Pet Trusts: The Basics

After you pass on, you might want to leave your belongings to your family and/or friends. You might think you have everyone accounted for, but there is a member of the family you may have forgotten about; the family pet. Yes, you can leave a trust to your pet.

What is a Pet Trust?

A pet trust should be created by an experienced pet trust attorney. Basically, a pet trust should provide the pet with a source of income and assets that will be used to care for your pet after you pass. The agreement should include very specific instructions on how to care for your pet. You can assign a trustee to your pet trust. The trustee will be required to make sure your pet’s trust is carried out as intended.

Types of Pet Trusts

When you are considering having a pet trust written, the first step will be to determine what type of trust is best for your pet. The more common type of pet trust is called a traditional pet trust. This type of trust is accepted in every state. The trust is intended to provide owners with control over the future of their pet’s life.

The other type of pet trust is called a statutory pet trust. This type of trust is very basic and leaves the care of the pet to be determined by state laws. If you intend on providing for your pet’s financial future and that’s all, this is the right choice for you. Statutory pet trusts are recognized in most states.

 Can I Just Address my Pet in a Will?

Yes, you can address your pet in your will. The only difference here is that you can only assign a caregiver to the pet. Once the caregiver takes control of your pet, they are not held to any requirements that may have been included in the will.

If you are planning your estate and care about the future of your pet, contact an experienced estate planning attorney.

 

I Don’t Have Kids, Do I Still Need an Estate Plan?

Planning your Estate Without Children

Estate planning is often a topic that is accompanied by the feeling of anguish. The overwhelming majority of people are uncomfortable talking about their imminent death. Unfortunately, it’s something that must be discussed., because, frankly, there’s no way of avoiding death. It happens to everyone; sometimes out of the blue and other times you can see it coming. It is important to have a plan in place for your possessions after you pass away.

If you don’t have children, you may be thinking “what’s the point of putting together an estate plan?” Well, the point is that you get to decide where a lifetime of hard work ends up. You can leave your possessions to anyone, it does not have to be your children or spouse; it can be a friend or a charity as well.  If you do not have a plan for your estate, the state government will determine what happens to your property.

Tips for Planning your Estate

We took it upon ourselves to give you some personal tips on what to do with your stuff after you leave this life. Some of the things you should take care of in an estate plan are:

  • Name an Executor

Naming an executor is one of the most important aspects of an estate plan. The executor will make sure that your estate plan is properly carried out. This person should be reliable and reputable as they will divide your property amongst recipients. Before you name an executor, make sure to speak to the individual. Some people may not want this responsibility.

  • Name a Decision Maker

The decision maker is another important aspect of an estate plan. The decision maker will do just that; make decisions for you when you are unable to, both financially and medically. They will also be responsible for making decisions on items that are not covered in your in your estate plan. This individual must be strong and have the capability to make tough decisions. When you are choosing a decision maker, make sure that person is aware of their impending responsibilities. It’s also recommended that you choose alternate decision makers in the event that the main individual is unable to make a sound decision.

  • Assign Your Stuff

Create a list of everything you own, from your finances, to any jewelry, or any other property or possessions you would like to be addressed. Then designate who gets what. The more detailed you are here, the easier it will be for the executor to follow your estate plan.  

  • Charities?

Are there any charities you contribute to? If there is no one else to leave your possessions to, or because you just feel like it, you can leave them to a specific charity. There are also ways to lessen the tax hit on charities, speak with an estate planning attorney for more information.

  • Pets?

Are you a pet owner? Do your pets have a place to go after you die? You should think about your pet(s) when creating an estate plan. For example, if you have a dog, choose a family member or a friend that is okay caring for them in the event of your death.

How Does A Prenup Agreement Help Protect Your Inheritance?

