04/26/2018










Living Trust FAQs Everyone Should Know

living trustA living trust allows your loved ones to inherit your assets directly, which means without going through probate court. That means you save time and money distributing your estate to your family members.

The living trust is a useful estate planning tool, and it could save your estate thousands of dollars. Like other legal tools, you should familiarize yourself with how a living trust works. Also, consult with an attorney to find out if a living trust is right for you – or if there is an alternative based on your estate’s unique circumstances.

FAQs on Living Trusts to Know

Before you consider your estate plan “finished,” review these frequently asked questions. They may help you to assess whether or not your estate could benefit from a living trust.

How does a living trust avoid probate court?

A living trust requires that you transfer all assets from your name into the trust; therefore, the trust now owns the assets.  You will then name a successor trustee, who will then manage the trust and distribute the assets according to your wishes after your death.

The process takes a few weeks, and you do not have to worry about court fees or extensive attorney’s fees to complete the process.

Does a living trust protect assets from creditors?

No, it does not. While it is useful, a trust will never protect applicable assets from bankruptcy or creditors. Any legally enforceable debt can use assets from your living trust to satisfy the debt.

Is it difficult to hold property in a living trust?

When you make a living trust, it requires an extensive amount of paperwork.  Then, you will need to sign over your property into that trust. Once it is part of the trust, the hard work is over. However, some people may find the process of getting there time-consuming, costly, and tedious.

Does a living trust protect assets from medical costs?

No, a living trust does not offer such protections. Your living trust can be used to pay for catastrophic medical costs, but it does not generate funds solely for these expenses. You can, however, ask an estate planning attorney to help you set aside funds for unexpected medical costs.

Do you need an attorney to create a living trust?

Technically, you do not. However, it is highly recommended that you use an attorney. Living trusts are complicated legal documents. When you attempt to draft a living trust without professional assistance, you may leave out specific wording, ignore critical statutes, and leave loopholes in your trust documents.

It is best to consult with an attorney in New York so that you can ensure your trust is set up legally – and efficiently.

Do you need a will if you have a living trust?

Yes, you still need a will even if you have a living trust. In fact, it is best if you draft both together so that they work together smoothly. A will allows you to name a guardian for minor children, but also designate beneficiaries and wishes. It will also cover any assets you forget to add to your trust before your death.

Consult with a New York Estate Planning Attorney Today

If you are curious about your options for estate planning, speak with an estate planning attorney in Long Island, NY today. The Law Office of Andrew M. Lamkin, P.C. can help you with your living trust, will, and other necessary estate planning documents.

Schedule a free consultation today by calling 516-605-0625, or request more information online.

5 Reasons Why You Might Not Need a Living Trust

living trustA living trust is a way to avoid the hassles and costs of the probate court, and while it is certainly beneficial, it is not beneficial for everyone.

When you are examining your options for an estate plan, realize that not all options apply to everyone. Therefore, it is always best that you consult with an estate planning attorney. An attorney will review your assets and your wishes, then help you decide which components make the most sense in your specific situation.

While you wait for your consultation, here are a few reasons the living trust might not work for you.

5 Reasons a Living Trust Might Not Make Sense for You

Some people can benefit from establishing a living trust right now, while other times you can wait on the living trust or forgo it entirely. Here are five common reasons a living trust is not used – see which might apply to your situation.

Reason 1: Your Biggest Assets are Jointly Owned

You do not need a living trust if your largest assets are all jointly owned. That is because jointly owned assets will pass directly to the other survivor via right of survivorship – which means that your co-owner would automatically inherit the asset anyway.

Reasons 2: Assets with Beneficiary Designations Avoid Probate

If the rest of your assets have designations for your beneficiaries – such as investment accounts, bank accounts, life insurance policies, and retirement accounts – they would avoid probate court altogether. These assets which have named beneficiaries do not go through probate, and your loved ones are allowed to access them right away.

Reason 3: You are Young and Middle Income

A living trust does not usually make sense for anyone in the mid-income range that is under 55 or 60 years old. That is because a living trust doesn’t do anything for you while you are alive, and there is not much reason to worry about one when you are in your 20s, 30s or even 40s.

Reason 4: Simple Estates Often Go through Probate without Issue

Most states now offer streamlined probate court processes, especially for smaller estates. In New York, estates that are classified as “small” will go through the quicker process, which costs less and takes significantly less time too. Therefore, if your estate is already “small” in the eyes of the state, your loved ones would not have the costs or time hassles of the traditional probate court process.

