Common Mistakes Of Estate Planning

Even though planning your estate isn’t an enjoyable job it’s necessary so that you can efficiently and successfully transfer all of your assets to those you leave behind. With a bit of careful planning, your heirs can avoid having to pay estate taxes and federal taxes on your assets. As well, a well planned estate avoids confusion for your loved ones. Still, with all the advantages of estate planning, many people make a great many mistakes in the process.

The most common mistake when it comes to estate planning is not getting around to doing it at all. Make sure that you take the time to plan at least the financial portion of your estate so that you leave your loved ones behind with some amount of security.

Don’t fall into the trap of thinking that estate planning is just for the rich. This is completely false as planning your estate is essential for anyone who has any amount of assets to leave behind. Many people don’t realize that their estate is as large as it really is, especially when they fail to take into account the assets from their home. Remember to update your will and to review it at least once every two years. Factors that can change information about your beneficiaries include deaths, divorce, birth, and adoption. As your family structure changes so does the change in your assets and who you want to leave them to.

Don’t assume that taxes paid on your assets are set in stone. Talk to your financial planner about ways that your beneficiaries can avoid paying taxes on your assets. There are several strategies for tax planning so that you can minimize taxes or avoid them altogether. All of your financial papers should be in order so that it’s easy for someone to find them. Make sure that one of your loved ones has information on where to find the papers necessary for planning after your death.

Many people take a lot of time deciding what to do with their assets and forget that they need to appoint guardianship for their children. There are many details to take into consideration when it comes to guardianship.

The above mistakes are common when people are planning their estate. Take the time to plan for your death even though you think that you have years before it becomes an issue. The key to successful estate planning is being prepared.

Easy Steps for Estate Planning

Most people don’t have a will, never mind an estate plan. Planning your estate is an essential part of preparing for your later years in life. Before you start planning your estate make sure you have a will. If you don’t have a will at the time of your death your entire estate will end up in probate court. This means that the family you leave behind will have to fight to gain control of any of your assets. All of your important documents should be in one place. Consider a health care proxy, also known as a living will. Your living will should have a strong power of attorney that will ensure that your wishes will be carried out in the event that you’re unable to speak for yourself in a medical emergency or an accident.

Beware of online “do it yourself” programs. These software packages will get you started with your estate planning but you’ll want to hire an attorney to help you complete the form and legalize your signature. Your attorney will also be able to help you review your estate and guide you in making the right decisions. Your last will and testament will have to be notarized by yourself and by witnesses. Signatory laws will differ and depend on where you live. Make sure that one of your beneficiaries doesn’t sign as a witness.

If you have already set up an estate plan make sure that you review it on a regular basis. You’ll want to make changes to your estate and will when there are changes to your life such as divorce, marriage, the death of your spouse, the birth of a child, adoption, or when you move from one state to another. Have a clear list of all your assets and liabilities. Remember that your liabilities will have to be paid when you die. The remainder, less probate and administrative costs, will go to your beneficiaries. It will be up to you to decide what portion of your assets each of your beneficiaries receives.

Choose an executor who can manage your estate from the time of your death until the time that all of your assets have been dispersed. The executor needs to have the ability to manage your estate as well as the time to do so. Don’t forget to appoint a guardian for your children. Guardianship is a big issue and should be discussed with whomever you want to appoint for this important duty. Remember that planning your estate is probably a lot less complicated than you may think it is. Take the time to be prepared for your death by planning your estate today.

Estate Planning for Your Children

If you have minor children, estate planning is a very important step when it comes to planning for your death. Failing to name guardians for your children in your will can lead to custody issues that are easy to avoid by simply taking the time to decide who you want to take care of your minor children in the event of your death. Determining who will raise your children if you die can be a difficult decision. For this reason alone many parents avoid the issue of custody decisions since they’re unable to find someone who they think will be the perfect guardian.

Avoiding the issue of guardianship is the number one reason why people fail to plan their estate or have a will. By procrastinating the decision about custody parents put their children at risk in the event of their death. Unless you name a guardian the courts will name someone they feel is right for the role of guardian. And this could be someone who you least wanted to have custody of your children. Court battles for custody can be long and drawn out, especially if there is more than one applicant who is seeking custody. This can place a huge financial and emotional strain on your children as well as deplete the assets from your estate. The worst case scenario is that no one applies to take custody of your children. The courts may decide to give custody to someone in your family who really doesn’t want the responsibility or your children may end up in foster care.

