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VSED – Why Won’t Caregivers Honor a Dementia Patient’s Advanced Directive?

Voluntarily Stopping Eating And Drinking – Seven years ago, at age 57, Susan Saran was diagnosed with frontotemporal dementia, a progressive, fatal brain disease. She had started forgetting things, losing focus at the job she’d held for three decades. Tests then revealed the grim diagnosis, reported The New Hampshire Union Leader in its recent article entitled “Diagnosed with dementia, she documented her wishes. They said no.”

“It was absolutely devastating,” said Saran, 64. “It changed everything. My job ended. I was put out on disability. I was told to establish myself in a community, before I was unable to care for myself.”

Therefore, Saran sold her home in 2015 and found what looked like an ideal place: Kendal at Ithaca, a bucolic retirement community in rural New York, whose website promised “comprehensive health care for life.” She’s now battling with that community over her right to determine how she’ll die, even though she’s made her wishes known in writing. It’s a fight that could impact millions of Americans with dementia in future.

After two brain hemorrhages, Saran talked to an elder lawyer and signed an Advance Directive for Dementia. This is a controversial new document created by the group End of Life Choices New York that instructs caregivers to withhold hand feeding and fluids at the end of life to avoid the worst destruction of the disease. However, when she gave the document to the continuing care retirement community where she has spent more than $500,000 to secure her future, officials said they couldn’t honor her wishes. The facility’s attorneys held that the center is required by state and federal law to offer regular daily meals, with feeding assistance, if necessary.

There’s no provision, they said, for “decisions to refuse food and water.”

It’s a problem for Saran and other Americans who want to use these new dementia directives created in recent years. Even when people document their choices ― while they still have the capacity to do so ― there’s no guarantee those directions will be honored, which may be especially troubling for the 2.2 million people who live in long-term care settings in the U.S.

People with dementia are most likely to die in nursing facilities, according to new research from Duke University and the Veterans Affairs Boston Healthcare System.

A big question is whether patients with dementia — or those who fear the disease — can say in advance that they want oral food and fluids ceased at a certain point, which would hasten death through dehydration. This is a controversial form of what’s known as VSED — voluntarily stopping eating and drinking — a practice among some terminally ill patients who want to end their lives. In those cases, people who still have mental capacity can refuse food and water, resulting in death within roughly two weeks.

Many states prohibit the withdrawal of assisted feeding because it is basic “comfort care” that must be offered. Only Nevada now explicitly recognizes an advance directive that calls for stopping eating and drinking.

These dementia directives used in the past few years are designed to fill what elder law attorneys see as a major gap in advance-care planning: the gradual loss of capacity to make decisions about one’s care.

Frontotemporal dementia affects about 60,000 people in the U.S. Patients typically die within seven to 13 years. However, in Saran’s case, the disease appears to be moving more slowly than anticipated. After Saran had her strokes, she understood what losing her abilities might mean.

She was shocked to learn it might not matter—despite her elder law lawyer drafting health care proxy documents and a power of attorney. However, with the laws in most states, care facilities say they are bound to offer food to all residents willing to eat, and to assist with hand feeding and fluids, if a person requires assistance. The controversy is over the definition of those terms.

Thus far, there’s been no court decision that say a clear advance directive for VSED must be honored. Many individuals move out or have their families move them out of long-term care facilities to avoid assisted feeding in the last stages of dementia.

Reference: New Hampshire Union Leader (Jan. 27, 2020) “Diagnosed with dementia, she documented her wishes. They said no.”

 

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Fixing an Estate Plan Mistake

An irrevocable trust can’t be revoked. However, in some circumstances it can be modified using techniques such as decanting. The trust may have been drafted to allow its trustees and beneficiaries the authority to make certain changes in specific circumstances, like a change in the tax law.

Those kinds of changes usually require the signatures from all trustees and beneficiaries, explains The Wilmington Business Journal’s recent article entitled “Repairing Estate Planning Mistakes: There Are Ways To Clean Up A Mess.”

Another change to an irrevocable trust may be contemplated, if the trust’s purpose may have become outdated or its administration is too expensive. An estate planning attorney can petition a judge to modify the trust in these circumstances when the trust’s purposes can’t be achieved without the requested change. Remember that trusts are complex, and you really need the advice of an experienced trust attorney.

Another option is to create the trust to allow for a “trust protector.” This is a third party who’s appointed by the trustees, the beneficiaries, or a judge. The trust protector can decide if the proposed change to the trust is warranted. However, this is only available if the original trust was written to specify the trust protector.

A term can also be added to the trust to provide “power of appointment” to trustees or beneficiaries. This makes it easier to change the trust for the benefit of current or future beneficiaries.

There’s also decanting, in which the assets of an existing trust are “poured” into a new trust with different terms. This can include extending the trust’s life, changing trustees, fixing errors or ambiguities in the original language, and changing the legal jurisdiction. State trust laws vary, and some allow much more flexibility in how trusts are structured and administered.

The most drastic option is to end the trust. The assets would be distributed to the beneficiaries, and the trust would be dissolved. Approval must be obtained from all trustees and all beneficiaries. A frequent reason for “premature termination” is that a trust’s assets have diminished in value to the extent that administering it isn’t feasible or economical.

Again, be sure your estate plan is in solid shape from the start. Anticipating problems with the help of your lawyer, instead of trying to solve issues later is the best plan.

Reference: Wilmington Business Journal (Jan. 3, 2020) “Repairing Estate Planning Mistakes: There Are Ways To Clean Up A Mess”

 

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If I’m 35, Do I Need a Will?

Estate planning is a crucial process for everyone, no matter what assets you have now. If you want your family to be able to deal with your affairs, debts included, drafting an estate plan is critical, says Wealth Advisor’s recent article entitled “Estate planning for those 40 and under.”

If you have young children, or other dependents, planning is vitally important. The less you have, the more important your plan is, so it can provide as long as possible and in the best way for those most important to you. You can’t afford to make a mistake.

Talk to your family about various “what if” situations. It is important that you’ve discussed your wishes with your family and that you’ve considered the many contingencies that can happen, like a serious illness or injury, incapacity, or death. This also gives you the chance to explain your rationale for making a larger gift to someone, rather than another or an equal division. This can be especially significant, if there’s a second marriage with children from different relationships and a wide range of ages. An open conversation can help avoid hard feelings later.

You should have the basic estate plan components, which include a will, a living will, advance directive, powers of attorney, and a designation of agent to control disposition of remains. These are all important components of an estate plan that should be created at the beginning of the planning process. A guardian should also be named for any minor children.

In addition, a life insurance policy can give your family the needed funds in the event of an untimely death and loss of income—especially for young parents. The loss of one or both spouses’ income can have a drastic impact.

Remember that your estate plan shouldn’t be a “one and done thing.” You need to review your estate plan every few years. This gives you the opportunity to make changes based on significant life events, tax law changes, the addition of more children, or their changing needs. You should also monitor your insurance policies and investments, because they dovetail into your estate plan and can fluctuate based on the economic environment.

When you draft these documents, you should work with a qualified estate planning attorney.

Reference: Wealth Advisor (Jan. 21, 2020) “Estate planning for those 40 and under”

 

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Estate Planning for Unmarried Couples
Attractive Mixed Race Couple Portrait in the Park.

Estate Planning for Unmarried Couples

For some couples, getting married just doesn’t feel necessary. However, unmarried couples don’t enjoy the automatic legal rights and protections that legally wed spouses do, especially when it comes to death. There are many spousal rights that come with a marriage certificate, reports CNBC in the article “Here’s what happens to your partner if you’re not married and you die.” Without the benefit of marriage, extra planning is necessary to protect each other.

Taxes are a non-starter. There’s no federal or state income tax form that will permit a non-married couple to file jointly. If one of the couple’s employers is the source of health insurance for both, the amount that the company contributes is taxable to the employee. A spouse doesn’t have to pay taxes on health insurance.

More important, however, is what happens when one of the partners dies or becomes incapacitated. A number of documents need to be created, so should one become incapacitated, the other is able to act on their behalf. Preparations also need to be made, so the surviving partner is protected and can manage the deceased’s estate.

In order to be prepared, an estate plan is necessary. Creating a plan for what happens to you and your estate is critical for unmarried couples who want their commitment to each other to be protected at death. The general default for a married couple is that everything goes to the surviving spouse. However, for unmarried couples, the default may be a sibling, children, parents or other relatives. It won’t be the unmarried partner.

This is especially true, if a person dies with no will. The courts in the state of residence will decide who gets what, depending upon the law of that state. If there are multiple heirs who have conflicting interests, it could become nasty—and expensive.

However, a will isn’t all that is needed.

Most tax-advantaged accounts—Roth IRAs, traditional IRAs, 401(k) plans, etc.—have beneficiaries named. That person receives the assets upon death of the owner. The same is true for investment accounts, annuities, life insurance and any financial product that has a beneficiary named. The beneficiary receives the asset, regardless of what is in the will. Therefore, checking beneficiaries need to be part of the estate plan.

Checking, savings and investment accounts that are in both partner’s names will become the property of the surviving person, but accounts with only one person’s name on them will not. A Transfer on Death (TOD) or Payable on Death (POD) designation should be added to any single-name accounts.

Unmarried couples who own a home together need to check how the deed is titled, regardless who is on the mortgage. The legal owner is the person whose name is on the deed. If the house is only in one person’s name, it won’t become part of the estate. Change the deed so both names are on the deed with rights of survivorship, so both are entitled to assume full ownership upon the death of the other.

To prepare for incapacity, an estate planning attorney can help create a durable power of attorney for health care, so partners will be able to make medical decisions on each other’s behalf. A living will should also be created for both people, which states wishes for end of life decisions. For financial matters, a durable power of attorney will allow each partner to have control over each other’s financial affairs.

It takes a little extra planning for unmarried couples, but the peace of mind that comes from knowing that you have prepared to care for each other, until death do you part, is priceless.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”

 

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Retirement Fund Withdrawals Can Affect Social Security Benefits

Coordinating Adjusted Gross Income in retirement takes a bit more thought than just collecting a paycheck. Take too much from Peter, you’ll end up paying Paul. Some retirees end up owing taxes on their Social Security benefits. If you want to avoid this scenario, master the details as explained in the article “Will My Retirement Fund Withdrawals Affect My Social Security Benefits?” from The Motley Fool.

It all depends upon your income. This is defined as your adjusted gross income, or AGI, plus nontaxable interest plus half of your annual Social Security benefits. The Adjusted Gross Income is a person’s income for the year, minus certain tax deductions, like self-employment taxes and contributions to tax-deferred retirement accounts. Withdrawals taken from traditional IRAs or most 401(k)s, which are tax-deferred retirement accounts, do count towards the Adjusted Gross Income. However, Roth retirement account withdrawals do not. The only nontaxable interest in your combined income calculation would be tax-exempt bond funds.

For example, a single person with an Adjusted Gross Income of $20,000 with $1,000 in non-taxable interest and a $12,000 annual Social Security benefit would have a combined income of $27,000 ($20,000 plus $1,000 plus $6,000 totals $27,000).

Single taxpayers with a combined income of more than $25,000 and married couples filing jointly with a combined income of more than $32,000 could pay taxes on as much as 50% of their Social Security benefits. Single adults with a combined income greater than $24,000 and married couples filing jointly with a combined income greater than $44,000 could owe taxes on as much as 85% of their benefits.

But wait—here’s a detail you need to know. Because you could owe taxes on 50% or 85% of your benefits does not mean you’ll actually pay this much. There’s a Social Security benefit tax formula that will help you understand how this works. Your estate planning attorney or your accountant can help you figure out how this might impact your retirement finances.

Can you avoid these taxes? With the right plan, maybe. Most retiree’s sole source of income is Social Security and withdrawals from retirement accounts. Being smart with those withdrawals, can reduce the likelihood of owing taxes on Social Security benefits.

If you know that you are approaching one of the Social Security threshholds, try to avoid withdrawing more money from tax-deferred retirement accounts. If you have Roth accounts, try to live from them, because they don’t impact your tax status. Another alternative is to pinch pennies for a while, or simply take the plunge and pay the taxes.

Delaying Social Security benefits as long as you can, up to age 70, is another way to reduce the likelihood of owning taxes on benefits. Yes, you can start taking Social Security at age 62, but you must wait to claim your full benefits until you reach your full retirement age. If you start taking benefits early, you’ll get less than your full benefit, and that smaller amount will be permanent.

You can’t pay taxes on benefits that you’re not receiving. Delaying benefits will increase their size, which will reduce the amount to be withdrawn from tax-deferred accounts. This will lower your Adjusted Gross Income.

It’s possible that you may not be able to avoid paying taxes on Social Security benefits. However, knowing your unique situation in advance and planning accordingly, will be better than living with a reduced budget because you didn’t know and didn’t plan.

Reference: The Motley Fool (Jan. 17, 2020) “Will My Retirement Fund Withdrawals Affect My Social Security Benefits?”

 

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What IRA deadllines Does a Retiree Need to Circle?

