Spring Is Almost Here
Adulting 101: Your Living Will
You may have heard people speak of a “living will” and wondered what they are talking about. A living will is also called an advance health care directive. But, no matter what you call it, every adult needs a legal document that tells your loved ones and doctors the medical care you want if you cannot make those decisions yourself.
Your living will outlines the procedures, medications, and treatments you want or do not want to prolong your life when you cannot make those decisions for yourself. Additionally, it can address if and when you want life support removed and whether you want hydration and nutrition supplied if that is the only thing keeping you alive. If these decisions need to be made and you haven’t provided specific instructions, decisions will be made, and they may not be the decisions that you would have chosen.
Don’t confuse a “living will” with a “last will.” A “last will” sets forth what happens to your property and wealth after you die. A living will sets forth what medical treatment you want while alive.
A healthcare or medical power of attorney is another part of advanced healthcare directives. The healthcare power of attorney is the legal document that names who will make the healthcare decisions for you. Simply put, a medical power of attorney names those who can make medical decisions in the event of your incapacity, while a living will explains what medical care you want.
A living will is a vital part of every adult’s estate plan, as it can ensure your medical treatment is handled exactly the way you want if you cannot communicate. Without a living will, your loved ones are left to make difficult decisions which can result in conflict, stress, and guilt.
We all know that unforeseen illness or injury could strike at any time. Don’t wait to plan. We can assist you to ensure your medical treatment and end-of-life care is tailored to suit your unique needs and wishes and provide counseling and guidance in decision-making.
Now is the Time to Act
Tax-Saving Strategies For 2022
Although the end of the year can be hectic, it’s also the deadline for you and your family to implement several key tax-savings strategies. By taking action now, you may be able to reduce your tax bill due in April significantly. But you must do this before the end of the year, so act fast.
While there are dozens of potential tax breaks you may qualify for, here are 4 of the leading moves you can make to save big on your 2022 tax return.
1. Maximize retirement account contributions
By maximizing your contributions to tax-deferred retirement accounts, such as IRAs and 401(k)s, you can save for retirement and reduce your taxable income for 2022.
In 2022, you can contribute up to $6,000 to an IRA, up to $20,500 to a 401(k) if you’re under 50, and up to $7,000 to an IRA and $27,000 to a 401(k) for those 50 and older. If you don’t have the cash available to fund the maximum amount, contribute at least any amount that your employer will match since that’s basically free money, and you lose it if you don’t use it.
That said, the ability to deduct your traditional IRA contributions from your taxes comes with certain limitations. These limitations are based on factors such as whether or not you or your spouse are covered by a retirement plan at work and your adjusted gross income (AGI), so make sure you know how your family is affected by these limits when taking deductions. On the other hand, Roth IRA contributions are not tax-deductible since they are made after taxes are taken out, but withdrawals from a Roth in retirement are tax-free.
Additionally, consider maxing out your Health Savings Account (HSA) contributions. Contributions to HSAs for 2022 are capped at $3,650 for individuals and $7,300 for families, with an additional catch-up contribution of $1,000 allowed for those aged 55 and older.
You have until December 31st, 2022, to contribute to a 401(k) plan and until April 18th, 2023, to contribute to an IRA or HSA for the 2022 tax year.
2. Defer income if you’ll make less next year
If you’re expecting to make significantly more income this year than in 2023, try to defer as much income into next year as possible. However, this strategy only makes sense if you’ll be in the same or a lower tax bracket next year.
On the other hand, if you think you’ll be in a higher tax bracket in 2023, you may want to do the opposite and accelerate income into 2022 to take advantage of a lower tax bracket.
3. Use “loss harvesting” to offset capital gains
With the stock and crypto markets down this year, it can be the ideal time to use a strategy called “loss harvesting.” This means selling taxable investment assets (such as stocks, mutual funds, and bonds) at a loss to offset any capital gains you may have realized earlier in the year. Capital losses offset capital gains dollar for dollar.
