How To Make An Incapacity Plan

Becoming incapacitated is probably one of the last things you want to think about and we all want to stay healthy forever. Unfortunately, you never know what is going to happen in life and it is important to have an incapacity plan in place to deal with your estate should you become incapacitated.

This plan will ensure that your assets go to where you want them to go and that your heirs don’t have any problems getting their inheritance. An incapacity plan will ensure that there is someone to make healthcare decisions for you that you trust will follow your wishes.

When you have an incapacity plan, someone will be there to handle your finances and take care of any issues that could affect you. It is important to have one of these plans because you can’t control what is going to happen to you and things could get ugly if you don’t have one. Your estate could end up in the hands of the wrong person and you could end up with someone acting on your behalf that you wouldn’t want in that position.

If you don’t have a plan in place and something happens to you, the court is going to appoint someone to handle your affairs and this person might not be the person you want to handle things for you. Also, the entire process is going to be supervised by the court which is going to cost time and money. If you don’t want to find yourself in this nightmare scenario, it is important that you set up legal documents like a Power of Attorney and appoint someone to handle your affairs when you become incapacitated.

The Power of Attorney is the most popular way to do this. It is a legal and binding document that gives someone else the authority to make medical decisions, sell assets, and pay your bills if you are unable to do it. A broad Power of Attorney allows this person to handle any type of financial matter.

If you want to protect yourself, you will need to see a lawyer to draw up the documents. Think very carefully about who you want to act on your behalf. It has to be someone you trust and someone who is going to have the time to make all these decisions for you. An incapacity plan is essential as you get older.

Reasons You May Need Trust Litigation

Trust litigation is a rough time no matter who’s involved. It’s not the sort of thing undertaken lightly. After all, everyone is already grieving from the loss of a friend or loved one. The last thing anyone wants to do is deal with the legal system.

If you’re uncertain what trust litigation is or how it functions, don’t worry. The basic concept is simple.

What Is Trust Litigation

A trust is a legal agreement stating that a particular person or group is allowed to execute the last wishes of the deceased according to a legal will and testimony. Living wills are a well-known part of life and death, at least in the United States and other countries with similar estate laws.

Trust litigation is a lawsuit against the trustee, usually because others involved feel the trustee is not executing the will appropriately. From there, it’s fairly easy to understand why this particular form of litigation exists.

Reasons For Trust Litigation

When other beneficiaries feel the trustee is acting inappropriately, they may file suit. There are a number of reasons for this, some more pressing than others.

Unreasonable Delay

This is always difficult to navigate since “unreasonable” can be subjective. However, if time drags on and there are excuses rather than execution then it may be time to call a lawyer.

Sudden Changes

Changes have to be made on occasion, but usually only after all beneficiaries have agreed. If there’s a sudden change then you should ask questions. And if the change seems to favor the trustee over the other beneficiaries, then you should call a lawyer.


Sometimes assets must be sold off under market value. There are many assets which may be costly and time-consuming to maintain, and people often sell them at incredibly low prices just to be rid of them. But if the trustee seems to be selling an unusually high number of assets at these low rates, you may need a lawyer.

Ultimately, any time an issue between the trustee and the other beneficiaries can’t be resolved then trust litigation is the answer. The courts tend to try other solutions first, however. Mediation is often used, and it can work quite well.

Unfortunately, sometimes everything else fails and standing in front of a judge is the only option. If you find yourself in this situation, then call a lawyer. Many lawyers will offer a free consultation, and you can get a better idea of whether or not litigation is the right option.

Various Differences Between Revocable And Irrevocable Trust

There are many differences between a revocable trust and an irrevocable trust when it comes to tax and legal consequences. It is important to understand the difference between these two different types in order to make sure you are making the right choice for your needs.

Asset Ownership

In case of an irrevocable trust, all the assets transferred to the trust belong to the trust and not to be Grantor. It’s also important to understand that assets are there for the benefit of the Grantor but the legal ownership belongs to the trust. In case of a revocable trust, the ownership of the assets is retained by the Grantor.

Estate Taxes

In case of an irrevocable trust, the asset ownership lies with the trust which means the assets are not included in the estate tax calculations at the time of death. On the other hand, the ownership lies with the Grantor in case of a revocable trust and the assets are included in the calculation at the time of death for the purpose of estate taxes. In other words, irrevocable trust protects from estate taxes whereas revocable trust does not.