Kiplinger’s recent article entitled “A Retiree’s Guide to Key Dates in 2020” explains that the calendar below has the significant IRA deadlines and dates of importance to pre-retirees and retirees. It will give you a head start on getting organized.

January 1:

Now that we are officially into a new tax year, and as you find your documents to prepare for filing your 2019 tax return, look for ways to lessen your 2020 tax tab.

If you’re still working, you can deposit more into your 401(k)s for 2020. You can put up to $19,500 into your employer plan—$500 more than 2019. If you’re 50 or older anytime in the calendar year, your maximum contribution jumps to $26,000. You can also put funds in a traditional or Roth IRA, or a combination of both. The maximum total IRA contribution for 2020 is $6,000, plus an extra $1,000 if you’re 50 or older. Once you turn 70½, you can no longer contribute to a traditional IRA. However, you can contribute to a Roth IRA, if you’re still working. If you’ve retired but your spouse is still working, the working spouse can make the maximum contribution to a spousal IRA for you, provided the worker’s earnings cover the contribution and his or her own IRA contribution.

The first is also the start date for Medicare’s general enrollment period. It goes until March 31, and coverage begins July 1. If you miss enrolling for Medicare at age 65 and don’t qualify for a “special enrollment period” (for people who had group coverage beyond age 65), you can enroll in Parts A and B during this period. In the same time frame, Medicare Advantage beneficiaries can move to a different Advantage plan or to traditional Medicare.

January 15:

This is the deadline for the fourth quarter estimated tax payment for 2019 taxes. You can forgo this deadline, if you file your 2019 taxes by January 31 and pay the remaining balance at that point.

March 31:

This is the deadline for traditional Medicare general enrollment and Medicare Advantage open enrollment.

April 1:

If you turned 70½ in 2019, April 1 is the deadline for taking your first required minimum distribution (RMD) from your tax-deferred retirement accounts. All subsequent RMDs must be taken by December 31. To figure out a first RMD due by April 1, 2020, take the 2018 year-end account balance and divide it by a life expectancy factor based on your birthday in 2019. You can find the factor in IRS Publication 590-B. you’ll still need to take your second RMD this year, if you waited on the first RMD.

If you’re still working past 70½, you can skip the RMD from your current employer’s 401(k) if you don’t own 5% or more of the company. However, you must take RMDs from traditional IRAs and 401(k)s from previous employers.

April 15:

The federal tax filing deadline for 2019 returns is on the regular date in 2020.

You can make 2019 IRA contributions up until April 15, which is up to $7,000, if you are 50 and older.

This is the deadline for the first estimated tax payment for 2020.

June 15:

This is the deadline for the second quarter estimated tax payment for 2020.

July 1:

Here’s when you can gauge a midyear estimate of your 2020 tax bill. Be sure withholding or estimated tax payments are on track to avoid underpayment penalties. You can avoid those penalties by paying at least 90% of the current year tax tab or 100% of the prior year tax tab (110% if you have a high income).

Look for tax-saving moves to trim your 2020 tab.

September 15:

This is the deadline for the third quarter estimated tax payment for 2020. If you are off track with estimated tax payments, or just don’t want to bother, you can withhold tax from your RMD. Withholding is to be evenly paid over the year, even if you withhold tax on an RMD taken in December and it can help cover the tax on all your income for the year.

September 30:

Your “annual notice of change” from your Medicare Advantage or Part D prescription-drug plan should be delivered to your mailbox by today.

October 15:

If you filed for an extension on April 15 for your 2019 tax return, today is the deadline to turn it in.

Medicare open enrollment begins. From now until December 7, you can switch between traditional Medicare and Medicare Advantage, or choose new Advantage and Part D plans, with coverage effective 2021.

November 1:

Early retirees in most states can purchase 2021 health coverage offered on exchanges under the Affordable Care Act from now until December 15.

December 7:

This is the deadline for Medicare’s open enrollment.

December 15:

This is the deadline for the ACA’s open enrollment.

December 31:

This is the IRA deadline for your RMD to be out of your account.

While you are at it, consider maxing out contributions to your employer retirement account, harvesting portfolio losses, making a Roth conversion, making charitable gifts and using up your annual gift exclusion of $15,000 for 2020 to give gifts to as many people as you choose.

Reference: Kiplinger (Dec. 24, 2019) “A Retiree’s Guide to Key Dates in 2020”

 

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When Do I Need an Elder Lawyer?