Reason 5: Your Assets are Not in the Millions

The biggest reason living trusts do not make sense is when the estate is small – such as $300,00 or less. However, if you were 45 years old and have an estate worth $1 million or higher, you may consider a living trust.

Consult an Estate Planning Attorney in Long Island, New York First

While these reasons might apply to you, you must realize that every estate is unique and the process of drafting an estate plan is highly complicated. Therefore, your estate may need a living trust even when you may think it is unnecessary, or you meet any of the conditions cited above.

To see if you could benefit from a living trust, contact the Law Office of Andrew M. Lamkin, P.C.

You may schedule your free case evaluation at 516-605-0625, or contact us online to schedule your appointment.

4 Reasons You May Need a Trust

trustsIf you have not considered a trust, now is the time to reconsider. A trust is a great way to pass on your wealth and wishes, and it covers areas of estate planning that a will cannot. If you have substantial assets, a trust could protect those assets better than a standardized will. Furthermore, a trust will protect your wealth for future generations.

What is a Trust?

A trust is not a document; instead, it is a legal structure. It creates instructions on how and when your assets are passed on to your trust’s beneficiaries. There is no single type of trust either; instead, you and your attorney discuss your needs and decide which type will help you reach those goals.

Is a Trust Right for You? Here are 4 Benefits to Consider

A good trust starts by documenting your assets and wishes – something a qualified estate attorney can assist you with. Your trust must adhere to all state and federal guidelines too, otherwise, the courts may not recognize the trust.

When you have a properly drafted and established trust, you can:

  1. Pass on your wealth efficiently and privately. The biggest benefit to a trust is that your estate is now private; not public. With a will, your estate goes through probate, which opens your estate up and it becomes a matter of public record. With a trust, there is no probate court. Instead, your assets are transferred over privately, and you control exactly how and when those assets are passed to beneficiaries.
  2. Be in complete control of how assets are distributed. With a trust, you customize your distributions. You can distribute based on stipulations, such as children can only receive trust funds for college or health care. You can also set ages, such as a child receives 20% when they reach 21 years, 20% at 30 years, and so forth. This ensures your beneficiaries do not receive a lump sum that they can spend quickly.
  3. Keep all assets within the family. You want to preserve your legacy, and a trust can do that. A trust sets goals for your estate and you can ensure remaining assets are transferred to beneficiaries you choose – including family businesses.
  4. Trusts are low maintenance. With a trust, once the assets have been transferred over and everything is set up, there is little you need to do. The only times you must amend the trust is when you need to change a beneficiary or trustee.

Is a Trust Right for Your Estate? Consult with an Estate Planning Attorney in Long Island

The only way to determine if a trust is a right choice for you is to speak with an estate planning attorney. An attorney from the Law Office of Andrew M. Lamkin, P.C. can help you decide which type of estate plan is right for you based on your assets and wishes.

Schedule a free consultation with attorney Andrew M. Lamkin today by calling his office at 516-605-0625 or request your appointment online.

3 Common Issues with Trusts – and How to Correct Them

Living Trust and Estate PlanningThinking about the inevitable is not something anyone looks forward to, but it is in your best interest to do so – especially if you have family or assets you want to protect.

Estate plans often fail what they are designed to do because they contain severe errors. These errors render them practically useless, and the victims of these mistakes are the heirs to your estate – because the inconsistencies are typically not discovered until it is too late.

If you are setting up a trust as part of your estate plan, there are a few issues seen with these items that must be avoided if you want to truly protect your loved ones.

Assuming a Trust is a Set-it-and-Forget-it Situation

Assuming that your work is done just because you have established a trust is grossly inaccurate. Creating a trust and signing it is really just the first step. From there you must transfer your assets into the trust, because a trust is not valuable if it holds no assets. A financial planner can work alongside your attorney to help you do just that. But even then, your work is not complete.

Each year, you need to review your trust. Look for new assets to add, and include a “pour over” will just in case. These documents ensure that all acquired assets after the trust is established falls into the trust.  This would include any subsequent assets obtained – such as jewelry or motor vehicles.

Beneficiary Designations Do Not Count

Remember when you created your retirement account or established your brokerage account? You had to name a beneficiary. Known as beneficiary designations, those names are permanent and separate from your will or trust.

The party you signed on those documents is the person that will receive the inheritance from your retirement or brokerage accounts.  So if you later create a trust or estate plan and attempt to name a new person as the beneficiary of those accounts, that alone will not work.  The beneficiary designation on your retirement or brokerage accounts will trump your trust or estate plan.

