In an ideal world, people could leave their estates to their children and that estate would serve to make life more comfortable for those children. But in the real world, there are plenty of parents who know that their financially irresponsible children would squander an entire estate in just a few years.
Parents always want to look out for their children's best interests, and that is also true when putting together an estate planning program. If you have little confidence in the financial judgement of your child when it comes to your estate, then there are steps you can take to protect your child from themselves and make sure that the money you leave behind does truly make your child's life better.
A lifetime trust is an estate planning vehicle that would provide an income to your child for their entire lifetime after you have passed away. There are several forms a lifetime trust can take and you can choose how often and how much your child is paid throughout their lifetime. A lifetime trust can also have provisions that provide for financial emergencies, should your child ever come across that sort of need.
The key to a lifetime trust being effective is making sure the trustee you name is a responsible person who will look out for the best interests of your child. Most people leave their family attorney or a family member as a trustee to look after the lifetime trust. Some people even leave a family friend as a trustee in the event that their child does not have a strong relationship with the rest of the family.
These traditional types of trustees are convenient, but they are not practical. More than likely, your child is going to live longer that a family friend, attorney, or family member. Instead of naming a person as the trustee, you can name a financial organization as the trustee and ensure that there will always be someone responsible in charge of the account.
Your other option for leaving money to a financially irresponsible child is to instruct a trustee to purchase an annuity that pays a monthly income in the name of your child after you pass away. This is a very reliable way of distributing funds that offers plenty of security for your money and your child.
The issue with an annuity is that it can often be difficult for your child to get at the money during a financial emergency. There may be a legitimate medical emergency or some other type of situation where your child would benefit significantly if they could access the money, but it is extremely difficult to get a large lump sum from an annuity.
Parents work hard to raise the best possible children, but there can be personality traits in people that make them very irresponsible with money. A parent knows their child better than anyone else, and that is why it is practical for a parent to arrange in their estate planning process to protect their financially irresponsible child from themselves and set up ways for an inheritance to be distributed gradually instead of all at once.
When parents look at setting up their estate plans, they should ask their attorney about creating a trust that will make sure that their children have money for many years to come. Even after they have passed away, parents can still bestow important lessons on their children about money and life thanks to trusts.
Estate planning professionals, especially lawyers, get a lot of questions throughout the estate planning process. One of the most common questions they get deals with the differences between a will and a trust. Before you can ask for a will or a trust, it is probably a good idea to understand what they are and why they are different.
The first difference between these two estate planning tools is that a will is a piece of paper, while a trust is a legal entity, much in the same way a corporation is a legal entity. A will is not powerless, but it is not its own entity. A will is basically a set of instructions the court uses to administer your last wishes. A trust is not based as much on your last wishes, and its more involved with management of property than distribution.
The only time a will is enacted is after the subject of the will has passed on. Prior to the death of the subject, a will has no power over any property distribution and it cannot be used to determine property ownership.
A trust takes effect the moment it is signed into existence. There is property that is moved into a trust that the trustee can transfer ownership of whenever they want. A trust can also be used to set up charitable funds during the subject's lifetime, and it can also be used to dictate business decisions and property distributions many years after the trustee has passed on.
A will is used to transfer property that is owned by the deceased. A will can only designate property distribution as it applies to the deceased, and it cannot dictate any other property ownership changes.
When a trust is created, property is transferred into the trust from anyone who decides to transfer it. Once a property is transferred into the trust, the trust as a legal entity owns that property can can transfer it to whomever it wants. A trust cannot say that it transfers all of the property of the deceased trustee to someone else because it is not a will. A trust can only transfer that property which it owns.
A will has to pass through probate before it is approved and acted upon. If the court finds anything wrong with the will, then the deceased's final wishes may not be honored.
A trust does not have to go through a probate process, which means that a trust does not have to take on the extra fees of a probate court and is a much faster solution. If you are looking for a way to get your assets transferred to loved ones without paying for a probate court and waiting months for everything to be finalized, then you need a trust.