Elder law is different from estate law, but they frequently address many of the same issues. Estate planning contemplates your finances and property to best provide for you and your family while you’re still alive but incapacitated. It also concerns itself with the estate you leave to your loved ones when you die, minimizing probate complications and potential estate tax bills. Elder lawyers contemplate these same issues but also the scenario when you may need some form of long-term care, even your eligibility for Medicaid should you need it.

A recent article from The Balance’s asks “Do You or a Family Member Need to Hire an Elder Law Attorney?” According to the article there are a variety of options to adjust as economically and efficiently as possible to plan for all eventualities. An elder law lawyer can discuss these options with you.

Medicaid is a complicated subject, and really requires the assistance of an expert. The program has rigid eligibility guidelines in the event you require long-term care. The program’s benefits are income- and asset-based. However, you can’t simply give everything away to qualify, if you think you might need this type of care in the near future. There are strategies that should be implemented because the “spend down” rules and five-year “look back” period reverts assets or money to your ownership for qualifying purposes, if you try to transfer them to others. An elder law lawyer will know these rules well and can guide you.

You’ll need the help and advice of an experienced elder lawyer to assist with your future plans, if one or more of these situations apply to you:

  • You’re in a second (or later) marriage;
  • You’re recently divorced;
  • You’ve recently lost a spouse or another family member;
  • Your spouse is incapacitated and requires long-term care;
  • You own one or more businesses;
  • You have real estate in more than one state;
  • You have a disabled family member;
  • You’re disabled;
  • You have minor children or an adult “problem” child;
  • You don’t have children;
  • You’d like to give a portion of your estate to charity;
  • You have significant assets in 401(k)s and/or IRAs; or
  • You have a taxable estate for estate tax purposes.

If you have any of these situations, you should seek the help of an elder lawyer.

If you fail to do so, you’ll most likely give a sizeable percentage of your estate to the state, an ex-spouse, or the IRS.

State probate laws are very detailed as to what can and can’t be included in a will, trust, advance medical directive, or financial power of attorney. These laws control who can and can’t serve as a personal representative, trustee, health care surrogate, or attorney-in-fact under a power of attorney.

Hiring an experienced elder law attorney can help you and your family avoid simple but expensive mistakes, if you or your family attempt this on your own.

Reference: The Balance (Jan. 21, 2020) “Do You or a Family Member Need to Hire an Elder Law Attorney?”

 

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A 2020 Checklist for an Estate Plan – Unified Federal Estate & Gift Tax Exemption

Unified Federal Estate & Gift Tax Exemption – The beginning of a new year is a perfect time for those who haven’t started the process of getting an estate plan started. For those who already have a plan in place, now is a great time to review these documents to make changes that will reflect the changes in one’s life or family dynamics, as well as changes to state and federal law.

Houston Business Journal’s recent article entitled “An estate planning checklist should be a top New Year’s resolution” says that by partnering with a trusted estate planning attorney, you can check off these four boxes on your list to be certain your current estate plan is optimized for the future.

  1. Compute your financial situation. No matter what your net worth is, nearly everyone has an estate that’s worth protecting. An estate plan formalizes an individual’s wishes and decreases the chances of family fighting and stress.
  2. Get your affairs in order. A will is the heart of the estate plan, and the document that designates beneficiaries beyond the property and accounts that already name them, like life insurance. A will details who gets what and can help simplify the probate process, when the will is administered after your death. Medical questions, provisions for incapacity and end-of-life decisions can also be memorialized in a living will and a medical power of attorney. A financial power of attorney also gives a trusted person the legal authority to act on your behalf, if you become incapacitated.
  3. Know the 2020 Unified Federal Estate & Gift Tax Exemption. The Unified Federal Estate & Gift Tax Exemption for 2020 is $11.58 million, an increase from $11.4 million in 2019. The exemption eliminates federal estate taxes on amounts under that limit gifted to family members during a person’s lifetime or left to them upon a person’s passing. New York has additional rules.
  4. Understand when the exemption may decrease. The Unified Federal Estate & Gift Tax Exemption amount will go up each year until 2025. There was a bit of uncertainty about what would happen to someone who uses the $11.58 million exemption in 2020 and then dies in 2026—when the exemption reverts to the $5 million range. However, the IRS has issued final regulations that will protect individuals who take advantage of the exemption limits through 2025. Gifts will be sheltered by the increased exemption limits, when the gifts are actually made.