When planning your estate try to choose guardians for your children who you know will want to take them. Don’t feel that you have to choose a family member; friends you trust can also be ideal candidates. Consider separating guardianship of your children from the assets of your estate. By naming someone other than the guardian to be the trustee of your children’s money you ensure that there are some checks and balances in place when it comes to deciding how that money is spent.

Always have a backup named for the guardian in the event that your first choice is unable to accept the role. Keep in mind that if you name a couple as the guardian the issue of their breakup may become an issue and this can lead to a legal battle for custody. For this reason alone it’s a good idea to name individuals as guardians. If you’re divorced, consider your ex-spouse as the guardian. Most of the time, your ex will want to have custody anyway. Why make it more difficult by naming someone else as guardian and risking a lengthy court battle?

Estate Planning for The Unpredictable

Once you reach retirement age it’s important that you have your estate planned so that you can enjoy those retirement years without having to worry about what will happen in the future. One of the biggest assets that you own will be your home. Your home is your biggest form of investment and gives you a great deal of security, especially if it’s been paid off completely. You can use your home as capital in your retirement years or you can leave it as an asset for your loved ones after your death.

If you’re a long time homeowner your home has no doubt increased in value since you purchased it. One option for increasing your assets is to sell your home and buy a home that is lower in value. The money that you make from the sale of your home can be invested elsewhere. For instance, you can sell your home and receive tax free gains if you invest in the right places. Talk to your financial planner about increasing your assets. This will benefit you during your retirement as well as leave more behind for your loved ones. Another option when you own a home is to sell your home to your children and then rent it back from them. This takes care of the transfer of ownership before your death and can provide you with tax savings. This option eliminates the need for property to be part of your will.

Planning your estate to deal with unpredictability is one way that you can protect your family if and when something happens to you. Estate planning is also important so that you protect your wealth. You’ve worked hard all your life to build up your assets. A correctly planned estate ensures that your later years in your life are comfortable and also ensures that you’re leaving your loved ones well taken care of after your death. Death without a will means leaving a mess behind you as your loved ones scramble to work out your finances. Without a will the state will determine what happens to your assets. Preparing a will won’t cost you a lot of money and is the only way that you can make sure that your wishes are carried out. Hire an attorney to help you work through the legal issues of preparing a will. Be sure to review your will once every couple of years so that you can make changes as circumstances in your life change. As well, find out if there are any new tax laws that will affect how your assets are distributed after your death.

Estate Planning For your Elderly Parents

Helping your elderly parents to plan their estate is one of the most important things that you can do. A well planned estate will ensure that your parent’s wishes are carried out as well as making sure that they receive the best care possible without putting a financial strain on you and the rest of your family. The first step to planning your parent’s estate is to talk to them about their wishes. Find out who they want taking care of them in a medical emergency. As well, talk about their financial affairs. Make sure that you stress the importance of making all these decisions before they have to be acted on in order to avoid confusion and pressure later on. Ask for the names of their attorney and financial planner so that you have them for your own records.

Designate one person who is in charge of your parent’s health care issues. This person should be chosen by your parents and be someone with whom they are comfortable and who they trust to take care of their best interests. Obvious choices are you, your siblings, or a close family friend. Always have a backup plan in place in case the first person chosen is unable to meet the responsibility. The second choice should be someone who is just as familiar with your parent’s medical and financial situation.

Discuss with your parents the benefits of having a living will. Emphasize that a living will is there as guidance for medical situations that may arise where your parents are unable to speak up for themselves. As well, you might want to talk about hospice care in the event that your parents require this type of medical attention. Make sure your parents understand that the bills will keep coming in even if one of them is ill. Talk with other family members to determine what will happen if your parents are unable to make their own decisions about finances and medical care. By researching information, such as the cost of home care, ahead of time both you and your parents will have a better understanding of what it will cost to take care of them.

When planning your parent’s estate make sure that the assets can be passed on the heirs of the will as fast and easily as possible. A good attorney can help you avoid tax penalties so more of your parent’s assets go the beneficiaries and less to the state. By ensuring that your parents have a legal will you’ll avoid all the legal hassles that come about when a will is lacking.

Estate Planning: Reviewing Your Plan

An important part of your estate planning is taking the time to review it at certain times in your life. Many people overlook the review process and fail to update important information. There are many events that occur in your life that can affect the way you distribute assets and property to the loved ones you leave behind. Perhaps the most important part of estate planning is having a will in place that manages your assets.

If you have minor children make sure that you review your guardianship issues at least once a year. You don’t have to make changes to your estate plan however, you should be aware of who you’ve chosen to have custody of your children and the reasons why. Over time circumstances may change and the person you first felt was right as guardian may no longer be a good choice. Don’t forget to take into account the ages and living circumstances of your chosen executor. If you have to make changes to guardianship don’t be afraid to hurt the feelings of your family. Making choices about custody should be all about your children and what’s best for them.

