DrBoyceEstatePlanning

Estate Planning Mistakes

2009-12-11T19:44:00.000-08:00

By: Nicole Nelson

The number one mistake of estate planning is the mistake of “never getting around to it”. If an estate is not made, including designation of a trustee, a will and a living will the people who are closest to you may be left with your debt or have to make tough decisions because you “never got around” to drafting documents that explain what you would like to happen to you and your assets. By creating an estate you are letting your beneficiaries know what you would like to be done in some touchy situations. This also may prevent arguments between beneficiaries because your wishes were clearly laid out.
Another mistake that is commonly made is the myth that estate planning is only important for the wealthy. Regardless of the size of your net worth, everyone owns assets that are worth something. Also, some people end up surprised how large their estates actually are after taking into account things like the value of their home. If you are concerned what so ever with where your assets will end up upon your demise, an estate needs to be seriously considered.
Although a will is made, does not mean the job is done. This is another mistake that has caused people legal trouble in the past. Things such as birth or adoption of children, divorce, death and other factors may change how your will is divided to your beneficiaries. Other things such as the sale or purchase of large and valuable assets or just simply changes in tax legislation may make your will not as legally tangible as you thought. This is where review and updates of your will are important.

http://www.allbusiness.com/personal-finance/retirement-estate-planning/4005-1.html
http://www.investopedia.com/articles/retirement/08/estate-planning-mistakes.asp?viewed=1
http://www.lawguru.com/articles/law/trusts-wills-and-probate/the-most-frequent-estate-planning-mistakes

Death Comes Before Fame

2009-12-11T14:57:00.001-08:00

By Ahmed Al-Salem

This is kind of strange. A man dies yet he continues to make money. So much so, that he can make more money dead than he can alive. We see this a lot in history. Death comes before fame sometimes. And those who fall victim to this strange phenomenon are usually artists. Shakespeare, Van Gogh, Tupac, MJ...and the list goes on. Who gets all this money? Since the person is dead whos bank account do the sales go to. In most cases, the money goes to the people who go after it the most. The government gets the first cut, then agents, then producers, etc and what ever is left get split among those who received money from wills.

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Estate Planning Facts

2009-12-11T13:14:00.000-08:00

By Shawn Chandok

1. No matter how wealthy you are, it is crucial to have an estate plan.
2. An estate plan isn’t only a will, but has several other elements as well. Examples include, the power of an attorney who will execute your will, trusts that help you avoid taxes to your heirs and a health care proxy who will have medical power in case you are unable to do so for yourself
3. Including ALL of your assets: Make sure you include all your assets in your estate plan such as investments (mutual funds, stocks), real estate (in state & out of state), and insurance policies (life insurance beneficiaries).
4. The Will: Everyone needs a will. A will designates your beneficiary and/or guardians. Furthermore, a will avoids you from dying intestate or without a will whereby your assets can be drained by the government or almost anyone who puts a claim on them and battles in court.
5. Trusts aren’t only for the rich: Trusts enable EVERYONE to give gifts to relatives’ tax free while providing privacy and sometimes protection from courts.
6. Don’t leave all your wealth with your spouse: Although you can leave all your of wealth to your spouse tax free, this isn’t necessarily a good idea because when your spouse dies, your children will have to pay more in taxes if he/she leaves it to them.
7. Charity: Making charitable donations reduces your current taxable income by the present value of your future donation.

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Not Time to Die Yet, but Start Planning Now Anyway

2009-12-11T12:46:00.001-08:00

By: Kelsey Hoffman

Estate planning is something that we should all start doing at a young age, even though we all believe we will live to be about 100 with modern medicine. Making wills and starting to save now is essential if you want your death to run smoothly. Of course it will be devastating for people, but you want to help soften the blow as much as you can and not leave them with tough decisions as to what to do with your possessions etc.

Estate planning also comes with many tax burdens that you must plan for. These include many such as inheritance taxes and estate taxes. If you plan your finances the right way you can avoid many taxes which will give you more money to leave for your family. Estate planning can sometimes be very costly as they have to be approved by lawyers and everything, so Wisconsin has actually decided to help out.

Milwaukee, WI has started a new program called “Wills for Heroes” in which they are offering free estate planning for police officers, firemen, and other emergency personnel. “Services include help in creating wills and living wills, as well as providing power of attorney for financial and health care matters.” It is a good way to give back to the people that risk their lives every day to help others.

Sources:
http://www.qck.com/avoid-inheritance-tax-hit-with-estate-planning-162935.html
http://www.chicagotribune.com/news/chi-ap-wi-willsforheroes,0,7219503.story
http://www.capitalpress.com/lvstk/TH-estate-tax-side-121109

Plan Ahead to Soften EstateTax Impact

2009-12-10T20:59:00.000-08:00

Posted by Chris O'Sullivan

Whatever Congress ends up doing with the estate tax, farmers and ranchers can shield themselves from its impacts by planning ahead, an expert advises.

By using a trust mechanism that's available to everyone, a farming couple could protect a larger portion of the family's estate from taxes, said Terry Francl, senior economist for the American Farm Bureau Federation.

Farm owners can also gift a certain amount of property to their heirs each year, which over time reduces the amount of assets that can be taxed at the owners' deaths, he said.

"There are many types of legal remedies," Francl said. "For example, you can give stock to charities and so on. You get a charitable deduction and don't have to pay capital gains on them ... There's a lot of alternatives."

The options remain as Congress has entertained numerous proposals for estate tax reform this year, the latest of which is a bill by Rep. Earl Pomeroy, D-N.D., that would freeze the estate tax at 2009 levels.

Currently, the estate tax is set at 45 percent for estates worth more than $3.5 million or $7 million for a couple. If Congress does nothing, estate tax rates will revert in 2011 to pre-2001 levels, with estates worth more than $1 million taxed at 55 percent.

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Don't Wait Plan Estate

2009-12-10T12:22:00.000-08:00

By: Nicole Nelson

Although many people have been putting off making an estate plan because of rumors of the elimination of the federal estate tax, president Obama has stated that the tax isn’t going anywhere. People shouldn’t be worrying about estate tax though since only the wealthiest two percent pay this tax, they should be worrying about if their estate protects what needs to be protected. There are certain things to make sure you include when planning your estate. If you have children that are minors, you need to name a guardian and a trustee (who should not be the same person) in case both you and your spouse die. Also, some states require that a half to a third of your estate goes to your spouse even if you specify in your will a smaller share. It is also important to know that an estate has a couple parts. These parts are your will, an assignment of power of attorney and a living will or health care proxy. It also may be a good idea to make a trust. Trusts aren’t just for the wealthy these days. They can allow you to reduce your estate tax as well as gift tax (if they apply). They also may be able to offer you greater protecting of your assets from creditors you may have and against potential lawsuits. Overall it is never too early to plan your estate. It is also always a better idea to have one then not. Having an estate will make it much easier for your loved ones after you die.

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Estate Planning,..The value you leave behind?

2009-12-10T08:34:00.000-08:00

By: Robert Katz

Many people wait much too late until they decide to start Estate Planning; when it is much better to just understand the fact the you are mortal and you will die some day, and that you should make sure your possessions, family and loved ones that your leaving behind are well taken care of. Estate planning consists of writing your will, deciding the distribution of all of your cash, who gets your real estate, dividing up your possessions and other property, and leaving a instructions and a last message to you family and friends with advice on dealing with your loss. There are many potential pitfalls when you plan out your estate insufficiently. Some of the serious financial problems with not planning out your estate properly or at all are the excessive delays of probate and the cost of lawyer, accountants, administrative fees, etc. After you dye, for example, if you have most of your money in investments and your investments start to decline with an economic recession, like the one we are in now, your family will not have the ability to withdraw these investments in time if you didn't set up the proper precautions. Additionally, while it maybe hard for you do deal with the fact that you are going to die some day, isn't it more important to help your family and loved ones cope with your loss by making these decisions and provisions for them so there isn't added stress and responsibility to deal with. Finally, isn't it also important to make sure you are the one whose in charge of whom is entitled to everything you've earned over the course of your life, and also how you will be remember based on the legacy create for yourself.

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Effective Estate Planning

2009-12-06T13:49:00.000-08:00

By Laura Reginelli

For many, planning for their deaths seems almost wrong. Nobody plans to die right? Well despite what many may think, planning for what happens after you die is a must. This is where estate planning comes in. According to about.com, “in simple terms estate planning involves both planning for the possibility of mental incapacity and planning for certain death.” Estate planning will determine how your accumulated wealth will be divided up amongst your heirs.

There are several various parts to an estate plan. The first and foremost part of your estate plan should be your will. According to CNN Money a will is imperative. A will is “a device that lets you tell the world whom you want to get your assets. Die without one, and the state decides who gets what, without regard to your wishes or your heirs' needs.” Furthermore, an estate plan usually contains a living will, letter of last instruction and a power of attorney. Each and every one of these parts ensure that after you die your wishes and intentions are carried out the way you wanted them to.

