When planning for the future, each of us would prefer to retain some semblance of power over the assets we leave to our loved ones. But how do we control how things are divvied up or used after death? One answer is to include a power of appointment in planning documents.
A key element of estate planning is to remember that things change. Assets today might not be available down the road. At the same time, assets might grow and require money to be moved around or reallocated when a spouse passes away.
Trusts are technical legal instruments that require a keen eye and foresight on the part of the attorney drafting them. To avoid complications after setting up your trust, below are a few common mistakes to avoid when drafting trusts for minors.
As the federal estate tax exemption continues to rise – now at $5,450,000 per individual, double that for married couples – estate tax-oriented planning is relevant for fewer and fewer clients. As the legal industry shifts focus away from federal transfer tax, one of the new areas of concentration is planning for clients who are not U.S. citizens, but who seek to invest, do business, or send family members to the United States.Once the exclusive domain of immigration attorneys, now trusts and estates attorneys are expanding their practice into the realm of international taxation, especially as it impacts married couples’ planning and non-citizen individuals who want to spend significant time in the U.S., but who want to limit their tax exposure.
Income tax rates play an increasingly important role in estate planning strategy as the federal estate tax exemption rises. In the late 1990s, the estate tax exemption applied to many more people than it does today. Today, it applies to only 0.2 percent of estates.
Deciding between joint and separate trusts for married couples has been a conundrum within the estate planning community for a long time. While many attorneys swear by one trust over the other, there are many factors—such as, the state in which the couple resides, the total of their marital estate, and the couple’s relationship itself—that contribute to the decision of which trust is more suitable.
Attorneys face unique challenges when working with blended families. When planning for blended families, attorneys must take into account property that each spouse owns from their prior marriages as well as property that is jointly owned by the spouses in the current marriage. This requires an understanding of the nuances of each case and special tools to address client needs.
Asset protection has become a common goal of estate planning. Asset protection trusts come in many different forms and can be used to protect property for your use and benefit as well as for the use and benefit of your family.
Some common long-term planning objectives of farming and ranching families are to keep the property in the family, maintain the operations even if it means creating multiple streams of income for financial support, and passing it all down to the next generation. Working with farm and ranch owners to accomplish all of this can be a challenge. Here are a few issues to consider in this process.
As soon as people find out what area of law I practice, they usually say, “I don’t know if I need a trust.” My response to them varies, but always ends with, “I am certain that you need a Health Care Directive.” Their eyes widen when I provide the following reasons: