What Issues Need to be Addressed during the Estate Planning Process?

Estate planning often becomes a confusing and overwhelming process because it involves legal documents such as wills, trusts, and power of attorney. The best way to approach estate planning is by determining all the issues that need to be addressed. Once you have worked out all of your focus areas, everything should fall into place without a problem.

What are the issues that need to be addressed? Asking who, what, when and how of transferring responsibilities when you can no longer perform them because of disability or death is a great way to start. Appointing individuals or professionals that you trust to carry out your responsibilities is very important. These individuals will perform the responsibilities concerning the people in your life and the property of your estate.

The best way to get started is making a list of people who are important to you and depend on you. These people include your children, friends, spouse, and employees, etc. After that has been completed, a list of properties that you own and control over must be made. Then you have to decide which individuals will have the responsibility of taking care of your assets, and be sure to have a set of guidelines that you want the individuals you select to follow.

These are the issues that any estate plan should address. There is never a truly perfect solution when it comes to estate planning, but if it is not done properly and in an orderly fashion, a judge will be making the decisions for you instead. Consulting an attorney, like those at Walters and Ward, LLC, can help guide you through the process.

Estate Planning in California

Being prepared for anything is very important these days. You never know what tomorrow will bring. The problem is, many people neglect one very significant part of life – people forget about death. What do you have to worry about if you’re gone, right? Wrong. Dying has never been more complex. The State and Federal courts will prowl through your estates in search of their share of what you've worked and saved for. That is, unless you have the right documents in place.

If you’re smart, you’ll protect yourself and your family now. Living trusts in California guarantee you and your heir’s privacy upon your death as well completely eliminating Probate. At Walters and Ward, we can do just that. Without the proper documents, prepared by a credentialed lawyer to meet your specific needs, your heirs might wait three years or more, and potentially spend hundreds of thousands of dollars going through probate.

You've worked hard all your life and you love your family. Protect them and everything you’ve worked your whole life for. You should be able to find a qualified Californian estate lawyer in your community. They will help take inventory of your estate, and ensure that all of your assets will be protected.

The bottom line is that California living trusts offer your family privacy, and can save a significant amount of time and money upon your death by avoiding probate

You Have a Will, But You Also Need a Trust

A will is simply a testament that defines which heirs will receive what assets. On the other hand, a trust is a property management arrangement in which one person (the trustee) manages assets for the benefit of another person (the beneficiary). When you have a will and a trust, court supervision during probate is eliminated. You no longer have a need for a court Executor to manage your assets for people whom you’ve already named as recipients to your assets. After-death distributions under a living trust are usually implemented privately, and avoid probate. This works because the trust creator, while still living, transferred assets into the name of the trust.

There are also other benefits that may make the process of losing a loved one a little easier. Having a trust eliminates the cost of a second state probate proceeding where there is out of state property. There also will be no automatic court supervision to deal with disputes, and all of your affairs remain private.

It is also important to note that you do have the option to create a trust in which you are able to change and modify throughout your life. This gives you the freedom to change your will and trust according how your life changes.

Though this may be hard to think about now, it is essential to plan for the future now. It’s important to make sure your loved ones are secured in the assets you’re giving them, and trusts give you the security you need.

Walters & Ward, A Professional Corporation specializes in estate planning in California. As San Diego estate planning attorneys, we have completed over 11,000 wills and trusts packages in thirty years of business. Our focus is helping clients avoid probate, reduce taxes, and keep family matters private.

What are the Differences between Wills and Trusts?

One of the surest things in life is that over time, people acquire stuff. Call it stuff, things, money, property, whatever – the point is that if something were to happen to you and you no longer own or posses this “stuff”, it’d be a good idea to already have a plan in place to disperse your belongings as you wish. This is the idea behind wills and trusts – to have your things divided up amongst recipients as you please, so that you can still have a say in matters once you cannot speak for yourself. Although it seems like something everybody should have, over 66% of Americans do not have a will or trust established in case of their death.

The main difference between a will and a trust is how your stuff is given out to beneficiaries. While a will explains your testament that simply designates who gets what, a trust establishes an intermediary, or trustee, who owns and administers your stuff for the beneficiaries. While a will can contain and establish a trust, a trust typically deals with real estate, shares, or cash.

A trustee can be a company, individual, or organization (such as a charity). For example, if a charity is chosen as a trustee, they own whatever is designated in the trust, but only on behalf of the beneficiaries, which would most likely be friends or family members of the donor. The beneficiaries get a revenue stream for a period of time, and then the charitable foundation gets the remainder of the trust. This is called a “split interest” trust and avoids income and capital gains taxes if it is shared with a charity.

While a will costs less and is easier to create, it will only pertain to the property that is specifically outlined in writing. On the other hand, a trust establishes a trustee that will make any other decisions that need to be made. Other important decisions include the area of health care, such as whether to keep you on life support - a decision that can be very difficult and emotional for your spouse or family to make for you.

Although wills and trusts are a very complicated legal matter, I hope you’ve learned something from this article and are more enlightened as to whether you’ll need just a will or a trust as well. Either way, Walters & Ward Estate Planning is ready to help you. Visit our website today at WaltersTrustInfo.com.

