trusts

How to Make the Most of Life Insurance Policies and Trusts

There are a number of estate planning funding sources. For example, death benefits received from a life insurance policy can often be considerable. These benefits can then either be paid directly to beneficiaries or can be placed in a trust and distributed to a beneficiary at a later date.  The following will review some of the reasons to consider funding a trust with benefits from a life insurance policy.  Using Trusts for Benefits is More Advantageous Some people decide to name an individual and an alternative to receive benefits from a life insurance policy, but it is often a wiser idea to name a trust as a beneficiary.  In many cases, there are limitations placed on naming a secondary alternative death beneficiary who receives benefits if the first named party does not survive the policy holder. Instead, placing life insurance benefits in a trust that contains instructions for a trustee on how the amount should be distributed is often a much more preferable option.  This is because trusts can be drafted in such a way to protect a beneficiary who would spend assets unwisely if they directly received them. Furthermore, trusts can also be used to protect assets from creditors.      Read More

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Ways to Add Flexibility to a Trust

The Tax Cut and Jobs Act of December 2017 offered a number of advantages to individuals who are interested in estate planning. This new law, however, is not without its limitations. For example, many of the provisions included in the act will expire in 2025. As a result, it is critical to consult with an estate planning attorney to ensure that your planning techniques will carry you through. One helpful technique is to make sure to include provisions in trusts that make them flexible and capable of adapting to changes in your life circumstances as well as the law. The following will review some of the most helpful strategies that can be used to make trusts flexible. Decanting The decanting process involves moving assets from an old trust into a new one that better reflects current circumstances or which contains more advantageous terms. It is even possible to use the decanting process to alter irrevocable trusts, which generally are not capable of being altered.  While many states have laws allowing the decanting process, Oklahoma currently does not.  Even though it is currently not possible to decant a trust in Oklahoma, if your estate will likely be administered elsewhere, it is     Read More

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What are Bypass Trusts?

Establishing an effective estate plan is one of the best ways to make sure that your assets are properly handled following your death. Based on the exact details of your situation, it is worth considering whether a bypass trust would be able to help achieve your goals.  The following will take a brief look at what bypass trusts are as well as some of the benefits that can be taken advantage of through the use of this estate planning tool.  How Bypass Trusts Operate Bypass trusts are legal agreements that offer married couples the opportunity to avoid estate taxes after a spouse passes away. When one spouse passes away, an estate’s assets are divided into two separate trusts. One trust is categorized as marital, while the second is a bypass trust. Marital trusts are revocable and belong to the surviving spouse. The terms of revocable trusts are capable of being changed by the individual who created the trust. Bypass trusts, however, are irrevocable and their terms cannot be changed.  Surviving spouses often act as the trustees of bypass trusts. It is the duty of a trustee to make sure that assets from a couple’s estate are appropriately divided into each     Read More

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How Trusts can Help People Who do Not Have a Lot of Assets

Estate planning is an uncomfortable process. Most people find it difficult to consider how their belongings will be distributed following their death. If you fail to make these choices, however, the alternatives are often much less desirable.  Not only does failure to create an adequate estate plan increase the chances that fighting will occur in your family, unnecessary taxes are also common. These challenges as well as many others can be avoided through the creation of a trust.  Despite this, the myth persists that trusts are only for the extremely wealthy and that they take a great deal of funds upfront to create. In reality, trusts are a powerful tool for most people because they offer the ability to great simplify things after a person’s death.  The Role of Trusts There are a number of different types of trusts that can be made part of a person’s estate plan. The most common type of trust used is a revocable living trust, which lets a person clearly outline how assets in an estate will be administered following that person’s death.  Trusts also let people avoid the probate process, which is the legal process through which a will is declared valid. Many     Read More

Reasons You Might Need to Write Someone Out of Your Will

In a perfect world, everyone would get along and there would be no arguments between family members or loved ones. Because we do not live in a perfect world, there are a number of issues and challenges in relationships that arise when estate plans are involved. Due to these disputes, it often becomes necessary for a parent or family member to write a loved one out of his or her will. An experienced estate planning lawyer has helped a number of people create their own unique estate plans, which can include writing loved ones out of an inheritance. While there are a number of reasons why you might decide to write someone out of your will, the following will discuss some of the most common reasons why you might employ this estate planning strategy. The Nature of the Relationship Has Changed One of the most common reasons that people choose to write someone out of his or her will is because the relationship with that person has changed. Relationships are often either strengthened or weakened over time. No matter how or why a relationship has changed, Oklahoma probate laws often allow an individual to write someone out of a will.     Read More

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The Advantage of Irrevocable Trusts