Creating a Trust Schedule

It is important that your child or children do not receive money before they are ready. Therefore, you need to create a trust program, which allows the trustee to give assets in increments to the beneficiaries. For example, you have a $1 million trust. You can distribute one-third of that $1 million by the time the child is at age 30, then another half at age 35, then the remaining balance by age 40.

Just be sure to talk to your children about the fixed schedule so that they understand they will not receive their full inheritance at once.

Speak with an Estate Attorney about your Trust

The best way to avoid common issues when creating a trust is to do so with an attorney’s help. An attorney knows the common pitfalls that can thwart your intentions, and can ensure that your estate plan is error free. Also, the fewer errors you have, the less likely it is that your heirs will have to endure estate plan disputes in the future.

To start the process of setting up a trust, contact the Law Office of Andrew M. Lamkin, P.C. today for a free consultation. You can schedule your appointment now at 516-605-0625 or request a free consultation online.

The Basics of Suffolk County Wills and Trusts

Elder Care Attorney Helping Families in Suffolk County Prepare Wills and Trusts

Wills and TrustsWills and trusts are essential estate planning techniques that protect your assets, but also your loved ones. While there are plenty of facts and guides out there, getting started with the basics helps you decide which method of estate planning is right for your situation.

Naturally, you should consult with an attorney that specializes in Suffolk County wills and trusts to explore your options. An attorney reviews your current estate and helps you decide which level of protection you need.

Without an Estate Plan, the Government Decides

If you die without an estate plan, you have died intestate. That means that the government now has the authority to decide how to divvy up your assets and which relatives receive them. The laws in New York specify which family members qualify for an inheritance, and the line of succession is followed strictly. If you do not want your estate to fall into the hands of individual family members, creating a will or trust can ensure your property goes to the family members you want.

Understand the Role of the Trust

The trust is an agreement that allows you to transfer your property from your ownership into the trust. The property is given to a trustee for the benefit of a third party, such as your family member. Trusts are used to ensure better estate taxes, but also to place conditions on inheritances. Unlike a will, you can dictate when and how much a family member receives in your trust.

Also, your trust helps your loved ones avoid the issues of probating assets, and the costs of going through probate court.

There are Various Types of Trusts

Trusts come in many forms, including spendthrift trusts, special needs trusts, life insurance trusts, and so forth. To decide which type of trust you need, you must speak with an estate planning attorney.

For example, you might use a living trust. A living trust allows you to maintain control of your assets even if you become incapacitated. Living wills offer more flexibility, including the ability to revoke or dissolve your trust if your needs change.

A Will or Trust is an Evolving Document

While your will and trust might be established with a set number of factors, realize that your estate planning needs change, and sometimes you must adjust your will or trust documents accordingly. Numerous life changes might require a correction, such as a divorce, new addition to the family, or purchasing and selling assets.

Always Meet with an Attorney for Suffolk County Wills and Trusts

Wills and trusts are something your attorney, and you work together to create. When you work alongside a trusted attorney, you can protect yourself, your loved ones, and your assets.

To get started on your estate plan, speak with a lawyer from the Law Office of Andrew M. Lamkin, P.C. today. You can schedule a free consultation by calling 516-605-0625, or you can complete an online contact form, and someone will be in touch with you as soon as possible.

Can Your House be Saved with a Trust?

Elder Law Lawyer Assisting Long Island Residents and Families with Trusts and Will Planning

estate planning and trustsNo one enjoys thinking about the end of his or her life. But, doing so could protect your biggest investments – including your family home. After all, you do not want loved ones having to guess what you want to do with your estate, or forcing the courts to have to decide on your behalf.

For these reasons, you might consider a living trust for your family home. A living trust is a legal document that takes your assets and places them into a trust for your benefit. You are named the trustee of the trust, and as long as you are alive, you remain the administrator. Upon your death, however, the assets are transferred to the successor trustee whom you name.

How a Living Trust Differs from a Last Will and Testament

Your living trust and will are two separate documents. Both protect your assets, but a will is designed to distribute possessions after death. If you have a last will, your estate goes through probate court, which is where the courts supervise the distribution and closing out of your estate. An executor is appointed in your last will to handle the distribution and pay all last remaining debts. Then, the remainder of your estate is given to beneficiaries based on the allocations you provide in your will. Probate can take as long as one year to complete, especially if there are issues. Probate also costs your estate and beneficiaries money.

A Living Trust Prevents Probate

Instead of forcing your grieving loved ones to endure the lengthy and time-consuming process of probate court, you can place your estate into a trust. The trust completes all the work for your family, and anything placed in the trust can be distributed to beneficiaries within just a few weeks. Also, your living trust is private, so it will not become public record.