Choose an executor for your will that you know you can trust. The role the executor plays can be difficult both emotionally and time-wise. Review your power of attorney at least every couple of years. The power of attorney, or the executor of your will, needs to be someone who is capable of dealing with a lot of legal issues and who has the confidence to step up and make sure that your final wishes are carried out. If you have a living will, or medical decisions that you’ve made, you need to be sure that your executor will carry out your wishes and is strong enough to speak on your behalf.

Consider having trusts in place as part of your estate. A trust is one way that you can help your family out with finances after your death or in the event that you’re unable to make decisions. There are many different types of trusts available so be sure to review your current trusts on a regular basis. As your assets increase you’ll have to make changes to the way the money is distributed.

Part of reviewing your estate plan is finding out which type of taxes will have an effect on the inheriting of your assets and property. As you review your estate, find out about the latest tax laws. If your will was valid when it was first drafted it will remain valid however, there could be significant changes in the laws where you live that can impact the legality and outcome of your will.

Estate Planning: The Importance of Your Will

Estate planning is all about taking control of what happens to your property and assets after your death. There are many different tools available to help you plan your estate but perhaps the most important tool is your will. No matter how old you are, or your current state of health, you should always have a will that is up to date and valid. If you have minor children your will becomes even more important. Many states insist on a will in order for you to name custody for your children with the guardian of your choice. Your will doesn’t need to be summarized by a lawyer, however legal advice can help you accomplish what you want with your will.

The biggest advantage of having a will is so that you get to choose who will get your assets and property rather than having the courts decide for you. If you die without a will, the state will provide one for you. This means that the courts will distribute your assets and property using the most generalist of terms. Your blood relatives will be given portions of your estate as dictated by law. The thing to keep in mind is that what the courts mete out won’t necessarily be where you wanted your assets to go. The biggest disadvantage when you don’t have a will is that you’ll end up paying more in taxes than you would if you had a legal will.

A legal will allows you to leave gifts for the loved ones you leave behind. You can leave any portion of your assets to your children, other relatives, friends, charities, or a trust. There are some limits that are imposed on the distribution of property. For example, your spouse has certain rights to your property regardless of what you state in your will. Gifts that you leave behind can take the form of money, jewelry, or any other property of value. As well, you can include general bequests in your will, such as leaving a percentage of your property to more than one person.

When you plan a will you can designate a particular person to act as the executor to your estate. The executor will manage many of the tasks that are involved with settling your estate such as collecting all your assets, paying off any debts that you owe, paying taxes that are owed by your estate, and distributing what remains of your assets to those people you have named in your will. The probate court will have the final say in who your estate executor will be however, naming someone in your will carries a lot of weight in the court.

Estate Planning: When and Where to Start

Many people don’t know when and where to start when it comes to planning their estate. It seems there are so many things that you need to know about estate planning such as trusts to reduce taxes, issues about guardianship, and how to distribute your assets. And then you need to think about finding the time and money to hire a lawyer to help you draft a will. So where do you start? Perhaps the best place to start is simply by thinking about what you want to happen when you’re gone. Nobody likes to think about their own death. But death is an eventuality and needs to be planned for by everyone. The sooner you think about planning your estate the sooner you can act. Once you have your estate in order you’ll be able to enjoy your later years knowing that your family is taken care of in the way you want.

Organize and arrange all of your financial information. Take into account all of your assets as well as your debt. You need to have accurate information about how much your estate is worth. Remember to include your intangible assets such as any investments you’ve made, your insurance policies, any art collections you have, and your personal property such jewelry and furniture. When you have a full picture of what your estate is all about you can decide what’s at risk. A lawyer experienced in estates can help you draft your will. Some questions that you’ll want answered are whether or not your estate will be subject to taxes and whether it will have to go through a probate court. As well, find out what the risks are to your estate in the event that you’re incapacitated and unable to make decisions for yourself.

Talk to your family and discuss what effect your estate planning will have on them. Talk about their wishes and how they want to see your assets distributed. At the same time, make certain that you talk about your own wishes since what you want is just as important. The more you talk before your death the less likely there are to be problems after your death. If you think that there may be difficulties after your death regarding the decisions you’ve outlined in your will you can consider a Legacy Trust which will have a more advanced strategy for dealing with your assets. A Legacy Trust will be much harder for anyone to contest. Keep an eye on the future. Your estate will grow and change over time so it’s important that you review it on a regular basis.