If your losses exceed your gains, you can write off up to $3,000 of collective losses against other income. Any losses in excess of $3,000 can be carried over into the following year. In fact, you can carry over such losses year after year over your lifetime.
Note that the loss harvesting strategy does not apply to tax-advantaged accounts, such as 401(k)s, IRAs, and 529 plans. Additionally, the IRS “wash-sale” rule prohibits using this tax write-off for buying a “substantially identical” asset within a 30-day window before or after the sale that generated the loss.
Always consult your CPA or financial advisor before employing loss harvesting to ensure it doesn’t backfire on you.
4. Watch your required minimum distributions (RMDs)—or ensure your parents are watching theirs—if you or they are over age 72
If you have an employer-sponsored retirement plan, including a 401(k), 403(b), traditional IRA, SEP IRA, or SIMPLE IRA, you must start taking required minimum distributions (RMDs) by April 1st of the year that follows
the year you turn 72. After that, annual withdrawals must be made by December 31st each year to avoid a severe penalty.
If you fail to take the proper RMD, you may face a 50% excise tax on the amount you should have withdrawn based on your age, life expectancy, and account balance at the beginning of the year. That said, if you do make a mistake, you may be able to avoid the penalty by requesting a waiver from the IRS. You can request a waiver if your failure to take the RMD is due to a reasonable error and you take steps to make the required distribution. To request a waiver, submit Form 5329 to the IRS with a statement explaining the error and the steps you are taking to correct it.
Note that in 2022 the IRS updated its uniform lifetime table to calculate RMDs to account for longer life expectancies. As a result, your RMDs for this year may be slightly lower compared to previous years. To determine your RMD, refer to the IRS RMD worksheet or use an RMD calculator.
Maximize Your 2022 Tax Saving
There you have just four year-end tax-saving strategies that could save your family thousands of dollars on your 2022 tax bill. But DO IT NOW, as the end of the year will be here before you know it.
‘Tis the Season
Beware of Holiday Scammers
‘Tis the season for fall leaves, first snowfalls, hot apple cider, and holiday cheer. For most of us, the holidays are full of giving, getting, and goodwill.
But we must also realize that the holidays are the time of year when scammers are out in droves. Unfortunately, not only is the number of scammers multiplying each year, but scammers have also become more and more adept at creating new scams to rip you off both in person and online.
Thousands of people become victims of holiday scams each year. The numbers are staggering. Consumers lost $770 Million to scams that originated on social media in 2021. Non-payment or non-delivery scams cost people more than $337 million, and credit card fraud accounted for another $173 million in losses. That is a large chunk of change! Not only is it the hard-earned money you can lose, but scammers can rob you of your identity and personal information and ruin your festive mood.
When shopping online this holiday season—or any time of year—always be aware of deals that seem too good to be true. Do your part to avoid becoming a scammer’s next victim!
Tips to Avoid Holiday Scams
Whether you’re the buyer or the seller, there are a number of ways you can protect yourself—and your wallet.
PROTECT YOUR PERSONAL INFO. It’s easy to hit a button and “Buy” from anyone anywhere on your phone or laptop. However, be sure you’re not sharing personal or credit card information over public Wi-Fi. Only “BUY” when you are on a secure network.
DON’T CLICK. Don’t click on just any links or attachments in emails, websites, or social media. Phishing scams and similar crimes offer a link to click on whereby you give up some personal information like your name, password, and bank account number. You may unknowingly download malware to your device with just a few link clicks.
GIFT CARDS. Yes, gift cards are a convenient holiday gift, but they also open the door to several scams. Gift cards are for gifts, not for payments. If someone asks you to pay them with a gift card, that’s a scam. Gift cards are popular with scammers because they’re easy for people to find and buy. They also have fewer protections for buyers compared to some other payment options. They’re more like cash: once a scammer has the gift card number and the PIN, they have your money.
If you are going to use gift cards, stick to stores you know and trust. Avoid buying from online auction sites because the cards may be fake or stolen.
