estate planning

Mistakes Frequently Made in Trust Administration

Creating a trust helps people achieve various important goals. Trusts help to manage assets and property as well as make sure that assets are appropriately distributed after a person's death. Trusts can also protect from creditors and others who are interested in collecting on debts. Despite these advantages, however, administering a trust appropriately is not easy. There are several mistakes that people commonly make while handling trusts. Not Understanding What is Required as a Trustee Sometimes, trustees are appointed without being certain about what their responsibilities are. Other times, ambiguous language in the terms of the trust leaves a trustee uncertain what the trust’s creator wanted. Because trustees are personally liable for mismanagement of trusts, it is a good idea for trustees to carefully identify what duties are requested and whether any potential conflicts need to be resolved first. Mismanagement of Trust Assets Trustees have a duty to act in the best interest of the trust beneficiaries and must also conform to federal laws and regulations. These regulations permit beneficiaries to pursue payment from trustees for any investment decisions that lead to financial losses. Trustees, however, can protect themselves by delegating investment duties to a professional investor. Not Remaining Neutral     Read More

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Recognizing When it is Time to Revise Your Estate Plan

Life changes. So does the way that we should handle our estate plans. As a result, it is a good idea to continuously review your estate plan to make sure that it reflects both your current and future goals.  Many life changes necessitate a revision of your estate plan, which is why it is a good idea to routinely read over the terms of your estate plan. This article was created to help provide a better idea of what situations should necessitate a fine-tuning of your estate plan. Federal Changes The exemption amount for federal estate gift and estate tax exemptions has changed significantly over the last few years, due in no small part to 2017’s Tax Cut and Jobs Act. If you wrote your estate plan before this time, it might be a good idea to revise your estate plan to reflect these changes.  Additionally, as 2020 nears its end, changes in both congressional and presidential leadership could also signify substantial changes in laws that impact estate planning.  Marital Status Changes Changing your marital status can greatly disrupt how your assets are transferred after a loved one dies. Marital status can include not just getting married but also divorce,     Read More

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Should You Place Real Estate in a Trust?

If you are interested in avoiding probate, you might have considered placing property in a trust. You might also have questions about whether the trust will be able to protect from creditors or remove the real estate from your taxable assets. This article reviews some critical details to understand about placing real estate in a trust, but remember that in these situations it also helps to speak with a skilled attorney.   How Trusts Function   Before discussing reasons to place real estate in a trust, it helps to understand some of the most basic terms used in relation to trusts, which include:   A beneficiary is a person designated to receive assets under the terms of the trust A grantor is an individual who establishes and fund the trust A trustee is an individual tasked with managing the assets in a trust   Avoiding Probate by Placing Real Estate in a Trust   The main advantage of placing real estate in a trust is to avoid the probate process, which can be both costly and lengthy. Passing real estate to loved ones through the terms of a will, however, results in the assets being subject to various costs. Because     Read More

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How to Stop Stalling and Write Your Will 

Despite what some people believe, estate plans are not only for the wealthiest or the oldest individuals. While simple estate planning documents like wills can benefit everyone, it is easy to delay writing them. After all, no one likes to be confronted with the idea that they are dying or might one day need someone else to raise their children.    If you have not gotten very far in creating an estate plan, you face the danger of dying “intestate,” which means that you will die without estate planning documents that guide your loved ones on how to handle things. To make sure that you create the necessary estate plan, it is helpful to remember several helpful estate planning tips.   Remember Why You are Doing it   Rather than focus on yourself, remember that estate plans are the best way to make sure that you provide for your loved ones. Providing details about what you want to happen after you pass away as well as who you would like to care for children who pass away can be a tremendously meaningful thing for your family. Making these decisions now saves you the expenses of later having to pay for     Read More

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How to Anticipate Tax Changes with a Potential Administration Change

In a Wall Street Journal article published last month, Philip DeMuth commented that Americans currently live in an ideal age of taxes due to President Trump’s 2017 Tax Cuts and Jobs Acts. Unfortunately, however, the tax advantages offered through various regulations passed by the current administration are scheduled to end on December 31, 2025.    Potential Changes to Estate Planning Laws   It is a good idea to review each estate planning during such uncertain times to make certain that assets are not placed at risk of unnecessary taxation. Some of the potential changes that could occur include:   Increasing the maximum estate tax rate from 40% to 77% Placing substantial limits on estate planning techniques like Grantor Retained Annuity Trusts and Defect Grantor Trusts Reducing estate and gift taxes as well as generation-skipping transfer tax to $3,500,000 from $11,580,000 Restricting the $15,000 annual gift exclusion afforded to unlimited donees to only two donees a year    Even though it can be difficult to predict what regulations might be passed into law, due to both the significant federal deficit and current political government, at least some of these regulations are likely to come to pass.   Estate Planning Techniques During     Read More

