Estate Planning Mistakes - Number Twenty-Six

It is important to know that face value of your life insurance is counted towards the value of your estate for Federal Estate Tax purposes. Therefore, the value of your estate could be subject to federal estate tax because your insurance policy increases the value of your estate.

An easy way to eliminate this problem is not to own the life insurance policy in your name. Instead, have the policy owned in the name of a trust. Such trust is known as an Irrevocable Life Insurance Trust. It can save your estate significantly on taxes.

Contact our office at http://www.ythlaw.com/ for all your Probate and estate planning needs.

Estate Planning Mistakes - Number Twenty-One

Does someone who is not related to you live with you? Is there someone living with you whose name is not on the deed to the house? What happens to that person if you die before he or she does? This is when you want to consider whether you need to preserve a life estate for that person.

What is a life estate? A life estate permits a person who is not on the deed to continue to live in the house for his or her lifetime. Upon his or her death, the house could go to whomever you choose. You want to make sure your Will has a provision similar to the following:

I devise and bequeath my house at ________ together with all household goods and furnishings therein, and all policies of insurance on said real and personal property, to my ________ for life so long as she/he desires to use such premises as a home and pays all costs of maintenance thereof, including taxes, assessments, insurance and ordinary repairs, said property to be insured in a reasonable amount insuring the interest of the remaindermen as well as herself/himself.
Upon the death of _________ or at such prior time as she/he no longer uses said premises as a home for herself/himself, I direct my Executor to sell said real and personal property and distribute the net proceeds thereof to _________.

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Estate Planning Mistakes - Number Seventeen

There are a number of triggering events that should have you making a Will or updating a current Will. One such event is marriage. Do not fail to amend your Will after you get married.

If you marry after making a Will (with no mention of a current or future spouse) and do not change it before you die, then your surviving spouse will receive the share of the estate to which a spouse would be entitled if you died without making a Will. This may or may not meet with your intent. It is always better to make your own plan then having the State's plan imposed upon you.

Contact us at http://www.ythlaw.com/for expert estate planning advice.

Estate Planning Mistakes - Number Twelve

Do not appoint the wrong Executor. An Executor is the person who handles assets and other matters when a person dies. Generally one might name the surviving spouse as the primary Executor and an older child (at least 18 years old) as the alternate Executor.

You want the assets of the estate protected. Make sure your Executor either has experience or knows how to hire the right professionals to assist with taking care of the assets. It is not always wise to name an institution unless you understand the fee structure and give an individual the authority to hire and fire institutions to manage your estate.

Contact us at http://www.ythlaw.com/ for expert legal and estate planning advice.

When someone dies, who pays the Debts?

I just got off the phone with a friend of mine who recently loss her husband. She does not live in Pennsylvania but knows I handle estate administration and I have been available to answer the numerous questions that inevitable arise. She has made good use of my book Stop! What are you waiting for? Your step-by-step guide to estate planning which was a gift to her before any of us realized just how sick her husband was.

She asked about the bills, medical bills specifically, which are beginning to pile up. Is she responsible for paying these bills? The answer is the estate is responsible. Did her husband have any assets in his name alone? Such funds must be used to first pay the debts of the estate before any distribution is made to beneficiaries. However, assets jointly with his wife and accounts/investments/retirement accounts with beneficiary designation are NOT part of the estate. Therefore, if all of the assets fell into those categories, the estate is bankrupt and can not pay its debts.

Remember though if the estate should come into any money, ie. win a law suit for wrongful death, then the estate has money and those piled up bills have to be paid first. Leave your comments here or contact me at http://www.ythlaw.com/

You Got To Dream Big

You have no excuse not to dream big. You don't need money nor an alloted amount of time. You don't need any one's permission nor their feedback. As the Nike commercials say, just do it or should I say "just dream it". A friend of mine shared with me one of her mottos "don't just face reality, create reality". So, you have to dream to make something that you want to happen in your life. You should not just wait for life to happen, because we all know it will.

When people say to me that they do not have an estate to plan, or assets to pass on, or a legacy worth preserving then I encourage them to dream. If they do, sooner or later, they will come to me with an estate to plan, assets to pass on, or a legacy worth perserving.

I found the young man in this video to be very inspiring. Watch and dream your big dream.

2009 In Review

As the year 2009 comes to a close we reflect on estate planning:

In the news:

We learned from the deaths of many notables the importance of estate planning to all. How important it is to have a will and one that is up to date. The death of Michael Jackson, Farrah Fawsett and Senator Edward Kennedy all reflected different aspects of estate planning. See prior blogs on these issues starting back in July.

Top Blogs:

And the top blogs for 2009 are:

1/15/09 - 10 Reasons why you should have a will

1/27/09 - The 10 Hottest Estate Planning topics

2/9/09 - Hiring an Estate Planning attorney - 10 things that you should know

7/10/09 - Michael Jackson - 5 Estate Planning Lessons

7/22/09 - Planning for Non-traditional families

8/13/09 - Estate Planning - How do I get started

8/24/09 - Irrevocable Trust - When to Use

9/29/09 - Costly Estate Planning Mistakes

11/10/09 - Facebook, My Space, Linked In, Blog, Oh My

11/24/09 - Great Review o f My Book

12/19/09 - Tax Tips for your 2009 Taxes

Pick your top news stories and blogs. Contact us at http://www.ythlaw.com/

Don't Take Your Passwords To The Grave.

I was reading an article in MarketWatch written by Andrea Coombes. See link below to place in your browser. I think it is food for thought. Many of us do not think about the details of our estate. Business that we do on-line has grown leaps and bounds. Many of our heirs would know nothing of these accounts waiting for something to come to our homes in our mailbox. I encourage you to read the article and see how your might protect your valuable assets from the state or others who are not entitled to the fruits of your labor.

Link:
"http://finance.yahoo.com/focus-retirement/article/107384/dont-take-your-passwords-to-the-grave.html?mod=fidelity-managingwealth"

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Do I really need a Will?

Question:
Do I really need a Will? I own everything jointly with my husband. Why should I even have a Will?

Answer:
Everyone should have a Will. A Will allows you, rather than the State, to determine who gets your assets. The State’s plan may not be the best plan for you.

In your particular case, joint property does not go through probate. At your death, jointly held property belongs to the other joint owner, your husband. However, a Will addresses who would get the property in case both you and your husband die simultaneously, in an accident or common disaster. In such a case, you may need to name a guardian, if you have minor children or disabled children.

Also, a Will allows you, instead of the Court, to name an Executor to make sure estate administrative responsibilities are handled. This includes any inheritance tax form filing and last income tax form due.

Finally, even if you believe you hold everything jointly, there may be items overlooked including beneficiaries under an insurance policy or 401K. Is your Estate named? If so, who do you want to take under your Estate? If you die as a result of the negligence of another, the legal suit is considered to be an asset of the Estate. Once again, who would benefit from these assets, you can decide under your Will or the State can impose its Intestate Law, the law applicable for those who die without a Will.

Have your question answered by entering a comment or go to http://www.ythlaw.com/ and email us your questions.