By creating an estate plan instead of dying intestate (without a will), your accumulated wealth will be passed on to whom you desire. Also, if you have any children, the estate plan will include a named guardian for your dependent. As scary as it is, planning for your estate after you pass away pays.

Sources: http://wills.about.com/od/estateplanning101/a/whatiespl.htm

http://money.cnn.com/magazines/moneymag/money101/lesson21/

http://www.wisegeek.com/what-is-estate-planning.htm

Avoiding Estate Mistakes

2009-12-05T10:34:00.000-08:00

By Leah Gorham

We often hear news stories about celebrities and wealthy people making mistakes when planning their estates, leading to hardships for their loved ones after they die or sometimes messy fights among heirs. For instance, when heath Ledger died at age 28, he had a will; however, it had not been updated in three years, which was prior to his relationship with Michelle Williams and the birth of their daughter, Matilda Rose. His will left everything to his parents and sister. Thankfully, when concerns were raised to whether or not Ledger's father would properly care for Matilda Rose, he assured the family that he would.

Although many people think that they do not need to worry about estate planning if they are not famous or wealthy, that is not the case. Mistakes such as Ledger's can have a negative impact on anyone. Believing the myth that estate planning is only for the wealthy is one of the top mistakes made in estate planning. Others include, not reviewing or updating your will, not using tax-planning strategies, and not planning for your children. Proper planning can help those to whom you are leaving assets avoid paying high federal income taxes and estate taxes and help avoid confusion.

In order to avoid mistakes in estate planning, there are some important things that everyone should know. First, no matter what your net worth is, it is important to have an estate plan to ensure that your family and financial goals are met after you die. Second, everyone needs a will. Dying without a will - also known as dying "intestate" - can be costly to your heirs and leaves you no say over who gets your assets. Also, discussing your estate plans with your heirs may prevent disputes or confusion. These are just the extreme basics in estate planning, and in order to learn more about how to make sure your assets are distributed as you wish after your death and that your family is taken care of, you can visit the links below.

Source 1, Source 2, Source 3

Estate Planning Tips

2009-10-22T09:47:00.001-07:00

By Shawn Chandok

By now, I think Dave, Ahmed and I have discussed the components of estate planning enough to say we can almost consider ourselves as experts. This is exactly why I have decided to provide some common estate planning tips that can be applied to anyone.
First and foremost, the most important part of estate planning is obviously having a will. Once this is established, you should make sure your will is notarized with the correct number of witnesses. This number varies from state to state and avoids any post death problems between beneficiaries. In addition, beneficiaries should never sign the will as a witness.

Another important tip should include naming an executor who will manage your estate from the moment you die until your wealth is distributed. Usually most people use their lawyers however this is a very important job, so make sure your lawyer is someone who is both trustful and dependable.

If you are a person with an exceptional amount of accumulated wealth, an irrevocable living trust maybe more beneficial tax wise. I say this so because in 2007 and 2008 only people with assets greater than $2 million had to pay estate taxes. In 2009 that number has increased to $3.5 million and it is expected to rise in 2011. An irrevocable living trust such as an Irrevocable Life Insurance Trust “is commonly used to remove the value of property from a person’s estate so that the property can't be taxed when the person dies. In other words, the person who transfers assets into an irrevocable trust is giving over those assets to the trustee and beneficiaries of the trust so that the person no longer owns the assets. Thus, if the person no longer owns the assets, then they can't be taxed when the person later dies.” Thus, it is clear how trusts are more tax friendly.

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What happens to credit card debt after death

2009-10-22T09:34:00.000-07:00

By Dana Dratch

Posted by Ahmed Al-Salem

You can't take it with you, but do credit card bills follow you into the grave? Does that debt die with you? Or can it come back to haunt those left behind?

What happens to your credit card when you die?There's no one-size-fits-all answer. A number of factors, including where you live and who applied for the card, can radically alter the situation.

Here's the simple part: If the card was yours alone, with no joint account holders, the debt is yours alone, too.

When you die, your estate is responsible for paying off the balance. If the estate goes through probate, your administrator or executor will look at your assets and debts and, guided by law, determine in what order bills should be paid. Remaining assets will be distributed to heirs by following your will (if you have one), or state law (if you don't).

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You Always Need a Lawyer!

2009-10-22T08:09:00.000-07:00

Post by David Held

There it is a lawyer for everything. When planning one’s estate he or she must consult with a lawyer. There are many technical aspects to writing a will and piecing together your estate. When selecting a lawyer, one has to do his or her research. This may be just searching on the Internet or conducting interviews with different estate lawyers. An estate lawyer can ultimately save you thousands of dollars because it is this person’s job to help you avoid all kinds of taxes. As mentioned previously in this blog estate taxes can eat up most of one’s estate.

The most common question that arises when one is looking for an estate lawyer is, “are the lawyer’s fees expensive and if I needed to re-plan my estate how much extra will be?” Lawyer’s fees vary from state to state and from agency to agency. There is no telling how many times one may need to re-draft his/her estate. The times where you would want to consider rewriting your estate are, if you get divorced, if someone dies (who is mentioned in your estate), or if you give away as something that was originally in your estate. Estate planning can be very tricky and the government is always out to take as much of your estate as it possibly can, mostly through taxes. So, one must be very careful when planning his or her estate because if they are not their loved ones will have trouble recovering the belongings that were meant for them!

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The Estate Tax: A New Conspiracy Theory

2009-10-21T14:47:00.000-07:00

Post by David Held
By CATHERINE RAMPELL

The political fight over the estate tax, the subject of a weekend article in The Wall Street Journal, may soon be re-engaged in Congress.

In 2001, President Bush pushed through a law that gradually decreased the levy on heirs over the course of a decade, until the estate tax finally disappears altogether in 2010. In 2011, though, the tax will rebound to its pre-Bush levels.

This policy quirk has spawned lots of “throw momma from the train” jokes among tax wonks, since potential heirs stand to gain a lot by having their rich relatives die in 2010. But the estate tax law also has implications for the federal budget.

Let’s say Congress, distracted by health care reform, leaves the current estate tax laws untouched. If a rich person dies at 11:59 p.m., Dec. 31, 2010, the government won’t get a dime. But if, through the wonders of modern Medicare-financed medicine, he manages to hang on another minute and instead dies at the stroke of midnight on Jan. 1, 2011, the government collects 55 percent of his net estate worth over $1 million.

Hmm. I smell a new job for those “death panels.”

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How Far Is Too Far When It Comes To Collecting Debt?

2009-10-20T18:06:00.001-07:00

Article by Katelyn Hayes

Post by Shawn Chandok

The grief of losing a child is unbearable enough, but as one New York couple found, keeping their dead son’s creditor’s at bay is ever more burdensome. According to this report on FoxNews.com, Roco and Laurie Crimeni are forced to relive the same pain they felt burying their 27-year-old son Vincent — who collapsed and died of a heart attack while playing softball almost a year ago — nearly every time the phone rings.

Why? Because creditors are demanding payment for the debts he left behind. Legally, though, these creditors have no right to do so. If there aren’t any assets left behind, and debts are in the deceased’s name only, family members are not required to pay. Yet this couple is being straight-up harassed over their dead son’s outstanding bills!

My heart goes out to them. They’re just trying to pick up the pieces of their lives, but they aren’t being given the opportunity to move on. Roco had this to say to MYFOXNY.com:

I’m afraid to pick up the phone in my own home,” he said. “That’s the hard part, to tell them my son is dead. How many times do I have to repeat it?”

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Credit/Bad Debt and Estate Planning

2009-10-20T13:21:00.000-07:00

Post by David Held

Even death may not stop debt collectors
BY CATEY HILL

Remember Benjamin Franklin's famous quote, "'In this world nothing can be said to be certain, except death and taxes"?

Well, if you're in debt, that quote might need to amended to say, "nothing can be said to be certain except death, taxes and debt collection."

Debt collectors are getting so gung-ho these days that for those in debt, even death won't stop the collections.

The New York Times reports the following:

"Dead people are the newest frontier in debt collecting, and one of the healthiest parts of the industry."

How does one collect from a dead person? By collecting from their living relatives, even when that person is not legally obligated to pay.

Take the company DCM, which began as a law firm but now spans into a variety of industries including debt collection. They have many trained agents who coax the next of kin for the departed person to settle that person's debts.