The Essentials of Estate Planning

Most people don’t look forward to estate planning. However, it’s important that you ensure your estate is in order long before you need it. You’ve worked hard to build up your estate; now it’s time to make sure that everything ends up where you want it to after you die. There are many areas of estate planning that will require the help of a professional, such as estate taxes, trusts, and probate. Following are some essential details that you need to think about when you’re planning your estate.

The most important thing about estate planning is that you have a will. Your will should indicate exactly where your property and assets should go when you die. You should also have what is called a “living will”. A living will specify certain health care and medical instructions that should be followed in the event that you are on life support or otherwise unable to make these requests yourself. You’ll need to name a power of attorney that will be in charge of managing the details of your living will.

Take the time to review your beneficiaries at least once every year. Your personal family situation will change during the course of your lifetime so you’ll need to make changes to your beneficiaries. Don’t forget to make these changes in your life insurance policies as well as any other documents where you have listed a beneficiary. If you have any minor children you’ll need to determine who will have guardianship over them if you die. Your will should clearly state what you want for the future of your children.

You might want to think about setting up a trust so that you maintain even tighter control of your hard earned assets. A trust can also be set up to carry out certain requests when you die. Another benefit of setting up a trust is that a trust bypasses the probate process, which can be quite lengthy and drawn out. Talk to your lawyer about the different types of trusts that are available. The time of your death will be emotional and difficult for your loved ones. You can make it easier by ensuring all the information they need is well organized. Make sure that you have all your documents in one place. This includes financial statements, insurance policies, your will, and the key to your safety deposit box.

The more care you have taken when it comes to estate planning, the easier it will be for the ones you leave behind to manage at the time of your death.

Why An Estate Plan Is Vital for Real Estate Investors

Estate planning is the process of making arrangements for how you want your assets to be disposed of if you pass away or become incapacitated. Sure, it might not be everyone’s favorite topic, but estate planning is nevertheless an important task that ensures your hard-earned assets are passed down to the right people and organizations. By making your arrangements in advance, you can leave specific instructions for which of your possessions are distributed to whom, at what time, and how.

While estate planning is important for everyone, it is especially important for those with a real estate portfolio–or at least in the process of building a real estate portfolio. Below are important documents to include in your estate plan if you are a real estate investor.

Wills & Living Trusts

Wills and living trusts are both tools used in estate planning. These documents are mainly used to designate beneficiaries for your property in the case of your death, but each option has different applications. Many choose to keep both wills and living trusts concurrently, so as to take advantage of the different benefits.

One of the main differences between a will and a living trust is that a living trust ensures that your property is passed on in private without going through probate, and without challenges from the court. A will, on the other hand, must be filed in probate court and becomes a public document. The property included in a will is subject to probate court and claims, which can be lengthy and expensive processes. There are multiple ways in which estate attorneys use these documents in order to ensure that real property is transferred as smoothly as possible upon an investor’s death.

Lifetime Planning For Investors: Powers of Attorney & Advanced Directives

A power of attorney is a document that gives one person (an agent) the authority to act on behalf of another (a principal). The principal may grant a limited or wide range of authority to the agent, depending on the principal’s needs. This document is often used for those who want to make sure someone is designated to make financial and business matters on their behalf in case they ever become unable to do so due to incapacitation or other reasons. Real estate investors may find granting an agent power of attorney useful for carrying out business functions such as collecting rents, making payments and managing tenants in their absence.

While powers of attorney generally allow someone to make business and financial decisions on another’s behalf, an advanced directive allows you to designate someone to make medical decisions on your behalf when you are unable to speak for yourself. Times in your life when you may want an advanced directive include if you have a chronic, ongoing health condition, are planning a surgery, receive startling health news, or have other concerns for your well-being. If this hasn’t happened to you, that’s wonderful. But the reality is we can all get sick.

Asset Protection & Tax Planning

An estate plan for real estate investors should also include strategies to protect your assets as well as provide tax sheltering strategies for your investments. To begin protecting your assets, start by creating an inventory of your assets and break them down based on how they are owned. Next, take the necessary measures to ensure that your assets can legally be passed on to your beneficiaries. This process can get a bit more complicated for real estate investors who purchase properties with partners or through an LLC. They will need to form a plan for how to to transfer the ownership of their investments, including those with a surviving business partner.

Our Office Can Help

Our office has served many real estate investors. We have extensive experience in how the various estate planning documents are used for investors. Contact our office today if you have any questions about estate planning. We will review your personal circumstances and help execute the best strategy for you, your business, and your heirs.