As the name suggests, no changes can usually be made to an irrevocable trust agreement. On the other hand, the agreement can be revoked or modified at the Grantor’s discretion in case of a revocable trust. It’s also important for you to know that under certain conditions, changes can be made to the agreement in case of an irrevocable trust.

Income Tax

When it comes to a revocable trust, the trust is granted its own tax identification number. The trust pays the tax itself or issues a K-1 to the Grantor. On the other hand, the taxpayer has to show everything in their own tax return in case of a revocable trust.

Independent Trustee

In case of an irrevocable trust, the trustee is usually an independent person who has a fiduciary duty to protect the assets under the trust. The trustee is supposed to exercise independent control over the assets of the trust. In case of a revocable trust, the Grantor usually also serves as the trustee and maintains complete control over the trust assets.


Overall, the major difference between these two types of trusts is the purpose. An irrevocable trust is established for protection of assets as assets included in an irrevocable trust are protected from estate taxes and probate process. It also protects the assets from frivolous lawsuits whereas a revocable trust is usually established only to avoid the probate process.

As far as choosing between these two types of trusts is concerned, it depends on the needs of the Grantor. It is recommended to consult with an expert in order to determine the appropriate choice for a particular situation.

Recognizing Common Estate Planning Fraud Situations

Preying on the elderly is a despicable act, but one that has become more common in recent years. It’s important to act early to prevent estate fraud from affecting your loved ones. Recognizing the most common types of estate planning fraud will help you step in if an elderly family member is being taken advantage of.

There are two main types of estate fraud: fraudulent acts and undue influence. Both types rely on an elderly person trusting someone they shouldn’t to an extent where they change their will or other financial documents. However, this goal is achieved through different means.

Fraudulent Acts

This type of estate planning fraud is more easily recognized as a crime or a scam. Generally, fraud considered a “fraudulent act” is based on false statements made by someone to the elderly person signing the will. These statements cause them to change their will or the terms of a trust in response.

These statements might be made by someone pretending to be a family member, for example, a long-estranged sibling, or they might come from someone claiming to be in the government. Luckily for everyone involved, if you can prove that the terms of a trust or will were changed as the result of false representation, the document is invalid.

Undue Influence

This type of estate planning fraud tends to be a lot harder on families and on the victim, as it involves someone close to the victim. Undue influence occurs when someone important to the elderly person convinces them to change the terms of their estate planning documents to something other than their original intentions.

Many elderly people become completely dependent on one of their children or an outside caregiver as they age. This person can end up over-ruling the elderly person’s original wishes for their estate. This does not mean that the caregiver necessarily instilled fear in the victim; undue influence fraud can be the product of a close, kind, and seemingly loving relationship.

Proving that undue influence fraud has occurred requires the family of the victim to prove three things:
– the caregiver had the opportunity to convince the victim to change their estate planning documents,
– the caregiver and the victim had a strong, trusting relationship, and
– the caregiver stands to benefit monetarily from the changes.

The first step to preventing or reversing estate planning fraud is recognizing when it is happening. It’s not always easy to accept that a loved one is being misled, but it’s important to pay attention to the signs.

Setting Up Inheritance For Your Grandchildren

There is nothing more important than ensuring your assets are in the right hands, and this includes your grandchildren.

If you are in this position and want to do things legally, it’s time to look into this in detail.

This read is going to offer insight on what you should be looking to do as soon as possible. This information will prove to be useful in the long-run as you put together a robust inheritance for your grandchild.

1) Speak With Accountant

The first thing you should be doing is speaking to an accountant.

You want to see how much you have in your account before moving forward. This is going to shed light on what you can put in the inheritance and how to access it the right way. This is information your accountant will be able to draw up and is going to be privy to.

2) Set Up Meeting With Estate Planning Lawyer

It’s time to look into the legalities of this process because you don’t want to end up breaking the rules. To do this the right way, you want to head over to a reliable estate planning lawyer as they will have years of experience. They will know what to do and how to do it.

This is going to take all of the guesswork out of getting the inheritance in place.

The estate planning lawyer will be able to set up a proper document that is going to be signed off on by you. Look into doing this as soon as possible to kick things off.

3) Consider A Trust

This is one of the ideal options when it comes to young grandchildren. If they are not going to have access to this money right away, it is best to set it aside and look to clear out any details about how the trust can be used. This can be done alongside an estate planning lawyer and your accountant.

Please note this should be done as soon as you can because there are many details to go through. You don’t want to be rushed and taking your time is always advised. Look to not only go through your cash but also other assets that might be of value such as gold, diamonds, and other jewels.

