Archive for the ‘Estate Planning Basics’ Category
Common Types of Trusts
Trusts fall into two categories; revocable and irrevocable. Revocable trusts are often called living trusts, and they can be canceled or revoked at any time. Irrevocable trusts are permanent, once created and funded they cannot be canceled or modified.
Revocable Living Trusts
These common trusts are normally used to avoid probate. [...]
Estate Planning for the Chronically Ill
A recent Wall Street Journal article (4/5/2009) cited some prudent extra steps and some good ideas for individuals with chronic illness when they prepare their estates. Here is a quick summary:
1. Power of Attorney
This document allows others to act on your behalf - paying bills, filing taxes, etc. A ‘durable power of attorney’ [...]
Inheriting Debt
Can you inherit your parent’s bills when they pass away? Generally not. Careful planning can make sure you don’t fall prey to “Negative Inheritance”.
Normal secured debt (like car loans and mortgages) are backed by the asset, and by the people who signed or co-signed the loan documents. If you didn’t sign the loan documents on [...]
One more holiday chore
Yes, there is a lot to do in December. Don’t leave gifting to the last minute - get it done now to insure your gift happens in this calendar year.
If you are gifting cash, remember the $12,000 exclusion limit. You can gift more than $12,000 but must fill out a gift [...]
Gifting and the IRS - Misconceptions
After years of incorrect understanding of gift taxes, today I did some research online and found a few interesting misconceptions and their correction. The definitive source online is the IRS site, with the relevant page located at:
IRS Gift and Estate Tax Overview
Misconception #1: The recipient of gifts over the exclusion limit ($12,000 per [...]
First Child on the Way?
Most young adults put off planning for their heirs - with few assets, little obligations that outlive them, and a sense of immortality in the mix who can blame them? Then a baby comes along, and everything changes. Along with deciding a name, picking a crib, and a sudden urge to live it up comes [...]
Inheritance with Strings Attached
Let’s say your assets are substantial, and you are worried that your children will misuse the estate you worked so hard to build. Many people place restrictions on their children’s receipt of the inheritance.
Common restrictions pass the money to the adult child in stages, with some money available at age 18, with more disbursements [...]
What is an Estate Plan
OK, an estate plan is a good idea, but what is it exactly? An estate plan speaks for you when you are no longer able. It helps your loved ones navigate through the legal and medical mazes surrounding severe illness and death. And it creates clear and simple directives that let others [...]
Organizing for Your Heirs
When a family enters the home after a death, the priorities are sometimes overwhelmed by emotions and memories. Diving through desks, kitchen drawers and the shoeboxes in the closet are often necessary to locate and secure wills, trusts, financial statements, car keys, etc. This time is better spent on grief, consolation of family members, reflections [...]
Who Needs a Will, and Why?
A will tells how to distribute assets and debts, names the person responsible for settling the estate, names potential guardians for dependents, and hopefully resolves potential conflicts before they start.
A living trust does not replace a will, you still need a will even if you have a living trust.
Young parents especially need a will, [...]