Looking Forward To The New Year In Estate Planning

One reason that estate planning can be so complicated without help is that the rules can change yearly. It is also easy to miss things, which can make it vital to have someone knowledgeable look over any documents like wills or trusts. Here is a bit of estate tax information that you may need to know for 2016.

New Lifetime Exclusion Amount

To receive tax benefits while gifting your heirs, a unified gift and estate tax credit lets you transfer property or gifts while you are alive. The lifetime exclusion amount that one can give without taxes applying is $5.45 million for 2016 as this number is adjusted for inflation every year. This gives a benefactor tax benefits, but estate planning documents are still needed to ensure that beneficiaries receive what one wants them to have when passing away.

Remember, Texas has its own rules for gifts and estate taxes. You might need a Texas attorney when making decisions regarding your estate to ensure your documents comply with all federal and state laws.

Yearly Gift Giving

You are allowed to give some gifts before the lifetime exclusion amount applies. The amount one can give annually stays the same this year at $14,000, and there is no limit to how many people this amount can be divided between. If you plan to give gifts this year, make a note of exceptions. For example, annual limits are not applicable for spouses.

Giving As A Couple

In 2016, couples have a lifetime exclusion amount of $10.9 million. This is because portability rules allow a surviving spouse to get a deceased spouse’s unused lifetime exclusion amount.

If you have questions about estate planning or want to make sure your documents are valid, contact us today.

Source

Things to Discuss About your Estate Plan

In our last blog post, we talked about whether you should consider explaining your estate plan to your family.  If you decide to have the conversation about your estate planning, the following is a list of topics you might consider discussing with them:

  • Where can your children find the documents that will be needed after you pass away
  • Information about who will be an advisor or trustee
  • Information about who will be the beneficiary for your accounts
  • Information regarding online information, such as usernames and passwords to your bank information
  • Information about who to contact regarding life insurance
  • Location of any money, checks, and other financial assets

When someone has children, they promise them that they will take care of them. When they really mean it, they will do everything in their power to ensure their children and future families will live with no worries. If you lay out all of your plans while you are still able to do so, your family will be able to carry out all of your wishes.

Planning your estate will not eliminate every problem, but when you make your needs and wants known to your family through legal documents, you can certainly reduce the amount of headaches and stress your family may experience.

If you need more information about estate planning or how you can communicate to your family about this, please do not hesitate to contact us.

Should You Have A Talk About Your Estate Plans With Your Family?

How many times have you watched a movie or TV show that depicted family members gathered around a table, waiting with baited breath to hear from a dead loved one’s lawyer as he officially reads the contents of their loved one’s highly secretive Will?

In the real world, you need to consider whether it is a good idea to die without revealing having revealed to your family what your Will says.

You may feel that it will be best for your family if you do not reveal your estate plans because you want to avoid family arguments or disagreements.  However, it may be best if you had a discussion with your family so you can give them an understanding of why you made the decisions you made.

Many people would prefer to keep these talks private or to a minimum, but you should really consider sharing as much information as possible with your family. This is especially true if one child will receive something that is different from the others.

You may have children who are financially responsible and others who are not good at managing money. For those who are financially responsible, you may decide to give them their money at once. For the others, you may decide to give the money in payments. If your children are adults who have children, you may also decide to leave money for your grandchildren.

If one of your children receives all of his or her money up front, the other children will wonder why their money was set up in a trust. When you have a talk about your plans before anything happens to you, everyone will be informed of why you made the decisions you made.

We understand that every family is different. Some families are uncomfortable with these discussions and some families would rather talk about it. If you want to have this talk with your family, but you are unsure of what you should do or how you should do it, contact us today.

Probate: Collecting Debts Out of an Estate

After the death of a loved one, the door is wide open to a number of conversations and legal problems that will involve the estate of the deceased. Probate laws deal with how a person’s property and other belongings are dispersed among family members, friends, charities, etc. Because the probate laws are not the same in every state, it is important that you are aware of the laws in your state.

When someone has a Will, the probate procedures are usually more simple because the Will specifically states the deceased’s wishes.  However, there will also be several additional factors that must be addressed after a person has passed away.  One of those factors include debt and taxes.

