Collaborative Divorce - Can We Change our Irrevocable Trust

At the time of divorce, an additional estate planning matter to consider would be modifying or terminating any trusts that you may have in place. At this time, I am addressing the Irrevocable Life Insurance Trust. Sometimes referred as the ILIT.

One would think that you can not change an Irrevocable Trust. However, there are opportunities to not only change the trust but also to terminate it. When I draft my ILITs for clients, I do provide for a divorce contingency so that by the terms of the trust changes are made as a result of a divorce. However, if your trust does not provide a divorce contingency, there are options available under the law. Under defined circumstances, the irrevocable trust can be terminated. At the time of divorce is the opportune time to address these legal issues. It will save time and expense.

Contact us at www.ythlaw.com for your probate, estate plannind and elder law matters.

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.

Michael Jackson's Will

It has been reported that Michael Jackson's will was found. This was a will from 2002 and reports indicated that there might be another will. Several things came to mind when I read and heard the reports and I share them with you.

FIRST, it is always important to keep your will up to date, to address changed circumstances such as a birth, death, additional assets, relocation, etc. Given Michael Jackson's life, a 7 year old will would probably be outdated.

SECOND, there should only be one original will. It should be maintained in a safe place. Generally the attorney preparing the will maintains the original in a safe. I have my clients maintain the original in their safe at home or at their bank in a safety deposit box. My records reflect the location of the will. When a new will is made the old original will should be destroyed. However, any new will would state that it revokes any prior (old) will.

THIRD, given all of the financial, legal and personal advisors to Michael Jackson, there should be more than just a will for his situation. He needed not only estate planning but asset protection planning. For his children, Trusts could have been established and funded during his lifetime. Such Trusts, if irrevocable, would not be subject to any creditors. Trustee(s) would have been named to manage the Trusts for the benefit of the children. The complexity of Michael Jackson's estate would result in not a simple estate plan but an intricate one addressing Federal Estate tax issues, creditors's issues, family and business matters.

FOURTH, the will when filed becomes a public document. For that reason, many people have their assets placed in a Trust which is not a filed or public document. If there is a will, it would be a simple one which is only done to make sure any asset not already in the Trust is place by the will into the Trust. All the terms, conditions and other specifics of the estate would be addressed in the Trust, the details of which would never become known to the general public.

IN CONCLUSION, this is just the beginning of what will be a long and complex legal matter. As the estate planning side of it unfolds, I will keep you apprised of what matters most. Your comments are welcomed or contact us http://www.ythlaw.com/

Family Trust

When I talk about a Family Trusts many people feel that they can not have one. They think that there is not enough money to leave to their children to even fund a Trust.

Well, I was reviewing a Family Trust recently. This one was set up as part of an Irrevocable Life Insurance Trust. This is a Trust that is funded by life insurance proceeds when a person dies. The person did not have a lot of money. Actually, the only money they had was the money that would come from the insurance proceeds. The money would go into the Trust to be use for the support, education and health of their children. This was a better way to make sure insurance proceeds lasted for a long time. If the money was given to the children without a Trust, then the money might not last long enough to porovide for the support, education and health needs.

So, there are ways to engage in estate planning with lots of assets or with no assets. There are strategies that everyone can use to help the next generation in some real way. Feel free to leave a comment or contact us at http://www.ythlaw.com/