Check out your gift card before you buy it. To ensure your gift card is protected, avoid the rack and ask for one directly from the counter. Make sure the protective stickers are on the card and that they do not appear to have been tampered with. Also, check that the PIN on the back isn’t showing. Get a different card if you spot a problem. And always keep your receipt with the card’s ID number on it, as that will allow you to file a report if your gift card goes missing.
TOO GOOD TO BE TRUE DEALS. There may appear to be deals galore over the holidays, and many are on social media – but not all of them are legitimate. Carefully read reviews, look for security credentials on websites, and research unfamiliar retailers before you take advantage of a deal or discount. If it is too good to be true, it probably is.
BEWARE OF PORCH PIRATES. When you’re expecting packages over the holidays, shippers will often provide us with updates on the status of our orders. Knowing this, scammers will send phishing emails pretending to be from companies like FedEx and UPS to lure us to phony web pages and get us to share personal information. So, look closely at delivery notifications and email updates before you click on links or input information. And remember, UPS and FedEx won’t ask for personal information via email.
DON’T RESPOND TO REQUESTS FOR UPDATES. Be especially wary if a company asks you to update your password or account information. Look up the company’s phone number on your own and call the company.
ROBOCALLS. The robocall scams continue. I’ve had two calls this year that appeared to be from a utility company. Lucky for me, the caller didn’t realize that I was going to interrogate him more aggressively before he was going to get information from me. Those calls appeared legit on my phone, and identified the call as the phone number for the utility company. Otherwise, I would never have picked up the calls in the first place. The caller attempted to tell me a past-due utility bill had been overlooked. I started asking very detailed questions to which the utility company would have the answers. I did report the calls to the utility company, and they enlightened me to the fact that scammers can now disguise their call and have it appear that it is the actual telephone number of the company itself.
The bottom line is don’t answer the phone if you don’t recognize the number. Scammers often use this time of year to call and solicit donations for fake charities. Don’t ever agree to donate to a charity or buy anything over the phone without first looking into the organization.
As we move into the holiday season, remember that we can all be targeted by unscrupulous persons. The best thing you can do to protect yourself is to be AWARE of the newest scams out there and verify the identity of the person or organization to be sure they are legit. Don’t be afraid to ask lots of questions, pause, think, and hang up if any red flags arise.
4 Major Advantages of a Trust
Wills and trusts are both estate planning documents used to pass your wealth and property to your loved ones upon your death. However, trusts come with some distinct advantages over wills that you should consider when creating your plan.
That said, when comparing the two planning tools, you won’t necessarily have to choose between one or the other—most plans include both. Indeed, a will is a foundational part of every person’s estate plan, but you may want to combine your will with a living trust to avoid the blind spots inherent in wills.
Here are four reasons you might want to consider adding a trust to your estate plan:
1. Avoidance of probate
One of the primary advantages a living trust has over a will is that a living trust does not have to go through probate. Probate is the court process through which assets left in your will are distributed to your heirs upon your death.
During probate, the court oversees your will’s administration, ensuring your property is distributed according to your wishes, with automatic supervision to handle any disputes. Probate proceedings can drag out for months or even years. Your family will likely have to hire an attorney to represent them, resulting in costly legal fees that can drain your estate.
Bottom line: If your estate plan consists of a will alone, your family is guaranteed to go to court if you become incapacitated or when you die.
However, if your assets are titled properly in the name of your living trust, your family could avoid court altogether. Assets held in a trust pass directly to your loved ones upon your death, without the need for any court intervention whatsoever. This can save your loved ones major time, money, and stress while dealing with the aftermath of your death.
2. Privacy
Probate is not only costly and time-consuming, it’s also public. Once in probate, your will becomes part of the public record. This means anyone who’s interested can see: the contents of your estate, who your beneficiaries are, as well as, what and how much your loved ones inherit, making them tempting targets for frauds and scammers.
Using a living trust, the distribution of your assets can happen in the privacy of our office. So the contents and terms of your trust remain completely private. The only instance in which your trust would become open to the public is if someone challenges the document in court.
