Estate Planning

I Need a Will: Really?

Answer: Absolutely you need a Will. A will is document by which a person directs his or her probate estate to be distributed upon death. Will governs probate assets. Will doesn’t direct your non-probate assets. Will probate assets are those assets that pass by beneficiary or operation of law upon death. 

I need a Will: How much does a Will Cost? 

Wills cost vary on the level and complexity of your Will plan. If you have basic Will plan, then the costs of a Will can be very inexpensive. A basic Will plan includes a financial power of attorney, healthcare power of attorney, living will, & HIPPA authorizations. Because ii takes the same amount of time to prepare a Will as it takes to prepare all the aforementioned documents, a Will plan is generally a better option for someone looking for a will.

I need a Will: Do I need a Will Attorney?

Wills are one of the most difficult documents to execute. Because Virginia wants to prevent abuse, the requirements for a Will are extensive. Additionally, because much of you assets pass outside of probate, you need an Attorney to help direct your non-probate assets according to the Will.

Estate Planning Attorney:

I am an Estate Planning Attorney. An Estate Planning Attorney may do many things. Estate Planning Attorneys should understand property, asset protection, wills and trusts, and tax law. Estate Planning Attorneys use their knowledge of the law to distribute your estate (your assets) to your beneficiaries. 

Estate Planning Attorney: Coordinating During Life

An Estate Planning Attorney also helps to ensure that if you lose capacity you and your dependents will be cared for. Estate Planning Attorneys plan for financial and business related issues by using Living Trusts & Financial Power of Attorneys. An Estate Planning Attorney plans for medical and health decisions by using a HealthCare Power of Attorney, HIPPA Authorizations and Living Will. 

Estate Planning Attorney: Asset Protection Estate Planning Attorney

An Estate Planning Attorney uses his knowledge of Creditor, Bankruptcy & Divorce Law  to protect assets for your beneficiaries. Asset protection estate planning is very important and there are multiple asset protection estate planning techniques that begin for very to little estate planning fees and costs. Medicaid planning for surviving spouses and beneficiaries is also very important to asset protection estate planning. 

Estate Planning Attorney: Estate Planning Attorney Tools?

An Estate Planning Attorney has many tools of the trade. The Estate Planning Attorney can use the aforementioned estate planning documents. Also Estate Planning Attorneys frequently use business entities, special tax trusts, annuities, disclaimers, marital agreements and other property agreements. An e Estate Planning Attorney’s tool bag is very large and contains many other tools. 

Contact us & speak with an Estate Planning Attorney today.

Trust for Children; Because your child is the most important Asset 

Trusts for Children Defined: protects children by using the child's inheritance to give each child the best chance of personal and financial success.

Trusts for Children; Most Important Estate Planning Issue

Its simple and inexpensive to create trusts for children. For a parent of a young child, its the number one reason to estate plan. Sadly, many attorneys fail to advise clients to create trusts for children.

Trusts for Children; Why?

Trusts for children are trusts designed to address the likely catastrophe if a child's parent dies. When a parent dies, or both parents, the child experiences a terrible lifelong loss of love and resources. Additionally the child looses the crucial rearing influence that helps form their moral compass and directs them towards a more prosperous path. The child's formative years, which should have been guided by a parent, are now guided by friends and popular culture. Deep feelings of sorrow, pain and injustice further aggravates the problem. 

Trusts for Children; Purpose

The purpose of trusts for children is to give the child the best chance of personal and professional success. Trusts for children use the decedent's financial resources (e.g., life insurance) as a tool to influence the conduct of the child and ensure that the named caregivers (there should be many named) have sufficient assets to care for the child. Trusts for children are designed to protect an immature child from the destructive influence of receiving a large amount of money while simultaneously protecting the assets from caretaker abuse and creditors.

Trusts for Children; Trust Provisions

Trusts for children should be designed to contain trust provisions designed to rear the child in a parental fashion. Trusts for children frequently have the following provisions;

• to protect assets from immature beneficiaries (child gets management control as trustee at a certain age; e.g. 30)
• to promote conduct (pay for college, higher education, trade-school, ect) 
• to inhibit conduct (stop all or certain payments if child joins a cult, develops a drug problem, abuses drugs)
• to provide positive assistance for life events (pay for a wedding, buy a first car, start a business)
• to protect the trust assets from a caregiver wasting trust assets
• to support the caregiver financially (caregiver will have great financial and personal responsibility)

Trusts for Children: Multiple Children & Giving

Trusts for children may be established for one or more children. Sometimes creating trusts for multiple children can be more effective and flexible than trusts for one child. During life, parents give to their child based on need. However they immediately assume that upon death that each child should get an equal share. However I believe the best solutions is a hybrid-solution. While the child is dependent (young, going to college or disabled), consider giving based on need (equitably). When that disability is lifted, consider distributing the remainder more equally. 

