Estate Planning and Mental Illness

A mentally ill child is your responsibility. The government also chips in with public benefits to help you handle the situation. However, we have seen some cases where the family of the mentally ill child ended up jeopardizing the eligibility to receive these benefits.

Let us focus on how you can plan your estate the right way, and leave a portion of it to your mentally sick child without the likelihood of getting the money squandered away.

• Leaving the Estate in the Hands of the Mentally Ill Child

  The law allows you to leave a portion of the estate to your mentally ill child so that they can stay comfortable when you are long gone. Well, this allows the kid to be in control of their own affairs. The issue here is that the kid will now lose all the public benefits because they now have an income.

  Another issue that arises when you leave money to the child is that he will spend it all on treatment and other requirements and soon the estate will be used up.

  Some of the kids end up using the money extravagantly especially when they are in a manic state. Additionally, they will become prey to people that want to take advantage of the situation.

  This tells you that leaving money directly to a mentally ill child isn’t such a viable option for you to explore.
• Having a Custodian

  The other option is to leave the estate in the hands of a custodian who is mentally sound to manage it on behalf of the child.

  You can assign a person, in this case a family member to act as a custodian of the estate. There is a small catch though – the child needs to be under the care of the custodian so that he can look after his affairs.

  This approach rides fully on the level of trust you have between you and the custodian. Talk to them and explain how you wish the money to be used. You can even come up with a written document telling the person the routine the child is used to, so that he can follow it to the latter.

  The only downside to this arrangement is that the custodian for the estate doesn’t have any legal responsibility to look after the kid. Therefore, if the person dies, then the estate you gave him can go to his heir.
• Establishing a Special Needs Trust

  Also called a discretionary trust, this is an arrangement whereby you fund a trust to look after the welfare of the child.

  To make sure this trust follows all the stipulated laws, work with an estate planning lawyer that can come up with a trust so that the government can’t get their hands on the funds, or declare your child ineligible for public support.

  For the trust to stand, it needs to be able to meet the requirements that have been set down in the state. For example, the trust cannot be used to provide money for shelter, food and clothing for the child because these services are provided directly by the public program.

  You can also opt to assign a professional trustee to handle the fund. Depending on the state, our staff at Trusts and Estate can recommend a few organizations that you can use. This trustee comes with relevant experience to know where the funds need to go and will be careful not to disburse too much or too little to the child.

  This trustee works closely with therapists, government agencies and therapists to make sure the funds won’t make the child ineligible for public funds.
• Advanced Healthcare Directives

  It is vital that you appoint someone to handle medical decisions on behalf of the child. For a child with special needs, you need to have a directive that understands the medical history and the types of medications that the child needs.

  A child that has mental illness needs special attention so that they can enjoy their youth. Many people don’t take it upon themselves to put the kid in an estate, but this is a requirement by the law because the child is your offspring.
• Call an Estate Planning Lawyer Today

  It is vital that you work with the right lawyer when setting up your estate plan to provide for a mentally ill child. Consult with friends for some advice, and then take the necessary steps to make sure your child will be well taken care of when you pass away.

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Estate Planning and Adopted Kids

Estate planning mistakes can leave your adopted child, however much you love him, without any cent.

Each state has rules about inheritance, which means you need the services of an established estate planning attorney to interpret the rules for you. They also guide you on coming up with the best estate plan.

When you don’t understand the different laws, you might end up disinheriting your adopted kids.

When you adopt a kid, your goals are to treat them like your biological kids. It is therefore natural that as an adoptive parent u expect that the kids are afforded the same treatment like your own kids.

Sadly, this is not usually the case.

Let us look at some of the issues that make succession for an adopted child hard.

• Confusing Language

  When you have adopted kids, the law has different clauses that protect them. However, the wording can be a bit confusing, making it imperative that you come up with precise wording for the same. The words that you choose to use need to be carefully chosen so that you define the family arrangement.