3. A plan for incapacity
A will only governs the distribution of your assets upon your death. It offers zero protection if you become incapacitated and are unable to make decisions about your own medical, financial, and legal needs. If you become incapacitated with only a will in place, your family will have to petition the court to appoint a guardian to handle your affairs.
Like probate, guardianship proceedings can be extremely costly, time-consuming, and emotional for your loved ones. Plus, there’s always the possibility that the court could appoint a family member you’d never want making such critical decisions on your behalf. The court might even select a professional guardian, putting a total stranger in control of just about every aspect of your life.
A living trust includes provisions that appoint someone of your choosing—not the court’s—to handle your assets if you’re unable to do so. Combined with a well-drafted medical power of attorney and living will, a trust can keep your family out of court and conflict in the event of your incapacity.
4. Enhanced control over asset distribution
A trust offers more control when it comes to distributing assets to your heirs. It can specify when and how your heirs will receive your assets after your death.
For example, you could stipulate in the trust’s terms that the assets can only be distributed upon certain life events, such as the completion of college or purchase of a home. Or you might spread out the distribution of assets over your beneficiaries’ lifetime, releasing a percentage of the assets at different ages or life stages.
In this way, you can help prevent your beneficiaries from blowing through their inheritance all at once and offer incentives for them to demonstrate responsible behavior. Plus, as long as the assets are held in trust, they’re protected from the beneficiaries’ creditors, lawsuits, and divorce, which is something else wills don’t provide.
If you do not want a living trust, you can use a testamentary trust to establish trusts in your will. A testamentary trust will not keep your family out of court, but it can allow you to control how and when your heirs receive your assets after your death.
An informed decision
The best way for you to determine whether or not your estate plan should include a living trust, a testamentary trust, or no trust at all is to meet with an estate attorney for a Family Wealth Planning Session. During this process, we’ll take you through an analysis of your personal assets, your family dynamics, what’s most important to you, and what will happen for your loved ones when you become incapacitated or die.
Sitting down with an estate attorney to discuss your family’s planning needs will empower you to feel 100% confident that you have the right combination of planning solutions in place for your family’s unique circumstances. Schedule your appointment today to get started.
Have You Considered Your Digital Legacy?
Social media is part of your legacy and is worthy of protection. Learn about how to preserve your digital assets so they will be significant and meaningful to your heirs for generations to come.
Continue readingHow will the Coming Wealth Transfer Affect your Family?
Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy-sounding name, it’s a fact that a tremendous amount of wealth will pass from aging Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of intergenerational wealth in history.
Because no one knows exactly how long Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. But studies suggest it’s somewhere between $30 and $50 trillion. Yes, that’s “trillion” with a “T.”
A blessing or a curse?
And while most are talking about the benefits this asset transfer might have for younger generations and the economy, few are talking about its potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance.
Indeed, an Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that intergenerational wealth transfers often become a source of tension and dispute among family members, and 70% of such transfers fail by the time they reach the second generation.
Whether you will be inheriting or passing on this wealth, it’s crucial to have a plan in place to reduce the potentially calamitous effects such transfers can lead to. Without proper estate planning, the money and other assets that get passed on can easily become more of a curse than a blessing.
Get proactive
There are several proactive measures you can take to help stave off the risks posed by the big wealth transfer. Beyond having a comprehensive estate plan, openly discussing your values and legacy with your loved ones can be a key way to ensure your planning strategies work exactly as you intended. Here’s what we suggest:
Create a plan: If you haven’t created your estate plan yet—and far too many of you haven’t—it’s essential that you put a plan in place as soon as possible. It doesn’t matter how young you are or if you have a family yet, all adults over 18 should have some basic planning vehicles in place.
From there, be sure to regularly update your plan on an annual basis and immediately after major life events like marriage, births, deaths, inheritances, and divorce. We maintain a relationship with our clients long after your initial planning documents are signed, and our built-in systems and processes will ensure your plan is regularly reviewed and updated throughout your lifetime.