It’s a great idea to have a resolution every January to check in with your estate planning attorney to be certain that your plan is set for the year ahead.

Reference: Houston Business Journal (Jan. 1, 2020) “An estate planning checklist should be a top New Year’s resolution”

 

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Dad’s Will and Revocable Living Trust at Odds?

A revocable living trust, commonly called a living trust, is created during the lifetime of the grantor. This type of trust can be changed at any time, while the grantor is still alive. Because revocable living trusts become operative before the will takes effect at death, the trust takes priority over the will, if there is any discrepancy between the two when it comes to assets titled in the name of the trust or that designate the trust as the beneficiary (e.g., life insurance).

A recent Investopedia article asks “What Happens When a Will and a Revocable Trust Conflict?” The article explains that a trust is a separate entity from an individual. When the grantor or creator of a revocable living trust dies, the assets in the trust are not part of the decedent grantor’s probate process.

Probate is designed to distribute the deceased individual’s property pursuant to the instructions in his will. However, probate doesn’t apply to property held in a living trust, because those assets are not legally owned by the deceased person. They’re owned by the trust. As a result, the will has no authority over a trust’s assets.

Let’s say that Bernie (who is the grandfather) has two children named Pat and Junior.  Bernie places the old family home into a living trust that says Pat and Junior are to inherit that house. Twelve years later, Bernie remarries. Right before his death, he executes a new will that says is the house is to go to his new wife, Andrea.

In this case, for the home to go to his new wife, Bernie would’ve had to amend the trust to make the house transfer to his wife effective. Thus, the home goes to the two children, Pat and Junior.

Sound confusing? It can be. Work with an experienced estate planning attorney, so that your intentions can be carried out without any issues. As mentioned, a revocable living trust is a separate entity and doesn’t follow the terms of a person’s will when they die.

Make sure everything is legally binding and the way you intend it with the advice of a trust and estate planning attorney.

It’s important to note that while a revocable living trust supersedes a will, the trust only controls those assets that have been placed into it. Therefore, if a revocable trust is formed, but assets aren’t moved into it, the trust provisions have no effect on those assets at the time of the grantor’s death.

Reference: Investopedia (Aug. 5, 2019) “What Happens When a Will and a Revocable Trust Conflict?”

 

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Not a Billionaire? Trusts Can Still Be Beneficial

Irrevocable Trusts- You don’t have to be wealthy to benefit from the use of a trust. A trust is a legal arrangement by which one person transfers his or her assets to a trustee who will hold those assets in trust for third parties, explains the Stamford Advocate’s article “Trusts are not for the wealthy only.” As the person who created the trust, referred to as “the settlor,” you determine who the trustee is, as well as naming the beneficiaries.

There are many different types of trusts which serve different purposes. However, the two basic categories of trusts are revocable (also known as “living” trusts) and irrevocable trusts. Their names reflect two chief characteristics: the revocable trust can be changed and controlled by the settlor. The irrevocable trust cannot be changed, and the settlor gives up the control of the trust. However, it should be noted that the irrevocable trust has certain tax and other benefits not offered by the revocable trust.

A will is definitely necessary to pass assets on according to your wishes, but a trust can serve other purposes. Here’s a look at some common reasons why people use trusts:

  • Protect assets from creditors
  • Allow heirs to avoid probate of assets in the trusts
  • Avoid, minimize or delay estate taxes, transfer taxes or income taxes
  • Control how assets are disbursed or invested
  • Facilitate business succession planning and manage business assets
  • Shelter assets for descendants, if a spouse remarries
  • Establish a family tradition of philanthropy

Trusts allow assets to be passed on quickly and privately, while eliminating some expenses for heirs. They also permit closer management of who will benefit from your assets.

The cost of setting up a trust depends on the complexity of the trust and the estate, as well as other factors, like the number of beneficiaries and how many generations are being planned for. Bear in mind that the cost of setting up a trust should be measured against the future cost of not just taxes, but any litigation that might occur if the estate is probated and becomes public knowledge, or if family members are dissatisfied with the distribution of assets.

Speak with an estate planning attorney to first determine what kind of trusts are needed for your estate plan to achieve your wishes. Discuss the role of a Special Needs trust, if any family members have mental or physical needs that make them eligible for public assistance. An experienced estate planning attorney will know which planning strategies are best in your unique circumstances.

Reference: Stamford Advocate (Jan. 19, 2020) “Trusts are not for the wealthy only”

 

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