  This is why you need an estate planning lawyer in your corner at this moment.
  Most parents don’t differentiate the biological kids from the adopted ones, which mean that they overlook the legal terms that need to be used when drafting the documents.

  When coming up with the estate plan, you need to have distinctions between your biological kids, step kids and even adopted kids. Otherwise these documents might end up causing a lot of conflicts between the kids when you aren’t around to clarify anything.

  You don’t need to assume that just because the adopted kids have lived under you for some time that they will be handled using the standard documents. It is good to consult your lawyers before you come up with a plan.
• Coming up with a Will

  One of the concerns of the parent is whether the adopted child will be provided for in the same way a biological child is provided for upon death of the parent. The good thing is that the state allows you to include the adopted child in your beneficiary list. When the will comes into effect, then the law will dictate the disposition of the estate as well as how the kids will get protected.

  Some state laws recognize the adopted kids to be at the same level as the biological children, while other laws don’t recognize this.
• Have Clear Instructions

  The first and biggest step in planning for your adopted children is to approach a lawyer and financial professionals to make sure you have a comprehensive financial plan in place. The plan need to give instructions on how the assets in the estate need to be used as well as naming a guardian for any minors that are under your care.

  If you have wills and trusts in the plan, make sure they are updated with relevant information to make sure the kids are included in the succession.

  Without having a valid estate plan, the assets will be distributed according to the laws of the state, and not by your wishes. If you don’t have a plan, you won’t choose the person to oversee the welfare of the kids when you are gone, which means that you leave everything to the government to assign one.
• Review Your List of Beneficiaries

  When you have an estate plan to implement, it is vital that you review and update the list of beneficiaries every now and then. Problems cone up when the parent forgets to add the names of the adopted child to the beneficiary list and hopes that the law will automatically give them something out of the estate.

  This is a wrong notion, because unless the will or trust has the names of the child as a beneficiary, then the assets are distributed only to the beneficiaries that are named. The language in use need to specify that the word ‘child” refers to all the children including the adopted one.

  If your adopted child has special needs, you need to make sure the plan is amended to include a special trust for him.
• Final Thoughts

  Adopted children need to be treated the same way as your biological children. This is because you have taken them under your wing and you need to make sure that you secure their future. Work with an estate planning attorney to make sure your child gets his right.

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Estate Planning After Cancer Diagnosis

Cancer – the dreaded disease that has beaten even the minds of the best scientists. Cancer diagnosis isn’t a death sentence, but many times, the prognosis of patients is poor. Some patients live for a few months while others survive with the cancer for years.
Some families see cancer as a taboo, a subject they talk about in hushed tones. This shouldn’t be the case
While cancer patients need all the love and care, it is no surprise that many caregivers forget that they have an estate to plan. Let us look at how to plan your estate after cancer diagnosis.

• Metastasis Leaves You Incapacitated

  For cancer patients, the risk of cancer metastasis is high, and the results include poor cognitive ability, which means that the person cannot be able to make sound decisions on their own. According to this survey, every sixth death in the world is due to cancer. It is a reality – we need to be prepared when it strikes.
  Even without metastasis, planning your estate when you are weakened by the illness is not a good idea.
  You can avoid these scenarios if you use the diagnosis as a catalyst to plan your estate and follow a few rules.
• Key Questions about Estate Planning

  When you are diagnosed with cancer, the following questions need to go through your mind:

  When I die:

  • What should happen to the property that I own?
  • Who do I entrust to take care of my kids or dependents?
  • Is there another person that I want to take care of?