There is a lot that can be passed on and you want to account for it all.

What Is The Difference Between A Living Will And A Will?

There are a lot of people who are confused when it comes to a living will and a last will and testament. These are 2 different documents and cannot be used interchangeably. It is important that you know what makes up a living will and a will to best understand when each will be used.

What Is A Living Will?

A living will is a legal document which provides people with instruction regarding medical care the person would like to receive if they are incapacitated. The living will, also known as an advance directive, will be used when the person is unable to communicate their preferences to medical staff. Some of the details included in a living will are whether the person will want life-sustaining medical treatments to be completed or breathing and feeding tubes to be used.

In a living will, an attorney in fact will be named to act as a representative of the will’s owner. They will have a power of attorney which allows them to communicate the contents of the will to medical professionals. A living will has the ability to suppress the will of the family members as it is legally seen as the voice of the owner.

What Is A Will?

A will or last will and testament is a different legal document which provides instructions about what will happen to a person’s estate after they pass on. There are people who die without a will and their estate will be left in interstate and state laws will be applied. This will change the distribution of their estate based on the state laws and not on their wishes.

A will states how the person would like their estate to be distributed and will name legal guardians for their minor children. The will should also identify a person who will manage the financial affairs of the minor children. It is recommended that you create and update a will each time you have a child.

The Differences

The primary difference between a living will and a last will and testament is when they take effect. A living will takes effect when a person is still alive, but incapacitated and unable to communicate their wishes in regards to medical treatment. A last will and testament will take effect on the death of the owner and will state how their estate is to be distributed.

The Role And Responsibilities Of An Executor

An executor of a will is an individual who is appointed to manage the administration of the estate of a deceased individual. The will usually mentions the name of the executor but in case it is not mentioned in the will, an executor is appointed by the court.

Being an executor is challenging as the individual is responsible for winding up the earthly affairs of a deceased person. It is the fiduciary duty of the executor to ensure that the assets of a deceased person’s estate are transferred to the beneficiaries as per the wishes of the deceased. An executor does not need to be a financial or legal expert but he or she needs to be impartial, diligent and honest.

Responsibilities of an Executor

The first step for an executor is to find all the assets of the deceased person and manage them until the assets are properly distributed to the intended beneficiaries. It may involve selling securities or real estate or other such things.

It is also the responsibility of the executor to figure out whether probate proceedings are needed. While an executor is not required to hire an attorney, it is recommended to hire the services of an attorney in order to help with the process. It is the fiduciary responsibility of an executor to take care of the estate assets including payment of taxes, debts and other such things.

An executor is required to notify all the beneficiaries of the will in case of a will as well as potential beneficiaries such as siblings, parents or children even if they are not named in the will. The executor should also place an advertisement in a newspaper to inform potential creditors.

The executive will need to determine the creditors and pay all the valid claims made by such creditors from the funds of the estate. It is important to mention here that there is no personal liability for the executor for the deceased’s debts. The funeral expenses are usually paid first by the estate.

The executor also needs to make sure all the taxes as well as tax forms are filed on time including the income taxes and estate taxes. Once all the creditors have been paid, the executor needs to make sure that all the beneficiaries are paid as per the will or as per the law in case there is no will.

It is also the duty of the executor to keep accurate records of everything they do. The beneficiaries need to review the final accounting before distribution of the estate assets. The estate is closed by the court after the approval of final accounting by the court and beneficiaries. Once the final report is filed with the court, the estate is closed and the executor’s work is complete.

The executive is also entitled to compensation as estate administration involves a lot of work but the compensation needs to be approved by the court.

Answered – What Is a Beneficiary?

When it comes to making legal or financial decisions, it is always important to understand the terminology. Mistakes could be made and it could end up costing you in one way or another. One of the terms that you often hear associated with the financial planning process and in choosing a life insurance policy is “beneficiary.” This leads many people to ask, what exactly is a beneficiary and how can you choose one that is appropriate for your needs?

By way of a simple definition, a beneficiary is an individual who is able to profit or otherwise receive an advantage from something. As far as insurance policies are concerned, it’s the individual who would receive the payout if you should happen to lose your life. For those who are associated with the last will and trust or another form of financial planning, the beneficiary is the individual who receives something from the estate.