5 Ways to Eliminate Your Estate Taxes

1. Annual Gifts
A person can make a monetary gift annually to another person, usually a child or grandchild, of up to $12,000 per year without having to pay a gift tax. If a husband and wife each give this amount per year, they are giving $24,000 per child or grandchild without having to pay a gift tax on the sum. The total amount that is given away is deducted off of the estate value. If the end estate value is less than $600,000, it is exempt from estate taxes.

2. Probate-Avoidance Trust
The Probate-Avoidance Trust is for people who have an estate valued under $600,000. This allows the person to avoid probate and estate taxes since the estate is exempt from this kind of tax.

3. AB Trusts
An AB Trust is designed to double the exemption amount for any given year of death. It is a very common way to avoid probate and estate taxes for people with an estate valued over $600,000. A married couple enters an AB Trust with naming a final beneficiary, usually a child or grandchild. If one spouse dies, half of the property is transferred to the final beneficiary while the other spouse still has rights to the property and any income that is generated for the remainder of their life. Once the second spouse dies, the other half of the property is transferred to the final beneficiary without incurring any estate tax.

4. QTIP Trust
A QTIP trust is best for those who have children from different marriages. This type of trust ensures that the living spouse, who must be a citizen, is financially taken care of for the remainder of their life without the interference from the deceased spouse’s children from a different marriage. At the death of the second spouse, the assets are passed to the beneficiaries of choice, such as children from the first marriage. This type of trust provides flexibility in estate tax planning.

5. Charitable Trusts
Charitable trusts are a way to get a large tax reduction by giving generously to a charity. Once a charity trust is set up and operational, it is irrevocable and the person who set up the trust cannot regain control. The charity becomes the trustee and any assets that are transferred into the trust are managed by the charity in order to generate income. They pay the person a portion of the income generated for a specific amount of time and when the person dies, the charity gains possession of the assets listed in the trust. The estate will not be subject to estate tax since it will be in the possession of the charity.

Before making any decisions about your estate plan, Walters and Ward advises you to speak with an experienced attorney. We can help you decide what will work best in your situation.

Estate Planning Tips

With the state of the current economy and an uncertain future for many, estate planning has now, more than ever, become essential step for any family.

CNN's "Money 101" series recently covered estate planning and offered up some information and tips for those considering to implement the various tools of estate planning. Here are some

• Having even a basic estate plan in place is important, no matter what your net worth may be. Contrary to popular belief, you don't need to be wealthy to consider having a trust and/or will.
  

• The elements of the estate plan include the following: a will, the assignment of power of attorney, and a living will or healthcare proxy, and (for some people) a trust may be the best solution

• Start by taking an inventory of assets, including investments, retirement savings, insurance policies, and real estate or business interests. Consider who you would want inheriting your assets, who should handle financial affairs if you're incapacitated and, lastly, who you would want making medical decisions if you are not able to make them yourself.
  

• Everybody should have a will, since it can become extremely costly for your heirs and you have no control over who gets your assets. This is also needed to take care of any holdings that may exist outside the trust.

• Make sure to discuss estate planning with family members, in order to avoid confrontation or conflict surrounding the distribution of assets.

• There are a few federal tax issues to consider: The federal estate tax exemption has been rising gradually and is expected to hit $3.5 million this year. In addition, the estate tax is coming down and is scheduled to phase out in 2010. Yet, this may only last a year, depending on whether Congress chooses to re-instate it in 2011. You should also be well-versed in any state taxes that may be levied against your estate.

• Two ways exist to give gifts tax-free and reduce your estate. First, you may give up to $12,000 per year to an individual without being taxed. Second, payments to medical or education bills are tax-free regardless of the amount, so long as the payments are made directly to the institution where the expenses were incurred.

The rest of of the tips can be found here

Source: CNN

Protecting yourself now and in the future

Here at Walters and Ward we specialize in to ensure that your assets belong to you, both now and in the future. Throughout our 30 years of service we have been answering many people’s questions to clarify the importance of asset management. Continuing years of experience and high customer satisfaction has given our firm the expertise and talent needed to handle the future assets of our clients.

Estate planning deals with the random chance of accidents by securing one’s future today. Tomorrow is unpredictable and while it is always hopeful, there are potential devastating events that can occur. Difficult complications frequently transpire if one suddenly becomes incapacitated or deceased; therefore, it is important to delegate assets in the present to insure that these possessions go to the right people.

A will is one of the most important documents that can be written in one’s lifetime. The document is so crucial because it states where your assets will go after you pass away. Dying without a will allows the Court to decide who will administer your estate and become legal guardians of your children.

Although the will is a very significant certificate, it is still required to go through the Probate Courts. This process is very extensive and costly, requiring much time and effort on behalf of your loved ones. The only way to bypass this process is by preparing a trust document, which takes away the hassle of having your assets being frozen and your will sent to the courts.

Guaranteeing your future and the future of your loved ones is an issue that should be dealt with immediately. Keep your assets in your hands and not in those of the Probate Courts to assure that your hard earned assets are distributed correctly. Visit the legal experts at Walters and Ward to dictate your future today.