Though not a comprehensive list, when planning for the future, you may need to consider options other than a will.
A trust is where property is managed by someone on behalf of someone else. The person who owns the property (settlor or grantor) sets up the management of property with a person or group of people (trustee) on behalf of a spouse, child, or someone else (beneficiary).
There are several kinds of trusts covering all aspects of property and life situations. Determining what kind of trust is right for you requires professional legal advice.
A living trust refers to a trust that may be revocable by the trust creator, known by the IRS as the grantor. It will allow assets to be passed to heirs without going through the probate process, which can save substantial costs. (Fees in probate court are sometimes based on a percentage of the deceased’s net worth.) It also allows you to maintain privacy; probate records are open to the public, while assets distributed through a trust are private. Living trusts also can be utilized to plan for unforeseen circumstances such as incapacity or disability.
The person or persons setting up the trust may also serve as trustee or co-trustee. If there is more than one trustee, the trust document may allow one trustee to act alone on behalf of the trust or require that both trustee sign or act together.
It can be expensive to set up the trust, resulting in up-front fees that could be delayed until the grantor’s death. In the long-term, depending on the circumstances, the upfront costs may be significantly less than probate costs, and the process for distributing the estate is generally much faster than probate.
Despite the advantages, there are also some negative aspects to a living trust. Beneficiaries do not save beneficiaries federal estate taxes or state inheritance taxes. Married couples who establish a trust can, however, effectively double estate tax exemptions by setting up the trust with a "formula clause." This allows the distributions from the trust to be established by a formula that allows the beneficiaries to take advantage of the changes in the federal estate taxes that increase each year through 2010. The remainder of the trust will remain with the surviving spouse to take advantage of the unlimited spousal deduction allowed under the internal revenue code.
To setup a living trust, an individual transfers title of his assets from himself as grantor, to a trustee of the trust (often the trustee and grantor are the same person). The trustee then administers the trust for the benefit of the grantor and at least one other person. The trust may also name the remainder beneficiaries who will take over after the grantor dies. The beneficiaries get nothing until that person dies.
In some cases, depending on the size of the trust, it could be advisable to use a corporate trustee such as a bank. One advantage of a corporate trustee is that it can act in perpetuity, whereas an individual cannot. Corporate trustees must provide accurate and detailed records (an accounting) of all transactions that take place in the trust, for however long the trust exists. Most state laws allow the corporate trustee to act in a "directed capacity," meaning that they would be required to have oversight of the trust’s investments, but not the day-to-day management of the trust.
Elder law is a specialization of law dealing with the issues faced by the elderly. This includes trusts, estate planning, health care planning, Wills, etc.
Seniors can properly plan and take action to reduce the stress of uncertainty and improve their quality of life through the various issues of elder law. The senior years represent the fulfillment and rewards of their life’s work. This can be a new beginning with fewer responsibilities and financial pressure. However, it also can come with pressures to remain independent. Proper planning and legal counsel is needed to help guide you through the various issues relating to elder law. There are laws in place to protect your rights and your wishes.
An experienced Elder Law attorney can discuss and plan for these areas of your life:
Elder Law focuses on legal issues for persons over the age of 55 and their families. It is more than Estate Planning. An experienced attorney will educate older adults about their legal rights and find ways to meet the various needs of the older adult population.
A death benefit is a payment from a policy or agreement to a beneficiary after the death of someone else. It is generally the face value of the policy minus any unpaid liens or claims against the policy.
Death benefits can be paid in a lump sum over time in an annuity. Annuities can also be paid in either fixed or variable amounts. Variable amounts are policies attached to an investment account. How the annuity is paid depends on how the policy was written.
Some portions of insurance death benefits are non-taxable, but not all. In some policies, only the first $5,000 is considered tax-free. Any amount over $5,000 can be considered gift income and is subject to federal income tax.
Check with any company or organization about qualifications and requirements Some life insurance policies have double or triple pay outs for certain accidental deaths. Other restrictions or qualifications may apply.
If you are a beneficiary of someone's death benefits or are planning for the future, talk with a lawyer about your options. Attorneys can help you protect your loved ones or your rights when it comes to claiming death benefits.
There are other issues when preparing for the future. Consulting with an attorney is only prudent when dealing with such emotional and serious matters. Your attorney can help you make sure your wishes are met and your family taken care of if something should happen to you.
If you would like to link to Estate.LegalRow.com from your Web site, please copy the following HTML code onto your site. Thanks for helping us spread the word!