Discuss wealth with your family early and often: Don’t put off talking about wealth with your family until you’re in retirement or nearing death. Clearly communicate with your children and grandchildren what wealth means to you and how you’d like them to use the assets they inherit when you pass away. Make such discussions a regular event, so you can address different aspects of wealth and your family legacy as they grow and mature.
When discussing wealth with your family members, focus on the values you want to instill, rather than what and how much they can expect to inherit. Let them know what values are most important to you, and try to mirror those values in your family life as much as possible. Whether it’s saving money, charitable giving, or community service, having your kids live your values while growing up is often the best way to ensure they carry them on once you’re gone.
Communicate your wealth’s purpose: Outside of clearly communicating your values, you should also discuss the specific purpose(s) you want your wealth to serve in your loved ones’ lives. You worked hard to build your family wealth, so you’ve more than earned the right to stipulate how it gets used and managed when you’re gone. Though you can create specific terms and conditions for your wealth’s future use in planning vehicles like a living trust, don’t make your loved ones wait until you’re dead to learn exactly what you want their inheritance used for.
If you want your wealth to be used to fund your childrens’ college education, provide the down payment on their first home, or invested for their retirement, tell them so. By discussing such things while you’re still around, you can ensure your loved ones know exactly why you made the planning decisions you did. And doing so can greatly reduce future conflict and confusion about what your true wishes really are.
Secure your wealth, your legacy, and your family’s future
Regardless of how much or how little wealth you plan to pass on—or stand to inherit—it’s vital that you take steps to make sure that wealth is protected and put to the best use possible. As your Personal Family Lawyer®, we have unique processes and systems to help you put the proper planning tools in place to ensure the wealth that’s transferred is not only secure, but that it’s used by your loved ones in the very best way possible.
Moreover, every plan we create has built-in legacy planning services, which can greatly facilitate your ability to communicate your most treasured values, experiences, and stories with the ones you’re leaving behind. By working with us, you can rest assured that the coming wealth transfer offers the maximum benefit for those you love most. Schedule a Family Wealth Planning Session today to get started.
This article is a service of Cris Carter, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $500 session at no charge.
Kids Protection Plan
Did you know that 69% of parents have not yet named guardians for their kids?
And of the 31% who have, most have made one of 6 common mistakes? Click this link to review the 6 common mistakes most parents (and their lawyers!) make when naming legal guardians and then schedule a Family Wealth Planning Session with us today, so we can fix those mistakes with you.
If you are a parent of minor children (or those with special needs) who are counting on you, your estate plan must begin with your children would always be taken care of by the people you want, in the way you want, no matter what happens.
At Cris Carter Law, one of our areas of greatest expertise is planning for the well-being and care of the children you love.
- Your children could be placed into Child Protective Services (CPS) even if you have a will in place; even if you have a living trust while your legal documents or located or your family is identified. Or worse, your kids could be left in the care of the one person in your family you would never want raising them;
- A Judge who doesn’t know you, or your family, will decide who will raise your kids, even if it’s the last person you would ever want;
- Approximately 5% of the total value of your assets could be lost due to probate, a court process that can tie up your assets for months or years and deprive your kids of the resources they need to live comfortably;
- When your kids turn 18, they get a check for whatever assets are left – outright with no protection
- There are unscrupulous people who make it their business to review public records to find out what 18 year olds are coming into money;
- The vast majority of estate planning attorneys simply do not address these issues, and do not plan from a parent’s perspective.
Yes, these things scare us too. That’s why we offer a Kids Protection Plan® with every estate plan we prepare for families with young children.
A Kids Protection Plan® is a set of instructions, legal documents and even an ID card for your wallet, which you need to have if you have kids at home who count on you for their well-being and care.
If you are in an accident, your Kids Protection Plan® will make sure your children are never taken into the custody of Child Protective Services, strangers or the care of anyone you wouldn’t want because the authorities don’t have clear instructions from you. And your Kids Protection Plan® will ensure your children are raised by people you choose, not someone chosen by a Judge who doesn’t know you.
To get started with your Kids Protection Plan®, contact us.