Trusts for Children: Cost Effective & Efficient

Trusts for children are not terribly expensive. Estate planning fees are generally based on expectations of attorney time. The parent is best suited to determine what trust provisions to include. If the attorney properly involves the parent in planning, and efficiently collects information, than the estate planning fees should be significantly reduced. 

Trusts for Children: Collecting Information

We collect asset information from the parent via an Estate Planning Worksheet. We help the client select caregivers during a conference. We present the client with a trust Provision Template for their trust for children and allow them to modify and craft the provisions for their child’s care and wellbeing. 

Trust for Children: Selecting Trustees & Caregivers

Trusts for children frequently have caregivers who also serve as trustee. Our position is that while that may work, its generally not preferable. Consider separating the duties of caregiver and trustee in your trust for children. When selecting a caregiver or trustee, the client has much to consider. What make a good candidate for a caregiver may not necessarily be the case for a Trustee. Additionally, by separating the money supply from the caregiver, you can both comfortably provide for the caregiver and protect the trust assets from caregiver abuse. 

Trusts for Children: Grandparents & Extended Families Roles

Trust for children can be created by grandparents and extended family. Consider notifying every person who may likely name you or your child as their beneficiary that you have created a trust for children. By having said person name your trust for children as beneficiary (as opposed to your child), than the money can be directed to the trust for the reasons identified above (as opposed to going directly to the child). 

Trusts for Children; Not just for the rich

Trust for children are not exclusively for the rich. Anybody who has a young child should consider creating a trust for children. Anybody with young children should have life insurance (insuring your future wealth) to provide a security net for your family. Most young people can easily purchase a life insurance policy sufficient to fund the trust for children. Of course, the more assets the parent has, the more necessary the trust for children becomes for a young parent.

Trusts for Children: Getting Started

Trusts for Children are very important estate planning devices. It is easy to get started on your own trust for children. Review some of the paperwork we have provided and give us a call. We are happy to discuss establishing your own trust for children.

The following analysis pertains to the effect of a durable power of attorney on estate planning. Although the specific jurisdiction is Florida, the same general issues (not the law) may apply.   

Sometimes its nice to read other attorney's analysis on certain aspects of the law. I have pasted below a Florida attorney's analysis of their law. I don't certify the validity of the attorney's analysis, but I find it interesting. 

""Foreseeable Problems Under Florida’s Revised Power of Attorney Act Regarding Agent’s Authority to Modify an Estate Plan

In October of 2011, Florida amended its Power of Attorney Act under Section 709 . . . Notably, under section 709.2202, the new act provided additional safeguards regarding the agent’s ability to exercise special powers. In order for the principal to grant certain powers to the agent, the former must sign or initial next to each special power and such power cannot be prohibited by another agreement. Fla. Stat. Ann. § 709.2202 (2011). For example, where a mother seeks to grant the specific authority for her son to create a trust, gift property, or disclaim assets on her behalf, the former must initial next to every enumerated power for the latter to exercise such powers. In all, 709.2202 vests broad powers for an agent to materially affect the principal’s estate plan.

Problems may arise in the following contexts: (1) although the power of attorney grants the agent the ability to make gifts or amend the principal’s trust, the trust instrument itself may prohibit such powers, (2) the agent may wish to make certain changes on the advice of those who may not be competent to render advice regarding the principal’s dispositive plan, and (3) the agent’s proposed changes directly conflict with the trust drafting attorney’s design plan. The following may be helpful to sidestep such issues to ensure a proper balance exists between the agent’s fiduciary responsibility of making necessary estate plan changes and the need to protect a settlor’s current estate plan.

Problem #1: First, in drafting the trust, the attorney should inquire as to whether an outstanding power of attorney exists and whether it contains special powers that, if used, can have a substantial impact on an estate plan. If such powers are present, the drafting attorney should determine whether the principal intended to grant such broad powers to the agent and whether the trust document should either prohibit or limit the agent’s powers. Also, the power of attorney may need to be revoked to conform to the settlor’s/principal’s intent. While drafting a trust for a client, knowing whether a Power of Attorney exists and exactly what type of powers it conveys will ensure that a client’s estate plan remains consistent.