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Poor Credit Personal Loans – Credit Report Repair Helps Lower Rates

2009-10-20T12:16:00.000-07:00

Posted by Andrew Lipsitz

Poor credit personal loans are a financial tool that many Americans are using to help get some extra cash. Going through a credit report repair program could go a long way towards getting you lower interest rates. Your ultimate goal in getting a poor credit personal loan should be to get the lowest interest rate you can get without having to pay any extra fees. Some personal loan companies will lower your rate but watch out for the fees up front that could end up costing more.

Many personal loan companies offer borrowers up to $25,000 if they qualify. You may not need this much money but it could go a long way towards paying off bills and digging yourself out of the hole of bills everywhere. Although most financial planners suggest not using debt to pay off debt it might be a good idea to help get some bills out of the way if you get a low interest rate on a personal loan. It would not be advisable to pay off debts with a lower interest rate though.

It should not be difficult to find a poor credit personal loan company out there as they are advertising all over the Internet and on the television. If you watch CNBC or FoxBusiness at all you know exactly what I am talking about. It seems like every single time there is a commercial break there are several ads for debt consolidation or personal loans. This is not a bad thing if you need these services; make sure to jot down the number of these companies when you do see the commercials.

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Wills vs. Trusts

2009-10-20T09:51:00.000-07:00

Article by LectLaw

Post by Shawn Chandok

Wills
A Will is the legal document that allows you to distribute your property to those you choose. A Will allows you to designate beneficiaries to receive specific items from your estate, and other beneficiaries to receive everything else. For example, if you want your house, your car, or your antique thimble collection to go to a certain person or organization, you designate that person or organization as the beneficiary.
A Will also gives parents of minor children the chance to nominate a guardian. The court makes the final decision when appointing a guardian for your children after your death, but the court will usually accept your nomination. A guardian’s legal responsibility is to provide for your child’s physical welfare.

Trusts
A Will comes into play only after you die, but a living trust can actually start benefiting you while you are still alive. A living trust is a trust established during your lifetime. It is revocable, which allows for you to make changes. You will transfer substantially all of your property into your living trust during your lifetime, and any omitted assets can be transferred into the trust at the time of death through the use of a simple Pour-over Will. You should always make a Pour-over Will at the time that you establish your trust.

A living trust will be used as the mechanism to manage your property before and after your death, as well as provide how those assets, and the income earned by the trust, are distributed after your death. If you should become incapacitated or disabled, the trust is in place to manage your financial affairs, usually by a successor trustee, if you were serving as trustee. A living trust is not subject to probate, and therefore, all provisions of the trust will remain private.

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Intestacy Laws

2009-10-15T09:06:00.001-07:00

By Shawn Chandok

Intestate death means you have died without ever written a will to designate your wealth and lifework. So the question we ask ourselves is what happens if we die and don’t write a will? Well the answer to this varies state by state. Most states begin with the spouse or children as the number 1 beneficiaries. If you do not have a spouse or kids, your parents will accumulate your wealth assuming they are still alive. If your parents are no longer alive either, then siblings are usually next in line, followed by nieces and nephews if you have no siblings. Intestate death can create many problems for the families because it gives the state the right to choose who inherits what. This also means your wealth can go to a sibling or family member whom you disliked.

Another problem with intestate deaths is that it doesn’t consider any friends. For example, if you die the state cannot, and will not name any of your friends as inheritors of your life work. Instead, if you have no close family, all your life work goes back to state in which you resigned. This is another HUGE reason why you should consider making a will as soon as possible.

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Paul Anka to Get Half the Royalties for the New Michael Jackson Song

2009-10-14T18:35:00.000-07:00

By BEN SISARIO

Posted by Ahmed Al-Salem

Michael Jackson’s new song “This Is It” could prove a significant payday for Paul Anka. Although the song had been advertised as an unheard recording left behind by Mr. Jackson — and written by him alone — it became clear after it was released on Sunday night that “This Is It” was not new at all: it had been written by Mr. Jackson and Mr. Anka 26 years ago, and recorded by the singer Safire in 1991 as “I Never Heard.” Late Monday afternoon, the Jackson estate acknowledged Mr. Anka’s role and said he would be given credit. On Tuesday, the estate also confirmed that Mr. Anka would receive half of all due royalties for the song, which could be substantial. The song will play over the end credits of the film “This Is It” and feature prominently on its soundtrack. In addition, Mr. Anka would be owed fees for any licensed use of the song to commercials or other films. The Jackson estate is said to be in talks with Coca-Cola about possible use of “This Is It” in a large ad campaign, according to people with knowledge of the discussion who were not authorized to speak about it.

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Death Comes Before Fame

2009-10-14T18:23:00.000-07:00

What Does An Estate Consist of?

2009-10-14T07:35:00.000-07:00

Post by David Held

When people are trying to plan out their estates the most common question is; what is included in it? People can be either extremely specific or very broad when doing estate planning. The more specific someone is, when writing their will or planning their estate, the less bickering, fighting, and legal work there usually is by their heirs. Everyone has seen on TV, siblings fighting over Mom and Dad valuables, and believe it or not, this is very common in the real world.

The most important thing to put in an estate would have to be your greatest assets. For most people their house is the most valuable thing they own. Along with their house; cars, stocks, clothing, jewelry, bonds, retirement options, and various other assets which could include coin and stamp and art collections, even businesses, should all be included or taken into consideration when distributing ones estate. “How the estate is distributed is determined by several things: the will, the beneficiaries named (if any), the way the property is titled, any letter of instructions, and the laws of the state in which the person lived.”

The average person doesn’t equate taxes with inheritance, so estates have to plan on how to pay the government. Once a person dies, the government intervenes to make sure that they get their share of taxes from the estate. It may take a while to settle an estate once the government gets involved; it could be even years before everything is settled. That is why it is very important to hire a good lawyer, while you are young, to help get everything in order!

Sources #1, #2, #3

King Siblings Settle Estate Lawsuit

2009-10-14T06:50:00.000-07:00

Post by David Held
By SARAH WHEATON

The children of Martin Luther King Jr. settled a longstanding and bitter dispute over the slain civil rights leaders’ estate late Monday night.

A lawsuit pitted two of Mr. King’s children, Bernice King and Martin Luther King III, against a third child, Dexter King, the president of King, Inc., which runs their father’s estate. They had accused Dexter King of cutting them out of the decisions about the corporation, withholding documents and refusing to hold shareholder meetings since 2004. A jury trial was set to begin soon, threatening to reveal details about the inner workings of King Inc.

“All of the siblings are very pleased that the matter was amicably resolved, and they are committed to looking toward the future, to beginning the process of working on their family’s relationship,” said Lin Wood, the lawyer for King Inc. He said the siblings agreed not to discuss the details of the settlement.

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Brooke Astor’s Son Guilty in Scheme to Defraud Her

2009-10-13T09:14:00.000-07:00

Article by JOHN ELIGON

Post by Shawn Chandok

The son of Brooke Astor, the philanthropist and long-reigning matriarch of New York society, was convicted in Manhattan on Thursday on charges that he defrauded his mother and stole tens of millions of dollars from her as she suffered from Alzheimer’s disease in the twilight of her life.

The jury’s verdict means that Mrs. Astor’s son, Anthony D. Marshall, 85, faces a sentence of at least a year and as many as 25 years. A co-defendant, Francis X. Morrissey Jr., a lawyer who did estate planning for Mrs. Astor, was also convicted of a series of fraud and conspiracy charges, as well as one count of forging Mrs. Astor’s signature on an amendment to her will.

The verdict drew the curtain on a long trial that cast an unflattering spotlight on one of New York’s first families of high society. Henry Kissinger, Barbara Walters and Annette de la Renta, among others, testified that Mr. Marshall mistreated his mother in her later years and conspired to inflate his inheritance from her estate — largely to appease his wife, Charlene Marshall. Mrs. Astor died in 2007 at age 105.

As the verdict was read, Ms. Marshall sat stone-faced; moments later, while her husband went to meet with a probation officer, she left the courtroom, saying, “I love my husband.” She and Mr. Marshall then held hands and ignored requests for comment before being whisked away in a black Town Car.

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Trusts: A solution to Taxes?

2009-10-11T19:31:00.000-07:00

By Shawn Chandok

One of the most important overlooked facts in estate planning is what parents do to ensure their children have a successful future. The basic goal of parents (whether wealthy parents or poor parents) to ensure their child’s future should be to “teach money management skills to their children when they are young.” One of the most popular strategies used by parents before the bubble burst was the grantor retained annuity trust. The basic idea behind this trust was that parents would bet on an asset (usually real estate) to appreciate for a time period of 2-10 years. Then when the trust hit maturity, the children would receive the appreciated asset tax free. An example of this asset gift would include first homes for newly married couples. Now that real estate assets have dramatically decreased in value, it seems as if this strategy is useless. However, there is one loophole to ensure your child receives your gifts. It is stated that “The grantor can swap out the original asset for one of equal value without penalty and start another trust with the original asset, if he believes it unfairly lost value.” Although grantor retained annuity trusts (GRATs) are excellent for giving money/wealth to children tax free, some have said they aren’t very useful in giving money to grandchildren. Another option recommended for giving gifts to grandchildren is a generation skipping trust.