A trust and a will are both powerful tools in the estate planning world, but they are very different. With a trust, you are creating an entity that can take on any property and distribute property as it sees fit. With a will, you are creating a set of instructions for a probate court for transferring ownership of your property after you have passed away. Only your attorney can give you the right answers when it comes to deciding between a trust and a will.
No matter what age a person may be, estate planning seems to be the furthest thing from their mind. It is easy to convince people of the importance of estate planning, but it is difficult to get them inspired enough to start the process.
If you know you need to attend to your estate planning but just cannot get motivated, then there are steps you can take that would help you to get started. Once you start the estate planning process, you will find it easy to ride that momentum to the project's completion.
Your lawyer will need to generate an action list of things you will have to do to complete your estate planning. The amount of action items you have will depend on a lot of things, but you could be looking at a good sized list. The good thing is that lists tend to act as great motivators and it may be easier for you to get yourself motivated to do your estate planning when you know exactly what you have to do.
Lists can quickly become demotivating if you are not sure exactly what you are supposed to be doing. As you get your action list from your lawyer, be sure to ask questions and get the guidance you need to complete each task. There is no such thing as a silly question, especially when you are working on something as important as your estate.
Before you leave your lawyer's office, the two of you should sit down and take care of all of the easiest action items on your list. You will be left with a list of action items that will require a great deal of thought on your part, but at least you will know that all of the easy items have already been taken care of.
Remember that you can, and should, update your estate plan whenever you want. It is impossible and impractical to think that you can create an estate plan now that will stand for the rest of your life. When you sit down to answer your questions, you should put a time frame of no less than five and no more than 10 years. Answer all of your questions and settle all of your issues based on that time frame, and then plan on doing an update in 10 years.
People find that funding a trust is really just a process of transferring assets from one place to another, and it can be very tedious. This will probably be the most difficult part of your estate planning process to finish, but only because it can require a lot of paperwork and take time. You should do this last so that you can remind yourself that once this part is done, your estate planning is done.
Estate planning is not something people look forward to doing, but most people understand the importance of getting the process done. With a little help from your attorney, you can muster up the motivation you need to finally get this important process done and preserve your estate for your family.
The percentage of people who focus on doing a proper will is extremely small, which means that the percentage of people who put a lot of thought into who their estate's executor will be is even smaller. When you have passed on, your executor becomes extremely important to your family and to your final wishes. Instead of glossing over the decision on who your executor will be, you should give the idea some serious thought.
Your executor makes the decisions regarding your assets and determines how to handle your debt after you have passed on. You may have left your stamp collection to your nephew, but your executor may decide that the stamp collection is too valuable and needs to be sold to pay off your debts.
Since your executor makes all of the important decisions regarding your estate, you want to choose someone you trust. You also want to choose someone you know will be able to handle the pressure of being your executor, have the family's best interests in mind, and be able to make good decisions.
Each state has its own rules when it comes to executors, but there are a few basic guidelines you can follow to make a good decision. First and foremost, do not try to choose a convicted felon as your executor. Even if that felon is your closest relative, your will could be contested based on your executor's felony status and the courts may not even recognize your executor at all.
In most states, relatives can be executors no matter what state they live in. You can even have a relative who lives in an American territory or foreign country, and most states will allow that relative to be your executor. Once again, each state is different when it comes to direct family relationships. Some states recognized step-parents or step-children as direct relatives, while others do not. Be sure to discuss your possible executor decision with your attorney to determine if your relative qualifies to be your executor.
Unless there is a glaring problem such as a felony conviction or some other issue with your executor, the courts will do their best to acknowledge your wishes and allow your executor to make decisions. But it is always a good idea to choose an executor who knows you well, and is able to speak freely with your family.
Your will could be contested if your family feels that your executor is making decisions that are against your final wishes. Questioning the power of the executor is just one reason families contest wills, and it can change your entire final wishes if your executor gets removed by the courts. Take your time and find an executor who can keep the peace after you pass away, and make sure that your final wishes are administered properly.