  If I’m unable to make decisions on my own:

  • Who do I want to make financial and legal decisions for me?
  •  Who will make my medical decisions for me?
• Creating the Perfect Estate Plan after Cancer Diagnosis

  You need to execute different steps to achieve the best plan for your estate:

  Define Your Estate

  You need to list down all the property that you own at the time of your passing on. These include both physical and digital assets. Make sure you list them down and for each, show where they are located and in whose name they are titled.
  After you have a comprehensive inventory of the things that you own, the next step is to determine the worth of each asset. To do this, you can enlist the services of a professional valuation expert.
  Some items have sentimental value, which means you might want it to remain in the family.
  The final step in defining the estate is to show how the property is owned. There is more ways than one when it comes to property ownership:

  • Individual ownership – this is when you own the property fully. You can make decisions on who gets the property without consulting anyone.
  • Joint ownership – this is where you own the property jointly with someone else.
  • By contract – the ownership of the property is bound by a contract. You have full ownership only when alive, but when you pass, the property is given to a beneficiary.

  Know Your Dependents

  When setting up the plan, you need to determine who depends on you, for instance children with special needs, minors etc. after you know your dependents, you should consider what they need and how to care for them when you are gone.

  If you have small kids or parents that are incapacitated, then you need to identify a guardian to take care of them. The guardian manages the estate on behalf of the beneficiary.

  Know the Documents that You Need

  Every estate plan is unique, which means that the documents you need might not be the same for everyone. When determining the documents that you need, it is essential that you consider the estate planning rules of each state.

  The main documents that you will consider are trusts, power of attorney and wills. Talk to a qualified estate planning attorney to understand the differences and then guide you on what you need. The lawyer also helps you draft the documents depending on your needs.

  Advance Health Care Directive

  Cancer diagnosis means a lot of things. For some, it means that sooner or later they might not be able to state clearly what they need to be done. This is why you need to have a legal document that tells your family what medical attention you need when you become unable to state your wishes clearly.

  One of the clauses in the directive is when to stop medical care when treatment might not be the best option.
• Final Words

  Cancer diagnosis is not a death sentence, because we have seen patients that have lived for many years with the illness. However, you need to know that the illness makes you weak, and you need to take steps to make sure your loved ones’ future is secure.

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source https://trustsandestate.com/estate-planning-after-cancer-diagnosis/

Selling Off Your Parent’s House after You Inherit It Part 5 of 6

The previous article gave us an idea of how to resolve estate planning issues and how to value the house before selling it. This part looks at the next steps.

• Perform a Home Inspection

  Tidbit
  Did you know that if a home review uncovers problems with the house, the buyer might lose interest in your home?

  A home assessment is a way to find out the state of the house before you advertise it. The assessment is done by an independent specialist who reviews the house.
  Presenting a home inspection report to the buyer convinces him to pick your property over others. The report details the state of the physical structure, both internal and external.
  The inspector looks at all the major appliances and if they are functional or not. He checks the AC, plumbing, and the electrical connections to be certain all are working correctly.
  Since you don’t know the state of the home when you inherit it, the goal of an assessment is to make sure you understand what concerns come with the inheritance.
  To work with a good home inspector, ask for references from coworkers, friends, and even family members. You can also use databases set up by professional associations to get the task done. When you get a referral, take time to interview the potential home inspectors on what they do and how they do it, so that you know what to expect.
• Selling the House

  You have various options for selling the house:

  Use a Real Estate Agent

  When you find yourself stuck in an estate planning rut or family struggle for a property, or you have already been given the house as an inheritance, get a real estate agent that all the beneficiaries like. This will reduce disputes and ease the process.
  Regardless of the scenario, whether the house is going through probate or it is in a trust, you need to use an experienced agent.
  This comes with various benefits:

  • He will give you all the expert guidance because he has experience selling similar houses before. He will be able to list the home at the best price for the prevailing market conditions.
  • He gives you streamlined communication, which is an excellent way to make sure you are on par with the siblings at all times.
  • The agent comes with an all-encompassing network of contractors that are available to you at all times.
  • The agent gives you all the marketing platforms you need so that you don’t have to do this by yourself, which might be time-consuming.
  • Since you are selling the house, you need to present it well. A well-presented home sells faster compared to one that isn’t displayed correctly. He suggests any improvements that might give you top dollar on the property.
  • Since the property market isn’t as easy as you think, you might find yourself stuck when it comes to getting buyers. The agent usually has a premade list of prospective buyers that are ready to buy the home. These are serious buyers only.
  • They negotiate for the best price. They usually remove the emotional aspect of any sale, making the process faster and more fulfilling.
  • A significant issue with selling a house in the current market is the paperwork that you have to condone with. When the house changes hands, the agent will speed up the paperwork because they know the process better than anyone else.