In 10 minutes, this FREE website will help you protect your kids if something unthinkable happens to you prior to creating your formal estate plan. This of it as the first step to ensuring your kids are raised by the people you want, in the way you want, no matter what.
Five Reasons To Never Give An Outright Inheritance To Your Children – and What to Do Instead!
If you’re like me, you want to leave an inheritance for your children. It’s likely part of what you are working so hard to do. But, far too often, the way we leave those inheritances actually does more harm than good. Something no parent wants.
Giving outright ownership of our assets to the kids could put everything you’ve worked so hard to leave behind at risk. Why, how and what can you do about it?
Let me share with you the five reasons leaving an outright inheritance to your kids is a mistake and then show you the way to protect your kids’ inheritance for many, many generations.
According to current statistics, forty-two percent (42%) of our children will divorce during their lifetime. In most divorces property is divided evenly. So if you have a married child, or a child who will get married in the future, and you leave them an inheritance, and they later divorce, as much as half of their inheritance could go to their ex-spouse. You aren’t working as hard as you are to support your child’s future ex-spouse, right? Good news, there is an alternative!
Your child may incur such extreme debt that the only possible relief will come through bankruptcy.
Possible causes of such debt are a business venture gone bad, a health event, such as addiction, mental illness, accident, or disease that results in either a temporary or permanent inability to work in combination with staggering medical bills, or an accident, resulting in judgment, as discussed below.
Bankruptcy does happen to good people and you can ensure that the inheritance you leave behind will never be at risk due to a mistake or health issue.
Unintended neglect that injures someone’s person or property could wipe out an inheritance you leave your children. For example, ACE Financial Services, Inc. in 2012 found these lawsuit judgments:
- $49 million in California for an automobile accident where the family of 21-year-old college student sued drivers of two vehicles involved in the multi-vehicle crash. The plaintiff’s counsel claimed one defendant was sleep-deprived, while the other was on their cell phone. The plaintiff was in a coma for one month and is expected to require lifetime 24-hour care.
- $20 million in Florida for an ATV accident where a teenage male was killed while riding an ATV on the neighbor’s property. The neighbor had invited him to drive the ATV, permitting him to operate it without proper safety equipment and without adult supervision. The teenage male struck a fence and was decapitated.
- $11.9 million in Florida for an internet defamation suit brought by a Florida consultant against a Louisiana woman for posting defamatory statements about the plaintiff on an internet bulletin board. The defendant called the plaintiff a “crook” and a “fraud.”
- $5.9 million in Maryland in a dog-bite case where a 16-month-old child was attacked and killed by a pit bull kept at the home of a family friend.
In the Florida ATV case, the defendants thought they were doing the neighbors’ son an act of kindness by allowing him the “fun” of driving the four wheeler around the family property. Apparently, they didn’t tell the young man about the barb wire on the property. Their good intended neglect, resulting in the decapitation of their neighbor’s son, was not seen as good by the parents or the court, who ordered the $20 million judgment.
In my own personal life, a friend recently called me because he accidentally left a faucet running at a friends’ house where he was visiting and the resulting flood causes $413,000 in damage that the insurance company is now looking to collect. If he had an inheritance, it would be wiped out by this potential claim.
As we can see, well intended, but neglectful behavior on the part of your children could wipe out any inheritance you leave them.
I have many clients who tell me they do not trust their children to manage money. This could mean that their children are spendthrifts, unwise investors, or easily manipulated out of the money. And, the statistics support this for nearly 20% of inheritors.
According to Prof. Jay L. Zagorsky of Ohio State University, 40% of individuals inheriting less than $100,000 will spend or lose the entire inheritance and 18.7 % of individuals who inherit more than $100,000 will spend or lose the entire inheritance. . It’s quite likely that if that inheritance was left in a different way those numbers would greatly improve. I’ll share more with you about that below.
My father once said, “Some people can’t handle prosperity.” He was right. In fact, most people cannot.
For example, Thomas Stanley and William Danko in their book, The Millionaire Next Door, uncovered research showing that children who received an inheritance were worth four-fifths less than others in their same profession who didn’t.