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Appreciating the Importance of Medical Directives During the Pandemic

As the coronavirus pandemic continues throughout Oklahoma, many people are faced with the question of whether their estate plan is sufficient. While many people think that a will is sufficient, it is often important to create other critical estate planning documents. During these times, it is helpful to consider whether a “living will” or “medical directive” is a suitable estate planning tool to create in case you ever pass away or become incapacitated.    The Difference Between Living Wills and Medical Directives   Living wills serve the purpose of reflecting what or whether or a person would like to receive life-sustaining procedures. Living wills are classified as only one type of advance directive, which directly focuses on measures required to sustain a person's life. Some of the other types of advance directives include a wide range of alternative planning options.   Living wills fall into the category of medical directive, which refers to documents establishing a person’s wishes for certain medical procedures as well as end-of-life care. While the term “advance directives” is often used in relation to these documents, this often refers to power of attorney documents that assign another individual’s ability to make financial or medical decisions.        Read More

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Estate Planning Basics as Children Head Back to School During the Pandemic

Oklahoma public schools are poised to return on August 10th. Understandably, going back to school during the COVID-19 pandemic has given many people time to think about the strengths and weaknesses of the system. Even if you work somewhere other than a school or hospital, back to school is one of the best times of the year to make sure that everything in your house is in order, including your estate plan.    Why You Need an Estate Plan   While many people think of wills when they think of estate planning, there are many other critical documents that a person should utilize to plan for death or incapacity. While it is a great first step to write these documents, it is just as good an idea to continuously revisit these documents after they are created to make sure that they still reflect your intentions.   Other Documents to Consider Including in Your Estate Plan   Besides a will, some of the other valuable documents that you should consider utilizing as a part of your estate plan include:   Trusts: There are many kinds of trusts that can be utilized to achieve various purposes. Most trusts involve a designated individual     Read More

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Four Essential Inherited IRA Rules That Beneficiaries Should Know

If you are like one of many people who inherited an individual retirement account (IRA) this year, you likely have countless questions involving estate planning and taxes. While it can be a financial advantage to inherit an IRA account, there are still taxes to worry about, and making one wrong decision can raise the attention of the Internal Revenue Service. Some people decide not to make any decisions on how to handle an IRA account without first speaking with a knowledgeable estate planning attorney. It can also help to understand some vital but often overlooked rules addressing how IRA accounts must be handled.    Do Not Forget About Year-of-Death Distributions   One challenge presented by IRAs is deciding if its creator took a required minimum distribution in the year that he or she passed away. If the creator failed to take a required minimum distribution this year, the beneficiary must make sure this requirement is met. Remember, however, if the creator had not reached the age of 70 and a half by the time he or she passed away, there is no year-of-death required distribution.    Your Situation Influences How You Handle the IRA   If you inherited an IRA,     Read More

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Making an Estate Planning “Football” During the COVID-19 Pandemic

We often discuss the various types of estate planning documents and their value, but it is just as important to realize that an estate plan does little good if the key people either do not know about the estate plan or are unable to access key documents after a person’s death or incapacity. The need to make sure that your loved ones can quickly access your estate planning documents has become even more important as the COVID-19 pandemic accelerates in Oklahoma and the risk grows of people suddenly falling ill or ending up incapacitated. It is a common occurrence after a person unexpectedly passes away or becomes incapacitated that their loved ones must go on a hunt to locate that individual’s estate planning documents. This problem can be avoided by having your estate planning documents current and contained in a specific location.  Some have suggested creating a “nuclear football” during the COVID-19 pandemic, which refers to the briefcase that the President of the United States supposedly uses to authorize a nuclear attack. To avoid leaving your loved ones unable to locate your critical estate planning documents, it is a good idea to create your own version of a nuclear football     Read More

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Think Twice About Adding a Beneficiary to Your Deed

One of the critical reasons to engage in estate planning is that the upfront costs to establish the proper estate planning strategies often cost much less than the trouble that can arise if a person does not create a proper plan. One of the most costly types of estate planning errors involves the methods that a person utilizes to convey property to loved ones following death or incapacity.    A unique challenge presented by many individuals currently engaged in the estate planning process is that they have been in their “home” or property for many years, during which time the worth of the estate has increased substantially. Consequently, a transfer of the property creates long term gain complications, which means that listing a beneficiary on a property deed is often not the best type of estate planning strategy.    The Challenge Presented by Listing Beneficiaries   Most people list beneficiaries on various estate planning documents including life insurance policies, retirement accounts, and trusts. Consequently, these individuals often make the mistake of thinking that it will present little harm to name a beneficiary on a deed. Even if a person is aware of the risk presented by transferring property in this     Read More

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