What is a prenuptial agreement? You may have heard this referred to as a “prenup.” A prenuptial agreement is a document that is signed and agreed upon by both parties before they marry that concerns the ownership of respective assets should the marriage fail. In other words, a prenuptial agreement is put in pace when one or both people that are getting married have individual pieces of property that they want to protect in the case of a divorce. A prenuptial agreement is considered a non-romantic gesture by many, but it may be necessary. If one person in the marriage is invested in assets that are worth a large sum of money prior to the marriage, they may be inclined to have a prenuptial agreement protecting those assets drafted in an effort to protect what they have collected in the event that the marriage goes sour.

Can I Protect my Inheritance With A Prenuptial Agreement?

You can include a number of things in your prenup agreement including your inheritance. This makes sense since a prenuptial agreement is usually put in place to protect the individual finances of a person who is getting married. You can include any type of financial inheritance in your prenup whether it is a business, property, trust, or so on.

Common Things Included in a Prenuptial Agreement

There are a number of reasons to get a prenuptial agreement. If you are getting married, you should meet with a lawyer and have him/her analyze your situation financially. Some things you might want to detail in your prenuptial agreement are:

  • Separate business
  • Retirement benefits
  • Income, deductions, and claims
  • Management of household bills and expenses
  • Management of joint bank accounts
  • Arrangement regarding investing in certain purchases or projects, like a house or business
  • Management of credit card spending and payments
  • Saving contributions
  • Property distribution to the survivor, including life insurance, in the event of death
  • Arranging putting one or the other through school
  • Settlement of potential disagreements

Although these are all things that you can detail in your prenuptial agreement, you are not limited to these details. A prenuptial agreement can also include:

Distinguish between separate marital properties – Each state has its own laws on what types of property constitute separate and marital property. In the event of a divorce, the court will separate the property acquired while married evenly. If you have a prenuptial agreement, you can use it to separate your property from your spouse’s before the marriage takes place.

Protect one spouse from the other’s debt – Without a prenup, creditors can go after marital property for one spouse’s debt. You can limit this by adding a clause in your prenup that outlines debt liability.

Provide for children from previous relationship – If you want to ensure that your children inherit what you intend to pass down, you can include this in your prenup. This clause is most commonly used when you are entering a second marriage.

Keep family property in the family – If you have a family inheritance, business, or property that you want to pass on to your children, you should include this in your prenuptial agreement.

Define property distribution – This is a safety plan for a divorce. In this section you will agree on the division of property if you end up getting a divorce.

Things you Can Not Include in a Prenuptial Agreement

Although you can include many things in a prenuptial agreement, there are a number of things that can not be included in a prenup. It is important for your attorney to make sure you only include details that are accepted in court. If your attorney does not, sections of your prenup may not be considered by the judge. The following details should not be included in your prenup:

Provisions detailing anything illegal -You cannot include anything illegal in  your prenuptial agreement. If there is something illegal in your agreement the judge might void the agreement.

Decisions regarding child support and child custody – When it comes to child custody and child support, the court has final say. The judge will determine which living situation is “best fit for the child” and how the custody should be planned.

Waive your right to alimony – This is the most commonly struck down provision by courts. Some states allow you to waive your right to alimony, in some states it is frowned upon to include this provision, and in a few it is strictly prohibited to waive your right to alimony in a prenuptial agreement.

Encourage Divorce – You are not allowed to offer an incentive to get divorce. This incentive is usually financial. If this is included in a prenup, the court will rule this section void.

Make rules about personal, rather than financial matters – Prenuptial agreements are designed to address financial matters. Non-financial issues will not be upheld in court. If you want to have personal matters factor into a divorce, you must include it in a separate document.

Going through a divorce is difficult for anyone, even if you have a set terms prior to the marriage. Our divorce attorneys are experienced in writing prenuptial and postnuptial agreements. Contact one of our attorneys for assistance in planning your prenuptial or postnuptial agreement. We will make sure all of your assets are protected in the event of a divorce.

What Happens To The Joint Checking Account When Someone Dies?

