It is important to have a conversation with your grown children about the money they will inherit, in order to ensure that you have given them the best chance to make this wealth last. Unfortunately, plenty of assets that have passed on to future generations do not last for long and this is particularly true when it comes to family business interests. The family business interests or the wealth amassed by the company could be misspent or squandered away in just one generation if you’re not careful. The best way to guard against this is to ensure that you have taken a comprehensive approach to estate planning and engaged your beneficiaries in a conversation about how to protect this wealth. Having the right support from an experienced estate planning professional who understands how all of these issues will affect your own future is beneficial. Unfortunately, trusts and investments often do not last until the third generation.
Thousands of business owners and high net worth families will even have difficulty passing on this wealth to the children, much less the grandchildren. Many of these cases involve a breakdown in communication and trust. Lack of preparedness on the part of the younger generation receiving the wealth is part of the challenge but it is also the responsibility of the person making the estate plans to consider all possible ways that they could guard beneficiaries from themselves.
Beneficiaries may not be capable of receiving a large lump sum inheritance. An estate planning professional will be well advised to counsel you about the unique situations in your family, especially if you are concerned about a spendthrift child or a child who is struggling with addiction-related issues.
Americans and people the world over, are living longer than ever before and while this is generally good news, it can be disconcerting if you don’t have an appropriate estate plan in place. Thankfully, doing your estate planning work in advance with the help of a knowledgeable attorney can give you greater peace of mind that should you ever need long term care, that it would be accessible to you and confidence in your estate and financial planning.
The first stage for protecting yourself for greater longevity is considering long term care. There is a good chance that one spouse of every married couple will at least end up in a nursing home. Traditional long-term care policies might be too expensive, but it’s a good idea to investigate your options now. The second thing to do to prepare for greater longevity is to consider incapacity.
Many people assume that their spouse will have the automatic ability to make financial and medical decisions on their behalf in the event they become incapacitated, but this is not always the case. You should have legal documents that line up directly with your wishes and individual desires. The third thing you should do to incorporate longevity into your plan is to avoid probate. If you were to pass away without assets in your sole name, your loved one may have to go through the painful, expensive and sometimes frustrating process known as probate.
Probate can cost anywhere from a couple of thousand dollars to many thousands of dollars and can take six months to a year or longer. Finally, the last step to consider in your longevity plan is how to minimize taxes. Although federal estate taxes might no longer apply unless you have substantial assets inside, there are other taxes that you might need to consider, including inheritance taxes, estate taxes, and capital gains taxes. Make sure that you consult with an attorney about what to do if this applies to you.
Are you a big art collector but are not sure how this factors into your estate planning? You could be leaving behind major problems for you beneficiaries that go far beyond simply passing on these art related assets. First of all, if you don’t have the appraisal work completed, your beneficiaries or your executor could be dealing with challenges such as estate fraud.
While the federal estate tax and gift tax exemption is $11.18 million per person, and estate taxes might not be an issue for most people, if you’ve accumulated a substantial volume of artwork over the course of time, ignoring the value of this art could lead to problems later if you don’t report it appropriately. If you don’t report the value of your art collection, penalties, estate taxes, fines and tax fraud issues could affect your loved ones.
Since the statute of limitations for tax fraud is essentially limitless, you want to do your homework well in advance. Even if the estate tax exemption amount won’t be triggered by your personal art collection, you want to have clarity and organization regarding how you intend to dispose of these assets and its overall value. This can help to keep the peace among beneficiaries and decrease the chances that your loved ones will become involved in an estate planning or probate related dispute. The first step to take is making an inventory. Make a list of every piece of art and its overall value. If you’re not familiar with the values, you can hire an art appraiser to determine the fair market value of the collection. In addition to leaving artwork to beneficiaries with the appropriate value percentages, you’ll also be informed about whether or not any estate tax issues arise.
A trust may be a better way to pass on your art collection. If you transfer your art collection into a trust, this protects the privacy of your estate and the artists involved, as well as the beneficiaries. Schedule a consultation today with a knowledgeable estate planning lawyer who can help you figure out what you need to do in order to best protect your interests.