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The Thrill of Wills

2009-10-08T10:38:00.000-07:00

By Ahmed Al-Salem

The thing that annoys me is the fact that there are so many arguments over money after a person dies. The laws of inheritance that are practiced when no will is in place in the United States lack common sense. If a man or woman were to die in the midst of a divorce settlement, then all the money that the husband/wife has goes to their ex. Why? That doesn’t make any sense. That’s the last person the dying person would want to have want to take their money.
I think to lessen the grief and argument that happens over wills is to make a set of rules where everyone is entitled to a piece of the money no matter what. So if you had kids then a third of your money gets split among them, if you have a wife, then another third goes to her etc. That way people would not argue and there would be no incentive to suck up to a rich dying man because the money is out of his hands. A third should be designated for the dying person to do as he pleases but there has to be a system in place where those who are closest to him are taken care of before other relationships.

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Estate Planning: What You Need to Know

2009-10-08T10:20:00.000-07:00

By PAUL SULLIVAN

Posted by Ahmed Al-Salem

Estate planning rarely gets the attention it should get.

Saving for your children’s education, purchasing a second home, deciding when and how to retire — these are all topics that people talk about with their friends and their financial advisers. But deciding what happens to whatever is left of your money when you die is often passed over. It shouldn’t be, though, because it is crucial to a financial plan.

But not discussing something that is going to happen will not stop it from happening. And at some point, someone is going to have to sort out your estate — regardless of how big or small it is. Here are some ofthe key issues that should be addressed:

Read On

Death Panel

2009-10-07T15:38:00.000-07:00

Post by David Held

Everyone knows that planning estate is a tremendous task that most people do not want to do. No one wants to plan his/her death, but it has to be done! Planning is not only done with your family, but physicians and lawyers, as well. Planning an estate does not only have to only be about distributing belongings, it also has to do with how you are treated when you are in the last stages of life. Do you want a do not resuscitate clause, meaning if you flat line in the hospital or anywhere you are getting treated you do not want them to bring you back to life(no paddles/electric shock to the heart).

Bill Thomas, M.D. of Ithaca, N.Y. says, “The entire point of doing this planning is thoughtful communication with a physician and creating some documents that can guide your care…It’s so you decide.” As I stated before not many people want to have this conversation, but it is completely necessary! This should definitely be done if you are diagnosed with a terminal disease, but it should be done in your 20’s. It is better to be safe than sorry, especially when it comes to your life.

All of this should be included in your living will. “A living will is a document that tells doctors and medical professionals your wishes regarding life-and-death decisions such as whether to accept or refuse life-prolonging treatment after a critical accident. You should complete documents recognized by your state.”

Source #1, #2, #3

Your Financial Future: Getting Your Will Right

2009-10-06T12:17:00.001-07:00

Post by David Held

Your Financial Future: Getting Your Will Right
You may need legal help to have things turn out the way you want
By: Martha M. Hamilton

It’s easy enough to understand why most of us are reluctant to write a will. Who wants to confront mortality?

I finally drafted a will about 10 years ago after my lawyer sister insisted. I realized that if I were to die before my pending divorce was final, everything would go to my soon-to-be-ex-husband unless my will said otherwise, and that turned out to be just the motivation I needed.

Now things have changed, and I really need to pull together a new will. It has been on my to-do list for more than two years.

And yet, I haven’t done it, and I suspect I’m not alone. So I turned to Edward L. Weidenfeld, a highly respected lawyer whose specialty is estate law, to ask how people can get themselves motivated to prepare for the inevitable. And what he said was persuasive.

First, when you die there is going to be “a division of your worldly goods, and if you don’t say with some precision how you want it done, the court’s going to apply standards that may not reflect your wishes, and be more expensive,” he said.

But, more important, he added, “it’s really the caring thing to do. Just like you don’t like a houseguest who leaves everything in a mess, most people really don’t want to pass on a mess for their family.”

One legacy you don’t want to leave behind is a family fighting over your assets.

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Estate Planning: Why is it important?

2009-10-05T10:16:00.000-07:00

Article by Pat Perkins

Post by Shawn Chandok

What is an Estate Plan?
Simply put, an estate plan is a blueprint designed during a person’s life for the purpose of specifying the manner in which a particular estate will be disposed of after death. An estate plan typically attempts to conserve estate assets by reducing tax liability and other expenses as well as eliminating uncertainties with respect to the administration of a probate. (A probate is the process of certifying the validity of a will by judicial means.) Depending on your goals, your concerns regarding the legacy you want to leave behind, your family structure and the number and kind of assets you own, your estate plan could be simple or complicated. The process of estate planning usually entails the input of one or more specialized, professional advisors including your lawyer, financial planner, accountant, life insurance agent, banker and broker

Why Do I Need an Estate Plan?
If you don’t own anything of value and have no living relatives, pets or children, then you probably don’t need a will. You can die “intestate” (without a valid will) and your personal items will be distributed according to your state’s laws. However, this description applies to a very, very few. The rest of us whether married or single, young or old and with or without children need to have some sort of estate planning in place in the event of our deaths.

As Ben Franklin once opined, “In this world nothing can be said to be certain, except death and taxes,” but with good estate planning, you may be able to at least reduce some of the taxes your estate will be required to pay upon your death. These taxes, called estate taxes, are determined by an assessment of the total gross value of your estate; they are levied when you die and can eat into the value of the estate you leave to your heirs or beneficiaries. If you want to control the disposition of your assets–home, car, pets, money, stocks & bonds, life insurance, personal valuables–as opposed to letting Uncle Sam decide for you, then you need a proper estate plan. You might not be able to take it with you, but you sure can decide who gets what you leave behind.

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Heath Ledgers Estate Planning

2009-10-01T10:20:00.000-07:00

By Shawn Chandok

The Mysterious Life Insurance Policy
On January 22, 2008 Australian actor Heath Ledger, was found dead in his four bedroom apartment by his housekeeper. Although there has been controversy over whether it was a suicide or accidental prescription drug overdose, the fact of the matter remains he is no more. However, one of the main reasons there was so much controversy over the mystery of his death is because of the fact that he took out a $10 million life insurance policy only two years before his death. Excluding his assets, this policy would provide $10 million to his 2 year old daughter and beneficiary, Matilda.

The Will
Initially Heath Ledger had written his will 2 years before his marriage with Michelle leaving everything behind to his parents and sisters. However, due to some legal calamities lawyers argued that it should be re-evaluated to include Michelle. Finally, after constant family disputes, Kim and Sally ledger (parents of Heath Ledger) finally agreed with Michelle Williams that Heath’s estate would too be inherited by Matilda. However, what struck me as the most interesting was the fact that when Heath “signed the will on April 12, 2003 it listed assets and cash of just $118,000, but the actor's estate is believed to be worth more than $16.3 million.” This value is preceding his role in the famous movie “The Dark Knight,” which we all know as one of the most profitable movies ever created. In conclusion, although things came out for the best for Heaths wife and daughter, all the problems and controversy could have been avoided if Heath managed his wealth with strategic estate planning.

Source#1
Source#2
Source#3

Organ Donation: Not Just for Steve Jobs

2009-10-01T10:16:00.000-07:00

Organ Donation: Not Just for Steve Jobs
By Ahmed Al-Salem

Money is always the first thing that a person is sought after when he dies. Where will it go and to whom? That’s not the only thing that people care about nowadays. A debate about harvesting the organs of the deceased is a big concern to many people. Steve Jobs, the CEO of Apple, recently got a liver transplant that saved his life. “I now have the liver of a mid-20s person who died in a car crash and was generous enough to donate their organs. I wouldn't be here without such generosity," an emotional Jobs told the audience at an unveiling of new and cheaper iPods at a showing in San Francisco. He urged everyone to become an Organ Donor. Only 38% of the nation is registed as organ donors. That means more than half of the people that can register don’t. Eighteen people die each day waiting for an organ transplant and such deaths can be saved if people were to donate their organs.

Some of the reasons that people are reluctant to donate are: concerns about bodily integrity, worries that signing a donor card may 'jinx' them, mistrust of doctors and fear that they won't get proper care if they are registered organ donors and religion. The only valid excuse in my opinion is the last, which is religion. We will all die one day and if your organs are going to rot into dust than you might as well give it to someone who can make use of it. I am personally an organ donor and I have specified that my organs be harvested only to save lives. I think it’s a good idea and that people should do this before they die.