  However, just the way this process comes with many benefits, you need to be wary of the disadvantages as well. These include:

  • You have to part a percentage of the proceeds as a commission.
  • The process can take longer, which means you have to set aside a few months to allow for the completion of the sale.
  • You might have to repair the house and handle anything that is found during the home inspection.
• In Closing

  A home inspection process brings to the surface issues that are hidden from view. The inspector comes up with a detailed report that you can use to rectify the home. Buyers also need the report, and don’t be surprised when your client asks for one before you negotiate the price of the house. Talk to an estate planning attorney to give you viable referrals today.

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Estate Planning 101: Retirement Accounts

When you are working, you get to set up a retirement account that will assist you to live well after you retire from active work.
The retirement account is ideal for both office workers and small business owners. Some of the common accounts include the IRA and the 401(k) accounts.
Having a retirement plan gives you the ability to save money and watch your savings grow, giving you the income you desire later on. Even after you pass on, you can pass the benefits to your family, allowing them to avoid probate.
You are not limited to the amount of money you use when you are alive, but the remainder is passed on to your kids when you become deceased.
The process is such that the beneficiary withdraws money from the account, and this is regarded as taxable income of the beneficiary.
The IRS has come up with many rules that govern the retirement plans. Most of the regulations are hard to figure out, and require the intervention of a qualified estate planning attorney to figure out what concerns you and how to go about it.

• The Benefits of Retirement Plans

  When you have a retirement plan, you enjoy various benefits, and when you are deceased, your family also enjoys a host of them.

  Enjoy Interest on Your Money

  The earlier you begin your retirement planning, the more you will reap in terms of interest. The interest you accrue is calculated based on the principal and the interest that you have accumulated over previous periods.

  Tax Benefits

  Some of the retirement plans don’t charge you any tax when you disburse the funds to your beneficiaries. It is therefore vital that you talk to your estate planning lawyer to understand what types of retirement plans you have at your disposal, and then choose the best one that will work for you.

  Enjoy Independence

  You have been working for more than half your life, and now it is time to relax and enjoy your hard work. For you to achieve this, you need to have the right retirement plan to give you the money that you need.
• You Can Retire Sooner

  When you have a substantial amount saved, you can decide to retire and enjoy your sunset years. If possible, start saving in your 20’s rather than your 40’s. No matter what age you are when you begin saving, a financial advisor can help you have a solid plan.
• Legacy Opportunities

  When you plan for retirement, you also have your loved ones in the context. The amount you save can end up helping your kids, because you are allowed to pass the retirement benefits to them.
• Picking a Beneficiary

  When filling out the forms for a retirement plan, you will be required to come up with a beneficiary that will inherit the money when you are no more.
  Picking the beneficiary to inherit the retirement benefits is a vital decision to take. The law lets you choose whoever you want when you are single, but the moment you marry, the law comes up with some rules to follow.
  Many married people choose their surviving spouses as the beneficiary to inherit the money in the account. If your spouse is still alive and you decide to name someone else, you might find yourself facing various complications due to laws that have been set by the state and federal government.
  If you have a 401(k) account, then you need to know that your spouse has a right to inherit all the money you have saved u in the account unless she declares in a waiver that it shouldn’t be so. She has to name a different beneficiary on the waiver.
  Regardless of the type of retirement account you set up, try and make sure that your spouse signs in waiver before you can name someone else as the beneficiary.
  If you choose your spouse to be your beneficiary, you give them a flexibility to use the money for things that are important, such as the education of your kids.
• In The Event of a Divorce

  If you named your spouse as a beneficiary and then you divorce, some states revoke the right of your ex to inherit your benefits.
• Final Thoughts

  When you decide to start planning for your retirement, you are faced with a few choices to make. Pick the perfect retirement plan that suits you, and make sure you name a beneficiary.
  Visit an estate planning lawyer today to understand the role of your retirement plan in your succession.

