I write frequently on my blog about the importance of having a top-notch estate plan, but just as important as having an estate plan is maintaining your estate plan. Once we’ve worked to create the perfect trust to protect your family, you’ll need to re-title any assets you’d like to be protected into name of your trust. This is called Funding. Funding a trust is not difficult at all, but when you don’t know where to start it can seem daunting.  The result is that even the best of us may be tempted to procrastinate, sometimes to the point of negligence.

Here are a few tips to get you started on the process.  Each trust will be different, but the following suggestions are a foundation to begin funding just about every revocable trust:

Bank Accounts: For this you will need your Certification of Trust.  This is the document your bank will require to put your account(s) in the name of your trust.  With this document it’s a quick matter to stop by the bank some afternoon and ask them to make your trust the owner of your accounts.  NOTE: You should NOT be required to change the name on your checks or bank cards!

Real Property: Check your records to make sure your home is in the name of your trust.  Even if you know you transferred your home into your revocable trust, refinancing will often result in your home being taken out of it.  If your home is not owned by the trust, contact your attorney to have it put back in.

Stocks and Investments: Contact your broker, financial advisor, or transfer agent to change the title of the investment accounts to the name of the trust.  For stocks owned outside of an investment account, ask for the certificate to be re-issued in the name of your trust.

Personal Property: Tangible personal property such as antiques or artwork often cannot be titled in the name of a trust.  But you can tell your attorney you’d like to sign an Assignment of Personal Property, sometimes called a Comprehensive Transfer Document.  This states your intention to hold all of your tangible property in the name of, and for the benefit of, your revocable trust.

Don’t let your trust turn into an empty shell.  The funding process is much easier than you think.  Once you get started you’ll gather momentum quickly.  The coordination of retirement accounts with trusts, such as IRAs or 401(k)s, is a very complex issue, and should not be attempted without the help of a lawyer due to the possible inadvertent tax consequences and penalties.  A full discussion of this type of account is beyond the scope of this article.

A family vacation home—whether it’s a summer house on the beach or a winter skiing bungalow in the mountains—can be just the thing that brings a family together.  Unfortunately, it can also be just the thing that tears a family apart when parents pass away and the time comes to decide what to do with this wonderful family treasure. This article in the Wall Street Journal mentions that “Tensions often mount when a family figures out what to do with a property that could be a lightning rod for sibling rivalries—not to mention a sizable chunk of an estate.”

There are a number of issues that can be brought to the surface when adult children or grandchildren try to share a family property. “One big friction point in such an arrangement is how to pay the costs involved in maintaining a home—including taxes, insurance, utility bills.” But that’s only the beginning. “Other factors to consider: How the family gets along, where they live, what happens when the children who inherit a home get married and who is going to use the property.”

Fortunately, this is one family fight that can be prevented (or at least softened) by a little bit of forethought and planning. One of the first suggestions in the WSJ article is to leave family property to the next generation in a trust funded by life insurance. “That way, a professional trustee can manage the property, and the insurance proceeds can cover expenses.” A Qualified Personal Residence Trust (QPRT) or a Dynasty Trust can both be perfect for this purpose.

Another beneficial safeguard is to form a Limited Liability Company (LLC) for the property. An LLC can help establish an operating agreement to “cover rights of use and property management,” as well as shield heirs from estate taxes.

Having a good plan in place for your family vacation home can be the determining factor which allows the property to continue to serve as a place where your entire family can come together, to create happy memories that will last a lifetime.

A recent article in the LA Times reminds us of just how important it is to have some kind of living will or advanced healthcare directive, and that it is absolutely necessary to talk about these things with your loved ones. If you have not done these things it is your loved ones who will be left to make the painful and terrible decisions about your medical treatment and possibly even the heart-wrenching DNR determination.

The author writes of his father—chronically ill, stroke survivor, suffering from mild but advancing dementia—who is currently staying in a nursing home, “where they’ve put him on a diet of pureed foods and thickened liquids, but he often refuses to eat, demanding to be taken home and fed the home cooking he’s always loved. It’s hard to tell him that may never happen, and that his options are increasingly grim. If my dad can’t eat, a feeding tube will be his only choice. Other than giving up the fight.”

