Most people do it to save money, but they may overlook or forget to take care of some important details – details that may eventually cost them much more than the amount they could save.
Wills, trusts and estate plans should be crafted with the help of an estate planning attorney. Don’t try this at home all alone!
The Meridian (MS) Star’s article, titled “Reasons not to write your own will,” says that some of the big mistakes include these:
What can you do to push past the emotional aspects of estate planning to make sure your surviving family members can successfully deal with issues that may arise after you pass away?
Start early. Patrick Severo is the senior vice president and financial advisor at RBC Wealth Management. He also has three kids and knew he needed a plan to take care of them after he is gone. Severo recently told Forbes in the article titled, “Don't Let Emotion Sabotage Your Estate Plan,”that, although the discussion about what happens after you pass away feels uncomfortable, the earlier you can begin, the better off you’ll be because these things take time – maybe even years!
To help the people you care about handle the financial, administrative and familial consequences of your eventual passing, be as transparent as possible about what they can expect from your estate. Mismatched expectations can often cause trouble that could’ve easily been avoided if the news wasn’t coming as such a surprise.
Fran had just learned that her deceased husband Ed’s life insurance proceeds were going to be paid to his ex-wife Sally. As Fran found out from her lawyer, beneficiary designations can be the trump card of estate planning.
You heard that right. The ex-wife Sally will get the life insurance proceeds. It doesn’t matter what the will says in these circumstances. With certain financial instruments the beneficiary designations have authority to control the asset disposition regardless of other provisions.
A recent WMUR article, titled “Money Matters: The trump card of estate planning,”sets out a handful of good pointers to remember.
At some point, everyone needs to consider estate planning. It’s time to create an up-to-date estate plan when you experience one of these life events.
Think estate planning isn’t for you? Think again! And it’s not just a one-time deal; changes in your life should result in changes to your plan, so be ready to make some updates.
The Richland Source notes in a recent article, titled “Do you need an estate plan?”, that it’s time to create an up-to-date estate plan when you have one of these life events:
Actually the trusts are Crummey trusts named after one D. Clifford Crummey who won a decision in the Ninth Circuit in 1968, when I was just a high school lad. Israel and Erna Mikel were just in Tax Court showing how powerful the Crummey power can be as they used it to shelter over $1.4 million in transfers to their family trust from gift taxes. An arbitration clause that called for the use of a religious court caused the IRS to challenge the validity of the exclusions, but the Tax Court ruled in the taxpayer’s favor.
Trusts can have pretty funny names. Take the Crummey trust for example – doesn’t sound very good, does it? Who wants a “crumby” trust? Let’s explore this tool further.
A recent Forbes article, titled “Religious Arbitration Clause Does Not Hurt Million Plus Gift Tax Exclusion,” reminds us that there’s an annual exclusion from gift tax. Reminder: every year you can give the annual exclusion amount ($14,000 this year) to as many people as you want without any gift taxes or disturbing the unified credit against transfer taxes. However, to qualify for the exclusion, the gift has to be of a “present interest”.
Coming together at 50-plus is different from getting married in your 20s, particularly when it comes to money. "You've had a lifetime of solidifying your money beliefs" and behaviors, says Janet Stanzak, president of the Financial Planning Association. These are some ways to smooth the transition if you're tying the knot this summer.
It’s true, marriage at 50 looks a lot different than marriage at 25 for most Houston couples. And no, we aren’t talking about the latest wedding fashions or honeymoon destinations. Financially, there is much to consider when getting married past 50.
AARP Magazine published an article titled “4 Smart Money Moves If You Marry After 50”last summer that did a great job of discussing some reminders before saying “I do” after you turn age 50. These reminders will work for you if you are walking down the aisle this June, July, or August.
"The costliest errors are ones we make ourselves, often without realizing how much damage we're doing."
"Estate planning is intertwined with the financial plan," a newsmax.com article explained, and it’s no secret that many individuals fail to prepare for retirement. When doing an estate plan, the article offers some sound advice:
Now is the time for small business owners to evaluate their year-end retirement planning while building a retirement budget line item for next year.
A recent article in The (Great Falls MT) Prairie Star, titled “Review estate, tax and retirement planning issues now,” argues that a farm or ranch operation should include retirement savings for the owner and/or employees as a part of annual budgeting. These retirement funds provide tax savings now and may provide liquidity and income when the decisions for retirement and/or farm transition take place.
Small businesses, including self-employed taxpayers, have two choices after the end of the year to establish and contribute to a retirement plan. These two choices are the Simplified Employee Pension (SEP) plan and the individual retirement arrangement (IRA). A taxpayer has until the due date of the business federal tax return (including extensions) to set up and fund a SEP, but IRAs can’t be funded after the due date of the taxpayer’s personal federal income tax return.
Sometimes, a loved one’s estate may include debt. Do you know what to do should if you are the spouse or heir that inherits debt?
If you aren’t sure what to do with a loved one’s debts after they pass – or what to tell others to do with your own debts – you may want to read a recent article in The Huffington Post titled “Debt and the Deceased: How Should Spouses and Heirs Proceed?”
Be honest about your financial situation. It’s not that easy for some family members to discuss debt issues, especially older Americans who hoped for better at the end of their lives. Even so, parents and their adult children or spouses should thoroughly talk about any outstanding debts that could affect the borrower's estate.
Once you're divorced you should immediately create a new estate plan — a will or revocable living trust, a healthcare power of attorney, and a living will ("pull the plug") designee. Read on for more estate planning must-do’s regarding divorce.
A recent article in the The Huffington Post, titled “Divorce and Money,”says that you should always listen to your attorney about the applicable laws in your state regarding divorce and your estate. In addition, the article says that you should also look at the following issues.
The division of property in a divorce is typically not taxable to either party. However, if instead of dividing marital property, one spouse agrees to monthly maintenance (alimony), this will be taxed as ordinary income. And it’s deductible to the paying spouse. The original article also notes that the spouse receiving the maintenance checks must make a quarterly estimated federal and state tax payment, so you need to plan accordingly.
Houston Estate Planning and Elder Law Attorney Blog