Is a Living Trust Right for You?

If you have several assets, placing them in a living trust is ideal. A home is typically the largest asset for the average consumer, and if you have vacation properties, those can be protected with a living trust too.

While you might place assets in a trust, you will also need a last will. The will designates who receives personal possessions, while the trust handles your bigger assets. To put your family home into the living trust, you should have an elder law attorney draft a trust agreement and put the home’s deed to the trust instead of to you directly. If you have a mortgage, you can still put your home into your trust. However, you must notify the lender that the home is moving to the trust to avoid any confusion. Naturally, the mortgage is paid in full before the rest of the home can be distributed through the trust.

Speak with an Estate Planning Attorney in Long Island, NY Today

If you are interested in placing your family home and other possessions into a living trust, schedule a free consultation with the Law Office of Andrew M. Lamkin. You can reach us directly at 516-605-0625 or connect with us online.

Do I Need to Hire an Attorney to Create a Trust?

attorney assisted trust You already know the benefits of creating a living trust – and you want your estate to avoid probate court. But, how do you proceed after you have made such a decision? You may be curious if you can create your own trust. After all, there are plenty of DIY websites out there and how-to documents to help you through the process. While it is true people with little education could easily set up a trust, these trusts often lack the complexity and ignore the state’s specific trust laws, which leaves their estate vulnerable.

To decide if you need an attorney or not, it is in your best interest to first understand the purpose of a living trust.

Do Living Trusts Help You Avoid Probate?

You want to avoid probate court and give your loved ones the opportunity to grieve without having to attend court hearings. A revocable living trust, unlike your standard will, will give your family members a fast, private and probate-free way to administer the estate upon your death. While the living trust does not substitute for your will, it will be more efficient when it comes to transferring property upon your death.

The Cost of a Living Trust

When you hire an attorney, you may pay an hourly rate or a flat fee to have the living trust set up. If you are doing it at the same time you are drafting a will, you will find that you pay less since attorneys will file their services together to help clients save money. You can still expect to pay over $1,000 to have the trust created and submitted to the court, but you get what you pay for. When you pay the cheap several hundred-dollar fee of online trust and will websites, you are not getting the same legal expertise an attorney has. Plus, these sites are not built for the specific laws that your state requires your trust to address in order to be valid.

The Basics of a Living Trust

A revocable living trust will include certain basics, such as:

  • The name of the grantor, settlor or trustor;
  • The name of the person responsible for managing the trust and all assets included in that trust;
  • The name of the person that will take over responsibility of managing the trust after you pass away (known as the successor trustee);
  • The name of those that you leave your trust property to;
  • The name of the individual in charge of managing your assets left in the trust for minor beneficiaries.

Do You Need an Attorney?

As long as a trust contains the right basic elements, it should be valid. But, that is not to say that you will leave out a valuable asset, name the wrong beneficiary or use the wrong wording in your trust to make it invalid. While it may cost more to hire a professional, the benefits often outweigh such costs. In fact, for a few extra hundred dollars, you will have peace of mind in knowing that your family (and your estate) is truly protected.

Contact a New York Trust Attorney

If you are ready to protect your family and your estate, contact the Law Office of Andrew M. Lamkin, P.C. today. We offer free consultations to discuss your will and other estate planning concerns. Schedule your consultation now by calling 516-605-0625 or fill out an online contact form with your legal questions.

Benefits of Creating a Discretionary Lifetime Trust

lifetime trustWhen you are exploring your options for passing on your estate to your beneficiaries – including your spouse, children, or other beneficiaries – one option that you may want to consider is creating a discretionary lifetime trust for each beneficiary. These offer a level of asset protection for your beneficiaries, and also a legal barrier that bars creditors, and even divorcing spouses, from taking away what you wanted your beneficiaries to inherit.

Using Lifetime Trusts for Minors

When beneficiaries are minors, a trust is required to keep the beneficiary’s inheritance until they reach a specific age. Most of the time, parents will pick an age that ranges from 20 to 30 years – when they feel that their beneficiary is mature enough to invest or manage their own inheritance funds. When the beneficiary reaches the specified age and the trust is distributed, the property becomes the beneficiary’s property; therefore, it is subject to creditor claims and divorcing spouses directly associated with the beneficiary.

To protect minors from such actions, you could create a discretionary lifetime trust. This will allow the trust to continue during their lifetime. When drafted properly, it creates a layer of asset protection for the beneficiary – so that, even if they are sued or file for divorce in the future, their inheritance is not affected.