The family is now struggling to decide if a feeding tube is the right course of action, what their father would (or does) want, and how involved he should be in the decision considering his current state of mental health. “We worry… that with mild but advancing dementia, my father won’t be able to fully comprehend the implications of being fed through a tube implanted in his gut. And if he declines it, is he competent to make that decision?” These are the heart-breaking decisions that can leave loved ones asking themselves for years after, “Did we do the right thing?”

We often shy away from talking about these issues with our family members and loved ones. We think that they are too sad, too depressing, or too far into the future to worry about yet.  The only thing that can make these decisions even the tiniest bit easier, however, is knowing for certain what your loved one would want; and the only way to know for certain is to talk about your feelings with your family, and to put your wishes in writing with a living will or healthcare directive. Our office can help you do this.

More often than not the best that can be hoped for in a situation like the one discussed above is that some measure of peace is attained. We wish this for the author of the article and his family, and we wish this for any of our readers involved in similarly difficult and painful circumstances.

Most parents (even parents of adult children) want to provide for their children—but not necessarily right away, and maybe not all at once. According to a recent article in Barron’s, “A growing number of parents are shunning the time-honored practice of handing big inheritances to their children when they turn 21. Instead, they’re waiting until the kiddies are in their 30s and 40s.”

The reason for this is that more and more parents are coming to realize that there is a learning curve associated with handling large sums of money, and dropping a large inheritance in your child’s lap may be giving he or she more than they can reasonably handle all at once, essentially setting your child up for failure. “Premature distributions to heirs can have the same effect as the jackpot has on lottery winners… The money becomes a burden, and your child may not fully develop into the adult you hope to raise.”

Fortunately, if you don’t want to bequeath a fortune to your children all at once, you have a number of options for ensuring your children are provided for and eventually receive the inheritance you intend for them. As mentioned in the Barron’s article, some of the most popular strategies include passing an inheritance through either a revocable or an irrevocable trust. A trust allows a parent to transfer assets to their children while still retaining control of when and how the assets will be distributed. Of these two options, a revocable trust can provide more flexibility, while an irrevocable trust can provide more asset protection, although both kinds of trusts provide a measure of each. You will want to discuss with your estate planning attorney which option will work best for your family.

With either trust option parents can choose to simply keep the inheritance in trust until the child reaches a certain age, or distribute funds slowly over the course of time, to better acquaint the recipient with the responsibilities of wealth. However you choose to structure your estate plan, our firm can help you accomplish your goals for yourself and for your children.

Much is made every December about spending time in the warm presence of your family, appreciating and caring for each other. If you belong to a close family we have plenty of posts on our blog about how you can protect and care for your family with an estate plan. But the sad truth is that not all families are happy, and estate planners learn that not everybody wants their parents or siblings (or even, on rare occasions, their children) to benefit from their wealth upon their death.

It’s not as unusual as you may think for someone to ask “How do I make sure my money won’t go to my family when I die?” The answer to this question is actually very easy—if you’ve had the foresight to create some kind of estate plan, that is. Without any kind of estate planning (a will or a trust, for example) the law automatically distributes your estate to your closest living relatives upon your death. But the simple act of creating a will or a trust can prevent this automatic distribution from happening.

A will or a trust can be as basic or as complex as you choose. Simply naming the people or organizations of your choice as your heirs is often enough to ensure that your wishes are followed, but if you are worried about relatives who may contest your wishes you may want to ask your attorney about stronger measures, such as including a disinheritance clause or a no-contest clause in your will or trust. This can be as simple as including a single sentence stating “I have specifically chosen not to provide for my brother John.”

Although it can be as simple as this, in many cases this simple sentence may not be enough.  There are complex legal laws regarding disinheritance.  The laws require specific wording and specific provisions included in your will or trust to make it legally binding in a court of law.  If you have questions about this procedure, you need to contact a legal specialist to make sure that is properly worded and that all required provisions are included.

We understand that not all families are the same, and not all people will want their wealth distributed in the usual manner. If you have a unique family situation, or unusual circumstances or requests, please don’t hesitate to contact our office. We can help.