Before distributing all of the estate’s assets to the beneficiaries of the Estate, the executor or administrator of the estate has an obligation to notify any potential creditors of the fact that the estate has been opened.  When the creditors have been notified, then they are required to file a claim to seek to have the debt paid out of the estate.  The process for handling claims from creditors can be very complicated, and the rules vary significantly depending on whether the probate administration is “independent” or “dependent.”  In either case, the claims will be paid according to whether sufficient assets exist in the estate to pay them, and they will be paid according to the priority provided by Texas law.  For instance, funeral expenses have a higher priority for payment than credit card debts.

Whether you are the creditor trying to be paid from an estate or you are the executor of the estate trying to handle the estate debts, you should seek experienced counsel in dealing with those issues.  The attorneys at Ford + Bergner are prepared to assist you with creditor claims in probate estates.

If you need the advice of an attorney who can lead you in the right direction after a loved one has passed away, do not hesitate to contact us today.

4 Trusts That You Could Use

While a Will is generally a must-have document when it comes to estate planning, a trust is also useful for a variety of reasons.  Here are four types of trusts that you might want to consider.

Revocable Trusts

Also called living trusts, this allows one to change instructions in the trust while still alive. After one passes away, the trustee acts based upon the information in the trust. Families get benefit from this trust because they generally do not have to go to probate court, so this trust offers privacy and can save time.

Irrevocable Trusts

This type of trust could be used to protect beneficiaries from taxation as it can keep assets separate from one’s taxable estate. One with a life insurance policy might put the policy in the trust so that more money goes to loved ones instead of being taxed.

Charitable Trusts

People can receive benefits by putting an estate or assets into a trust for a charity. This can give one income from a trust along with tax benefits for the gift that passes to a charity after death.

Special Needs Trusts

Despite what impressions you might have of trusts, those of any income level could have reason to create one. This is perhaps best highlighted by special needs trusts as people use this trust to make sure a family member with disabilities has funds. A family needs to establish this kind of trust so that a beneficiary has financial support but is still eligible for government assistance.

There might be many options for you based on your wishes and the type of trust you are interested in, so contact us as we will work with you to ensure you and your loved ones get the most value possible from trusts and estate planning.

Source: What Is a Trust, and Why Should I Have One?

Trusts or Wills: Which Is Better For Your Estate?

Because of increases in some states in the use of trusts in place of a traditional Will, many of our clients often ask which is better, a trust or a Will?  To answer this question, it is important to consider the attributes of each:

What Is A Will?

A Will is a document that a person executes during their lifetime to go into effect only upon their later death.  The Will can serve several purposes:  it can lay out how the person’s assets will be divided upon death, it can appoint a guardian of the person’s children, and it can appoint a trustee to manage the person’s assets for his minor children.

What Is A Living Trust?

A living trust is generally perceived as a substitute for a traditional Will.  The trust is created during a person’s lifetime, and all of that person’s assets are transferred into the trust when it is created.  Thereafter, the trust can be amended, changed, or revoked at any time prior to the person’s death.  However, when the person dies, the assets in the trust will be distributed pursuant to the terms of the trust agreement, rather than according to the provisions of a Will.  In some states, the probate laws are so difficult that the living trust eases the process at death of distributing assets.  In Texas, however, as a general rule, the living trust provides only limited benefits over a traditional Will.

The selection of the best method for handling your assets upon death, either by Will or by Trust, is a question that requires solid consultation with a qualified attorney.  Should you be wrestling with this question, please contact us so that we may help you understand all of the considerations involved in making this decision.

The Kardashians Remind You To Update Estate Documents

While some relationships ultimately bring the phrase “trouble in paradise” to mind, there is often less paradise and more trouble when it comes to the Kardashians. Kim, Khloe and Kris have gone through divorces on the family’s reality show, and they serve as a reminder to those in Texas and other states to update estate planning documents when life changing events happen like new additions to the family, divorce or remarriage.

The National Law Review pointed out an instance where Kris told her ex Kaitlin Jenner that she had updated her living will to appoint a new executor. Changes like this are necessary so that someone more appropriate than an ex can make important health decisions if oneself is no longer able to do so.

The NLR points out that Kris may have gotten some of the terms wrong, but one may need to make several additions to a will or trust when divorce occurs. The executor of an estate is who helps carry out a will when a person passes away while a Health Care Power of Attorney or Advance Health Care Directive might be included in a living will to name an agent who can make health related decisions for a person.

Some people choose to use trusts because wills go through the probate process while trusts do not. This often gives a family more privacy when a loved one dies and may come with less tax burdens. When establishing or editing estate planning documents, contact us so that we can help ensure that your wishes are clear and enforceable.