Vic Preisser, of the Institute for Preparing Heirs, says that unprepared children who inherit money are susceptible to excessive spending, identity loss, and guilt over receiving money they didn’t earn. Preisser says, “In a year to 18 months, everything falls apart — marriage, finances — and if there is a drug problem it becomes worse.” Thus leaving an outright inheritance to our kids, may do harm instead of good. But there is an alternative!
As we can see, an outright inheritance is NOT the best answer for your kids.
Most lawyers would tell you that the answer is to leave your kids’ their inheritance in a Trust and they’d be right, but they would likely still distribute that Trust outright to your kids at specific ages or stages.
We’ve got a plan for your family that is far, far better.
An alternative to an outright inheritance to your children (“outright” meaning they both personally own and can personally lose the inheritance) is to gift your assets to your children at the time of your death via a Lifetime Asset Protection Trust.
A Lifetime Asset Protection Trust can be drafted to give your children full control of their inheritance (if you choose), but ensure they never own the inheritance. And because the rule of law is you can’t lose what you never owned, you are gifting your children with airtight asset protection, of the kind they couldn’t give themselves at any price.
When you gift an inheritance to your children via a Lifetime Asset Protection Trust, the trustees of the trust own the property, not your children. Thus, if your children ever get divorced, file bankruptcy, or are ordered to pay damages in a lawsuit, they can’t lose the inheritance, simply because they never owned it.
You can use the Lifetime Asset Protection Trust as a vehicle for educating your children about investing, giving, and even business by allowing them to become a Co-Trustee of the Trust, with someone you’ve chosen and trust to support their education.
And you can even build in provisions to allow your child to become the Sole Trustee of the Trust or the right to become Sole Trustee at specific intervals, as well, giving them effective full control without the risk of ownership.
There are quite a few nifty additional ways we can structure this trust to meet the needs of your unique family and children.
When you come in for a Family Wealth Planning Session, if you desire to provide the most airtight form of asset protection for your child, and set up a structure that incentivizes them to invest and grow their inheritance rather than squander and waste it, we will discuss all the options with you then.
One of the benefits of a Family Wealth Planning Session is that you will get more financially organized than you ever have been before and understand all of the options for ensuring everything you are working so hard to leave behind to the people you love is handled with the ease, grace and care you desire.
This article is a service of Cris Carter, Personal Family Lawyer,® who develops trusting relationships with families for life. That’s why we offer a Family Wealth Planning Session,™ where we can review your family wealth needs and help identify the best strategies for you and your family. You can begin by calling our office today to schedule a time for us to sit down and talk because this planning is so important.
How “Shopping Around” for An Estate Plan Could Leave Your Family With an Expensive, Unintended Mess
Maybe you’ve heard that before investing in a professional service you should “get three estimates.” While often this is wise advice, it’s actually a bad idea when it comes to estate planning. This article explains why and how you can ensure you get the most efficient and affordable plan possible for your family without shopping estate planning lawyers the way you may think.
Let’s begin with why “getting three estimates” for an estate plan doesn’t work to actually get you what you want.
First and foremost, this recommendation assumes that you should be shopping for an estate plan based on cost and that you understand exactly what you are shopping for and how to evaluate those estimates.
Shopping for an estate plan based on getting the lowest cost plan possible is the fastest path to leaving your family with an empty set of documents (maybe in a beautiful binder, but not worth the paper they are written on) that won’t actually work for your family when they need it.
Unfortunately, we see the negative effects of cheap estate planning when family members come to us during a time of grief with that fancy binder that sat on the shelf for years sending out signals of false security, full of out of date estate planning documents and find themselves stuck in Court or conflict, even though that’s exactly what their loved one thought they had paid someone to handle for them.
This article is a service of Cris Carter, Personal Family Lawyer,® who develops trusting relationships with families for life. That’s why we offer a Family Wealth Planning Session,™ where we can review your family wealth needs and help identify the best strategies for you and your family. You can begin by calling our office today to schedule a time for us to sit down and talk because this planning is so important.