While it is true that no two families are the same, it is also true that no two families have the same type of estate planning requirements. Fortunately, many concerns can be adequately addressed by creating proper trust provisions. While there are many different ways to create an adequate estate plan, trusts offer some substantial advantages in comparison to other tools. After the trust’s creator dies, the trust carries on indefinitely. The following will review some of the benefits that people realize through incorporating trusts into their estate plans. Avoid Probate All property that is placed in an irrevocable trust avoids the probate process, which can mean substantial saving in regards to time and expense for individuals. As a result, the use of an irrevocable trust can help to save a substantial amount of time as well as energy that a person would otherwise be required to invest in the probate process. Privacy Any property that passes through a probate estate becomes part of the public record. A trust is capable of keeping the entire transfer process private, which means that these trusts can play an important role in the lives of families who want to maintain a level of     Read More

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Learning from the Estate Planning Mistakes of Aretha Franklin

While Aretha Franklin is remembered as an extraordinarily talented musician, she made some significant estate planning mistakes from which we can all learn. When Franklin died in August of 2018, she did not leave a will or any type of estate plan despite having four children, including one with special needs. If you fail to leave an estate plan, it means that your inheritance will not be distributed in the way that you intended. If you need any type of estate planning assistance, you should not hesitate to speak with an experienced estate planning attorney. A Large Number of Americans Die Without Estate Plans Caring.com released a study in 2017 that found a large number of Americans die without a living trust or will. The most common reason why individuals claim they do not create these estate planning documents is that they simply have not gotten around to it yet. There are many reasons why people delay creating estate plans including the emotional unpleasantness of having to make end-of-life decisions. Other individuals think that because they do not have a large inheritance, creating an estate plan is not important. In reality, everyone should be concerned about proper estate planning because     Read More

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Four Commonly Overlooked Items in Estate Plans

There are certain elements that must be satisfied if a person is interested in estate planning, which include some things that are frequently overlooked. Failure to create an estate plan can lead to a variety of negative consequences. Fortunately, an experienced attorney like Jim A Lyon knows how to best anticipate overlooked elements of estate plans. Incapacity While many estate plans take death into consideration, they often fail to consider how incapacity can influence a person. Unfortunately, a large number of individuals are likely to experience issues related to incapacity during their lifetimes. One of the most common ways that estate plans take incapacity into consideration is with trusts that are created for the management of a person’s assets during incapacity. Management of Assets Some individuals create estate plans for beneficiaries who reach a certain age or goal but fail to create proper management of these assets until these events occur. Details regarding the management of benefits at every step of the process must be included in a reliable estate plan. Divorce Protection Many estate plans are written without consideration for how divorce will influence who should be named as a beneficiary. Even if a person is happily married, there     Read More

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Common Mistakes in Picking Life Insurance Beneficiaries

Appointing a person to handle money from a life insurance policy often only involves one decision, but this selection is one of the most difficult choices that many people must make. It is common for individuals to make errors, however, when making estate plans, which can result in life-changing mistakes. The following will review some of the most common mistakes that people make when deciding on whom to name as a life insurance beneficiary. Mistake # 1: Failure to Update Your Policy It is critical that people with insurance policies realize that these documents should not be abandoned or forgotten about after being written. Instead, a person should make sure to update a life insurance policy after every major life events including deaths and marriage. Not only is it possible that a person’s perspective on an individual might change, these events can also change how individuals can inherit amounts. Instead, the best advice is for a person is to always make sure that beneficiary choices are kept updated. Mistake # 2: Forgetting Primary Beneficiaries Some people decide on a suitable life insurance beneficiary, but fail to appoint an alternate person to act as a beneficiary. As a result, if something     Read More

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Establishing Trusts When a Family has Debt

More than many other estate planning tools, trusts are capable of protecting a family’s assets for future generation. However, if either the person creating the trust or the beneficiary has debt, the trust will likely not be able to protect the assets from creditors. This means that if someone in the family files for bankruptcy, there is a risk that the trust could be seized for the repayment of debts. The Difference Between Revocable and Irrevocable Trusts The role of debt in the creation of a trust emphasizes the distinction between irrevocable and revocable trusts. A person who creates a revocable trust is in control of the trust until his or her death, which means that assets in this type of trust are considered property during the creator’s lifetime and will pass to beneficiaries after the creator’s death. Irrevocable trusts are not in control of the trust’s creator, but sometimes a “spendthrift”  provision can be added to the trust to protect it from creditor seizure if a beneficiary of the trust later files for bankruptcy. The Advantages of a Trust There are some distinct advantages to both irrevocable and revocable trusts. Irrevocable trusts offer the benefit of reducing estate tax,     Read More

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