No matter what size your estate may be, everyone has ideas on how they want their final wishes to be carried out. The job of making sure your final wishes are done your way falls to the executor you choose for your estate. Take your time and make the right choice because the person you choose as your executor will be the person who represents you after you have passed on.
A trust is a legal arrangement that distributes assets to heirs after the trust owner has passed on. The primary reason people use trusts is to try and avoid the hassles and costs that come with going through probate.
Before you decide to utilize a trust, there are some basic facts that you need to understand. While a trust can be a good method for accelerating the process in getting your heirs their inheritance, there are some elements of a trust that you should understand before you get involved in one.
A trust is a great way to handle the distribution of your wealth after you have passed on, but it is limited in the other types of arrangements you may need to make. If you have a child with special needs, then you will need a will to outline what is to be done with that child when you pass on.
A will is the best way to make sure that your final wishes are honored, beyond taking care of the financial needs of your estate. While a trust can be more efficient than a will in some estate planning areas, a will is still an important tool to use.
When a will is filed or read in probate, the terms of that will are often made public. With a trust, the information regarding the inner-workings of the trust are usually kept private. One of the exceptions is if someone challenges the trust and the trust must be revealed to the court. But if you want to decrease the chances that your final financial arrangements will be kept private, then you may want to consider a trust.
A trust allows you to compound the protection offered by the FDIC on your bank accounts. Under normal circumstances, you are offered $250,000 in protection on a bank account in the event that the bank may fail. But for the people who have more than that in the bank, the chances of losing most of their money before they pass away remain real.
With a trust, your first five beneficiaries are each given the $250,000 bank account protection for a total of $1.25 million in federal insurance. The protection for six or more beneficiaries varies depending on the situation, so it is a good idea to have your attorney talk to the FDIC to see what would happen to your six or more beneficiaries.
In most cases, anything with a beneficiary on it such as a life insurance policy or a retirement account will get paid to the beneficiary without needing to go through probate. This means that you do not need to include these types of beneficiary arrangements in your trust.
When you decide to get involved in estate planning, it is important to hire the services of an experienced professional. There are several tools that can be used to get you the results you want when planning your estate, but only an expert knows how to use those tools to your advantage. Spend some time with your lawyer and understand how a trust could be a better way to get your money through probate and to the people who need it after you have passed on.
Estate planning is something everyone should do to make sure that their assets are distributed the way they want after they have passed on. If you need to make special arrangements for your family after you are no longer around, then estate planning is the best way to get the job done.
While estate planning is important, it is also easy to make mistakes that could cost you and your family a lot of money and aggravation in the future. To avoid these mistakes, it helps to understand what they are and what you can do to make sure you do not fall prey to them.
An estate planning lawyer can bring together all of the accounting and insurance resources you need to make sure that all of your final wishes are taken care of. Without a lawyer, it can be almost impossible to understand how to take care of your estate, and understand important pieces of estate planning such as a will. A good lawyer can also be there for your family when you have passed on to make sure that your final wishes are done properly.
Many people who decide to do estate planning find themselves knowing how much insurance they really need to make sure their plans are paid for, but they decide to buy less insurance because they don't see the value in planning ahead. When you plan for your estate, it is extremely important that you get enough insurance to take care of your family and execute all of your financial plans.
You just got married and you have a baby on the way. To go along with that, you just got the job of your dream and life could not be better. You have time to do estate planning, right? Then you drive to your first day of that job and get into a fatal car wreck. Now your new wife and child are left with nothing, and the house you just bought could be in trouble too. It is not pleasant to think about, but estate planning is something you need to take care of right now.
What happens if your spouse passes away before you do? How would your plans change if you got divorced? A good estate planning attorney can help you to plan for contingencies that may never occur to you as you are going through the process of planning your estate. Without good contingency planning, even the best estates can go off course.
An estate plan includes every member of your family, including your furry family members. When people do not specify what happens to their pets in their estate planning, then they are leaving their pets to an unknown fate. Instead of leaving Fluffy's fate up to the courts, you should take the time to make provisions for your pet in your estate planning.
Estate planning is serious business that will have significant effects on your family after you have passed on. For the sake of your loved ones and the traditions you hold so dear, it is important that you get involved in an estate planning process as soon as possible.
