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There are several reasons why people hesitate to or refuse to plan for death or incapacity. Failure to create an estate plan, however, can result in a person facing several complications which includes increased fines and placing additional stress on your loved one.
As a result, this article reviews some of the important pieces of estate planning errors you should make sure to avoid.
# 1 – Failure to Create an Estate Plan
The federal estate tax exclusion was recently raised to $11.4, but there are cases where large estates or businesses are transferred to beneficiaries and the recipients are subject to estate taxes. In some situations, the only way for your loved ones to pay for the taxes that accompany these assets is to sell the very assets that you hoped to pass on.
Several estate planning strategies that can be utilized to avoid the risk that your loved ones will end up paying estate taxes. One of the best methods to avoid these estate taxes is to use an irrevocable life insurance trust.
How Life Insurance Trusts Work
Very few people look forward to living in a nursing home the last years of their lives. There is a growing segment of the population that wishes to remain in their homes as long as possible. To do so however, assistance is needed from medical professionals and home health aides.
Continuing care retirement communities
Continuing Care Retirement Communities, also known as CCRCs, are well known to retirees. The premise is that residents live on a campus-like setting in facilities that change as their care needs increase. For example, a CCRC resident may begin at independent living facility, shift to assisted living, and enter a memory-care unit or nursing home. Where a resident starts depends on their overall health, mental faculties, and mobility level.
Before recently, the terms used by each individual website influence who has ownership and access to digital assets following a loved one’s death. These regulations greatly increased the number of regulations that loved ones must follow after your death. In many cases, these complex laws ended up having the result of beneficiaries losing digital assets that belong to the deceased family member.
Understanding RUFADA
Passed in 2015, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADA) governed a person’s access to online accounts when the account owner passes away or loses the ability to manage their digital accounts.
A recent story out of Virginia recently received a great deal of national attention. An 83-year-old grandmother of five and great grandmother of five received a “Notice of Lease Violation” from the management office of her assisted living facility.
What was the infraction?
It appears that Ms. Elsie Cruey had taken too many cookies from a community event. Ms. Cruery had previously run afoul of the community house rules when she took a partial gallon of milk after breakfast. She had hoped to combine the milk with the cookies she took as a late night snack.
While trusts grow in their popularity and usage, some people still encounter difficulties in creating a trust. One problem that some clients face is banks and financial institutions who create challenges in funding a trust.
While this problem is not all that common, it is still helpful to understand why these challenges can arise. This article also reviews some of the benefits that people commonly realize through the creation of a trust.
Common Challenges involved with Trust Funding
In the United States, married individuals almost always receive assets from their spouses without paying estate tax. One exception is the often-overlooked law involving marriage between a citizen of the United States and a foreign national. If you find yourself in this situation, it can create a unique challenge during estate planning.
The Foreign National Exception
Under federal law, if an American citizen is married to a foreign national and the first to die in the couple, the surviving foreign national is prohibited from using the standard marital deduction to inherit property. If the couple lives in the United States, the entire asset is subject to this regulation. If the couple lives overseas, however, only US-based assets are impacted by this law.
An increase in new types of family structures, new estate planning laws, and new types of assets has led to the use of many new non-traditional estate planning tips. Hopefully, by reviewing some of the non-traditional methods in this article, you will begin considering whether your estate will benefit from any of these strategies.
# 1 – Appoint a Trust Protector
One of the most difficult (although obvious) parts of estate planning is that after you die, your estate planning language will be permanent. A trust protector can help you make sure that your wishes for a trust are carried out. Some of the powers that you can assign a trust protector include making revisions to the trust and resolving disagreements among trustees.
Is an advance directive enough to ensure that your wishes are followed when you cannot express them because of disease or illness that affects your ability to make decisions for yourself? Physician Orders for Life-Sustaining Treatment (POLST Orders) for short, are often confused with advance directives. These medical care planning tools are very different from each other.
What is an advance directive?
An advance directive consists of a living will and a health care power of attorney. Every adult, regardless of age, should have one and update them from time to time, especially following a diagnosis of a serious medical condition.
Many people understand that they should create an estate plan, but there are many reasons why they hesitate to do so. One of the most common reasons is that it can be difficult to accept that a person will not be around one day.
If you die without an estate plan in New York, however, you risk dying without an estate plan that could make sure that your assets are protected and that your loved ones receive what they deserve.
This article follows some strategies that you should follow to make sure that you end up writing your estate plan sooner rather than later.
New York Estate Planning & Elder Law Blog