One of the most important documents that you can never create is a will, a document that will be activated at the point of your death. It is going to state where you would like to have your assets distributed. People that do not have a will are subject to intestate laws. This is because they fall under the category of intestacy. These are the laws that govern situations where a person has not filed an official last living will and trust which directly instructs where their assets are to go. One of those assets is a checking account, and the assets that are in their will be distributed as mentioned on the will. This can sometimes be different when there is a joint checking account. Let’s look at what happens to a joint checking account when someone dies and they do not have a will.

What If There Is No Will When Your Spouse Dies?

If your spouse dies, and you do not have a will, people wonder what happens to a joint checking account. In most states, because the checking account is in the name of the spouse or partner that they have, those assets immediately are redirected to the person on the account. This is very important to have, in case you are not able to create a will and one of you unexpectedly dies. This prevents any problems from occurring such as family members that would request the money that is in the checking account, something they will not be able to access because it is jointly in your name.

Does A Joint Banking Account Need To Be In A Will?

Although it typically does not need to be, it is a good idea to put it in the will because it reaffirms that the deceased wanted the other person to have the money. By doing so, it prevents any possibility of family members stating that the money should be distributed to family members and not the spouse. It is done to prevent any possibility of disputes occurring which are quite common when someone dies.

The best thing to do is to have a will, or a living will, created before your death. Most of us do not know the time or date that will happen. Therefore, by creating one early, even if you are young, you can make sure that your assets are distributed to people that you would actually want to receive what you own. In the case of a joint checking account, there is usually no problem, but it’s always good to have a will that will list the joint checking account and its assets going to the surviving spouse or partner.

Some Common Types Of Will Contests

Essentially, a will is established to protect an individual’s wishes regarding his or her estate. It is the document that will also be enforced by their legal party, or chosen representative. For the most part, the estate will be distributed according to the will without any complications. But there are instances where people “contest” the will, and this can be based on several different reasons. Also, the individual or group needs to have a good basis for bringing the contest in the first place.

Here are some of the most common types of will contests.

1. Questionable Mental Capacity

Questioning the mental capacity of the testator (the individual who sets up the will) is one of the most common contests. Given that the testator has to be of sound mind when executing or adapting his or her will, it leaves a lot of room for exploitation. In other words, the contest is based on the assumption that the testator wasn’t of sound mind and complete understanding.

While courts don’t particularly like this type of claim, it is still one that enjoys a lot of popularity.

2. The Testator Was Wrongfully Influenced

A will should typically only be handled by the testator and his or her attorney because it prevents this type of contest to hold any ground. Basically, the contest claims that somebody influenced or coerced the testator at the time when the will was executed.

If it can be proven that a third party influenced the decisions of the te

3. The Right Procedure Wasn’t Followed

This is going to vary between states, but there are certain things that need to apply when establishing a will. For example, some states have made it mandatory to sign the will in front of witnesses and have them sign as well. The moment specific procedure isn’t followed, it can render the will invalid.

4. Basic Fraud

There are situations where individuals are lied to and deceived during the execution of the will. When this can be proven in court, the will is immediately declared as useless.

What happens when the contest is successful?

The court will either rely on a previous will to distribute the estate, or it will implement the state’s intestacy rules. And it is due to these contests that individuals use experienced and trustworthy estate planners to help secure their last wishes, otherwise, it can easily be unfairly contested.

Common Estate Planning Myths: Stay Informed

There are many myths that surround estate planning. In fact, these myths can lead to a great disadvantage for those who choose to stay misinformed. But in light of staying informed and getting some of the common estate planning myths out of the way, here are some of them.

1. Only Rich People Invest Time In Estate Planning

Just because you don’t have millions in the bank doesn’t mean you shouldn’t look into estate planning. Remember, this is a process where you distribute your sentimental possessions and everything else you own. If you don’t do it, regardless of how little you think you have, you might leave your loved ones in a small claim war.