Using Lifetime Trusts for Adults

Discretionary lifetime trusts benefit adults just as much as minors. You could set one up for a beneficiary of any age, including your own spouse. The same reasons for a minor lifetime trust apply for an adult one: To protect their assets.

Also, if the adult beneficiary is already known to mismanage money, you can create a trust and still give him or her an inheritance without worrying about how or what he or she will spend it on, because a lifetime trust will protect the beneficiary from outside influences, and his or her own bad decisions – as well as excessive spending habits.

Three Key Benefits

To sum it up, there are three key benefits to creating a discretionary lifetime trust:

  1. The beneficiary never receives an outright distribution or lump sum payment from his or her inheritance. Instead, the money is kept in a trust to ensure that he or she cannot spend it all at once. He or she is then given smaller, more manageable distributions.
  2. Beneficiaries of the trust receive distributions for health, educational purposes, maintenance, and support. The trustee will have discretion over the distributions made to the beneficiaries.
  3. If the beneficiary is sued, has creditor judgments, or gets divorced, the lifetime trust is inaccessible.

Protect Your Beneficiaries – Create a Lifetime Trust

If you want to protect your beneficiaries and ensure that they can enjoy their inheritance for the rest of their lives, contact the Law Office of Andrew M. Lamkin, P.C. today. We can help you explore options for trusts, including special trusts for adult beneficiaries, as well as trusts for minor children. To get started, schedule your free consultation at 516-605-0625 or fill out our online contact form with your questions.

Tips for Naming an Executor in Long Island, NY

When you consider who to name as an executor of your will, keep in mind that the job of executor is very time-consuming and requires many difficult decisions in order to faithfully carry out the wishes of the deceased. The executor’s job starts upon the death of the decedent and ends once all of the directions contained in the will have been completed and the estate is closed under applicable law.

First, the will must enter probate, the judicial system in place to determine the validity of the will. Subsequently, a determination is made regarding creditors, taxes, the identity of the beneficiaries, and the extent to which each beneficiary inherits from the estate. Additional variables can complicate the job of the executor, including an estate tax audit or a legal challenge to the will. In total, the executor’s role could last from one to several years.

Honest, Vigilant, and Detail Oriented

Given constantly changing tax laws, the enormous amount of personal property in some estates, and the potential for unhappy heirs, the potential executor should have a few basic qualities. First, for the sake of those who will inherit, the executor candidate should be honest and diplomatic. Depending on the estate, the executor may have quite a bit of work to do to get the job done right. Not everyone is good at keeping track of the many items of personal property that might be found in the attic or the basement. Staying focused on the process of taking inventory of the estate and meeting deadlines can be crucial to the work of the executor. When you are thinking of someone to be your executor, ask yourself whether this is someone who can efficiently meet deadlines and yet maintain harmony with all interested parties.

A Younger, Responsible Family Member or Friend

Who knows you better than your family or your best friend? Probably nobody is more familiar with your intentions than your loved ones. In addition, these people in your life might also have the best idea of where all your assets might be located. If you don’t have a family member or a close friend, consider making a list of all the people you do know and start to narrow down that list. During this process, you will probably figure out those who would be best suited for the role of executor.

One problem people commonly run into as they grow older is that their contemporaries start to pass away due to sickness and old age. This is one reason why many people opt for an executor who is younger in age yet responsible. Look to your social circle and identify the younger people within it.

Someone With Experience

Educational and professional background could also be relevant to choosing an executor. While it is true that anyone can hire an expert for consultation on estate issues, the job may be best handled by someone who has related experience, such as an attorney or an accountant. Such people would have familiarity with the issues that may come up, and they also have liability insurance, just in case something goes wrong.

Other Considerations

Some lawyers advise their clients to avoid naming a specific bank or trust company in the will, but rather to appoint someone to interview these institutions and negotiate fees if necessary.

Another popular idea for people with many children is to name all of the children as co-executors. This is generally not recommended, as it will result in arguments, with the larger share of work being done by one or two of the siblings. In addition, if all of the children are co-executors, all of their signatures will be needed when papers need to be signed. This can result is great inconvenience and delay. The better choice is to name one child in that role, while others can be named as alternates.

Of course, the cost of an executor’s services should be considered when naming a person in that role. You should consult with an attorney to gain an understanding of how much applicable state laws will allow fees to be charged to the estate.

Lastly, you should discuss the role of executor with the person you would like to name prior to signing documents. In addition, you should discuss the matter with family members who were not chosen to avoid any hurt feelings.