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source https://trustsandestate.com/estate-planning-101-retirement-accounts/

Estate Planning 101: Property valuation

When planning your estate, reality remains that the worth of your assets changes with time. By the time you are done with the estate plan, the value might have shifted up or down.
This is the reason you need business valuation services.
When you handle business valuation using an expert, you are sure that the assessment will be based on facts and figures to tell you how much the asset costs.
As a person interested in setting up the perfect estate plan for your property, you need to have the services of a valuation expert at all times.
So, what are the benefits of using these services when you come up with an estate plan?

• Helps You Understand What You Own

  When you have assets spread all over the state, you end up forgetting that some exist. And while the market fluctuates, the value of the assets also changes.
  Without the right information regarding the assets, you won’t be able to determine how much each asset is worth in a given timeframe.
  An accurate valuation of the assets will give you specific numbers that you can use to plan for later.
• It Limits the IRS’s Ability to Reassess Your Assets

  When you use an expert valuation expert to determine how much your assets are worth, the IRS won’t have to go through the process again when trying to determine the amount of tax that they need to charge on the assets.
  When you submit your tax return, you can include the appraisal to make sure the IRS handles the process faster.
• Allows the Executor to Distribute the Assets Accordingly

  When you understand the value of your estate, you can distribute the assets better than if you are guessing the value. Unless you have a true reflection of how much your assets are worth, you won’t have a sure way of knowing how to distribute the wealth.
  You might end up giving a beneficiary more wealth than you planned, which might bring issues with the other family members.
• How to Compute the Worth of Your Assets

  While you can take some steps to lessen the total amount of taxes on your estate, you will still need to have a plan to forge ahead. Here are the ways to estimate the worth of your property.
• Determine the Net vs. Gross Estate

  The term gross estate refers simply to the worth of the estate before you deduct the taxes that relate to it. The good thing is that the value of tax that you are liable to pay is based on the net value of the estate.
  However, you need to know that the deductions that are placed on your estate differ according to the states.
  Other liabilities that you need to pay include loans, mortgages, credit card balances and more.
  When we talk about your assets, we mean the property that you own in full, as well as the ones that you hold in part.
• Date of Death Valuation

  The date of death valuation is what your assets are worth at the time of your demise. This will be the amount you hold in your bank, retirement account sand investments.
  This value needs to be handled by a professional evaluator.
• Alternate Valuation Date

  This is the worth of your properties counted in your gross estate list six months after your demise.
  When time comes to compute the taxes that you need to pay, the administrator of the estate decides the date that can be adopted. They can use the alternate date or the date of death.
  If the worth of the property is expected to reduce in the six months after your passing, then the executor can adopt the alternate valuation date to compute the taxes. This will result in a lower tax burden.
  Opting for the alternate date of valuation is a bit tricky at times, especially when you have different asset classes across the state. When you use this method of valuation, you will have to analyze all the properties, and not just those whose value has dropped over the past six months.
  Enlist the services of a qualified estate planning lawyer to guide you on the best method to use. You can insert a clause into your will declaring the executor to use one of the two methods in calculating taxes.
• Final words

  For you to understand what your estate is worth, and to distribute your assets fairly, it is ideal that you work with a professional valuation expert to know what your estate is worth.

The post Estate Planning 101: Property valuation appeared first on New York Estate Planning Law Firm.

source https://trustsandestate.com/estate-planning-101-property-valuation/