June 26, 2015   Retirement Planning,   Trusts,   Estate Planning

Money Advice for Same-Sex Couples After the Supreme Court's Obergefell v. Hodges Ruling

By Matthew T. McClintock, J.D. Vice President, Education, WealthCounsel
Today’s Supreme Court ruling making same-sex marriages legal in all 50 states — Obergefell v. Hodges — has major financial implications for LGBT couples. The Court held that same-sex married couples are entitled to equal protection under the laws and that their marriages must be recognized nationwide. Here are the most significant impacts for same-sex married couples.The ability to file taxes jointly as a married couple (typically, the more a couple’s incomes differ from each other, the more they gain by filing jointly)The married couple’s state estate tax exemption (where applicable)The ability to access Social Security spousal and survivor benefits no matter where they live when they file (a recent analysis by Financial Engines estimated that...
July 3, 2014   Trusts

Common Misconceptions about Living Trusts

People often hear things about living trusts from friends, family members and the media, and just assume they are true without taking the time to check them out. Here are some common misconceptions—and the facts.   1.      A living trust is expensive. A well-drafted living trust will have a higher initial cost than a will. But when comparing costs the true cost of a will should include the costs of probate when you die, the costs of a conservatorship if you become incapacitated and the costs of a guardianship if you leave assets to a minor child. There may be some costs associated with transferring your assets to your trust when you set it up, but there are frequently similar costs associated with properly titling assets when a will is used as the primar...
June 26, 2014   Trusts

4 Reasons Why a Living Trust is Preferred over a Will

By Vickie Schumacher
Many consumers and professionals now prefer an estate plan that uses a revocable living trust over a will as the primary estate planning document. Here are four reasons why:  A properly prepared and funded revocable living trust plan avoids probate at death, including multiple probates if you own property in other states. A will must go through probate to be verified and enforced, and if you own property in more than one state, your family could face multiple probates, each one according to the laws in that state. Avoiding the cost of probate is often a factor when choosing a living trust, but many people are just as interested in avoiding the court process altogether, along with its delays, lack of privacy, loss of control and emotional stress.  A properly prepared and funded li...
March 20, 2014   Trusts

Five Common Mistakes with Living Trusts

A properly prepared and funded living trust has many benefits, including avoiding court interference at death and incapacity. But people often make mistakes that prevent their trusts from working the way they intended. Here are five of the most common ones: Not having a properly prepared document. Too many people try to save money by using online or do-it-yourself forms, or choosing an attorney with the lowest price. If the documents are not properly prepared, you have wasted your money. Your trust may not work the way you intended or, worse, you could be left with no valid plan at all. It’s best to go with a local, experienced estate planning attorney who will be able to provide you with well-written documents and valuable counsel. Finding the right attorney may take some time, but...
March 18, 2014   Trusts

Four Things a Living Trust Does Not Do

There are so many benefits of a revocable living trust that people sometimes think it will do everything they want. Here are four things a living trust will not do. It does not control medical decisions. A living trust is not the same as a living will. Although the names are similar and they are both legal documents, they do very different things. A living trust lets you keep control of your assets. A living will lets you keep some control over medical decisions, but it is very limited—it only lets others know how you feel about life support in case of terminal illness. A better document is a health care power of attorney (also called an advance directive or health care proxy). This lets you give legal authority to another person to make all health care decisions for you if you are u...
January 21, 2014   Trusts

Should I Put My Life Insurance Policies In My Living Trust?

Generally speaking, all titles and beneficiary designations should be changed to your living trust. But there are some exceptions, including IRAs and retirement plan benefits, and your attorney will be able to advise you about them. Regarding life insurance policies, it will depend mostly on the size of your estate—and if it will be subject to estate taxes after you die.   Federal estate taxes must be paid if the net value of your estate when you die is more than the amount exempt at that time. Currently the federal exemption is $5 million, adjusted annually for inflation. (In 2014, the exemption is $5,340,000.) Some states also have their own estate or inheritance tax, so it is possible that your estate could be exempt from federal tax but have to pay a state tax.   To det...
January 17, 2014   Trusts

How Do I Evaluate a Corporate Trustee?

By Vickie Schumacher
A corporate trustee is a bank trust department or trust company. Its employees can help you build, manage and protect your wealth when you put your assets in a trust.   There are several benefits of having a corporate trustee involved with your trust.Experience. Managing trusts is their business. They are familiar with all kinds of trusts, tax and estate planning strategies, and the legal responsibilities of a trustee.Professional asset management. Generally, a professional who has more time, resources and experience can achieve better results than an individual.Regulation. They are regulated by both state and federal agencies. Also, most courts consider them to be experts and expect a higher degree of performance than from an individual.Reliability. They won’t become ill or die...
January 14, 2014   Trusts

What Does Funding My Living Trust Mean and How Do I Do That?

Funding your trust is the process of transferring ownership of your assets from you to your trust. To do this, you physically change the titles from your individual name (or joint names) to the name of your trust. You will also change most beneficiary designations to your trust so those proceeds will flow into your trust when you die.   This is important, because if you have signed your trust document but haven’t changed titles and beneficiary designations, you will not avoid probate. Your trust can only control the assets you put into it. You may have a really good trust document, but until you fund it (transfer your assets to it), it doesn’t control anything. If your goal in having a living trust is to avoid probate at death and court interference at incapacity, then you...
December 9, 2013   Trusts

Who Can Be Trustee of My Living Trust?

By Vickie Schumacher
When you establish a living trust, you name someone to be the trustee. The trustee basically does what you do right now with your financial affairs—collect income, pay bills and taxes, save and invest for the future, buy and sell assets, provide for your loved ones, maintain accurate records, and generally keep your financial matters in good order.   You can be trustee of your own living trust. If you are married, your spouse can be trustee with you. Most married couples who own assets together, especially those who have been married for some time, are usually co-trustees. This way, if either of you become incapacitated or die, the other can continue to handle your financial affairs without interference from the court—one of the main reasons many people choose a living tru...
December 6, 2013   Trusts

Is a Trust in a Will the Same as a Living Trust?

By Vickie Schumacher
Many people hear or see the word “trust” in estate planning and think they are all the same. But there are different kinds of trusts for different purposes, and they perform differently.   For example, an irrevocable trust is frequently used in tax planning. Generally speaking, once an irrevocable trust is established, you cannot change it or remove assets that have been transferred into it. These include charitable trusts, life insurance trusts, asset protection trusts, grantor trusts, qualified personal residence trusts and others.   A testamentary trust is created after you die by a provision in your will. This is a “trust in a will.” It can be used in tax planning or to manage assets for minors or other beneficiaries. Common estate planning trusts used...
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