Problem #2 & #3: The drafting attorney should have a candid discussion with the principal/settlor to determine whether the agent is the proper person to hold such powers. For example, the power of attorney can be drafted in a way to appoint co-agents which can only act upon the concurrence of both. Fla. Stat. Ann. § 709.2111 (2011). Similarly, if properly counseled, an agent can limit his authority by not acting upon the powers conferred to her regarding modifying a principal’s estate plan. Regarding #3, it would be wise for an agent or someone who advises the agent to discuss the potential repercussions of any proposed changes with the principal’s estate planning attorney. Since the agent is bound by fiduciary standards especially in exercising powers delineated under 709.2202, the agent may have a duty to confer with the settlor’s counsel prior to making any material changes to a trust.

A Power of Attorney that allows one to change a principal’s dispositive scheme is a powerful tool. Attorneys should be cautious when inserting section 709’s estate planning powers to ensure that principals are aware of the powers they are conveying. Further, Power of Attorney and trust documents should be drafted or amended to be consistent with the principal’s/settlor’s estate plan.

*The above is for informational and educational purposes only and is not intended to provide specific advice to any such persons. Please seek a qualified attorney in your area to discuss specific facts and how the applicable laws in your area apply.""

Do I need & Estate Planning Attorney? Yes

Estate Defined: An Estate is the amount, degree, nature and quality of a person's interest in land or other property. 

When we talk about basic estate planning, we mean the following:

(i) estate planning for the cost efficient transfer of that persons estate (all a person's interest in property) upon their death. Estate planning methods include executing a basic will, basic trust or a probate avoidance living trust or inter-vivos trust and ensuring beneficiary designations are properly completed. 

(ii) estate planning means preserving a person's assets when that person looses capacity. That could mean anything from making sure the mortgage is paid (home is an estate asset) or keeping a business running (a business an estate asset). Estate planning methods include powers of attorney (POA), joint accounts ect.

(iii) estate planning means planning for health decision, including life or death decisions, made upon a person's incapacity. Estate Planning methods include healthcare powers of attorney (HCPOA), Living Wills, HIPPA Authorizations & Advanced Medical Directives. 

Consequently, every person needs an estate planning attorney. 

Why? Because everybody dies, everybody may become incapacitated and almost everybody has some asset that they want to leave to some person they care about. Fortunately, these basic estate planning documents are not time consuming and fairly inexpensive.

See below for the 2012 Spring estate planning costs & fees estimates for two of our basic estate plan packages 

How Much Does Estate Planning Cost?

The cost of estate planning is respective to the amount of work involved. If a person doesn't want to trust plan, the cost can of estate planning can be very inexpensive. Additionally, if the person wants a trust for probate avoidance purposes alone, than that person's estate plan is also relatively inexpensive. 

Estate planning costs go up when we incorporate advanced asset protection or draft great detail into an estate planning document. If you want to restrict a beneficiary's access to the estate inheritance, or protect the inheritance from divorcing spouses, Medicaid, Bankruptcy or creditors, your estate planning costs begin to increase. 

Deadline Extension Approaching under Notice 2011-76, 2011-40 IRB 479, 09/13/2011

The IRS on 13 September 2011 made effective Notice 2011-76, 2011-40 IRB 479. The notice concerned the Estate Tax Return, Estate Tax Payment & Generation Skipping Tax Return Deadline.

The tax deadline is fast approaching for decedents who filed Form 4768 for automatic relief from late filing and late payment penalties. By 19 March 2012, the applicable estates must file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, or Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, and pay the estate tax.

If you have any questions about the United States Estate Tax, United States Generation-Skipping Transfer Tax, please feel welcome to contact the law firm.

Sincerely,

Luke Lenzi, Esq. (Attorney & Counselor at Law)

Mortgage note beneficiaries should strongly consider creating a revocable living trust and funding that note into the trust for estate planning purposes. However, no action should be taken without proper legal counsel.

Definition: A mortgage note is a written promise of one party to pay money to another party (Black's Law Dictionary)

Probate Problems

If a decedent's probate property includes a note than that person’s estate may receive numerous payments spanning multiple years. The decedent's personal representative (e.g. executor or administrator) may face numerous difficulties and increased exposure to liability because of the potential probate issues. The estate administration process may likely be significantly delayed (potentially for the life of the note or longer). Consequently, the estate administration expenses, costs and delays can be very substantial.