Source #1
Source#2
Source#3

Obama Plans to Keep Estate Tax

2009-10-01T10:00:00.000-07:00

Obama Plans to Keep Estate Tax
BY: JONATHAN WEISMAN
POSTED BY: AHMED AL-SALEM
President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010, suggesting the levy might outlive the "Death Tax Repeal" movement that has tried mightily to kill it.

The Democratic stance on the estate tax contrasts with Mr. Obama's reluctance to press forward with his campaign pledge to raise income-tax rates on top earners, which he worries could have an adverse economic impact during a recession.

.But Democrats are determined to act quickly to prevent the estate tax's scheduled repeal. Elimination of the levy on big inheritances was approved by Congress under President George W. Bush in 2001, with rollbacks phased in slowly and its full elimination slated to take effect next year.

The Senate Finance Committee will move within weeks on legislation to reverse that law, and Mr. Obama is expected to detail his estate-tax preservation proposal in his budget next month, congressional tax writers said.

Under the Obama plan detailed during the campaign, the estate tax would be locked in permanently at the rate and exemption levels that took effect this year. That would exempt estates of $3.5 million -- $7 million for couples -- from any taxation. The value of estates above that would be taxed at 45%. If the tax were returned to Clinton-era levels, it would exclude $1 million from taxation with the rest taxed at 55%.

In making their case for the restoration, Democrats contend that such a large additional tax break for the rich shouldn't go into force halfway through Mr. Obama's proposed economic-recovery package. They argue that the deficit is already in record territory, while their plan wouldn't have any impact on the economy since it would merely keep the estate-tax rate at its current level. Mr. Obama and his party also say that the affluent already have benefited handsomely from the Bush tax cuts.

They also reason that if they don't act now, it will be politically harder to go ahead with their plan to resurrect the estate tax once it has disappeared.

For small-business groups, farmers' associations and the affluent families that created and bankrolled the "Death Tax" repeal effort, the emerging Democratic plan marks a stark defeat.

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Did Michael Jackson Take Care of His Estate?

2009-09-30T09:01:00.000-07:00

Post by David Held

As everyone knows, the King of Pop passed away this summer. Now, the number one question that arises is who gets what part of Michael’s estate? Michael Jackson’s estate is worth billions, from the Neverland Ranch to the rights of the Beatle’s records, not to mention his children. What many people did not know was that Jackson was in debt when he passed away. It is reported that he owed Back of America over $270 million because of ridiculous spending sprees, but in the end his estate is in the green. Because of all the debt Jackson owed, “Jackson's estate is also subject to federal inheritance taxes of up to 45%, depending on what was placed in tax-limiting personal or family trusts. A trust arrangement also would keep much of the estate disbursement private and out of probate court but wouldn't prevent public scrutiny from legal challenges by creditors and other claimants.”

Since Michael had a will and planned out his estate correctly, most of the estate money will go to Katherine Jackson and his three children. Also, a portion of the money went to covering funeral costs. A Wall Street Journal article states, “In court documents released today, it's revealed that Katherine Jackson is paid $26,804 per month and the 3 kids $60,000 per month.”

Source #1, #2, #3

The Benefits of Budgeting

2009-09-29T09:24:00.000-07:00

Post by Shawn Chandok
Article by Paul Sullivan

Now Even Millionaires Can See the Benefits of Budgeting

SOMEONE with $100 million has nothing to fear, not even fear itself. But not long ago, a client with such assets called and asked Bruce Bickel, her wealth adviser at PNC Wealth Management, to put her on a budget.

“She said we’ve never done this before, and we think we should,” said Mr. Bickel, managing director of private foundation management services at PNC. “It’s all relative. Their loss has put them in a fear response.”

That mindset is a direct result of the financial panic that turned one year old this week. At this time last year, Richard Fuld was center stage in the financial crisis; Ken Lewis, chief executive of Bank of America, was being hailed as Merrill Lynch’s savior; and Bernard L. Madoff was little known beyond the financial world.

None of that is true today. And even though a year has passed, wealthy investors remain cautious.
The Boston Consulting Group predicted this week that worldwide wealth would not return to 2007 precrisis levels until 2013. It also said it found that the number of millionaires was down 18 percent and that, across the board, clients of wealth management firms had lost trust in their advisers.

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Sophisticated Estate Planning Strategies

2009-09-28T14:45:00.000-07:00

Post by David Held

Sophisticated Estate Planning Strategies
by Rande Spiegelman, CPA, CFP®, Vice President of Financial Planning, Schwab Center for Financial Research

So far we've covered the basics of estate planning as well as estate tax repeal and the role of lifetime gifting in reducing your taxable estate. Here, we highlight some advanced strategies people can use to accomplish their gift and estate planning goals in a tax-efficient way. Of course, these are but a few of the many estate planning strategies available.

A few things to keep in mind:

Don't be seduced by intriguing strategies or what someone else did with their estate plan. Your estate plan should begin and end with your personal goals and desires, both tax and non-tax—after all, it’s your estate.

Sit down with a qualified estate planner who’s up to date on the latest statutory, regulatory and judicial developments. You may even want to combine the strengths of a qualified CPA (to map the most tax-efficient strategy) and an experienced estate planning attorney (to draft the legal documents and provide additional insights).

Beware of strategies that seem too good to be true, such as excessive valuation discounts, promises of tax-free offshore deals, and the like.

Click HERE to read on..

What goes into a will

2009-09-28T08:57:00.000-07:00

By: Jessie Bruyn

Every person is different and carries different values during their life, so therefore there is no set formula for a will per say. However, there are certain topics that should be included and touched upon in the creation of every will.

The first, and arguably the most important, are the funeral expenses and payments of any pre-death debts. Money should be allocated for both of these things by the creator of the will. If debts exceed assets, state law will prescribe the order in which debts are paid. You also have the opportunity to forgive debts owed to you in your will. The biggest advice given by lawyers in creating wills is to think of all the "what ifs".

The next category in creating a will is the gifts of personal property. This is where you can give assets to specified individuals (family, friends, or charitable donations). If you have several children or want to distribute certain assets evenly you give the property to "the class" this would include all the people (for example all children) and the assets would be divided evenly.

If you have custody or rights over individuals, for example your children. Detailed instructions of who the care goes to in the event of each possible circumstance are provided. You must also include special instructions for the gift and inheritance of minors (for example to wait until a certain age and how much is allocated to the specified caregiver and what for). Most importantly, make sure the will is signed and dated and kept in a safe place.

The writing of a will is very complicated and should be done with assistance of a lawyer and in conjoint with your spouse if assets are shared. It should not be taken lightly and should be updated frequently in the best interest of you and your loved ones.

http://public.findlaw.com/bookshelf-gwe/gwe-7-1.html

http://www.free-legal-document.com/how-to-write-a-will.html

http://www.wikihow.com/Write-Your-Own-Last-Will-and-Testament

Estate Planning

2009-09-28T08:55:00.000-07:00

By: Jessie Bruyn

Don't Avoid Estate Planning

2009-09-22T10:15:00.000-07:00

By Nicholas Vanikiotis

The biggest mistake anyone can make in regards to estate planning is putting it off. It is one of the most important things you can do with your money and needs to be given the proper amount of attention and consideration. The cost of hiring an attorney or a financial advisor is a small cost to pay, a few thousand dollars depending on how large your estate is, to properly allocate your finances in case you die. People put off estate planning because no one wants to plan for their death. It’s a dark subject and people simply do not want to think about it or even talk about it.

Another Mistake people make when planning their estate is not asking enough questions. When you walk out of the attorney’s office you should be entirely clear on where your money will after you die, after all it is your money. Also, a discussion should occur with your heirs so it is made clear where to your family and friends as to how all of the assets will be allocated.

A third mistake is only putting a will or trust in your plan. An estate plan is a package where all of your assets are grouped together so they can be dispersed to the appropriate people in a timely manner upon death.

http://www.seacoastonline.com/articles/20090607-BIZ-906070332

http://wills.about.com/b/2009/09/10/estate-planning-donts-6-dont-be-afraid-to-question-your-estate-planning-attorney.htm

http://money.cnn.com/magazines/moneymag/money101/lesson21/

Estate Planning Do's and Don'ts

2009-09-22T10:07:00.000-07:00

Watch Here

By Nicholas Vanikiotis

Trusts vs Wills

2009-09-22T08:38:00.000-07:00

By Jessie Bruyn

A trust is an agreement between two people in which one person manages the property and assets of another person - the beneficiary. There can also exist a living trust in which the specified person manages the assets of the other person in the event that they are disabled and cannot manage their property by themselves. When the person dies, the trustee becomes responsible for the assets and allocates them to desired individuals.
A will, on the other hand, is a legal tool used only after the individual is deceased. The only say in the division of assets with a will is the creator, whereas with a trust the trustees have access and rights as well. When creating a will, the person appoints an Executor to handle the business and distribute the assets. Wills usually require Probate, or court involvement. However, having a responsible Executor helps eliminate the court's involvement in distribution after the death of a loved one.
Initially, a will is less expensive but can require more expenses after the death. On the otherhand, a trust is more expensive at first, but requires less expenses after death.

http://www.premack.com/columns/2003/2003-03-04.htm
http://legal-dictionary.thefreedictionary.com/will
http://legal-dictionary.thefreedictionary.com/living%20trust

Education savings as an estate-planning strategy

2009-09-22T08:21:00.000-07:00

By: Jessica Bruyn

Now that our youngsters are back in school, we can turn our attention to some of our other goals. When was the last time you reviewed your estate planning strategy? Did you know education savings can be a part of your estate plan?