Contact Us

To discuss your estate plan, call the Law Office of Andrew M. Lamkin, PC today at (516) 605-0625 or fill out our online contact form and we will get back to you within 24 hours.

Estate Planning for a Second Family

The purpose behind estate planning is to simplify a potentially complicated situation for family members. When a second family is involved, estate planning may be a bit more involved, but it is no less important. Several factors influence the best course of action to take when determining an estate plan for a second family. It is vital to note that every family situation has different dynamics and ultimately, the decision is yours. This can be based on your relationship with family members as well as the amount of money and/or possessions you have to divide. The goal is to create as little tension as possible to prevent bitterness from developing between people that you care about.

Factors to Consider

The division of money or possessions to a second family should be based on several variables. Things to consider are:

  • How long has the second family been established?
  • What plan for the home and property makes the most sense?
  • What arrangements will cause the least amount of family discord?

A Newer Second Family

Perhaps the second family was acquired later in life following years of marriage to someone else. You will be obligated to your first family simply because of the unbalanced amount of time you invested in the first versus the second. Children you raised with your first spouse until adulthood should not suddenly become less of a priority because you have children in a second family. Provisions for your second spouse and children are certainly warranted, but careful consideration should be given to the members of both families.

A Brief First Marriage

If the second family was established many years ago and the majority of your family life has been spent with them, then it is appropriate to treat the second family as your primary family. Separate provisions can be made for your first spouse and children from your first marriage, but the approach to estate planning in this case will be as though you have one big family instead of two.

Property Division

Property division is the most complicated aspect of estate planning for a second family. Leaving a family home that children from your first marriage grew up in to a second spouse can cause negative reactions. Yet a second spouse may deserve the home depending on the duration of the second marriage. This is where legal advice and careful thought needs to play a part in estate planning.

Communication

A straightforward strategy will be most productive in estate planning for a second family. Be direct with family members, explaining how things will be handled and why. This allows them to understand your reasoning and prepares them for the future. You can also take time to answer questions and take steps to make sure that there will be as little family tension as possible.

Legal Help

Andrew M. Lamkin is proficient in handling estate planning even when the situation may be a bit complicated. Call or fill out our contact form to get in contact with Andrew M. Lamkin. He will help you ensure that your family is taken care of.

Estate Planning for Peace of Mind

elderly couple on the beachDuring the course of adult life, there are occasions when we are called upon to serve a role in the disposition of matters relating to the estate of a person who has recently passed away. Although the prospect of facing the duties of Executor of an estate can seem overwhelming to many people, there are ways to minimize the difficulty of managing these duties. Where the decedent has been proactive enough to put together an estate plan, the process of administering an estate can be far less stressful, resulting in peace of mind for all involved parties.

We should all do some planning regarding our property in the event of death. That being said, it is particularly important that those who support dependents and those who own significant assets to engage in estate planning. Estate planning provides control over the disposition of assets upon death. It ensures that your loved ones are provided for in the way that you would most desire. Estate planning reflects your preferences for what should happen to your property after you die. A good estate plan will account for two major issues: first, taxes and probate treatment; second, the simplicity with which the Executor and the beneficiaries can administer the estate plan.

Select Your Lawyer and Executor

While the services of a financial planner are helpful to estate planning, it is absolutely crucial to find a qualified attorney for the purpose of drafting an appropriate legal Will. The Will is the legal document which names your beneficiaries and designates the name(s) of the person(s) who will serve as the Executor to your estate. The Executor is the person who you authorize to distribute the assets in your estate to the named beneficiaries. The Will is fundamental to any estate plan.

Upon your death, the Executor will be obligated to do what you direct him or her to do as stated in your Will. For the sake of the Executor, the Will should clearly state the manner in which your assets should be distributed. In addition, when organizing your estate plan, it is recommended that a small insurance policy be available so that the Executor has funds with which to pay incidental costs associated with estate administration. As a side note to all potential Executors, it is generally advisable to review the Will prior to agreeing to act as Executor. If the Will is overly complicated, you may not want to undertake this responsibility.

Name Your Beneficiaries

With each significant change in your life, you will want to reexamine your Will to make sure any appropriate amendments are made to accommodate for current circumstances. This might mean that upon the purchase of real estate, a review of the Will might be necessary. Attorneys often advise their clients to review the Will once a year. Additional examples of life-changing events might include a marriage, the birth of a child, a divorce, or the death of a spouse or other loved one. Just as life brings changes to family and the nature and value of assets, so must a Will be altered to reflect those changes.

