10 Things You Should Know About Living Trusts

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For most people, a will is the first choice for passing on an estate to heirs. But it's not the only choice. Among other estate planning tools, the revocable living trust is gaining in popularity, especially among boomers.

In addition to being one of several ways to avoid probate—the legal process to determine whether a will is valid—living trusts may offer before-death and after-death advantages.

Whether a living revocable trust is right for you depends on your circumstances. Consultation with a qualified attorney and a personal financial adviser should always be part of your estate planning, but here are 10 things you should know about living trusts:

What is a revocable living trust?

A revocable living trust is a written agreement designating someone to be responsible for managing your property, It's called a living trust because it's established while you're alive. It's "revocable" because, as long as you're mentally competent, you can change or dissolve the trust at any time at your own discretion for any reason. Typically, a living trust becomes irrevocable (cannot be changed) when you die.

A trust involves three parties: you as the creator, the trustee or trustees who agree to manage your assets as directed by the terms of the trust, and the beneficiaries.

You will probably want to name yourself and your spouse as trustees, because you want full control of the property while you're alive. As trustee, you will have the power to wheel and deal with your assets—sell them, exchange them, invest them, do whatever you want with them.

What is the difference between a living trust and a will?

Both a will and a living trust contain your inheritance instructions, meaning who gets what, when they get it, and how.

"A trust is often preferred for people concerned with privacy and avoiding probate," says attorney Thomas J. Bogar of Cheltenham, Pa. A living trust will not become part of the public record unless a trustee or a beneficiary demands court approval of accounts. Probate records are always open to the public.

While trusts serve a purpose in some circumstances, for most people with relatively modest estates, wills are quite adequate. They are generally less complicated and less expensive than a trust.

for more information: http://www.aarp.org/money/estate-planning/info-09-2010/ten_things_you_should_know_about_living_trusts.html

10 Common Estate Planning Myths That Can Be Detrimental to Your Family

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In a recent blog post, my colleague, Nancy Anderson, writes about “Three Common Estate Planning Mistakes That You Can Easily Avoid.” It’s not surprising that these mistakes are so common since in my experience, estate planning is the area with the most widespread confusion and unfortunately, this confusion can lead to those very mistakes, costing so much in time, money, and stress to people’s families. In particular, here are ten estate planning myths I hear most often:

1) Estate planning is just for the wealthy. This myth comes from the focus of so many attorneys and financial advisers on the estate tax, which may not be an issue this year until your estate surpasses $5,120,000, an amount that most of us would characterize as pretty well-off, if not downright rich. This focus makes sense for estate planning professionals since they make so much more money dealing with that issue, but estate planning is about so much more than that. It’s also about making sure that your finances are taken care of if you’re incapacitated, that decisions about your health care are carried out the way you’d like even if you’re not able to make them, and that your children and other heirs are taken care of when that time eventually comes. That’s why estate planning isn’t just for the Donald Trumps of the world. Estate planning is for anyone who may become seriously ill or pass away. In other words, it’s for everyone.

2) I’m too young for estate planning. We never know when we might need estate planning and by then, it will be too late. For example, history is replete with the stories of celebrities who unfortunately died before creating a will, many of them at a relatively young age.

to read the rest: http://www.forbes.com/sites/financialfinesse/2012/10/03/10-common-estate-planning-myths-that-can-be-detrimental-to-your-family/

3 Misconceptions About Estate Planning

There are many misconceptions about estate planning that float around in people's minds and keep them from doing the proper planning.  Many people believe that estate planning is only for the wealthy, but this is not the case.  Anyone who has assets, no matter how little, should have an estate plan.  Other people believe that if they are in good health, they do not need an estate plan.  This type of thinking is dangerous because you never know what could happen.

An experienced Orange County estate planning attorney has more information for you to read.

http://blog.tompkins-law.com/2013/10/an-estate-planning-attorney-exposes-3.html

http://www.tompkins-law.com/estate-plan-reviews-and-amendments

What is Estate Planning?

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Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions. No matter how large or how modest, everyone has an estate and something in common—you can’t take it with you when you die.

When that happens—and it is a “when” and not an “if”—you probably want to control how those things are given to the people or organizations you care most about. To ensure your wishes are carried out, you need to provide instructions stating whom you want to receive something of yours, whatyou want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs.

That is estate planning—making a plan in advance and naming whom you want to receive the things you own after you die. However, good estate planning is much more than that. It should also:

• Include instructions for passing your values (religion, education, hard work, etc.) in addition to your valuables.
• Include instructions for your care if you become disabled before you die.
• Name a guardian and an inheritance manager for minor children.
• Provide for family members with special needs without disrupting government benefits.
• Provide for loved ones who might be irresponsible with money or who may need future protection from creditors or divorce.
• Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
• Provide for the transfer of your business at your retirement, disability, or death.
• Minimize taxes, court costs, and unnecessary legal fees.
• Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.

Estate planning is for everyone.
It is not just for “retired” people, although people do tend to think about it more as they get older. Unfortunately, we can’t successfully predict how long we will live, and illness and accidents happen to people of all ages.

Estate planning is not just for “the wealthy,” either, although people who have built some wealth do often think more about how to preserve it. Good estate planning often means more to families with modest assets, because they can afford to lose the least.

Too many people don’t plan.
Individuals put off estate planning because they think they don’t own enough, they’re not old enough, they’re busy, think they have plenty of time, they’re confused and don’t know who can help them, or they just don’t want to think it. Then, when something happens to them, their families have to pick up the pieces.

http://www.estateplanning.com/What-is-Estate-Planning/