First, let's review how estate laws affect your assets. After that, we'll show you how the special rules that apply to 529 education savings plans can help you deal with the general estate tax laws.

To simplify and summarize the estate tax, most assets you own when you die constitute your estate. If the value of your estate exceeds a specific amount ($3.5 million in 2009), then you'll be subject to federal estate tax. If you reduce the size of your estate, you can reduce the amount of estate tax owed.

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Probate

2009-09-21T09:38:00.001-07:00

Probate is how an estate is distributed in court or the legal process of administering a deceased persons estate as per their will. This process is usually only gone through when there are significant assets to be transferred. This does not include life insurance or retirement benefits which have a set beneficiary. A living trust is not subject to probate.
The court appoints an executor who will be in charge of managing the estate. When there is no will then the court names an administrator. Either of these hold a fiduciary duty to the family and the court to act on another's (the deceased) behalf. AS an executor you do get paid for your service, depending on the size of the estate.The will can be contested and this begins another process to resolve it.

Posted by Chris Keeler

http://www.scselfservice.org/probate/prop/FrequentlyAskedQuestions2.htm#what
http://en.wikipedia.org/wiki/Probate
http://www.nolo.com/legal-encyclopedia/faqEditorial-29135.html

Wills

2009-09-21T09:35:00.000-07:00

or View Here

Posted by Chris Keeler

Become Aware: September is Life Insurance Awareness Month

2009-09-19T21:41:00.000-07:00

Posted By: Laura Reginelli

If you happened to die tomorrow, how would your family take care of themselves financially? It is not a pleasant thought to think of, but not thinking about it can cause detrimental consequences. September is Life Insurance Awareness Month. Now is the time to make sure your family is protected from the worst case scenario.

Click here to read more.

Insurance for Your Future

2009-09-19T21:32:00.000-07:00

By: Laura Reginelli

Losing a loved one is emotionally devastating. On top of that, families then have to endure the financial burden of losing someone as well. According to State Farm, life insurance “is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.”

Although the subject of death is a touchy one, it is important to make sure that your family will be covered if you are to pass away. On top of losing someone that you deeply care about you could also possibly lose a substantial source of income on top it that. With that being said, it makes sense to purchase life insurance before any medical problems occur and when you are healthy. Generally the older one becomes, the more expensive his or her policy will be due to the increased chances of death or medical problems. There are two specific types of life insurance offered, term and permanent. With term insurance you gain coverage for a set amount of time, pay a lower rate in the short run and find it easier to comprehend. However, with permanent life insurance the protection spans a lifetime, has higher premiums but in turn can help you build up equity. Whichever you decide is best, it is important to make sure that both you and your family are insured for the uncertainty of the future.

Sources: http://money.cnn.com/magazines/moneymag/money101/lesson20/
http://www.statefarm.com/insurance/life_annuity/life/life.asp
http://www.metlife.com/individual/insurance/life-insurance/index.html#types

Tax Friendly Places for Retirement

2009-09-19T09:42:00.000-07:00

Posted by: Janielle Viggiano

No matter where you live, the federal taxes will be about the same. But you'd be amazed at how much your state and local tax burden may vary. And if you itemize deductions, how much you pay -- and deduct -- in local property taxes could affect the bottom line of your federal return, too.

People planning to retire "often use the presence or absence of a state income tax as a litmus test for a retirement destination," says Tom Wetzel, president of the Retirement Living Information Center. "But higher sales and property taxes can more than offset the lack of a state income tax."

Seven states -- Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming -- have no state income tax. Two states -- New Hampshire and Tennessee -- tax only dividend and interest income that exceeds certain limits. But many of the remaining 41 states (and the District of Columbia) that impose an income tax offer generous incentives for retirees. If you qualify, moving to one of these retiree-friendly areas could be cheaper than relocating to a state with no income tax.

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Estate Taxes for Estate Planning

2009-09-19T09:31:00.001-07:00

Posted by: Janielle Viggiano

A lot of the estate planning process focuses on reducing or trying to eliminate taxes. The government imposes a tax known as the Unified Gift and Estate Tax which puts a tax on the transfer of your property to others both during your lifetime and when you pass away. But not everyone will have to pay federal estate taxes. According to estateplanninglinks.com, “If your estate falls under the government exemption your trustee/executor does not have to file an estate tax return (Form 706) and pay the required tax within 9 months of your death.” It’s important to know what property will be included in your estate for federal estate tax purposes. The estate includes all property owned by the decedent at the time of death: investments, cash, real estate, vehicles, personal property, life insurance proceeds from policies owned by the decedent within three years of death, life insurance paid to the estate, retirement assets and business interests.

There are some estate tax exemptions that can be helpful. The first is personal exemption, The "personal estate tax exemption" allows a certain amount (or all) of a deceased person's estate to transfer free of the estate tax. Next, there is a marital deduction. According to findlaw.com. “A deceased person's estate can pass tax free to a surviving spouse, as long as the surviving spouse is a U.S. citizen and his or her interest in the estate is not a nondeductible terminable interest. A nondeductible terminable interest is an interest in the property that is held by someone other than the surviving spouse.” And lastly there are other deductions which include; against the gross estate include certain administrative expenses, funeral expenses, claims against the estate, certain taxes and other indebtedness and charitable bequests.

With everything that has to do with estate planning, you should always consult a professional. According to Forster, “Should you realize that your assets do fall under the category of taxable, you should start looking for an estate planning tax consultant. There are a lot of ways you can protect your possessions from taxation laws. Most of these methods include different types of trusts that will give you estate-tax exemption. Living trusts also allows you the freedom to control your possessions while living, and care for your spouse and/or heirs without having to go through months of probate.” It is best to have an estate planning adviser who can regularly update your trusts and will. He can also monitor any amendments in estate-tax laws and make any necessary adjustments. This way, your beneficiaries will be protected from any new laws that may prevent them from receiving your bequests.

Sources: http://www.estateplanninglinks.com/epl_course/taxes.htm

http://estate.findlaw.com/estate-planning/estate-planning-taxes/estate-planning-taxes-overview.html

http://www.streetdirectory.com/travel_guide/143756/taxes/the_benefits_of_estate_planning_tax_advice.html

Estate looting 101: how the goods are gotten when the will gets in the way

2009-09-15T14:51:00.000-07:00

Posted by: Jessie Bruyn

The looting of estate assets, also known as Involuntary Redistribution of Assets (IRA), can occur through the use of various probate instruments - wills, trusts, guardianships, powers of attorney - and with the actual acts configured in different ways. Guardianships or powers of attorney can provide for estate looting while a person is alive, but asset diversion can be perpetrated posthumously via wills or trusts. Whether these acts are instigated by greedy lawyers, disgruntled family members or wannabe heirs (or often a combination), the sad reality is that death doesn’t necessarily bring the closure one might expect. Death, even with the most meticulous of estate plans, in no way ensures the honoring of a decedent’s wishes or heirs' avoidance of IRA.

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Affordable New Life Insurance for Kids!

2009-09-15T10:23:00.000-07:00

Video

Life Insurance: A Component of Estate Planning

2009-09-15T10:13:00.000-07:00

By Nicholas Vanikiotis

Life Insurance is one of the many components when planning your estate. It plays a slightly different role than the other assets in your estate. It is intended to make sure your estate has value at the time of your death. Thus, it is important to understand the different options available and to make sure it is included and given the proper attention when planning your estate.

The two main types of life insurance are whole life and term life insurance. The main difference is that whole life is permanent while term life is not. Term life insurance is a short-term option, which is usually taken by people who are younger since it is inexpensive relative to whole life insurance. Term insurance is taken out for a specific purpose and only last for five to ten years. This may be a good option for a young doctor going to work overseas in a hostile area where death is more likely than at home. Another aspect of term insurance is the premiums increase over time.