Ensuring you get the medical care you want in an emergency is a team effort which includes your attorney, your doctor, your healthcare agent, and your family and loved ones. But none of these people can be part of the team if they are unaware of your preferences. Here are five things to discuss with your doctor to make sure he or she is in the loop:

1. Your Advance Health Care Directive or Living Will. If you have already created a health care directive or living will we strongly suggest you give your primary care physician a copy of the document. It can be even more helpful to briefly discuss the document with your doctor and have him or her sign off on it, if possible. This prevents any unwelcome surprises, should an accident occur.

2. Your wishes for medical treatment if you are incapacitated. Part of creating an Advance Health Care Directive is outlining your wishes for medical treatment if you are incapacitated. This is more than just making a decision about a DNR (discussed in item #5), this also includes what medications or treatments you would like to receive and under what circumstances, it includes where you would like to receive long-term treatment if necessary, and it includes who you would like to be involved in medical decision-making (from your spouse, to your parents, to your favorite doctor or doctors.)

3. Your health care agent. This is the person who will be making medical decisions for you if you are unable to make them for yourself. We are not suggesting you bring your chosen agent in to meet your doctor, but briefly telling your doctor who the person is (your spouse, your brother, your daughter) and why you chose them can make all the difference.

4. Your HIPAA Authorization. This is the document that gives medical staff permission to share information about your health status with certain people. You can sign a generic HIPAA Authorization with your attorney as part of your estate plan, but it is likely that your physician and your local hospital will have their own forms to be signed. Ask your doctor how to ensure that the right people are getting the right information in case of emergency.

5. The inclusion (or lack) of a DNR statement in your medical file. We always hope that this will never be necessary, but we all learned our lesson from the Terri Shiavo case and know that it is better to be safe than sorry when it comes to your end-of-life wishes. Talk to your doctor about under what circumstances you would or wouldn’t want life-saving treatment, and the best way to include these wishes in your health care directive AND in your medical file.

If you’re an entrepreneur, or a small or family business owner, you have more to lose if you don’t have an estate plan. An estate plan helps you protect not only your family and your assets, but also the business you’ve spent years (or decades) building. A recent article at Entrepreneur.com, entitled What Entrepreneurs Should Know About Estate Planning, describes some of the main components of an estate plan and how they can be useful to a business owner.

That article covers eight estate planning components, beginning with a will and a living trust and ending with long term care insurance and disability insurance. All of these components are extremely useful (and in some cases absolutely necessary) and we highly recommend reading through the entire article.  We would also suggest that there are three more documents that an entrepreneur should consider to help preserve business and wealth for future generations.

Family Limited Partnership (FLP): A Family Limited Partnership is an asset protection tool which allows parents to take business assets out of their taxable estate and transfer the value of that asset to their children while still remaining in control of the business.

Buy-Sell Agreement: A buy-sell agreement is a formal plan or contract between business partners establishing what will happen to the business should one of the partners die. This document specifies whether a partner may or may not buy your ownership shares for your heirs and for what price, or whether you want to block certain family members or individuals from having any ownership share in the business.

Succession Plan: A succession plan should be a key element in any business plan, but especially for small or family businesses. A succession plan is exactly what it sounds like, a formal plan outlining your wishes for passing your business on to your successors. You may design a succession plan to facilitate your retirement, or to provide a smooth transition in the event of your death. In any case, a succession plan is essential for any business owner.

Don’t leave your business—or your family—out in the cold. Take the necessary steps to protect them both in the event of your death with a well-designed estate plan.

When most people think about estate planning they think about how to leave financial assets—savings, retirement accounts, investment assets, or large assets such as a home—to their children, grandchildren or other loved ones. But our firm knows that estate planning is about much more than just money.  In fact, once clients get beyond the big-ticket financial items and start considering the other assets or items they’d like to leave to their loved ones they often find that these “smaller items” involve far more concern and consideration than the finances.

Consider for a moment which items have meaning for you. What will happen to these items when you’re gone? The first things that come to mind are often family heirlooms: Your grandmother’s china, the engagement ring your father gave your mother; but what about items of significance to you in particular—a home library with antique books, a classical guitar collection, your personal inventory of artwork, or perhaps a valuable coin or stamp collection.

All too often these items of personal value are given only a vague mention as part of “the estate.” These personal items can end up either given away for a pittance at a yard sale, or they may cost hundreds of dollars in legal fees when siblings fight over them. Siblings often end up fighting and disowning each other over a disagreement about small items of personal value from mom or dad.