Funding

As beneficiary of the mortgage note, the beneficiary may be able to assign that note into their revocable living trust. By funding the note into a trust, the above referenced probate issues may be avoided. Notwithstanding, the trust should have provisions instructing the Trustee as it relates to extending the note and foreclosure. Before funding any note into a trust, the beneficiary should ensure that the assignment is allowable and prudent.

CAUTION: When funding mortgage notes, it’s critical to consult an attorney with regard to the tax and enforcement provisions of the note

Multi-Jurisdictional Issues

Determining what law applies can be complicated. The relevant law includes the jurisdictional law governing the enforcement and construction of the note, the jurisdictional law governing whether the transfer was completed and the jurisdictional law governing the administrative provisions of the trust beneficiary. There is a variety of rules that apply when determining jurisdiction and multiple states may claim jurisdiction.

If you have questions, feel welcome to contact our firm. We strongly advise you consult an attorney before taking any action.

Don't be fooled, you may not have documents in place, but you have an estate plan. The only difference is that the plan wasn't prudent, part was created by accident & part was created by the government. Sound like a smart idea? 

The Sturgis Journal has posted an article, by John P. Napolitano, on the need for people to remember their estate planning documents. The article notes how famous people receive attention when their lousy estate plans blow up in their faces. However, their estate planning needs are not much different than yours. They have the same desires, problems and concerns. They just have more money and more fame.  

Marginalization is the problem. People think that estate plans are only for the rich and famous. They have marginalized the need to plan and thereby marginalized their and their family's needs. 

Estate administration tragedies happen each day. However you won't hear about it because TMZ, Fox & CNN aren't interested in covering it.  

http://www.sturgisjournal.com/news/business/x643482854/Making-Cents-Dont-forget-about-estate-planning

Recently I reviewed and article on US news titled The Dangers of DIY Estate Planning. In response, I have posted the following:

The title is more than a little misleading. I was expecting the article to rip into the Legal Zooms of the world. I have to say, I was disappointed. 

Under no circumstances is it prudent for any person to, with forethought and time, forgo planning with an estate planning professional. Yes, that expressly excludes general practitioners who can be just as dangerous.  

Certainly every person, regardless of wealth, needs competent advice for incapacity planning. The costs of these documents aren't unreasonable. If a client doesn't have much money, many attorneys will do it for little or no cost.

Further, poorer individuals still have the same personal and family problems. Consequently, because of their lack of financial means, their and their families’ need for planning may often be much greater. Additionally, because they don't have a lot of assets, inexpensive methods can be used to reduce costs & expenses related to the planning and the client's death.

The argument that individuals of lesser means likely don't have serious issues worthy of planning is ridiculous. Such an argument is frequently premised on ignorance. The unaware claim that a person's estate planning needs correlate with the amount of wealth they have acquired. Additionally, people claim that the costs of planning are too great, and as noted above, that frequently isn't the case. 

However, it certainly creates a great narrative for justifying companies like Legal Zoom. 

Link

http://money.usnews.com/money/personal-finance/articles/2010/06/29/the-dangers-of-diy-estate-planning?msg=1

The trust funding process is very important. Intervivos trusts need to be fully funded with the appropriate assets. If you fail to full fund your trust, or fund your trust incorrectly, your estate may incur significant problems. The following is general information. When funding a trust, always consult an attorney. If you have questions, give us a call.

Generally a Simple Will is a document that expresses a person’s desires with regard to who shall inherit their probate property. Additionally parents’ frequently nominates persons to serve as a guardian or conservator for their child when they die.

Generally a Simple Trust is a document that expresses a person’s desires with regard to who will inherit their properly funded trust property. The document nominates a person to carry out the creator’s intent (a trustee). While a trust could provide for the outright distribution of the trust property to a beneficiary, they frequently create and attach strings to the distribution of trust property in an attempt to insulate assets from creditor’s, divorcing spouses, and immature beneficiaries.

Trusts can be created as living-trusts (intervivos trust) and by Will (testamentary-trust). A living-trust is duly executed and valid while the client is alive. An testamentary-trust is created when a decedent’s Will is probated after their death.

Please contact the firm if you would like to learn more. We are happy to discuss the matter with you.

Sincerely,

Luke Lenzi, Esq.