Devise a Plan to Pass Money to the Beneficiaries

You may want to confer with a financial planner as well as a lawyer to consider the tax consequences of passing assets and money to your beneficiaries. Some assets are better designed to avoid severe tax consequences and probate costs. Because many other types of assets are less probate and/or tax-friendly, it is very important to consider the nature of the assets that comprise the estate and whether their value will be diminished by probate and tax obligations. Examples of tax-efficient, probate-friendly assets might include Registered Retirement Savings Plans and Tax Free Savings Accounts.

Make a Plan to Keep Taxes and Other Fees to a Minimum

Ideally, the beneficiaries of your estate will receive the maximum value of your assets. The likelihood of minimizing taxes and fees is greatly enhanced by the proper and thorough drafting of the Will, a well-balanced financial portfolio, and an appropriate amount of insurance coverage.

Charitable Giving

If you wish to make a charitable donation, start a scholarship, or something similar, it is best to check with your financial planner, who can help to ensure that your desired charitable gift is made in a way that is most efficient to the organization of your choice.

Overall, formulating an estate plan will require work, including discussions with a lawyer, financial planner, insurance advisor, family members, and potential Executors. If you want to make sure that your beneficiaries receive the assets of your choice with minimal taxes and other fees, it is certainly worth the effort.

Contact Us

To explore your options for putting together an estate plan, call the Law Office of Andrew M. Lamkin, P.C. at (516) 605-0625 for a free consultation to discuss your estate planning issues and to begin working on a personalized estate plan. Call today or fill out our contact form.

In What Scenarios Should I Set Up A Pooled Income Trust?

In caring for elderly loves ones, complex emotions, logistics, and financial details must be considered. When making the best choice for an aging parent who is disabled or has special needs, greater research and a higher complexity of decision-making is required. Setting up a Pooled Trust may be a beneficial option; below are a few scenarios that may offer some insight as to why.

What Is a Pooled Trust?

Pooled Trusts are often referred to as “Community” or “Master” Trusts. A disabled person over 65 whose monthly income is excessive (according to Medicaid guidelines) is not eligible for benefits. If those assets are placed, monthly, into an Individual or Pooled Trust, the elderly’s basic living expenses (such as rent and utility bills) are paid by the trust, the individual now becomes covered by Medicaid, which, in turn, covers the medical bills for home care.

Avoiding a Nursing Home

If the family’s choice is to care for the special needs parent at home, this may be impossible to afford if the monthly income is middle or even slightly above-low. Medicaid qualifiers must show an extremely low income, and without the family actually bankrupting itself, the elderly will not qualify. A Pooled Trust can be beneficial for families who are financially not under the rock, but between a rock and a hard place.

Inability to Set up Other Trusts

Setting up an Individual or a Third Party Trust requires attorneys, financial planning experts, and capital. Many families do not have this ability. Pooled trusts are managed by nonprofit organizations that provide those specialists and resources. According to the American Bar Association, “Because assets are pooled together, the trust is able to maximize the return on investment and at the same time reduce the cost of administration and management.”

Trustee Challenges

With Individual and Third-Party Trusts, trustees must comply with fiduciary duties as outlined in the trust; however, on occasion trustees have been known to misallocate funds. Additionally, with a special needs parent, the responsibility is tremendous. Besides financial compliance, the trustee needs to keep abreast of ever-changing legislation and programs available to that population. The nonprofit organization that is chosen to oversee the Pooled Trust will advocate on behalf of the disabled, giving the family one less task in care-taking.

Pooled Trusts are a terrific alternative but may not be advantageous or even available for every family. Consulting with special needs attorneys, financial planners, and nonprofit organizations can offer specific details that can assist in making the best choice for elderly loved ones.

Source:
http://www.nytimes.com/2010/11/05/business/businessspecial5/05TRUST.html?_r=0
http://www.americanbar.org/publications/bifocal/vol_34/issue_5_june2013/pooled_trusts.html

3 Reasons to Set Up a Minor Trust

A minor trust is a type of trust fund that parents or grandparents set up for their minor children or grandchildren. it is generally used for a variety of reasons when a child earns income of any kind. There are certain benefits that come as a result of setting up a minor trust that should be taken seriously. These aspects can help you to better decide whether to create this type of trust for your child.

Protection Against the Kiddie Tax

There are taxes on any income that is earned, even that which is earned by minor children. There is what is known as “kiddie tax,” which can affect a child well into his or her twenties. The tax can have a major adverse effect on a regular savings technique that parents create for their kids that is typically meant for a college fund. When a minor trust is created, the child’s money is protected because this tax never becomes a factor.