No one wants their loved ones in the midst of a bitter battle about estate planning and inheritance issues, and yet far too many people have seen this firsthand. Thinking that you’re going to inherit something from someone’s will and later learning that another family member has initiated a will contest can be overwhelming as well as frustrating.
Thankfully, there are steps you can put in place to decrease the chances that there’s confusion or even disputes over the distribution of your assets. Multiple states, including Massachusetts, accept a very important document known as a personal property memorandum. This can become one of the most important documents inside your estate plan because it clarifies exactly what you do and don’t want done with your belongings.
A personal property memorandum is used to explain all the individual property you want to leave to your heirs. This means there’s little chance for someone to be confused or for your instructions to be misinterpreted. Listing each item inside your traditional will can be far too much detail, but when you instead list this in a personal property memorandum, it’s easier for the person managing your estate to distribute these details.
When your personal property memorandum details what you want done with your jewelry and furniture, it can’t be misunderstood. As long as this is included with the remainder of your estate planning documents and so long as your executor or your loved ones know where to find these materials after you pass away, you can make things much easier for everyone involved. That’s because your property can promptly be given to who you intend to receive it. This can be a big blessing for someone who does not want the potential of arguments down the road.
When it comes to creating this tool, be as detailed as possible. If you list that one person is to receive your china, but another person gets the “antique serving dish”, this clarifies what is and isn’t part of the general “china.” When you can include clear details about each item, there will be no question about who should receive it.
Whenever you need to include supplemental materials with your basic estate plan, this information should be drafted by a Massachusetts estate planning lawyer who knows the lay of the land.
All of the estate planning in the world can fall short if you didn’t follow through on the additional steps required after establishing the documents. One major mistake that your family members might discover after you have passed away is that you forgot to fund a trust.
Likewise, you might even discover this over the course of your life time if the intention is to transfer assets inside the trust for the purposes of asset protection planning and when you failed to do so, exposed yourself to personal liability.
Creating a trust is the first and one of the most important steps to creating a comprehensive estate plan, but if you fail to follow through and fund the trust, you don’t receive any of the benefits that you intended. The trust by itself can be functional but fails to meet its full potential until you put something inside it. Often attorneys who prepare trusts will take care of the real estate for you, such as preparing a deed in trust or preparing a deed.
This means that a real estate is officially transferred into the trust. After this has been officially recorded, the real estate is funded into the trust. You should also verify, after transferring real property into a trust, whether or not the county auditor’s office requires you to refile your real estate tax exemptions. Your insurance agent should also be contacted about any implications on that end.
Most estate planning attorneys will also help you in the additional steps required to fund your trust, such as moving personal property like appliances, collectibles, clothing and furniture into the trust. Assignments or bills of sale can be used. An assignment should only be used for those items that do not have a title of some type. You should not rely on an assignment to transfer cars, stocks or other items that have a form demonstrating ownership.
You can request an affidavit of trust or a certificate of trust directly from your bank account and you will have new signature cards issued which you can sign for as trustee of the trust. These important steps must occur in order get the most out of your trust document. Talk to your lawyer to learn more about your options.
A new study completed by Kaiser identifies what many operators in the nursing home industry already know.
As residents’ conditions are getting worse, occupancy levels are decreasing. Investigators recently identified that half of the nation’s nursing home residents had a dementia diagnosis and approximately two thirds of residents were currently receiving psychoactive medications such as anti-anxiety drugs, antidepressants or antipsychotics.
Just under a third of current nursing home residents have a psychiatric condition. The total nursing hours increased per resident for each day to 4.1 throughout 2016.
Other findings from the Kaiser study are that a proportion of for-profit-facilities has increased to 69% in 2016 and that Medicaid remains the primary payer for most of these facilities.
If you are contemplating long term Medicaid planning, it essential to consult with an experienced estate planning attorney to help you accomplish these goals and determine your next steps. Protecting a loved one’s interest is imperative and it is necessary to complete a thorough review of proper Medicaid planning to figure out how these facilities will be paid for.
