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.

What Estate Planning Documents Should You Have?

Many individuals know the importance of estate planning as part of their long-term financial planning task list. But the majority of these people procrastinate because they don’t have an idea of the essential documents required for the task. In fact, estate planning isn’t difficult when you know what estate planning documents you should have. This article provides information on what estate planning documents you should have.

The Last Will & Testament is one of the most important documents that you need to have when planning to distribute your assets after your death. Although the name may sound intimidating, this document is nothing more than a written legal document that highlights how you would like your property and assets distributed after your death. You can name an executor to carry out the instructions on the Last Will. You can also name guardians for your minor children in this document.

The Living Will is another important document in the estate planning process. This document is also known as a Healthcare Proxy – which includes your wishes regarding medical care facilities if you need to be on a life support system or become terminally ill. One may also consider a Healthcare Power of Attorney when preparing a Living Will. The Healthcare Power of Attorney will permit the individual to designate a healthcare agent to carry out the tasks in the Living Will.

A Living Trust is another important document in the estate planning process. Many people involved in the estate planning process would step up a Living Trust. This document will help your estate to avoid a probate court. This is very important since a probate court can take up to three years and cost more than 10% of the value of your estate. It also helps ensure your privacy since probate documents are open to the public. That is why you need to seriously consider a Living Trust when planning your estate.

The Financial Power of Attorney is considered another important document when it comes to estate planning. This document helps to designate a person to manage the affairs of your estate – including any financial decision. You can also choose when the appointment goes into effect – whether it is with immediate effect, or a future date, or only under certain circumstances.

The aforementioned article provides information on what estate planning documents should you have.

What You Need To Know About Estate Taxes

If you have a large estate, your heirs might be on the hook for a large estate tax bill. The estate tax is a tax on property and assets that is triggered when your estate passes to your heirs. Most people don’t have to pay any estate tax, but if the estate is worth over 5.5 million if you are single and 11 million if you are married, you are going to have to pay it.

Most people have estates that are worth much less than this value and they don’t even have to worry about owing any tax on their estates at all. Only the wealthiest estates in the country have to worry about paying this tax. You will have to have your estate valued to know if you are going to be responsible for paying this tax or not.

If you do need to pay the estate tax, there are certain things you can do to reduce the amounts that you owe. Meeting with an estate attorney is a good idea as the attorney can help you go over certain things that can reduce your tax burden. In fact, there are many different loopholes you can take advantage of to get your tax burden down to almost nothing.

Keep in mind that most people won’t owe anything, so it just isn’t a concern for most people as their estates just aren’t large enough to owe any taxes. Since only the truly wealthy are taxed, most people can enjoy the full value of their estate without having to pay any tax at all on it.

The estate tax helps to fund government programs and even though 99.8 percent of households won’t need to pay the estate tax, the money that is generated is a big source of revenue and it is something that is much needed. This money can go to help everyone and the estate tax isn’t even much of a burden for the people who have to pay it.

Most countries have to pay much more money in estate taxes and the United States is very moderate when it comes to estate taxes. The tax only affects the people who are most able to pay it and it is a crucial part of the tax code. If you have to pay the estate tax, consider yourself lucky that you are worth so much money.

What You Need To Know About A Durable Power Of Attorney

The Durable Power of Attorney is one of the most important legal documents. This document gives someone else the right to make legal decisions on your behalf if you become incapacitated and can’t make decisions. You can limit the scope of the Durable Power of Attorney, or you can make it very broad.

When you appoint someone with this power they can do things like sell your home or car. They could also sign contracts in your place or even make health care decisions for you. The person can handle your finances and perform any legal actions that you can’t do yourself.

A general Power of Attorney allows the person you appoint to do every type of legal act. It gives the person broad powers, so you have to think carefully about who you want to appoint to this very powerful position. You can always specify what types of things you want the other person to be able to do for you if you don’t want them to gain full control of your estate.

The Durable Power of Attorney ensures that your power of attorney doesn’t end when you become incapacitated. You want to think about who you want to appoint with these powers while you are still mentally capable. If you appoint someone with Power of Attorney and you are not mentally capable, your appointment could be challenged.

When you are appointing someone with Power of Attorney, you also have to think carefully about what you want them to be able to do. You have to trust this person and you have to be sure that they are going to act in your best interest if you are incapacitated. Knowing that someone is there to do your wishes if you can’t make your own decisions gives you peace of mind and it ensures that your estate is going to be taken care of the way you want it to.

A Durable Power of Attorney helps you to avoid intervention by the courts and it also helps to ensure that someone you don’t want to manage your financial affairs ends up managing them. The Durable Power of Attorney helps you manage your assets and ensures that they get to the people you want them to go to. You never know when you are going to become incapacitated and having a Durable Power of Attorney protects you.

Why You Need An Estate Plan If You Are Single With No Kids

If you have a spouse or kids, your assets go straight to them after you die. You name your spouse or children as beneficiaries on your accounts and there is no question as to where they are going to go. When you don’t have a spouse or children, things can get a little more difficult because you might not be sure who your assets should go to and choosing an executor for your will could be tricky.

If you don’t have an estate plan, legal costs are going to eat away at your estate and the court will end up naming an heir. Your estate might not go where you want it to go. Even if you don’t have kids or a spouse, it is better to set up an estate plan. You might want to leave your estate to charity, a school, or a trusted friend. None of this will happen if you don’t have a decent estate plan in place.

Draw up an estate plan and think about the causes that interest you. If you have a sizable estate, you could establish a foundation. Do this while you are still alive and you can enjoy it while you are still here. Gifting your money before you die allows you to see the effect that it is going to have on other people.

Other considerations you have to take into account when you are planning your estate are who you are going to name for medical power of attorney. If you get sick and you are unable to make your own health care decisions, you need someone who will be able to do this for you. You also need to name beneficiaries for your 401(k) and life insurance policy.

You might also want to name someone as durable power of attorney in case you are no longer able to handle your finances. You will also need to name someone to be the executor of your estate. The executor is going to distribute your assets and file your will with the court.

This person has to be someone you trust and who can handle the duties of taking care of your estate. If there is no one in your life that you trust to be executor of your will, you can always name your bank. An estate plan is essential, even if you are single.