Avoidance of Gift Tax

In addition to the “kiddie tax,” gift taxes can be avoided when a minor trust has been created for a child. What this means is that parents or grandparents can give up to a certain amount of money each year without being responsible for paying a gift tax. Making financial gifts to children, especially earlier in life, can really benefit everyone due to the fact that the money will grow over the course of time.

Builds Up Funds Over Time

Finally, another good reason to create a minor trust is to set aside money for your child that he or she cannot touch until the age of 18, 21 or 25 if you so deem it appropriate. Generally, a minor trust is made for the purpose of saving money for the child so that he or she can attend college. The funds are untouchable until you decide otherwise. You will be able to decide when your child or grandchild is mature enough to handle the responsibility of the money and use it the way it was intended to be used. This also means that the money will have sufficient time to build up over time so that your child will have access to more rather than less.

If you are a parent or grandparent of a young child, consider setting up a minor trust. It will definitely benefit the youngster in the long run.

Sources:
http://www.ustrust.com/publish/ust/capitalacumen/winter2011/features/top-5-reasons-for-creating-trusts.html
http://www.scscourt.org/self_help/probate/minors/minors_assets.shtml
http://www.businessmanagementdaily.com/19937/create-minors-trust-to-avoid-major-problems-kiddie-tax

5 Trust Types That Will Maximize Your Kids’ Inheritance

One of the most important parts of an effective estate plan is to ensure that a family’s children are properly provided for, whether they are minors or adults. This is often accomplished by placing some or all of the estate into a trust. The following five types of trusts have been found to be very effective in providing for the care and prosperity of a family’s children. In addition to the specific type of trust, many trusts can be written as revocable or irrecoverable trusts, depending on the specific needs of the family.

Irrevocable Trusts

An irrevocable trust is a trust where the property is placed beyond the control of the parents, subject to the terms of the trust. This has a variety of advantages, including reduced taxation and the fact that the trust’s assets are largely immune from the actions of creditors.

Revocable Trusts

A revocable trust is a trust that can be changed at the option of the grantor. These types of trusts are often used where changing family and personal circumstances may require modifying the trust over the course of the grantor’s lifetime. However, revocable trusts are somewhat more vulnerable to creditors and court actions than irrevocable trusts, and they do not share the same tax benefits.

The 5 Best Trusts For Transferring Money To Your Kids

Section 2503(b) trust is an irrevocable trust that takes the assets and holds them for the child, with the provision that the child must have the income of the trust distrusted to him or her at least once a year. The creator of the trust can determine whether the trust will terminate upon the child’s 21st birthday. This trust can effectively shield the child’s inheritance from creditors, as well as provide the parents with some control over how the child will spend the trust, even after his or her 21st birthday.
Section 2503(c) trust is similar, but automatically terminates upon the child’s 21st birthday. In addition, the trustee can use the money in the trust to pay for the child’s college education. This trust is a tool commonly used to protect the estates assets until the children are adults and capable of effectively managing the funds released into their care.

spendthrift trust is a special type of trust that can be especially useful if a parent has doubts about their child’s ability to manage his or her funds effectively. This trust allows the trustee to refuse to release funds if he or she believes that they will be taken by a creditor or otherwise misused by the beneficiary. This trust can protect the child from being rendered penniless due to a lawsuit or other civic debt.

special needs trust is a type of trust designed to allow an individual to be able to make use of the trust without rendering them ineligible for government aid. This type of trust can be useful for families who have disabled children, as it allows the child to avoid having to choose between their inheritance and the continuation of their government support. A special needs trust can also be used to shield an award from a personal injury lawsuit from government aid income restriction guidelines.

grantor retained income trust is a common tool used to reduce the potential tax liability of the parent’s estate. This trust allows the property to be placed in the trust, but mandates that the grantor will retain the property’s income for a time determined by the grantor. This helps reduce the property’s federal estate tax value, which can dramatically reduce the taxes the grantor’s children will be liable for.

These five types of trusts all provide extremely useful estate planning tools to help ensure that a family’s children, whether they are adults or minors, can enjoy the property that their parents wish to bequeath them.

Sources:
http://www.law.cornell.edu/wex/estates_and_trusts
http://livingtrustnetwork.com/estate-planning-center/revocable-living-trust/types-of-trusts
http://www.foxbusiness.com/personal-finance/2013/07/10/special-needs-trust-provides-for-disabled/
http://www.law.cornell.edu/wex/grantor-retained_income_trust
http://www.nolo.com/legal-encyclopedia/spendthrift-trusts.html



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