minor children

Market Volatility Got You Worried? Here’s Something You Can Control

When investors are faced with turbulent markets, there’s a human response to want to do something—sometimes, anything. We’re hardwired to try to take control. That doesn’t always help us make the best investment decisions. However, as reported in this Daily Camera’s article, there is something that you can do that may make you feel better: “Freaked out about the market? Resolve to get your estate in order.”

If you care about your health care, financial affairs, minor children and even your beloved pets, this is an important task to take care of. An estate plan includes legal documents that help you, when you are living and helps your heirs, when you die. In addition to a will, powers of attorney that will give your loved ones the ability to manage your affairs, if you become incapacitated. An updated will ensures that your assets go to the inheritors you chose. Don’t forget your beneficiaries.

Your beneficiaries are the people who are named on several accounts and life insurance policies. You may have named people on investment accounts, life insurance policies, IRAs, bank accounts, annuities and other assets. If you have not done a full review of those documents in a while, you want to take care of this right away. Life and relationships change over time, and the people you originally named as your beneficiaries, may no longer be the ones you would select today. Note that any changes must be made while you are living—when you are passed, the beneficiaries receive the asset, regardless of what is written in your will.

If you’re not sufficiently motivated to make an appointment with an estate planning attorney, you should be aware that if you don’t have a will, the laws of your state will determine who gets your assets and even, lacking a will that names a guardian, who rears your minor children. You may or may not be a fan of court proceedings, but if you don’t have a properly prepared will, the court is going to be making a lot of decisions on your behalf.

Contact an estate planning attorney to begin the process of putting your affairs in order. An attorney whose practice focuses in this area of the law, is most likely a better choice than one who does wills on the side. There are many complex laws in estate planning, and there are many opportunities available to make the most out of your assets and grow your legacy. An estate planning attorney will know what will work best for you and your family.

Reference: Daily Camera (Jan. 6, 2019) “Freaked out about the market? Resolve to get your estate in order”

How Do I Set Up a Trust?

Trust funds are often associated with the very rich, who want to pass on their wealth to future heirs. However, there are many good reasons to set up a trust, even if you aren’t super rich. You should also understand that creating a trust isn’t easy.

U.S. News & World Report’s recent article, “Setting Up a Trust Fund,” explains that a trust fund refers to a fund made up of assets, like stocks, cash, real estate, mutual bonds, collectibles, or even a business, that are distributed after a death. The person setting up a trust fund is called the grantor or settlor, and the person, people or organization(s) receiving the assets are known as the beneficiaries. The person the grantor names to ensure that his or her wishes are carried out is the trustee.

While this may sound a lot like drawing up a will, they’re two very different legal vehicles.

Trust funds have several benefits. With a trust fund, you can establish rules on how beneficiaries spend the money and assets allocated through provisions. For example, a trust can be created to guarantee that your money will only be used for a specific purpose, like for college or starting a business. And a trust can reduce estate and gift taxes and keep assets safe.

A trust fund can also be set up for minor children to distribute assets to over time, such as when they reach ages 25, 35 and 40. A special needs trust can be used for children with special needs to protect their eligibility for government benefits.

At the outset, you need to determine the purpose of the trust because there are many types of trusts. To choose the best option, talk to an experienced estate planning attorney, who will understand the steps you’ll need to take, like registering the trust with the IRS, transferring assets to the trust fund and ensuring that all paperwork is correct. Trust law varies according to state, so that’s another reason to engage a local legal expert.

Next, you’ll need to name a trustee. Choose someone who’s reliable and level-headed. You can also go with a bank or trust company to be your trust fund’s trustee, but they may charge around 1% of the trust’s assets a year to manage the funds. If you go with a family member or friend, also choose a successor in case something happens to your first choice.

It’s not uncommon for people to have a trust written and then forget to add their assets to the fund. If that happens, the estate may still have to go through probate.

Another common issue is giving the trustee too many rules. General guidelines for use of trust assets is usually a better approach than setting out too many detailed rules.

Reference: U.S. News & World Report (November 8, 2018) “Setting Up a Trust Fund”

Do You Know What Would Happen To Your Kids If Something Happened to You?  The answer may surprise you…

This Story Will Break Your Heart.

This Story Will Break Your Heart

CoverIn 2006 Casey and Melanie Barber were on a summer vacation with their three children when their van blew a tire and spun out of control, resulting in a horrifying accident that left Casey and Melanie dead. Miraculously, all three of their boys survived the accident. 

In the aftermath of the accident there was confusion among family members concerning who would care for the children.  Because the Barbers left no clear instructions, this confusion ultimately resulted in a court battle over custody of the boys (and their inheritance) that lasted for more than a year, involved no less than 9 different attorneys, and cost hundreds of thousands of dollars in attorney fees and court time.

In the end, the court appointed a legal guardian who may or may not have been the person who Casey and Melanie would have wanted to raise their children.  We’ll never know because they never made their wishes known.

It Doesn’t Have to Be That Way for Your Family

Like many parents with minor children at home, the Barbers didn’t take the time to put an estate plan together that would have protected their children after their accident.  Many parents have so many questions about the estate planning process and feel so overwhelmed by the thought of their children being raised without them that they procrastinate and do nothing at all.

The most important thing that any parent can do is name a guardian for their children.  A guardian is the person who will raise your children if you’re not able to raise them yourself.  Most people don’t realize that if you don’t legally name a guardian to raise your children, then the courts will have to do it for you; and they may not choose the person that you would have wanted. 

Every loving parent understands the need to have a plan in place should something happen to them.  Unfortunately, there’s a lot of misunderstanding surrounding wills, trusts, and the court system.  Getting information about the basics of a good estate plan is the first step.  The second step is to speak with an estate planning attorney about your unique family dynamic and your specific goal of protecting your children.  They should be able to answer your questions, offer advice for how to best protect your children, and craft a plan that meets your needs.

With a god attorney, the process of estate planning shouldn’t be intimidating, difficult or even time consuming.  It should however be a fundamental requirement for every parent.

Take the first step toward insuring that your children will be taken care of, no matter what happens to you!  Download your free copy of A Parent’s Guide to Protecting Your Children Through Estate Planning at www.parents.mastrylaw.com

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