Whole Life is the other option of insurance. This one is a lifetime commitment and attached by a savings component, which you have the opportunity to invest in different investment vehicles of your choosing. There are variations of whole life insurance that give you more freedom regarding the terms of the policy and how the savings component is handled.

http://www.investorguide.com/igu-article-348-life-insurance-types-of-policies-and-provisions.html

http://www.rhondasherwood.com/pdfs/EstatePlanning.pdf

http://www.newyorklife.com/nyl/v/index.jsp?vgnextoid=c4bc2f5a919d2210a2b3019d221024301cacRCRD

Estate Planning Help

2009-09-14T08:13:00.001-07:00

In these economic times more and more people are worried about their money and what will happen to it. There are a few options for you to explore. One of these is to visit a financial planner or specialized estate planner. Another option is to go to a seminar to learn what you can or should be doing.
The seminars have lawyers and professional planners who speak and answer your questions. They speak on topics from your estate to long term care (and LTC Insurance). Many seminars are free, while some are at a cost. It is a smart idea to attend one to get some basic information to mvoe you on the right track, but visiting a planner is still a must to ensure your estate and needs are met in the most efficient manner.

Posted by Chris Keeler

http://www.bristolpress.com/articles/2009/09/13/news/doc4aadb6a03741a150155695.txt

http://www.themorningsun.com/articles/2009/09/13/business/srv0000006367756.txt

http://pr-usa.net/index.php?option=com_content&task=view&id=262441&Itemid=33

Estate Costs

2009-09-14T08:06:00.000-07:00

Probate Planning To Minimize Estate Costs
Mon, Sep 14, 2009 12:00 AM EST

What is Probate?

When an individual dies intestate, the person's estate is divided among that person's relatives, and where there are no relatives, the entire estate falls to the government. Where there is a Will, all authority and property rights are governed by that Will and it takes effect upon the moment of death.

In principle, a properly drawn Will requires no further act to justify its legal existence. However, as a result of the often secretive nature of Wills, and the fact that the deceased is no longer available to verify the terms of his or her Will, third parties, such as financial institutions and land registry offices, will often require a higher level of certainty when dealing with the property of a deceased person. This certainty is provided through a process traditionally referred to as "probate", now called a "certificate of appointment of estate trustee". The process involves submitting the Will to the courts for verification. If there is no Will, the courts must appoint an individual called an "estate trustee without a will". With applications to the courts, both with or without a Will, it is necessary to pay the required court fees commonly known as "probate fees". With the exception of assets that were held jointly with a right of survivorship, court fees are calculated on the value of all personal property owned by a deceased anywhere in the world and all real property situated within the province. The basis for calculating the fees varies from province to province. In Ontario, the rate is calculated as $5 per $1000 of the first $50,000 of the estate and $15 per 1000 for the value of an estate over $50,000. It works out to approximately 1.5 percent.

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Posted by Chris Keeler

Planning for Boomers

2009-09-13T15:05:00.000-07:00

Posted by: Janielle Viggiano

For the vast majority of us who won't have taxable estates, the planning process should involve not just "financial planning" or "estate planning" but also "life planning," "long-term care planning (nursing home planning)," "death planning," "burial planning," and even "pet planning" if we own animals.

Recent times, however, don't bode so well for our progeny. When you couple a frail economy, a schizophrenic stock market, and the "running-on-empty" Social Security and Medicare systems with the rising costs of living, medical care, prescriptions and long-term care--then add in the prospect of fewer jobs--it's a good bet that boomers will inherit little, if anything, from their parents. And boomers' children may get even less.

At the same time, boomers live much differently than their parents. Many have incurred significant debt and live beyond their means, skip from job to job and wait for the retirement ship that may never come. In addition, because they have been marrying and having children later in life, boomers are still writing checks for children's college educations and incurring debt well into late middle age and beyond. And divorce and remarriage are further thinning assets and available cash flow.

What all this means is that seniors and boomers must develop plans for life, for the possibility of incapacity and for death. Creating and implementing this plan must be a multidisciplinary effort through a qualified team of professionals.

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Choosing the Right Estate Planner

2009-09-13T15:02:00.000-07:00

Posted by: Janielle Viggiano

When choosing an estate planner, there are four main things you look for. The first being trustworthiness. When it comes to choosing someone that is dealing with your finances and assets it is important to trust that person to not only deal with your stuff but to also steer you in the right direction of your planning. The next is professionalism. Your estate planning lawyer should be someone that is highly trained and recognized and that typically hold a certification or advanced legal degree. Thirdly is ethics. According to Donald West, “An ethical estate planning lawyer should consider all your needs and best interests above everything else. An ethical planner will always provide sound and legal advice and never recommend faddish or illegal scams to save or hide money.” Lastly, is commitment, your estate planning lawyer should have no problem staying late at work finishing the job and working with your accountant, insurance professional, and even your financial advisor. Below are some tips for choosing the best estate planner:

Referrals from friends

Check with banks

Look for names that repeat

Contact your state bar association

Interview candidates

According to About.com, “When it comes to estate planning, a fiduciary is a person or institutions given the power to act on your behalf if you become disabled and on behalf of your beneficiaries after you die. This includes personal representatives, successor trustees, health care agents, attorneys in fact, and guardians.” Choosing a fiduciary is similar to choosing an estate planner because you want to pick someone that you can trust, is honest, and loyal.

Sources: http://ezinearticles.com/?How-to-Choose-the-Best-Estate-Planning-Attorney-For-You-and-Your-Family&id=1092208

http://wills.about.com/od/choosingfiduciaries/How_to_Choose_Fiduciaries_for_Your_Estate_Plan.htm

http://www.estateretirementplanning.com/attorney.html

Step One When it Comes to Estate Planning

2009-09-12T08:55:00.000-07:00

Posted By: Laura Reginelli

DYING without a will can be a nightmare for those left behind.

If you have young children, it can be much worse if you have not stated who you wish to be their guardian in the event that both you and your partner die.

A will is a must even if you are young and invincible with not many assets, otherwise your mother-in-law may become the new owner of your stuff.

Scott Whitla, partner at McCullough Robertson Lawyers in Brisbane, says even though Michael Jackson's untimely exit sparked an outpouring of grief from around the world, his estimated $US1 billion ($1.2 billion) estate is posing a real legal thriller.

Click here to read full article.

Start Planning Now: Create your own Will

2009-09-12T08:51:00.000-07:00

By: Laura Reginelli

Nowadays making a will seems like common sense, right? False. Only around half the population creates one prior to their death. So what does this mean for you? Although many go without them, start planning now to ensure that your estate is handled the way you intended. It’s even possible to create your own will if you choose to.

A will has several different, yet equally important parts. If you were to have small children at the time of your death, a will would designate who would be the legal guardian. Wills also specify how ones’ assets will be dispersed after passing away. By creating your own will you will be able to appoint executors who will follow out the wishes stated in your will.

An individual who passes away without making a will is known as an intestate. When one is an intestate, the reality of your estate being divided up may not exactly follow your intentions. It is possible that if you have a spouse that not all of your property will go directly to him or her. Instead, this is limited up to a certain amount.

In order to avoid becoming an intestate, make a will by either consulting a lawyer, solicitor or even yourself. From there you must include general information yourself and where you live, names of family members, spouses and beneficiaries, a list of your assets, names of guardians and executors and signatures from both yourself and witnesses.

All in all, it pays to plan ahead for the future of your estate and your assets.

Sources:http://www.metlife.com/individual/life-advice/retirement-planning/making-a-will/
http://www.moneyextra.com/guides/making-a-will.html
http://www.legal-advice-centre.co.uk/private/making-a-will.html

Understanding the Importance of Estate Planning

2009-09-08T07:53:00.000-07:00

By: Jessie Bruyn

With today's economy in distress, it is becoming more and more important for us to think about our future and the future of our loved ones. No one wants to leave their friends and family with mountains of debt or unfinished business to take care of in addition to grieving for their loss. Many people think that estate planning is only for rich individuals. But as Heidi Brown comments in her recent Forbes article, it doesn't matter your age or how much money you h ave, creating a will cuts down on confusion and chaos after your passing.

There are currently new federal laws being under examination for change based on regulations applied to estate taxes which will be repealed in 2010. Roy Adams, professor at Northwestern University School of Law says "What happens in the next few months could cause some of the biggest changes we've seen in the trusts and estates field."

Often times people avoid creating wills and other estate planning documents (such as trusts and long-term care agreements) because of the sensitive questions and concerns that arise from related discussions. But it is especially important to get past the uncomfortable feelings to make this less stressful and run smoothly when a death does occur. Having a well planned will helps eliminate further stress caused after a death of a loved one and will be greatly appreciated by those you left behind.

http://www.forbes.com/2009/09/02/estate-financial-planning-forbes-woman-net-worth-guide.html

http://ifawebnews.com/2009/09/07/biggest-changes-weve-seen-coming-to-trust-and-estate-planning/

http://www.24-7pressrelease.com/press-release/planning-for-the-future-can-save-families-additional-grief-down-the-road-115199.php

Estate Planning: Online Information

2009-09-08T07:35:00.000-07:00

By Nicholas Vanikiotis

Let’s face it, pretty much everyone and everything today is online, whether it is banking information or social networking sites. Who will control such sites and gain access to them when you pass away? This is a question people should ask themselves, especially when we are living in a digital age. Putting account IDs and passwords in either a safety deposit box or a virtual deposit box is not a bad idea.

