In the process of becoming new parents, many couples become experts at planning – scheduling the birthing classes, planning the new nursery, even picking out a preschool. There is so much to think about before you welcome your new child.
Unfortunately, one of the most important things you can do to protect your child is often overlooked: an estate plan. Here are five important considerations you need to discuss with your Personal Family Lawyer® when setting up an estate plan once your new baby is born:
Guardians and trustees. Parents who delay choosing a guardian for their children usually do so because they cannot agree on that “perfect” choice. Get comfortable with the fact that there is no perfect choice – and if you don’t choose, a court will choose for you. You can always amend your choice if you change your mind. When choosing a guardian or trustee, you need to think about choosing someone who shares your beliefs and who will naturally be a part of your child’s life. And you need to make sure whomever you choose is willing to take on the responsibility of raising your child if you are unable to do so.
As your neighborhood Personal Family Lawyer, I offer a unique process for families with young children at home. Contact me to discuss how a Kids Protection Plan® can ensure your children are always cared for by people you know, love and trust if anything at all happens to you.
Education. The cost of college is already sky-high; can you imagine what it will be like in another 18 years? You probably want to start saving right away, either through a 529 plan or an educational trust so you can realize some tax benefits while you save.
Passing on your assets. Assets cannot pass directly to children under the age of 18, so you will need to think about setting up a trust and naming a trustee to manage the assets you would leave your children. You also need to examine your beneficiary forms for retirement accounts and insurance policies to be sure your new child is included as a beneficiary. Even if you name them in a will, a beneficiary form for these accounts will determine who inherits.
Avoiding probate. Talk to your attorney about setting up a living trust so your heirs can avoid probate and assets can pass directly to them.
Asset protection. If you have an estate of more than $10.5 million, you will want to discuss asset protection strategies that will help you minimize taxes and protect assets for your heirs.
If you’re ready to protect your children through estate planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.
Downton Abbey – the PBS drama about the fortunes and misfortunes of an aristocratic British family in the early 20th century that has taken American audiences by storm – gets most of its gripping plot twists as the result of a number of bad estate planning moves. For example (Spoiler Alert: these include references to Season 3 that recently concluded):
Protect your inheritance. The Earl of Grantham inherits Downton Abbey and marries a rich American to keep the estate solvent. However, he squanders the family fortune on an unwise overseas investment that goes belly up. The family turns to Lady Grantham’s rich American mother, but she is unable to help since her fortune is tied up in a trust.
If the Earl’s fortune had been properly protected by a properly counseled and prepared trust, the estate could have been protected from his spendthrift investing.
Have a succession plan. The Earl’s new son-in-law Robert Crawley – also heir apparent to Downton Abbey since he is the last remaining male relative of the line – inherits a fortune from his former fiancée’s father to save the estate just before the family is forced to sell.
While the infusion of the new windfall saves the estate, Robert and the Earl disagree about how the estate is to be managed. Robert wants to modernize; the Earl is stuck in the old ways of doing things. Bad feelings among family members ensue.
Bringing the next generation into the family business can be a smooth transition when a succession plan is put into place and the roles and responsibilities of each family member are clarified and communicated.
Create an advance medical directive and Kids Protection Plan®. The Earls’ youngest daughter Sybil tragically dies in childbirth. As she falls ill, family members struggle over the course of treatment, bringing in two doctors who disagree as to the best medical plan. After her death, her family has to make their best guess as to how she would want her daughter raised.
A medical directive could have provided the family with important information on what Sybil would have wanted if she were unable to make medical decisions for herself. A Kids Protection Plan® would have addressed guardianship issues and spelled out her wishes for her daughter’s upbringing.
If you’re ready to do the right thing for your family, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.
There are a number of essential things a last will and testament can do for you, such as distribute family heirlooms and name a guardian for minor children, but there are some equally important things a will won’t do:
Diminish estate taxes – a will won’t help you decrease your estate taxes, but a Personal Family Lawyer® can advise you on what kind of trust instruments can accomplish this for you.
Provide long-term care – if you want to provide for someone with special needs or a person with long-term care needs, you will need to establish a trust or invest in a life insurance policy.
Distribute some types of property – to distribute assets from a retirement or investment account or the proceeds of a life insurance policy, you must execute the proper beneficiary designation forms, which supersede instructions in a will. If you own property jointly with someone else, your will won’t allow you to distribute that property.
Provide for pets – since pets cannot legally own property, you will either need to establish a pet trust or designate a caretaker and provide funds for the care of your pet after you are gone.
If you’d like to learn more about wills, living wills, advance health care directives, Power of Attorney for Health Care designations or any other aspects of estate planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.
There have been a number of new rules and services implemented by the Social Security Administration for 2013 that affect a majority of American workers as well as retirees:
Expiration of the payroll tax cut. Workers may have already noticed the hit their paychecks took this year due to the expiration of the payroll tax cut, which went from 4.2 percent to 6.2 percent on earnings of less than $113,700 (increased from $110,100 in 2012).
Paper checks to stop. On March 1, paper Social Security checks will no longer be sent to benefits recipients. Instead, you will need to choose between two options: direct deposit to a bank or credit union account or a prepaid Direct Express Debit MasterCard.
Online service increased. Those who qualify to begin receiving Social Security benefits can now apply online instead of visiting a Social Security office. In addition, you can access your Social Security statement online, which includes your earnings history and expected payments upon retirement.
Office hours decreased. Social Security offices have started decreasing their hours of operation to reduce costs, and now close at noon on Wednesdays.
Earnings limits increased. Workers aged 62 to 65 can now earn up to $15,120 before $1 in benefits will be withheld for every $2 of income earned above the limit. Those who turn 66 in 2014 can earn up to $40,080 before $1 in benefits will be withheld for every $3 of income earned above the limit. The earnings limit no longer applies to workers over the age of 66.
Payments increased. Social Security benefits payments increased by 1.7 percent as of Jan. 1, 2013, an average monthly increase of $21.
If you need to know more about effective retirement planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.