Now that the simple definition is out-of-the-way, there are some complexities that are also associated with understanding more about the definition of a beneficiary. For example, somebody may be named in a trust or life insurance policy but they might need to meet certain criteria in order to be eligible. For example, they may be a beneficiary in your financial planning but if they are not yet of legal age, they would not receive the money or other assets until they reached that age.

Something else to consider when looking at the term, beneficiary, is the possibility that it may not be a single individual. At times, there may be more than one beneficiary that are included on an insurance policy or in the financial planning process. If that is the case, the assets can either be split equally among the beneficiaries or you can specify the percentage or specific assets that go to one of the beneficiaries that are listed.

There are some benefits to being a beneficiary on a life insurance policy or when receiving assets through a will or through financial planning. In many cases, any assets that you receive are going to be tax-free, although you will have to pay for any interest that may accrue over time, as it would need to be reported on your taxes. These are just some of the factors associated with understanding and choosing a beneficiary. If you have further questions, you should seek the advice of a professional.

What Is A Special Needs Trust Used For?

If you have someone in your family that has special needs, and you would like to care for them after you are gone, you need to set up what is called a special needs trust. The reason for doing this is that you may have a substantial number of assets, ones that might make them ineligible for Medicaid or SSI. If that is the case, then you need to create this trust which will prevent your assets from being connected to them, allowing them to have the ability to qualify for these programs. These assets will certainly include all of the cash you have in the bank. Here are a few examples of how things could go terribly wrong if this trust is not set up properly.

Why A Special Needs Trust Is Necessary

Let’s say that you die and you will somebody $10,000. When you do this, and that money is designated for them, they would automatically be disqualified from receiving Medicaid or SSI. However, if you set up a supplemental or special needs trust, the money is not directly left to them. It is left to the trust which is a separate entity. You will need to appoint someone as the trustee that will have complete control and discretion over the property or money that you are disseminating to these individuals. This third-party will be the buffer, along with the trust, between the money you have left, and the person that would be disqualified from these state and federal programs which they need to have two survive.

How Do You Set One Up?

You can set one up very quickly by working with an attorney that will provide you with the necessary paperwork. They will fill everything out for you, and designate how much money you want to give to this person that has special needs. Once it is officially filed, and a trustee has been appointed, you will no longer have to worry about your gift to this person compromising their livelihood. They will be able to take advantage of SSI and Medicaid without any worries about the money or assets that you have left to them after your death.

These are very easy to set up. Most people will find an attorney that will fill out the paperwork, properly filing it so it is active immediately. If you do have someone in your family that has special needs, and you are thinking about leaving the money, this is something you absolutely must do. It will ensure that your gift will eventually get to them, and at the same time, ensure that they will continue to get the funding and insurance that is needed because of their condition.

The Right Time For Estate Planning Talk With Your Parents

Most families find it difficult have a talk about estate planning. Adult children shy away from it as they do not want to be deemed a control freak or worse, greedy. Parents usually feel that estate planning is personal and they are not ready to talk about it. However, it is essential to have the talk before it’s too late. Here are a few tips to help you figure out the right time to talk to your parents about their estate plan.

Follow the 40-70 Rule

Many experts recommend following the 40-70 rule. It simply means to have the talk when the parent is around 70 and the adult child is around 40 years old. The understanding of this rule is that the parent is young enough at 70 years of age to clearly outline their wishes and the adult child is mature enough at the age of 40 to comprehend the gravity of the issues.

After the age of 70, the chances of dementia, Alzheimer’s disease, stroke and other health conditions increase and these conditions may impair the ability of a parent to make the necessary decisions.

How to Talk about Estate Planning?

It’s a touchy subject and you shouldn’t just walk up to your parents and ask them whether they have made an estate plan. It’s a sensitive topic and therefore, you need to approach it carefully.

Experts recommend setting up a meeting with your parents as it will give them ample time to be mentally prepared for the talk. It will also give them enough time to gather all of your siblings if they would like to have the talk with everyone present. Another way to broach the topic is to ask for advice on your own estate planning. In this manner, you can start discussing the importance of estate planning before it’s too late.

To avoid any misunderstanding, it is important that you let your parents know that you want to fully understand their wishes to avoid any arguments later. If they feel comfortable, you should also ask a third party such as a financial planner or an estate lawyer to join the conversation in order to take the edge off.

During the talk, you should ask them about their wills, assets, debts and other such important things. It’s better to be prepared with specific questions.

Overall, it’s important to have this conversation before it’s too late. Keep in mind that it’s a sensitive topic and you need to have an open mind in order to have a frank conversation with your parents.