When creating your estate plan, you may wish to make use of one or more trusts. A trust can be very complicated, or amazingly simple. At its core, a trust is comprised of a grantor who creates the trust, a trustee who oversees the trust, one or more beneficiaries, and assets that are used to fund the trust. In many cases, the grantor, trustee and beneficiary position may be held by the same individual. While trusts come in many varieties and perform a wide array of functions, the two broad categories of trusts are revocable and irrevocable.

As indicated by the name, a revocable trust allows you, as the grantor, to terminate, amend or modify the trust at any time and for any reason. You may add or delete a beneficiary, amend the terms of the trust, or terminate it as you please. Additionally, a revocable trust is not required to pass through probate. Probate is the legal process used to inventory, value, and distribute estate assets upon your death. Avoiding probate allows assets to reach beneficiaries much sooner.

Although an irrevocable trust also allows you to avoid probate, it offers other advantages as well. An irrevocable trust offers asset protection and estate tax avoidance as well as capital gains tax and personal income tax advantages in some cases. In order to gain these additional benefits, however, you must give up the ability to terminate or make changes to the trust at a later point in time.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

Unfortunately, divorce is now more common now than it was years ago. In fact, more than half of all first marriages, and approximately 60 percent of second marriages end in divorce. While divorce clearly affects the spouses and children emotionally, it also has a significant financial impact. If you are currently in the process of a divorce, or recently finalized one, be sure to consult with your estate planning attorney to ascertain what estate planning changes may need to be made. While each situation is unique, the following changes, as well as others, may need to be made:

• Replace your ex-spouse as the beneficiary of retirement plans, pension plans or life insurance policies. Do not count on state laws to automatically remove your ex-spouse as a possible beneficiary.
• Removal of your ex-spouse as a beneficiary in your Last Will and Testament.
• Appointment of a guardian in your Will for your minor children.
• Creation of a trust and appointment of a trustee. Unless you want your ex-spouse to control funds left for your minor children, you may wish to create a trust for all assets left to them and choose a capable and trustworthy trustee to oversee the administration of the trust.
• Execute a new living will (often called an advanced directive or healthcare directive). You likely appointed your ex-spouse to make decisions on your behalf in the event of your incapacity. Unless you still want him or her to make these decisions, you will need to execute a new document.
• Revoke any power of attorney documents you executed making your ex-spouse your agent.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

Most people have created some type of retirement plan as well as an estate plan; however, people often fail to understand why the two need to be considered together instead of independently.

Think of it this way. Your retirement plan involves money and assets. Your estate plan also involves the same money and assets. Therefore, when you create one plan, you should consider how it will affect the other plan. Likewise, when you change one, you will likely need to change the other as well.

Take, for example, assets that you currently have in savings or in an investment account. You may be counting on those funds to support you during your golden years. Your current estate plan may direct that those assets go to your spouse or children upon your death. What happens, however, if you find that you need to place those assets in an asset protection trust in order to qualify for a program such as Medicaid as you age? A change such as that will also require you to make a change to your estate plan in the form of the creation of a trust.

By the same token, your current estate plan may include trusts for your young children in the event of your unexpected death. As you age, however, you may decide to terminate those trusts and use the funds for your own retirement once your children are grown and self-sufficient.

Because the two go hand in hand, you should make a point of reviewing one whenever you make a change to the other.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

Creating a Last Will and Testament is the foundation of any estate plan. While executing a Will is certainly essential, updating it is equally as important. As the saying goes “nothing stays the same.”  So how do you know when you need to update your existing Will? Although each person presents unique circumstances, there are some common events that warrant revisiting your Will, as well as any other estate planning tools you have in place.

Major life changes always warrant updating your Will. Although there are other events that may also warrant updating your Will, the top three major life changes that clearly require a Will update are marriage, divorce, or the birth of a child or grandchild. The reasons why are equally as apparent. If you get divorced, you likely do not want your ex-spouse to receive the bulk of your estate if you die. If, however, he or she remains a named beneficiary in your Will, that is precisely what is likely to happen. Likewise, if you get married yet fail to name your new spouse as a beneficiary, he or she may not be entitled to anything, depending on the laws of the state where you are a resident. Even if your spouse is entitled to something under state law, it may not be as much as you wished him or her to take from your estate. The birth of a child or grandchild is also a good reason to update your Will. Although the generic term “issue” is often used in a Will to refer to any children or grandchildren, it is best to name children or grandchildren by name in order to avoid confusion. In addition, if you did not have any children when you made your Will, you may not even have a generic provision for any future children, making an update essential.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

If you are considering the creation of an estate plan, one important consideration is often the avoidance of probate. In order to understand why avoiding probate is such an important facet of estate planning, you need to have a firm understanding of what probate is and how the probate process operates.

Probate is the legal process that is often required when someone dies. Although the process may vary somewhat from one state to the next, there are commonalities. Probate begins when someone petitions the court to probate the decedent’s estate and admits the decedent’s Last Will and Testament to the court, if one exists. The court then appoints a personal representative or executor. If the decedent left a will, an executor was likely named in the will. The court must still approve of the nomination. In the absence of a will, the court will appoint someone as personal representative.

The executor or personal representative is then charged with making a complete inventory of the decedent’s assets. All assets must also be valued and an inventory list submitted to the court. Notice of the probate is required to be given to beneficiaries and/or heirs as well as to the public by publications in a local newspaper. Claims can then be made against the estate for debts which are approved or denied by the executor or personal representative. Taxes must also be paid by the estate in some cases. A final accounting is eventually submitted by the executor or personal representative to the court for approval, If no disputed claims or a will contest against the estate have been filed, the court will then release the assets to the beneficiaries or

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

For many, a pet is much more than a pet, he or she is part of the family. According to the Humane Society of America, more than half of American families are home to at least one pet. Although dogs are the most popular pet followed closely by cats, there are an infinite number of other animals from birds to pigs that are kept as pets. Regardless of the type of animal that you have made part of your family, chances are that you wish to ensure that your pet will be well taken care of after you are gone.