Luckily, you don’t have to leave the distribution of these items to chance. Our firm will work with you to create an estate plan that will not only pass your financial assets to your heirs, but also your beloved personal items as well.  Perhaps you’d like to leave that home library to your literary niece along with a modest sum to help her buy bookshelves. Your classical guitar collection might be most appreciated by your local music center, along with a financial donation to put toward a musical scholarship program.

Artwork, coin collections, stamp collections—these “small” items can be the Achilles’ heel of an estate plan if not given the consideration they deserve; but it doesn’t have to be that way. With the right planning you can leave your cherished personal items in the hands of appreciative people who will care for them. Contact our office today and let us help you provide for the people—and things—you love most.

“The grass is always greener on the other side of the fence.” It seems that this old adage is appropriate for married people planning for retirement, who look over the fence at their single counterparts and imagine how much easier it must be for them. According to a recent article in the New York Times, “More than half of married Americans, and more than two-thirds of singles, say they believe it is easier to make major financial decisions for retirement when there is no spouse in the picture.”

We all know, however, that the wisdom of this adage comes from the fact that things are not always as they appear. The same is true, it seems, when it comes to perceptions about the difficulty of retirement planning for married couples vs. single individuals. The findings of the Charles Schwab & Company survey quoted by the NY Times article reveal that “85 percent of married Americans were saving for retirement, compared with 67 percent of singles, across all age groups. Thirty-eight percent of married Americans expressed confidence in their retirement readiness, compared with 32 percent of those who were single.”

The numbers aren’t all that surprising when you consider that while it may be easier to make decisions about money when you’re on your own, it’s easier to sock money away in a savings or retirement account when you have two incomes to draw from.

Furthermore, having a second person in the picture can actually serve as an incentive to stick to your savings plan. “While everyone wishes they didn’t have to compromise, a spouse is also a sort of ‘buddy system,’ in terms of staying on track for savings… If one person tends to be a spender, a spouse who has the opposite tendency may help the couple stay on track toward savings goals.”

The important thing—whether you’re single or married—is that you’re ready for whatever the future may be.  Having a retirement savings plan, and protecting that plan for yourself and your family, is of the utmost importance.

Income, estate, and other federal tax levies have commonly been a bone of contention between those with different political ideologies; but the current conflict has reached unusual heights, with various million- and billionaires publicly expressing their views (pro or against) about current tax laws. Of course, million- or billionaires aren’t the only ones with strong opinions about taxes.

If you feel that you pay too much in taxes, Brett Arends of the Wall Street Journal has some tips to help you save on taxes in the future. Much of his article is tongue-in-cheek, but the suggestions are valuable ones. Of special interest to our firm and our clients are four of the tips nestled in the middle of the article:

Give to your family. “Until the end of 2012 you can give $5 million, tax-free… In addition you can give $13,000 a year to each recipient — each child or grandchild — and a spouse can do the same. So a married couple with, say, three children and eight grandchildren can give another $286,000 a year, on top of that one-off $10 million. Over ten or twenty years that really adds up.”

Put your grandkids—and great grandkids—through college. “Money paid directly to schools or colleges escapes estate taxes.” Furthermore, if you contribute to a 529 educational savings account that money can be tucked away—and eventually used by the student for whom it is intended—tax free (so long as it is used for educational purposes.)

Buy life insurance. Proceeds from a life insurance policy can go to your beneficiaries tax-free upon your death, although you may have to make some arrangements ahead of time.  The article states that “Typically you put the policy in an Irrevocable Life Insurance Trust… The premiums that you pay annually are gifts to the beneficiaries… And when you die, the proceeds of the policy go to the trust, for the beneficiaries, free of estate tax.”

Talk to an estate planner. “There are other moves that can cut your estate tax, too. A Qualified Personal Residence Trust can slash the estate taxes on a residence. A Grantor Retained Annuity Trust, or GRAT, can slash them on an investment portfolio. So, too, can setting up a Family Limited Partnership. Financial planners say this is a great time to put investments — like stock — into a GRAT.”

If you have questions about these tax-saving strategies, or other strategies that can help you preserve your estate for your heirs, please contact our office. We can help you determine what your best options are to help protect your assets—and your family—in the years to come.