November, 2018 | Shah & Associates, P.C. Estate Planning & Business Law Blog
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Should You Use an Educational Trust?

November 13, 2018

Filed under: Trusts — Neel Shah @ 9:15 am

Often grandparents are the ones asking questions about whether or not to use an educational trust. This raises further questions about whether or not one fund should be set that all of them are eligible to tap into or individual funds for each person. 

Planning for a loved one’s education is an important contribution that you might be interested in making, but the most difficult part of this process is determining what form that bequest will take.

A trust is a great option for passing on benefits for future education. There are many different types of trusts and some of them offer flexibility regarding the conditions and terms that the loved ones need to meet in order to get the benefit of the assets placed inside the trust. If you want to establish one trust fund, this could come in the form of a pool of money that each beneficiary is entitled to request funds from.

This seems like a simple option but should never be created without careful planning because if you intend for all of the beneficiaries to be treated equally, you’ll need to establish clear terms. One beneficiary might attend a more expensive university than another.

Furthermore, if there are wide age differences between the beneficiaries, then the younger beneficiary could discover that the older ones used up the majority of the trust before the younger ones even had a chance to make it to the application stage of college. A separate trust for each of the beneficiaries is another option, but this is not without its downsides.

Individual trusts do make it easier for equal treatment because each beneficiary’s trust would get the same amount of money, but the separate trust might not be enough to meet your goals. Someone who chooses a less expensive education will have excess funds inside their trust, whereas, someone who pursues a more expensive option will run out too quickly.

 

What Major Life Events Should Prompt You to Consider Estate Planning Again?

November 12, 2018

Filed under: Asset Protection — Neel Shah @ 9:15 am

It has often been said that far too many people don’t have the necessary estate planning tools prepared and therefore put them and their family members at risk of problems after you have passed away.

Some of these estate planning mistakes can add additional time or could cost you money but it is important to realize that major life events should encourage you to schedule a sit down with your estate planning lawyer. It is all too common to see families with large amounts of wealth attempting to manage their own money.

However, a terminal diagnosis or a career milestone can change things. Major life events such as a divorce, getting remarried, the birth of a child or new grandchildren can all spark the need for professional expertise.

If you have been in do-it-yourself mode for a long period of time, that may no longer be effective as you work to shift towards future goals. You must accommodate for the additional complexity now included in your life and the only way to do this is to schedule a consultation with a knowledgeable estate planning lawyer who is highly familiar with your individual situation. 

An experienced estate planning lawyer can advise you about strategies and tactics that are designed specifically for your individual needs and can ensure that you have peace of mind about what is required in terms of estate planning and how your goals and strategies must shift as your life needs change.

When you work with an estate planning lawyer on a regular basis and revisit your plan as life events emerge, this gives you the potential to avoid problems such as failing to update beneficiary designation forms and can ensure that you have all of your questions answered as they emerge. Minimize the potential for mistakes by scheduling a consultation with an estate planning attorney who cares about you and your family’s future.

 

Avoid The Most Expensive Estate Planning Mistakes

November 8, 2018

Filed under: Estate Planning — Neel Shah @ 9:15 am

Not only are estate planning mistakes difficult for your loved ones, as they put your family members in a difficult situation after you have passed on, but they can also be unnecessarily expensive. Taking a leadership role with your own estate planning process is one of the only ways to avoid serious estate planning problems that your loved ones will have to cope with after you have passed away. Even a seemingly simple mistake in your estate planning process could have ripple effects that can last well into the next generation. estate-planning-mistakes

The biggest mistake many people make is not having a plan at all. The state then determines where the assets go and no matter how much your family argues that you wanted things a certain way, your wishes will impact the decision of the associated courts. No plan leaves important decisions up to the courts and a group of people who don’t know you and your individual concerns and wishes.

As your family situation becomes more complex, it’s even more important to sit down to avoid expensive estate planning mistakes. A simple will might have been sufficient for you when you first got married but once you have children, you’ll need to accommodate for additional issues such as guardianship. Another example includes the accumulation of wealth which requires a more comprehensive tax strategy.

More money is available for your family when you have contemplated how to pay less in federal estate taxes and there are also complex issues such as generation-skipping transfer taxes to be aware of. Always take a proactive approach because there are many different types of estate planning mistakes that cannot be undone after the fact. One final expensive estate planning mistake is leaving behind too much money to an irresponsible spender. Having unrestricted access to vast quantities of money may not be the right move for a specific person but a spendthrift provision or trust can help to avoid these challenges. Planning techniques can ensure that wealth you have worked so hard to create lasts into future generations.

Don’t Put It Off Until Later with Estate Planning

November 7, 2018

Filed under: Estate Planning — Neel Shah @ 9:15 am

Almost 60% of adults in the United States do not have an estate plan or a basic will and it’s something that many people don’t want to think about. Most common response to putting together an estate plan is, I’ll get to it later, with the assumption that it does not affect you right now. NJ-estate-planning-lawyer

However, it could take weeks, months or even years for estate plan to wind through the complicated probate process, especially if you have not taken any care in your estate planning process altogether.

Since the average funeral cost in the United States is $7000, this can put a sudden and unfortunate financial burden on your loved ones that you never intended to leave behind.

Furthermore, if you don’t have you wishes clearly laid out on paper in your estate plan, this can lead to conflicts within your families. You will need to contact an experienced professional to help you with basic and complicated estate planning.

There are many different assets that could be included in your overall estate and as estate laws are currently changing and tax laws are always shifting, it is important to identify an attorney who is highly knowledgeable about this area of the law.

New concerns emerge in the estate planning realm often, including what to do with digital assets, such as the photos and other memories you have stored online. Failing to include these in your plan can make things even more difficult for your loved ones and can delay the process significantly.

Not having a plan also means that you leave the decisions about what happens to what’s inside your estate up to people who don’t know you at all or might not understand the intentions that you had. If you do not articulate these on paper, your loved ones could be the ones paying the price for this difficult situation. If you are ready to sit down and discuss estate planning options, schedule a consultation today with a knowledgeable attorney.

 

 

Governments Entitled to Significant Portion of Prince’s Estate

November 5, 2018

Filed under: Estate Planning — Neel Shah @ 9:15 am

Have you ever wondered the answer to the question, how much will your family really inherit when you pass away? Prince’s failure to conduct estate planning has landed his estate in the news numerous times and it turns out that the federal government is entitled to as much as 40% of Prince’s estate. Furthermore, the state of Minnesota might be entitled to up to 16%.

Would you prefer that your money go to friends, family members and charities instead of estate taxes being paid to the government? Prince’s case is a perfect example of what not to do and how much of your estate the government can claim if you don’t carry out your own planning. NJ-estate-planning

When Prince originally passed away in 2016, his estate was estimated at around $200 million and he had not taken any steps to protect that from the taxes due to the IRS or Minnesota’s Department of Revenue. Legal fees and costs associated with the years-long battle of fighting out who is entitled to recover benefits under that estate will also diminish the overall value.

So, if the beneficiaries of Prince were planning to divide that money between them, they will find that it’s close to reducing by as much as half. Conducting appropriate estate planning can avoid these problems and enable your loved ones to take faster action if you were to pass away suddenly.

Scheduling a consultation with a knowledgeable estate planning attorney is your first step for determining what to do.