Creating an estate plan for a newly married couple depends on several factors which include if this is the first marriage for one or both of you, assets brought into the marriage, children from a previous marriage and if you have written a prenuptial agreement.
A young couple married for the first time with no children and little assets should at least start off with a Will. Later on they can create an Advance Health Care Directive and appoint a Financial Power of Attorney.
Once your family grows along with your assets, your Will should be revised and discussed further. If you are newly married, just starting out, but want to tie up any loose ends, contact an experienced Riverside Estate Planning attorney who will make sure all of your wishes and needs are met down the road.
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What happens to your money and possessions after your death? Is your family responsible enough to be able to divide everything up equally or will most of your family members disagree about almost everything?
This responsibility can be complicated and emotionally draining. You can plan ahead and avoid disagreements between family members. What can you do? You can make sure you have a will that details what each beneficiary is to receive.
Everyone should have a will, regardless of how much or how little you have. Your possessions are important to you and you want to make sure they go to people you want to have them. With a will there will be no disagreements; it states exactly who will receive your money or property and how you want your heirs to receive those assets.
Without a will, the state of California will decide who gets your money and possessions. What are you waiting for? Make one now because you can always update it later on. A will is a complex legal matter and should not be taken lightly.
If you need legal advice and help making a will, contact an experienced Riverside Estate Planning attorney who can answer any questions you have and will make sure the things you love will go to the people you love.
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I have heard people ask if their beneficiaries will have to pay taxes on the death benefits of their life insurance policy.
The answer is simple. This money is generally free from income tax to your beneficiaries. You can elect to have the insurance company hold this money after your death and distribute it at a later date or perhaps in monthly installments. The money, at this time, will earn interest. The principal amount is tax free; however, the interest portion is taxable to your beneficiary as ordinary income.
If you have incident of ownership in your policy, it could be subject to federal estate taxes. Incident of ownership is when you have control of your policy – allowing you to borrow against it, cancel it, surrender it or change the beneficiary at any time.
If you have questions about your life insurance policy’s death benefits, contact an experienced Riverside Estate Planning attorney who can explain them to you and advise you what is best for your situation.
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Many families face the problem of how to handle the transfer of assets to their children when they reach the age of majority or 18 in California.
Although the state considers them adults, do you? A Young Adult Trust may be the answer; it is a revocable living trust created by your child. Your child could be named as a co-trustee while also being designated as the beneficiary.
It can be modified or revoked at any time. Under the California Uniform Transfers to Minors Act, transfers provide an ownership form for the child and are designated to terminate once the beneficiary reaches the age of 18. It allows the child to delegate oversight of assets to a parent until the beneficiary reaches the age of 25 or 30.
Among other things, the trust allows your child to have a voice in the management of the assets within certain limitations and with responsible guidance. It allows the parent to teach the child proper financial management and discipline.
For additional information on a Young Adult Trust, contact an experienced Riverside County Estate Planning attorney who will answer all your questions and concerns.
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Some of my clients have asked me, “What is involved in estate planning?” Before sitting down to plan your estate, make a list and include:
· Who you want to receive your assets – the beneficiary or beneficiaries?
· List your assets and what you think they are worth
· Who do you want to manage your estate or make decisions on your behalf if you cannot during your lifetime or once you have died?
· Do you have minor children – who should take care of them?
· Where do you want to be laid to rest – buried or ashes scattered – where?
Once you have answered the questions, contact an experienced Riverside Estate Planning attorney for advice on how to proceed, and determine what your next steps should be.
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A Third Party Special Needs Trust is created to preserve government benefits for a disabled person – perhaps a child. Once this beneficiary receives an inheritance, all future government benefits will cease.
Government programs that are based on financial need include Supplemental Security Income, Section 8 housing program, food stamps and Medi-Cal.
A Third Party Special Needs Trust is established in lieu of leaving assets directly to the disabled child. The trust would be in the hands of an independent trustee for the lifetime of the child; the child has no control.
The trust is designed to pay for expenses incurred by the child, such as education, car expenses, or utilities. There are no cash payments involved. Although the beneficiary does not control the assets, the assets are used to help the beneficiary.
A Special Needs Trust may not be the answer for you if your child has no hope of financial survival without government programs. If you are considering creating one, contact a qualified Riverside Estate Planning attorney for assistance and advice.
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Many have wondered what an irrevocable charitable remainder trust is. Let me explain.
It distributes income during the lifetime of its beneficiary, and upon his or her death, it donates the rest to charity. Because the assets are given to charity, the Internal Revenue Code forgives any capital gains built into the assets. Additionally, it gives the creator an immediate charitable tax deduction and allows him or her to control the trust investments if he or she serves as a trustee. Finally, it allows the trustee to invest the assets in a tax-free situation, such as an IRA and it eliminates the estate tax on the assets held in the trust.
There are two different types of Charitable Remainder Trusts.
1. The Charitable Remainder Annuity Trust – pays a fixed amount every year to the creator
2. The Charitable Remainder Unitrust – payment is set at a percentage of the trust assets as valued each year.
If you enjoy donating to charities, you may want to consider a CRT. If you are considering creating a Charitable Remainder Trust, it can be very complex. I would suggest you contact an experienced and qualified Riverside County Estate Planning attorney who can assist you in establishing this type of trust.
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The Federal estate tax is a tax on transferring property from a deceased person to the beneficiary. It is calculated by adding the value of the decedent’s assets on the date of death, applying any credits and then subtracting allowable estate tax deductions.
The estate of all U. S. citizens is subject to this tax, but not every estate has to pay it. The reason is because the Internal Revenue Code gives each individual a “coupon” that can be applied against his or her estate tax bill – in 2011 it is in the amount of $5,000,000. If the estate does not exceed that amount, then it will pass to the heirs free from Federal estate taxes – this will be effective until December 31, 2012. Beginning on January 1, 2013, the Federal estate tax exemption will drop to $1,000,000 and the estate tax rate will increase to 55%.
If you have questions regarding the Federal estate tax, contact a knowledgeable Estate Planning attorney in Riverside County who will answer all of your questions in a language you can understand.
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I have been wondering many times how one determines who their beneficiary should be. My response is, “you can name anyone you want – your spouse, children, partner, the church, a charity”. If you name more than one person, each person would be a “co-beneficiary”. The process of determining a beneficiary is known as “designating the beneficiary” on insurance forms.
Your first concern should be the reason for having life insurance. Your reasons may consist of creating financial liquidity, protecting assets from estate taxes or simply providing for your survivors’ needs.
Whatever your reason may be, if you have any questions, it is wise to contact an experienced Estate Planning Attorney who is familiar with all the California laws and is best suited to help you make this most-important decision.
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Most pets are like family. What happens when a person dies and there is a pet left behind? It is important to make provisions for your pet; they cannot take care of themselves after you are gone. The following are helpful hints to make sure your trusted furry friend is safe, cared for and loved.
· Make sure you give your house keys to family members or friends
· Give them a copy of feeding instructions, your pet’s veterinarian and everything pertaining to your pet
· Carry a pet alert card next to your emergency information card (names of emergency caregivers)
· Provide for your pet in your will – name a beneficiary after discussing with that person
· Set up a trust for your pet
According to the law, a pet owner cannot leave his or her estate outright to an animal. You can leave money to the person designated to care for your pet. It is important to leave your pet to someone you can trust, someone who will love your pet almost as much as you did.
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