An effective estate planning process requires a working relationship between you and your attorney. Once you decide to engage an attorney in estate planning services, it is important to remember that you have your own set of responsibilities to make sure that your plans go through properly.
The process of having your attorney put together your estate plan is only the beginning of your journey. If you do not understand your role in your estate administration and planning, then you could unknowingly undermine all of the work that your attorney has done. Be wary of your responsibilities and do your part to preserve your estate.
An estate plan usually involves your personal assets and a significant amount of insurance to protect those you love. When you are dealing with an estate, you should keep your financial information to yourself and only share it with trusted advisers and your most immediate family members. You would be surprised at how many people suddenly want to be a part of your life the moment they hear that you have an estate of any kind.
Obviously, you want to trust the attorney that handles your estate for you because that bond between you and your attorney is critical. But if you decide to take on a new accountant or financial adviser after your estate planning foundation is in place, you should be very careful who you choose.
An organized estate can be easy prey for the wrong people. Your attorney can only do so much to protect you from financial predators. If you do decide to change professional service representatives after your estate is in place, then be sure to check their backgrounds thoroughly.
Unfortunately, the world is full of financial predators and nothing attracts these predators more than the idea of having an organized estate. You should do your best to keep your estate planning activities to yourself, but you should also be very suspicious of long lost family members or friends that suddenly want to re-appear into your life. You should also be suspicious of complete strangers who suddenly want to be your friend.
If your situation has changed at all, then you need to keep your attorney updated. For example, if you remodeled your home and significantly increased its value, then that is something your estate planning attorney would need to know.
It is also extremely important to discuss your beneficiaries with your attorney at least once a year to make sure that you are protecting the right people. If you have a family member who suddenly needs constant medical attention or you yourself experience a medical setback, then you should contact your attorney immediately.
Good estate planning is not a one-way street. Your attorney has all of the administrative responsibility when it comes to your estate planning, but you have responsibilities as well. If you are unwilling to hold up your end of an estate planning process, then there is only so much your attorney can do to protect you and your family. If you are unable to maintain your estate properly, then that is something your attorney needs to know immediately.
A will is essential in making sure that all of your final wishes are carried out, but there are a lot of myths about wills that cause people to avoid getting them done. Just like life insurance, people do not feel like a will is something that they have to worry about right now. But the one thing life insurance and a will have in common is that when you need them and you do not have them, your family will suffer the consequences.
Perhaps the most significant myth that causes people to avoid getting their wills done is the pressure they put on themselves about what a will represents. The idea of getting a will done is so built-up in the person's mind that they get intimidated by it and avoid doing it.
The best way to handle this type of hesitation is to talk with someone who has had a will done and get details on the process. Once a hesitant person understands how simple it is to have a will done, they will do what they have to do to protect their family.
There are two things people tend to avoid throughout their lives; doing their will and buying their cemetery plot. The prevailing attitude is that taking care of a will is something that is done later in life, and now is not that time.
Life is a fragile thing, and you never know what can happen from day to day. If you suddenly pass away without a will on file, then your family may have to spend money on an attorney to fight for your estate in court. A will is something done to take care of your last wishes, and you never know when you will need it. That is why it is important to take care of getting your will done right now.
This is another powerful myth and significant reason why people avoid having their wills done. If you have property you want to make sure gets distributed in a particular way after you have passed on, then the only way to do that is through a will.
After your estate passes through probate court, control of your possessions could wind up with just about anyone in your family. If you want your family taken care of and your personal interests honored after you have passed away, then a will is the only way to do that.
Your lawyer is the best place to start when it comes time to getting a will put together. Even if your attorney does not handle wills, they will have someone you can talk to that they trust to help you take care of this important part of your estate.
When you spend a lifetime building up an estate and looking after your family, you want to make sure that your estate and your family are properly cared for after you are gone. Instead of hoping that everything goes like you want it to in probate, you should force the situation to go the way you want it to by having your will in place.