Just as you make provisions in your estate plan for family members and loved ones, you can provide for your pet in the event of your death. Granted, your pet cannot manage his or her own money, but that can be accounted for as well with the creation of a pet trust. A pet trust operates in much the same manner as any other trust, except the beneficiary is an animal instead of a person. You will need to designate a trustee to oversee the trust as well as someone to handle the day to day care of your pet upon your death. While they can be the same person, they do not have to be. After that, you simply decide on the amount and type of assets you wish to use to fund the trust and your pet trust is created. By creating a pet trust, you can rest assured that your pet will be cared for after your death just as he or she was

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

When you visit an estate planning attorney to become apprised of your options with regard to vehicles of asset transfer you may well find that a trust is the most appealing option. Depending on the nature of your assets there are a number of different trusts that can be utilized to achieve specific objectives, and many people with significant, diverse holdings may want to use a combination of them. But even people with relatively simple financial profiles often choose to use a trust such as a revocable living trust because of the fact that the transfer of assets to their loved ones will take place outside of the probate process.

Individuals typically avoid the probate process for three primary reasons. One of them is the fact that probate is a public proceeding, and it allows for interested parties to step forward and challenge the will if they choose to do so. Many would prefer to keep their final affairs private and keep the door closed to those who are unwilling to honor their wishes.

Probate can also be a rather long and drawn out affair, taking anywhere from several months to several years to run its course in complicated cases. Of course the heirs to the estate do not receive their inheritances until the estate has been probated and closed. In addition to this, there are significant costs associated with probate that can erode the overall value of your estate considerably, and every cent that is spent is money that could potentially have been in the pockets of your loved ones.

If you do choose to use a trust as your vehicle of transfer it would probably behoove you to include a pour-over will as well. Most people are going to have some property remaining after they pass away that was not placed into the trust either because they obtained it after the trust was created or because they had practical reasons to retain personal ownership. The pour-over will accounts for property of this nature by directing it into the trust upon your death.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

If you have an elderly family member or loved one who has become incapable of caring for himself or herself, you may wish to step in and help make day to day decisions for your family member or loved one. Unfortunately, you may also have found out that having good intentions, or even being related to the person, is often not enough to allow you to make those decisions. Often, an appointment as guardian of the ward, or person who needs assistance, is required before you can help.

State laws determine when a guardianship is needed, how to petition for one and sets the limits of authority granted to a guardian. In addition, terminology may vary by state. As a general rule, a guardian has authority over the ward while a conservator has authority over the estate of the ward.

In order to become a guardian, you must file a petition for guardianship, or similar document, with the appropriate court. This is typically the probate court; however, it may vary by state or city within a state. After the petition is filed, anyone with an interest in the proceedings is entitled to be notified that the petition was filed, including the ward. The court will then schedule a hearing to determine two things — if the ward is legally in need of a guardian and, is so, whether you are an appropriate person to be appointed guardian. Given the importance of being appointed guardian, you may wish to consult with an elder law attorney once you see the need for appointment

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

The costs associated with long-term care are worth paying attention to if you are engaged in planning for the future. The MetLife Mature Market Institute survey tells us that a year in an assisted-living facility in the United States in 2010 averaged over $39,000. The same period of time residing in a private room in a nursing home would run you over $83,000 on average nationally.

According to the United States Department of Health and Human Services some 70% of senior citizens will someday need some form of long-term care, with 40% of them residing in a nursing home at some point in time. With the average nursing home stay being upwards of 2 1/2 years, you’re potentially looking at some pretty hefty end-of-life expenses. How do you meet these expenses?

Long-Term Care Insurance

The purchase of long-term care insurance can provide you with the peace of mind that you need, but it must be noted that this type of coverage is quite expensive. The younger you are when you obtain coverage the more affordable it is, and this is something to keep in mind when you’re making plans for the future.

Veterans A & A

Veterans of the United States armed forces who have served at least 90 days on active duty with a minimum of one of these days taking place during a time of war may be eligible to receive the Veterans Aid and Attendance pension. Single veterans who need assistance with their day-to-day personal needs can qualify for over $1600 per month.

Medicaid

Many people are surprised when they hear that Medicare does not cover long-term care expenses, but Medicaid does under certain circumstances. You must meet the financial need requirements, but when you consult with an estate planning attorney you’ll find that it is possible to qualify while still retaining ownership of a significant amount of your personal property.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

A “pay on death” account is basically an estate planning tool that allows the primary account holder to transfer funds or assets easily and quickly upon your death to a loved one. The best way to understand why you might wish to convert an account to a “pay on death” account is to illustrate what happens if the account is not titled in this way.

The “pay on death” option is typically available for bank, retirement and investment accounts as well as securities registrations. Some states also allow vehicles to be registered as “pay on death”. Imagine that you have a bank account with a substantial amount of money in the account. Your intention is for your child to have the money in the account upon your death. Titling the account as a joint account is an option; however, if you do not want your child to have access to the account while you are alive, then the joint ownership option will not work.

When you die, the funds in the account will become part of your probate estate. In most states, this means the funds will be frozen until a court is satisfied that all legal requirements have been met to transfer the funds to your beneficiaries or heirs. This can take months, or even years, to accomplish. By simply converting the account to a “pay on death” account, the funds held in the account are legally transferred immediately upon your death to your child, thereby avoiding the need for them to be held up in the probate estate process.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.