A recent study completed by Wells Fargo found that one out of every six older Americans knew that their financial documents are out of date. Many individuals put off these tasks because they assume a lack of urgency and that it is not important to deal with right away.
However, any time that you get prompts from a technology platform, an estate planning attorney or a financial advisor showing that your accounts may need to be updated, this is a good opportunity to review and verify that all of your beneficiary information and other planning tools are in line what you intend to accomplish. Furthermore, if you’ve done your estate planning but haven’t explained your goals and intentions to your family, this is another way that you can be exposed to problems. Not talking about your money will avoid you making a plan for what would happen if you were to become unable to handle your financial affairs.
This is particularly problematic in the event that you develop dementia or another cognitive problem later on. You want to have these wishes articulated clearly and communicated to key stakeholders so that you can avoid the possibility of problems in the future.
Make sure that you talk over what you want your plan to include with your lawyer and then make a strategy for informing loved ones.
Tax scams, unfortunately, disproportionately affect the elderly, and can expose people to a number of different financial risks going forward. Around tax season these scams tend to increase, and could expose you to serious financial problems.
Being aware of telephone tax scams is on the of the most important steps to take to decrease your chances of being affected. Unfortunately many people are receiving a common tax scam that appears to come in the form of a phone call from the IRS mandating that payment must be made immediately or criminal prosecution will be pursued.
These phone calls tend to threaten criminal prosecution, lawsuits, and police arrest, however the IRS typically communicates with consumers directly through the mail and letters that come on IRS letterhead. A phone call demanding immediate payment could be a sign of a telephone tax scam.
And they should contact an affected person to schedule a consultation or to contact the IRS directly. Being aware of telephone tax scams is one of the best ways to protect your assets that you have worked so hard to accumulate over your life from being decimated by a fraudulent scheme.
When protecting your assets, you must have both an eye towards the future and a plan to address scams or fraudulent schemes in the present. Discuss your options with an estate planning lawyer in MA today to learn more.
In light of the new estate and tax law changes that have come into place, many people are thinking about the benefits of adjusting their estate plan. It’s worth a review sitting down with an experienced estate planning attorney to talk through the advantages of adjusting your current strategies.
Regular revisions are smart planning, and they ensure that if something happens to you suddenly that you have plans in place to respond and put your loved ones at ease.
Below are seven reasons why outside of the current estate and tax law changes, you may wish to consider a visit with your experienced estate planning attorney. These include:
· Setting up guardianship for your children if you have not done so.
· Financial and administrative management of your affairs if something were to happen to you, including a disability or sudden incapacity.
· Disposing of your assets, whether it’s through a will or irrevocable trust.
· Ancillary documents, such as your health care directives, a general durable power of attorney over financial matters, and a health care proxy.
· Using trust to provide you with varying degrees of protection against creditors, predators and divorce.
· Tax efficiency.
All of these various benefits can be achieved by sitting down with an estate planning attorney and walking through the current strategies and documents you have in place to verify whether or not they are in line with what you intend to accomplish.
Unfortunately, experienced estate planning attorneys say there’s a high percentage of clients who have recurring mistakes in their strategy. If you haven’t had your plan updated in the last three years or if you’ve never visited with an estate planning attorney, you might not even have a will. If you do have a will, it is highly likely that the will does not fully protect you as you intended that it might.
Relying on a will alone is not enough. A complete estate plan must include numerous different documents that address your concerns prior to you passing away, such as an advanced medical directive and a power of attorney. These documents can enable one or more agents to make decisions and take particular actions associated with your assets or medical care when you are no longer able to do so. Unfortunately, when many people skip out on this process, the actions are only taken after a court appoints a guardian to act on your behalf and it could be someone that you didn’t intend to serve in this role.
Some people believe that there’s no rush to execute these critical estate planning documents but that is a myth. A sudden event such as a stroke or a heart attack could cause someone to need a power of attorney document and advance medical directive. Once an event like this happens, it is too late to put together the necessary documentation for legal purposes. This is why it is recommended to have it well in advance, even before you think you need it with a MA estate planning attorney.