2. Only Old People Think About Estate Planning

While it is definitely something you should take seriously in your senior years, estate planning cannot be left until the spur of the moment. When you pass on, there is no coming back and executing a will.

If you have people who depend on you, estate planning needs to happen as soon as possible. Seeing as nobody can predict the future, you are never too old to execute a will.

3. Estate Planning Is Basic And Straightforward

Unfortunately, estate planning isn’t just about choosing beneficiaries and forgetting about the document altogether. You need to take into account things that can change. For example, the person you leave everything to might pass away unexpectedly, meaning provisions have to be in place.

These types of considerations are usually focused on when you use an experienced estate planner. They know which questions to ask and how to expand on a basic will.

4. Everyone Will Be Happy With Your Choices

There is simply no pleasing everyone, even with a big estate plan. You have to decide who deserves what, and you need to stick to your decisions. You won’t be able to satisfy everyone’s needs, so don’t put unnecessary pressure on yourself.

5. Estate Planning Isn’t Necessary If You Trust Your Family

As much trust as you might have in your family to do the right thing, the situation is going to be challenging. Dealing with your death can change their perspective, and ultimately create a fight over who gets what.

Don’t expect your family to think logically during this time, because they won’t. Instead, execute a will and keep them from making the situation worse.

How To Plan For End Of Life Medical Treatments

Death isn’t something we want to think about, but it is going to happen whether we like it or not. The more you plan for your eventual death the easier it will on your loved ones. Not planning can lead to expensive court costs and other issues that can cause stress and cause you to lose money. Planning for end of life medical treatment is important because you want your loved ones to know what you want if you can’t articulate what that is.

You never know when you are going to become unable to make your own decisions, so you should start planning for the inevitable right now. Drawing up a Power of Attorney is a good place to start. You can choose to only use the Power of Attorney to make medical decisions on your behalf or you can draw up a broad Power of Attorney that allows the person you appoint to make all types of decisions, including financial ones.

If you don’t want extensive medical treatments when you can’t make your own decisions, you need to state that in the documents. You can specify the types of treatments you want and you don’t want and your wishes will be carried out by the person you appoint. You can draw up the papers yourself, or you can visit a lawyer.

If you don’t want to be resuscitated, you can also include a DNR, or Do Not Resuscitate order, with your Power of Attorney. This is a separate document and you will include it with your paperwork. If you are only interested in appointing someone to deal with your health issues, you could set up a Health Care Power of Attorney which will allow the person you designate to make any type of medical choices for you.

Many people choose not to have extended end of life medical treatments but you need to spell this out beforehand. If you don’t get the legal documents completed before you become incapacitated, the court is going to get involved and they could end up appointing someone to handle your medical needs that you don’t want.

You need to set up a Power of Attorney document before you actually need it so you are prepared for when the inevitable happens. If you want to make sure your wishes are respected, you need a Power of Attorney in advance.

Common Estate Planning Mistakes to Avoid

There are many decisions that we may need to make in life but perhaps one of the more important of those decisions involves our estate planning. In essence, we are making the decision as to what is going to take place when we are no longer able to care for our own finances. Making the right decisions can certainly go a long way in helping your wishes to be fulfilled. Unfortunately, there are also a number of mistakes that are commonly made throughout the estate planning process. Here are a few to avoid.

1. Assuming You Really Don’t Need an Estate Plan: Estate planning seems to be something that would only be beneficial to the wealthy, but that simply is not true. As a matter of fact, anybody who wants to make decisions as to what is going to take place with their finances or even with other factors when they are no longer able to care for themselves would benefit from this type of planning. This would include end-of-life healthcare decisions, what happens to the children and even how your private affairs are handled at that time.

2. Putting Things off for Too Long: One of the biggest mistakes that many people make with any type of estate planning is putting things off, sometimes until it is too late. Admittedly, it can be stressful to talk about a time when you won’t be able to care for yourself but it is an inevitability that all of us must face.

