. And you can claim a lower value of the gift for your beneficiaries based on their delay in actually receiving the property. But if you die while living in your home, it’ll count as part of your estate and be taxed according to its value at that time. Trust funds can be a big element in your estate-planning strategy, so talk with a qualified trust attorney to see which type of trust is best for you. Reference: Motley Fool (Sept. 18, 2016) “Navigating the World of Trust Funds: Your Quick Guide” #IrrevocableTrust #GenerationSkippingTrust #RevocableTrust #QualifiedPersonalResidenceTrust #CreditShelterTrust #estateplanning

The words “fun” and “estate planning” are not typically used in the same sentence. Most people see estate planning as a chore to muddle through. While choosing beneficiaries and thinking about end-of-life care is certainly nobody’s idea of a good time, making such plans can provide tremendous peace for both you and your family. With your affairs sorted out ahead of time, you will gain all sorts of insight into your senior years – and all the possibilities they hold. Support Your Favorite Cause As you get your estate plans in order, consider your favorite charities, non-profits, and causes that you have supported over the years (or want to continue to support when you are no longer here). If you are passionate about supporting them, you can factor them into your retirement plans with a uniquely crafted estate plan. This goes beyond merely donating your time. Your legacy is important, and thanks to estate plans, your impact can be felt for many years to come. Make Travel Dreams a Reality Have you spent your life dreaming of taking a trip around the world? Perhaps you want to finally realize your dream of living abroad for a few years. Or maybe you just want to finally buy that lakefront condo you have been obsessing over. Whatever your dreams are for your golden years, estate planning can help make them a reality without the worry of something happening unexpectedly lingering over your shoulder when finally bringing your dreams to fruition. While nobody likes to think of their own mortality at any given point, we must consider there is always a possibility of the unthinkable happening. Establishing your estate planning documents will allow you to travel knowing that everything back home is taken care of, should something happen to you when living out your wildest dreams. Ensure Inheritance Isn’t Squandered Many retirees spend their last years fretting about the future of their kids and grandchildren. The reality is that many people make unwise decisions after coming into large sums of money. Estate plans can help inexperienced beneficiaries spend their inheritance wisely instead of spending it frivolously. From education to real estate to investments, your hopes and dreams for your family can live on for many generations if you choose. Protect Your Assets from Tax Liability To live out your retirement as stress-free as possible, you will want to conserve your assets and minimize the impact of taxes. Many use trusts to do just that, which will allow for more of your assets to be passed down to your loved ones. IRS rules for calculating the required minimum distribution from IRAs and qualified retirement plans offer many long-term planning advantages. If you and your heirs do not withdraw the minimum amounts when required, taxes can take a good portion of what should have been withdrawn. Start Planning Today It is difficult to know what you do not know. This is especially true when it comes to estate planning. If you are eager to plan for the best retirement possible but are not sure where to begin, schedule an appointment with a member of our team today by calling us at (281) 885-8826 or schedule online here.