When an attorney says that they offer divorce services, that statement is much more broad than you may think. Filing for divorce can be a complicated process, even for people who think that they do not have much of an estate to fight over. As you talk to lawyers to try and find your perfect divorce attorney, there are a few other law fields you should ask about to make sure you are getting an attorney that can do the entire job for you.
A divorce can get extremely complicated if there are children involved. The parent with custody may want to move out of state and the other parent won't allow it, or the status of the custody agreement may be challenged by one side or the other. Unfortunately, some battling spouses use the children as leverage in a divorce and it can be up to the attorneys to step in and act for the best interests of the children.
A divorce attorney needs to be an expert on family law, and that attorney needs to understand how important timing can be. Either parent can file for custody whenever they want, but the advantage in a custody case can sometimes go to the parent who has an attorney who knows the importance of making the first move.
Divorces involving children can get messy, but divorces involving money and property can get downright personal. Each state has their own laws regarding the marriage estate of a couple, and you need an attorney who knows those laws inside and out to preserve your rights and allow to keep property that is yours.
Some of the worst divorce horror stories people hear are about estate battles, and most of those horror stories are true. That is why a good attorney is essential when you are filing divorce.
In the wake of a divorce, one or both spouses may want to amend their wills to exclude their future ex-significant other. If the husband set up a trust for his wife when they were madly in love, then he may change his mind when the divorce starts going through. When you have money wills and trust accounts that could be part of a divorce, then your attorney needs to be an expert on them to get you the results you want.
Some married couples start successful businesses together, and those businesses could become casualties of a divorce. One spouse may be part owner of a successful business, and the other spouse could be entitled to part of that business as a result of the divorce proceedings. If there is a business involved in your marriage in any way, then there needs to be an experienced attorney involved in your divorce.
A divorce lawyer is actually not a specialist, but rather a broad practitioner who is able to practice law in a variety of disciplines. If you do not have an attorney with a comprehensive understanding of all of the areas of law that are involved in a divorce, then you could stand to lose more than you had expected. When you search for your divorce attorney, be sure you find one who has all of the skills you need to get the job done right.
In many states, getting a divorce can be as simple as signing a piece of paper. Nevada is famous for its easy divorce laws, but that does not mean that a quick Las Vegas divorce is always the best answer. If you are going to go through a divorce, then you need to hire an attorney. The temptation to try and do it yourself and save the money is strong, but the amount of money you could lose if your divorce is not properly handled will seem like pittance compared to what you could lose if you are not careful.
When you and your spouse first decide to divorce, you may decide to be amicable and get the process over quickly. But once an agreeable spouse has had time to think things over, they can become disagreeable very quickly. The change in mood may come out of spite for what the spouse feels has happened through the whole downfall of the relationship, or the other spouse may have found success since the separation and the spiteful spouse wants part of the new fortune. In any event, you need to have an attorney on your side who can protect your rights from a vengeful spouse.
When you first told your friend you were getting divorced, he assured you that you can do it yourself by signing a couple of documents and filing it with the court. Aside from the dangers a spiteful spouse can create, the process is also not as simple as people make it out to be. Some people see a lawyer handle a divorce and think that it looks easy. But that lawyer has studied years to know how to file a smooth divorce, and that is why people hire attorneys to make sure that they do not lose everything in the process.
Even though you and your spouse agreed to get divorced without attorneys, that could change as your spouse does some research on the Internet and listens to their family and friends. A divorce is a legal proceeding and you should have an attorney representing your best interests throughout the process. The last thing you need is to try and save money by not hiring an attorney, only to find out that your spouse felt it was better for them to get legal guidance.
In matters like a divorce, there is no such thing as a lawyer going to court on your behalf once and then never coming back. Once you have been associated with an attorney, the court will require you to have that attorney present at all times. The court is basically protecting you from yourself by requiring you to have an attorney for the entire process.
When you and your spouse decide to get a divorce, you need to consider your best interests over everything else. If there are children involved, then you definitely want to do what is right for the children by hiring an attorney. The bold truth is that you need to hire an attorney for your divorce if you want to have your rights protected at all times.