Have there been changes in family
relationships, such as divorces, marriages, or new grandchildren?
2. Look into living trusts. All wills that transfer property must go
through a court process called probate. Probate eats time and money –
lots of both. Today, many families use living trusts to avoid probate,
reduce legal fees, and pay the least possible taxes. Living trusts work
well, provided they are handled properly during the parent’s life. Is
the living trust being used properly?
3. Dodge family disputes. Make sure either the will or trust distribute
personal items with a list describing the item and the intended
recipient. Most states allows distribution of personal items through a
“personal letter,” which is just a list of items and their intended
recipient. The letter is not part of the will until death, and then it
essentially becomes part of the will. Thus, the letter can be rewritten
or updated as often as desired without a trip back to the attorney. The
letter must be “authorized” by the individual’s will in order for it to
be effective. If specific distribution of personal items like the shot
gun, wedding ring, and the family stamp collection is made in the
letter, family fights will be avoided.
4. Split trusts to save taxes. If mom and dad have over $1.5 million in
their estate, including the life insurance, retirement money, and
business, they should either have an individual trust for each or have
a trust that “splits” into two trusts when the first one of them dies.
This shields up to $3 million from estate taxes that eat away at a
family’s wealth.
5. Protect life insurance. Life insurance is taxed. The family doesn’t
have to pay income tax on the money they get, but the money is taxed in
the departed loved one’s estate and the IRS will routinely take up to
50% of it. A living trust can help in smaller estates, and an
irrevocable insurance trust can totally eliminate the tax in bigger
estates.
6. Solve the incompetence problem. Use a durable power of attorney to
transfer power to someone when the parent can no longer take care of
their own business affairs. The power of attorney has to have language
in it that states it will endure the incompetence of the individual
making the power of attorney. With the power of attorney, there isn’t
any need to have the parent declared incompetent and have a court
appoint a guardian. It removes a lot of frustration.
The parents need to soften up and realize that
estate planning and
asset protection is
something they need to talk about and be taking care of. If they cannot
do it for themselves, they need to realize that their children are the
ones that they have to turn to. The boomers need to take their parents’
estate planning very seriously. The boomers have a lot at stake – a lot of money,
a lot of time, and a lot of frustration.
Author Bio:Attorney Lee R. Phillips is a nationally recognized expert in the field of finance,
estate planning, and
asset protection. Lee is licensed to practice law before the United States Supreme Court & also holds licenses in insurance and securities. Lee is a dynamic speaker & has spoken to over a half million people throughout United States, Canada & the Pacific Rim helping them understand the law.
Article Source: http://activeauthors.com
Attorney Lee R. Phillips is a nationally recognized expert in the field of finance, estate planning, and asset protection. Lee is licensed to practice law before the United States Supreme Court & also holds licenses in insurance and securities. Lee is a dynamic speaker & has spoken to over a half million people throughout United States, Canada & the Pacific Rim helping them understand the law.
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