It makes sense that you want to pass on as much as possible to your loved ones. What’s even more important, however, is how you choose to do this. The timing of when you make a gift to a loved one can make a big difference in how your family member is able to manage that resource.
The establishment of a trust is a popular tool for an estate planning strategy but if you’re not careful, it could end up being a big mistake. Putting together a trust when your children are relatively young, such as those under 6, might lead you to think that they can handle receiving large sums of money when they reach age 21 or 25.
It can be a shock for many parents who have already put this plan into place to discover that the children are simply not ready to inherit such a large sum of money. If you’re not careful in how you structure your fund, however, it’s difficult to overturn this when the child reaches these milestones.
Parents should consider delaying bigger portions of a child’s inheritance to allow a trustee to have greater discretion in distributing the money should your child need it sooner. It is not always easy to predict what your child may need in the future, but giving them too much too soon could actually make it more difficult for them to develop into adulthood and to protect their own interests.
Using a trust that has flexible terms and scheduling a consultation with a Virginia Beach estate planning lawyer who can walk you through this process and advise you against some of the most common mistakes is strongly recommended.
A trust is a legal way of managing, distributing, and holding property. The selection of a living trust is very popular, but you should always understand what is needed to ensure that this trust is valid.
In order for a trust to be effective and valid, it needs to have four different elements. First of all, there must be assets. Secondly, there must be a person who has created the trust, often referred to as the grantor or the trustor.
Another person must be named in order for the trust to be legally effective. This person is called the trustee and this individual manages, holds, and distributes the assets. Finally, in order to put together a properly structured trust, the trust must have a purpose and it must be funded. The person for whose benefit the trust is created is referred to as the beneficiary and you may have more than one beneficiary depending on your unique estate plan. Living trusts can help you avoid the probate process and for this reason are a popular tool for a number of different people who are looking to have a comprehensive estate plan. Scheduling a consultation directly with an experienced lawyer is the only way to figure out whether or not a living trust should be part of your estate plan and which or your assets should be placed inside it.
A living trust is titled in this manner because you can change it or revoke it over the course of your life, giving you maximum freedom and flexibility. Call a Virginia estate planning lawyer today to learn more.
A transfer on death deed can be updated at a later date. However, a ToD deed is not irrevocable. This is because the person establishing it has not transferred any real estates into it or given up any rights. This means they can change it at any time. A transfer on death deed performs the basic and important task of adding a beneficiary to your real estate. It is quite similar to naming a payable on death beneficiary in a bank account.
All this does is create an expectation rather than an actual interest in the real estate. In order for it a ToD deed to be effective it must be recorded. It needs to be filed directly with the County Recorder’s Office. For many people, this is one of the primary concerns associated with transfer on death deeds because they are not easy to change. If you wanted to update a payable on death provision on your savings account, you could go to your local bank branch and be assisted by a representative.
However, to change a transfer on death deed, you will most likely need a lawyer to ensure that it is done properly. This is an obstacle that can be overcome but is one that many people wish to avoid in order to make it as simple as possible to update a ToD. Consulting with an experienced estate planning attorney can make you more aware of the challenges as well as the benefits associated with using different tools and strategies.
An estate planning attorney is a vital component of your future plans with any deeds or other property.
Congratulations on your newest addition. There are many different things to think about in the wake of becoming a new parent but one of the most important is putting an emergency fund. The U.S. Department of Agriculture shares that the cost of raising a child up to age 18 is more than $230,000 for a married couple of little income with two children. Your own financial house needs to be in order before you can provide for your children. A starter emergency fund of $500 or so can help you in the event that a sudden and small expense crops up.
You’ll eventually want a bigger fund but it could take several years to get there. You will also likely need life insurance as well. Young parents will typically need up to 10 times their income in terms of coverage. You can boost your emergency and retirement savings until those accounts are on track. If you still have money left over after that, consider contributing to a 529 college savings account.
Furthermore, you will want to update all of your estate planning documents after welcoming a new loved one into your family. You’ll need to ensure that your will includes stipulations about who should step in in the event that you pass away to care for your minor child. A will is the only way to name such a person and it needs to be formally documented in case something ever happens to you and/or your spouse. Consulting with an experienced estate planning attorney is recommended.
An uncertain legislative and tax environment should be prompting you to analyze all tax opportunities as you look forward to 2018. There are several different things you can incorporate into your planning considerations for 2017 as an individual. These include:
- Deferring income and accelerating deductions if you can.
- Using itemized deductions before they disappear.
- Leveraging local and state sales tax deductions.
- Considering making charitable donations now.
- Getting your charitable house in order.
- Use increased withholding to make up a tax shortfall.
- Leveraging your retirement account tax savings.
- Documenting business activities.
- Treading carefully with estate planning and scheduling a consultation with a lawyer to review your existing estate plan.
- Evaluating your state residency status when you split your home between two places.
All of these steps are important and can provide you with further information about
mistakes you could be making that could compromise your ability to be successful with both your taxes and your retirement planning. Incorporating long term care planning, legacy planning, and tax planning all together gives you greater peace of mind for the future.
Ready to choose a plan that works for you? Estate planning is a very personal process and one that might change over time as your family structure and needs evolve. Take the time to meet with your estate planning attorney at least annually to review what’s no longer working for you and how you can plan for yourself and your loved ones.
