Estate Administration

Over the course of my career, I have encountered many families who were unprepared for the inevitable aging and loss of parents.   These families experienced unexpected rivalries that threatened to  cripple or destroy the very family unity and wealth that the parents and their estate planning attorney hoped to protect.   Well-drafted estate plan documents are designed to reflect clients’ instructions for passing their legacies to the right beneficiaries and providing for care of  clients and their families.  However, the best estate plan is no substitute for preparing heirs to deal with:  changing care needs of aging parents and other family members, the complexities of estate and trust administration, and how to avoid elder financial ab...

IRAs and other tax-deferred retirement accounts allow your savings to grow tax-free until you retire. At that point, typically the year after you become age 70 ½, you must begin taking required minimum distributions, on which you pay ordinary income taxes. The rest of the money in your account continues to grow tax-free until it is distributed to you. If you die before depleting your account, the balance of your account will go to the beneficiary you have named. Naming the right beneficiary is critical. Most people want to continue the tax-deferred growth for as long as possible, paying the least amount in income taxes. This is called “stretching out” the account. Distributions after you die will be based on the new beneficiary’s age and life expectancy, so...

In this article, WealthCounsel member David Hiersekorn discusses the hidden dangers of consumers using online legal forms, often referred to as “do it yourself (DIY) wills and trusts.” Hiersekorn notes at the end of his article that “You only get to use an estate plan once. If you screw it up, you’ll never know, but your family will.” Online legal document services offer an enticing bargain. Most people realize that they need an estate plan to manage their affairs if something happens to them. And, let’s face it, estate planning attorneys are expensive. That’s why many consumers are now questioning whether it’s possible to skip the attorney fees and use a low-cost website to prepare estate planning documents. The short answer is...

If you own a car, then you know it requires regular servicing in order to perform well and be reliable. More than likely, your car came with a recommended schedule for service, based on how many miles it has been driven; after a certain number of miles, you need to change the oil, replace the brake pads, rotate the tires, and so on. If you have a newer car, you probably have an irritating dash light that comes on when it's time for service and stays on until the mechanic resets it. Either way, whether you pay attention to the odometer or rely on that dash light, it's pretty easy to know when it's time to service your car. And if you keep driving it without servicing it, it's a sure bet your car will let you down. Like your car, your estate plan needs "servic...

If you can relate to any of these situations, you could probably benefit from the services of a corporate trustee: Building Wealth with Professional Asset Management My spouse took care of all our investments. Since he (she) died, I don’t know what to do or whom to trust. I don’t know where I should invest my money. I’m so confused by everything I read. I just received a large inheritance. I’ve never had to invest this much money before. I travel a lot now (business or pleasure) and I don’t have time to manage my investments like I used to. I recently sold my business (or other assets). Now I just need to figure out how to invest my money. I just received a large settlement from a lawsuit, divorce, etc. Wealth...

What are you planning to give your teenager when he or she legally becomes an adult? A car? A deposit for an apartment? A trip to Europe? Those are all fine gifts, depending on how much you can afford to spend. But here's one you may not have thought of...and it won't cost you a bundle. Take your son or daughter to your attorney's office and have them prepare a trio of documents: a simple trust or will, a durable power of attorney, and a medical power of attorney. Actually, it's a gift for both of you, because once your child reaches legal age, you will no longer be able to automatically make medical and legal decisions for him or her without the appropriate legal documents authorizing you to do so. If your son becomes ill or injured and cannot handle his...

Previously, if your adjusted gross income was $100,000 or more, you did not qualify to convert your tax-deferred savings to a Roth IRA. But this income restriction has been eliminated, so everyone is now eligible to convert to a Roth IRA. You can roll over amounts from your traditional IRA and from eligible retirement plans, which include qualified pension, profit sharing or stock bonus plans such as 401(k)s; annuity plans, tax-sheltered annuity plans; and deferred compensation plans of a state or local government. You do not have to roll these into a traditional IRA first. Of course, you will have to pay income taxes on the amount you convert; it will be included in that year's income. But when you consider the benefits below it may be worth it.  BENEFITS OF A ROTH...

On December 17, 2010 President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This legislation had some surprises for those who had been following the process. In addition to extending unemployment benefits, current income tax rates (the Bush tax cuts) were extended for all taxpayers for two years, and the estate tax was also extended for two years -- with a $5 million exemption and 35% tax rate. Here are the highlights of this law and how these changes can affect your estate planning through 2012. Estate Tax Exemption and Tax Rate Your estate will have to pay federal estate taxes if its net value when you die is more than the exempt amount in effect at that time. For 2011 and 2012, the individual exemption is...

What happens to your online legacy when you die? This includes your websites, email, usernames, passwords, banking information, LinkedIn, Twitter, Facebook accounts, and even blogs. It is a question most people have not even considered, although you should. Without proper planning and documentation your information may become inaccessible and eventually everything you have invested into the Internet may cease to exist. Almost everyone has some type of online account. You may communicate online, pay bills online, do banking online, have an online personality, some people even date online. You are careful to make sure that the passwords which allow you to conduct these aspects of your online life are protected and that only you have access to the accounts. This is good in most instanc...

Now is the time to update your existing estate plan, or proceed with implementing a comprehensive estate plan. Why? First, we now know with certainty that the federal estate tax is not going away, and thus we should establish a plan that avoids or at least minimizes this voluntary tax. More importantly, if you don't, you just might end up like the host of celebrities who have made the headlines recently because they either had no estate planning or because the planning they did have was woefully out of date or otherwise inadequate. As the recent celebrity examples demonstrate, estate planning is not just about planning to avoid estate tax. Instead, estate planning is about accomplishing what is important to you and your family, like: passing values to your children and grand...