Consider the fact that your family and others who would be part of the estate plan would be embroiled in a legal battle at that time rather than being able to grieve and overcome the loss that they just experienced. Be sure that you include estate planning early in your life and ensure that the appropriate people have a copy.

3. Thinking Your Estate Is Too Simple: Have you ever thought that an estate plan is not for you because your finances are relatively simple? A formal document is always going to be beneficial and an estate plan simply gives you more control in comparison to a last will and testament. Regardless of your situation, it is always worthwhile to look into the benefits of estate planning. You may just find that it is the best choice you could ever make.

Knowing these any other mistakes that are common to the estate planning process can help you to avoid them when going through the process as well.

The Difference Between Equitable And Equal Inheritance

When planning their estate, many people believe the best course of action is to divide their assets equally among their adult children. However, there are times when this is not the best solution or the most practical solution. It is at these times that you need to know the differences between equal and equitable inheritance.

What Is Equal Inheritance?

Equal inheritance is when each of your adult children receives an equal share of your estate. Of course, this will only happen when both of their parents have passed on. This option is the best solution for families that have children where the needs of each child are the same or you have provided similar support to the children. Each of the children must also be finically responsible and emotionally capable of handling their inheritance.

It is important to note that when you have real estate and other physical assets, you will need to determine the value of each asset to ensure that all children receive an equal amount. One of the primary benefits of an equal inheritance is that it will help avoid any disputes. These disputes can be costly to your children and take an emotional toll on them.

What Is Equitable Inheritance?

There are times when an equal inheritance is not the best solution. These cases could be when one child has taken on the role of caregiver to an aging parent or to compensate them for any lost wages and time. Equitable inheritance can be used when the amount of support given to the children by the parents during their life is different. This support could be for a wedding, a down payment on a house or educational expenses.

Equitable inheritance should also be used when you have a child with disabilities or special needs. These children will need more financial help in the future in regards to their living and medical expenses. However, it is important to place these funds in a special needs trust to ensure that they do not have direct access to the funds.

Equal and equitable inheritance are two different solutions that you need to consider when planning your estate. Equal inheritance ensures that all of your children receive an equal share of your estate. Equitable inheritance will provide certain children with more than the others based on a number of factors such as the amount of support provided while the parent was alive and if they have any special needs.

Estate Planning And Retirement Accounts

Most people have some sort of retirement account, whether it is a pension or a 401(k). These accounts must be considered during the estate planning process so they can pass smoothly to your beneficiaries. It is also important to keep in mind that your beneficiaries are going to have to pay income tax on the proceeds of your retirement accounts if you withdraw any of the money.

If the estate is very large, you might also have to pay estate taxes on retirement accounts. Interestingly, retirement accounts are some of the most heavily taxed accounts and you need to keep this in mind when you are planning your estate. If the retirement account is large and ends up being taxed at the full amount, you could end up paying as much as 70 percent of the worth of the account in taxes. This is why you need a good retirement planner who can help get this figure down.

The key is to not make withdrawals to the retirement accounts and let them grow for as long as possible. The interest will keep growing on the accounts and you won’t have to pay any taxes as long as you don’t withdraw any of the money. A good estate planner is going to know all the ways to save you money and make the most of your retirement accounts.

The key to estate planning and retirement accounts is to defer having to pay any taxes on the retirement income by postponing withdrawals. The longer you can postpone withdrawals the better. The money will continue to grow and you will end up with the account being worth more. As you near your retirement age you can start making withdrawals on the accounts.

Careful retirement planning is essential if you want to make the most of your money and save everything you can for your beneficiaries. A good estate planner will work with you to develop a plan that is going to minimize taxes and make the most of your money so your family gets the most money possible.

When you are dealing with retirement accounts, you have to keep in mind that they are treated much differently than real estate and other assets. Retirement accounts can be hit by huge taxes that can eat away huge chunks of your accounts. Make sure that you consult with an estate planner if you have substantial retirement accounts.