Americans keep assuming, incorrectly, that the government will cover the vast majority of their long-term care expenses, but that is not true, and research shows that long term care expenses are only increasing. The Genworth 2017 Cost of Care Survey was recently released and the President and CEO of Genworth’s U.S. Life Division indicated that people are living longer, but are not prepared.
A private room in a nursing home now costs consumers more than $8000 per month or just under $100,000 per year. A semi-private room still carries a price tag of $85,000 per year. Government oversight of hospitals could be influencing these higher prices because hospitals are now under pressure to reduce the costs and discharge patients more quickly.
Those patients who might have spent up to a week in the hospital in years past are now only spending a couple of days and then they return to the nursing home for rehabilitation, in need of more care because they are sicker. This means that the nursing home then has to put more experienced staff or more staff in general on duty. Home health care has experienced the biggest hike in long term care expenses. The annual median cost increased by 6.2% for home health aides.
The potential reasons for this include an increase in the minimum wage in certain geographic locations, making other jobs more attractive and an increasing demand for caregivers over all. If you or someone you know would benefit from talking to an attorney about protecting yourself against the high expense of long term care, schedule a consultation with a lawyer today.
If you are looking ahead to the future to protect your own assets and to cover the very expensive cost of nursing home or other necessary care when you are older, long term care insurance is an important opportunity to protect your future.
The majority of Americans over age 65 will need some type of long term care in their future. So, it’s in your best interest to purchase long term care insurance now. It is getting more expensive, however, so engaging in any opportunity you can to keep the cost down is well worth it.
The average cost of long term care insurance policies in the United States is about $2700 a year. The older you are, the more you’ll pay in long term care insurance and you’ll also pay more based on your health. With serious conditions like metastatic cancer or Alzheimer’s, an insurance company might deny you altogether. There are alternatives like short term care policies, which typically cost one third of long term care insurance, but it covers a lot less.
Hybrid insurance policies combine long term care and life insurance together; enabling you to tap into the debt benefit, if you need it for care. There may be significant upfront payments involved. Getting a long-term care insurance policy should always be done when you are relatively young and healthy.
You will get a better rate for your long-term care insurance cost at that point in time and have a better awareness that you are protected. Remember that long term care problems do not only emerge when you are older. Some of the individuals who have activated their long-term care insurance policies are in their 20s and 30s and need significant rehabilitation after a vehicle accident. Talk to an estate planning attorney in VA today to learn more about protecting your assets for the future.
There are plenty of different studies and toolkits that recommend incorporating digital estate planning but it is only as good as the value of your comprehensive planning. Overlooking common digital accounts could lead to major mistakes if you were to suddenly pass away.
Research found that many participants have digital media assets in the form of emails, banking records and social media accounts but they can also include medical records, iTunes account, bitcoins, and online businesses.
Online service providers each have their own unique approach to how they deal with somebody’s account when that person passes away. In many cases if they are informed that someone has passed away, they will all automatically close the account. In other cases, family members must provide documentation indicating that they have the right to terminate such an account.
You may not wish to close these accounts immediately because they have information that your family members may wish to save, such as a social media account that includes all of your digital photos. Having clearly articulated plans and verifying that they are incompliance with the rules of that particular service provider is strongly recommended.
Having a consultation with an estate planning attorney can further illuminate you about the critical issues involved in digital estate planning and the steps that you should take to ensure that you have considered all of your accounts and have clearly articulated instructions and compliance rules associated with passing these on. While you may want these accounts closed immediately after you pass away, having a plan can make things easier for your family when they are already struggling with the loss of a loved one.
Most people understand the benefits of traditional estate planning and yet many of them have not engaged in it at all. In fact, numerous studies indicate that far too many people don’t even have the most basic of estate plans in the form of a will. But another commonly neglected area of estate planning has to do with not thinking about what might happen to you while you are still alive.
Certainly, there a number of different risks and sudden incidents that could prompt you to consider the dangers of passing away without an estate plan but far too many people are actually at risk of suffering some type of incapacitating event during the course of their life that leaves their family members and even themselves unable to make informed decisions about medical care.
If you are suddenly incapacitated by a disability caused by something like a car accident, who would be appointed to make medical or financial decisions on your behalf? Do you have a comprehensive plan that looks at the different concerns that your family might be required to address in the immediate aftermath? Far too many families who are already coping with the broad range of changes caused by incapacitation are then asked to sort through a legal mess because someone did not engage in appropriate incapacitation planning.
Scheduling a consultation with a knowledgeable estate planning attorney can help you to articulate what you want to happen to your estate after you pass away as well as who will be appointed to make these critical decisions for your future if you suddenly become incapacitated.
For most people, they recognize that relationships that they’ve built over the course of their life are more important than anything else. However, no matter how good of a saver, planner or investor you consider yourself to be, other people are almost always impacted by your actions and decisions including your failures and your successes. Those people are often the same ones you care the most about.
- What is in the will?
- What others need to know about your end of life choices?
- Who is empowered to make healthcare decisions for you if you are unable to do so?
- Are you currently living within your means?
A good introduction to a crucial family conversation is about values. This is because it is much easy for people to approach the subject talking about values than money. Relationships matter more than money and more than things and establishing your values gives you preliminary opener to talk about your long-term goals that you hope to achieve. Spouses and partners should also be prepared to openly discuss their savings, their retirement dreams and their plans.
Family values should be discussed with younger family members as well. Money related talks can be difficult to broach but can be extremely important for establishing a conversation that allows your loved ones to know your intentions. Finding the right estate planning lawyer in Virginia Beach can help you with your own decision-making.