Imagine if you did not have any of your accounts or passwords stored for your beneficiaries. This would make it very tough for them to gain access to money and any other delicate information. In most cases they will have to get a court order that will cost your beneficiaries time, money, and the hassle of going through the process.

There are many online deposit options available. For example, Wells Fargo offers an online protection service of all your financial documents, which can include your will and any other estate plan documents you may have. They are also not very expensive at all. For example, keepyousafe.com only costs $50 per year for up to 5 gigabytes of storage. Thus, placing your account information in a secure place is a valuable investment and will ensure that your beneficiaries can gain access to your accounts after you pass away.

http://online.wsj.com/article/SB124796142202862461.html?mod=relevancy

http://www.atelier-us.com/consumers-and-ecommerce/article/wells-fargo-to-offer-online-safe-deposit-box-for-the-security-minded

http://www.nolo.com/legal-encyclopedia/checklist-29472.html;jsessionid=2CC16BF05710149684C5A4BCBDB28D42.jvm1

http://www.keepyousafe.com/pricing.php

Your Go-To Guide to Estate Planning

2009-09-08T07:33:00.000-07:00

BY: Jessie Bruyn

As many of us watch our portfolios dwindle and bills add up, it's tempting to put off planning for the future. Experts caution, though, that everyone--no matter their age or family status--needs to sit down and plan their estate.

Whether you are wealthy or debt-laden, you should tell loved ones and put into writing how you want your estate to be handled, says Debbie Whitlock, co-owner of Sound Financial Partners, a financial-services practice in Seattle.

Easy Organizing: Plan Your Estate

She says women often assume that such after-death planning is something only rich people need to do. Perhaps it's the word "estate." That's wrong.

"It doesn't matter how much money is in your bank account" or what age you are, says Whitlock, who works mostly with female clients. "Everyone needs to do estate planning. Without it there's a lot of confusion and chaos."

Estate planning isn't just about distributing cash. If you don't have a will, your children could end up guardians of the state. Heirs could end up liable for your debts. Loved ones will be saddled with your funeral costs with no hope of reimbursement until after a lengthy court process that can take years.

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Estate Planning Without Anxiety

2009-09-08T06:51:00.000-07:00

by nicholas Vanikiotis

WITH THE MARKETS in constant turmoil, planning for the here and now seems daunting enough; planning for the after-I-die is even less appealing. Nobody likes talking about death, telling relatives what they’re going to inherit or wading into jargon like terminable interest property. But if you haven’t figured out where you ultimately want your investments and property to go, you won’t control what happens to your savings when you die—and your family will be forced to make hard decisions without your guidance. The stretch between Thanksgiving and New Year’s is a great time for reflection and resolution. Here’s how to get on the ball.

First, take stock of everything you own: Your estate includes not just your personal belongings and investments but also your home, life insurance and retirement savings plan assets, as well as your share of any jointly owned property. You must not only decide where you want each piece to go after you die but also inform your loved ones. If this sounds difficult, start by literally cataloging how you have piled up your most important possessions; connect the work you’ve done with the things in your life that hold the most meaning. Using your life story as a narrative, write down what you’ve accumulated and develop a list of your most significant purchases and investments. Then when you divide up your estate, you will be working from a sense of pride in your accomplishments, not anxiety about death—and your heirs may be fascinated by the details that emerge.

Estate Planning

2009-09-07T12:25:00.000-07:00

By Chris Keeler

There are several elements in the estate plan. A few of the core pieces include you will, power of attorney, health care proxy and a trust. These elements help to protect you and your family in the event of sickness or death. You will have a handle on your assets and how they are to be distributed or maintained. When planning you must keep in mind tax laws, both state and federal. There are many ways to find tax favorable options in planning. Having a well thought out plan makes it easier on family and friends in the event of death and can avoid long legal issues to settle a non planned estate through probate. When going into plan your estate have your goals and objectives in mind as this makes it easier for an attorney to help you plan and draw up your estate plan.
IT is important for your plan to be in place to help both your children and their children. In the event of sickness it can put a strain on family who may have to take care of you. A plan in place can avoid this. If you are taking care of an elderly parent make sure to keep your finances in check first before worrying about the parent. Most times it takes a death or illness for people to realize the importance of planning. The earlier the better.

http://money.cnn.com/magazines/moneymag/money101/lesson21/

http://www.nmfn.com/tn/netserv--personal--page_estate_plng_intro

http://www.smartmoney.com/personal-finance/estate-planning/new-strains-for-the-sandwich-generation-21298/

Estates of disarray

2009-09-07T12:22:00.000-07:00

By Chris Keeler

Wealthy people who spend their careers building complex portfolios, with investments and assets all over the world, often overlook one key area of financial planning: how their estate will be passed on when they die.

Advisers say that no matter how closely engaged some investors are in their financial affairs during their lifetime, many are woefully unprepared when it comes to structuring their estate for their death. This partly reflects a reluctance to face the reality of death, but also time-pressed entrepreneurs and business owners often find the process of making a will a burden they can do without.

Estate Planning & Why You Must Start Now

2009-09-07T10:52:00.000-07:00

By: Janielle Viggiano

According to PriceWaterhouseCoopers there are several elements when it comes to estate and gift tax planning—“including gifting policies, the amount of property involved, resident or domicile status, the availability of deductions, and exclusions and credits. It’s important to understand US federal rules in this area; proper planning should also include a review of the rules in the state of residence, as those rules may also influence planning.” With estate planning you can determine:

How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
When and under what circumstances it makes sense to distribute your assets during your lifetime.
How and to whom your assets will be distributed after your death.
How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.

It is extremely important to plan ahead so that there is no question or doubt as to the future of your assets and estate. It doesn’t matter how much money you have or how old you are, everyone needs to plan their estate. If you’re married you need to sit down with your spouse and discuss your wills together and how you want distribute your assets. Although planning for your future can be somewhat scary and depressing you must take matters into your own hands, not only for yourself but for your loved ones.

Sources: http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581&id=2206
http://www.forbes.com/2009/09/02/estate-financial-planning-forbes-woman-net-worth-guide.html
http://www.pwc.com/en_US/us/private-company-services/pdf/gyb_vol_60_estate_planning.pdf

Planning for the Future Can Save Families Additional Grief Down the Road

2009-09-07T09:46:00.001-07:00

Posted by Janielle Viggiano

It is estimated that as much as 10 percent of the elderly population live on wages at or less than the national poverty line -- in 2009, $10,830 for a single person; $14,570 for two people for 2009. Even those who are living above the poverty line may not have the financial resources to pay for much needed care, especially if they need long-term care in an assisted living community or nursing home. This leaves the financial burden falling to their families, who also may not have the means to cover all of the costs.

One of the ways families can help ease any future financial stress is by sitting down with their loved ones and creating a comprehensive estate plan. This plan can include setting aside resources to pay for not only any possible long-term care needs, but also the day-to-day expenses loved ones may need in their golden years.

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Social Security Benefits See No Rise on the Horizon

2009-09-04T11:56:00.000-07:00

Economists are famed for the phrase “on the other hand,” and the sobriquet fits in looking at the most recent report on the Consumer Price Index.

While Friday’s report on the CPI was benign -- no change in the overall price index and a modest change in the “core” index -- it nonetheless could be a downer to millions of people collecting Social Security payments

Under provisions of a 1975 law, Social Security benefits are adjusted each year based on the year-to-year change of the Consumer Price Index for Urban Wage Earners (known as CPI-W). For every year since the law was enacted, benefits have been adjusted upward each January, with a 5.8% boost at the beginning of this year, the largest since 1982.

Click here for full article.

Posted By: Laura Reginelli

Estate Planning: Planning for a Safer Tomorrow

2009-09-04T11:32:00.000-07:00

By: Laura Reginelli

No one obviously likes to think about their death; however, sometimes it is necessary to plan ahead for the day that you will no longer be around. According to www.bloomberg.com , estate planning is “the preparation of a plan to carry out an individual's wishes as to the administration and disposition of his/her property before or after his/her death.” With proper planning, your wishes about how your assets should be divided up will be followed properly when the time comes.

Some helpful tips to tackle estate planning include:

· Go through and create a list of all your assets. Then estimate a monetary value associated with each of the assets.
· Plan accordingly for how any sort of debt you may have had in your life will be taken care of in the case of an event where you would die.
· Create a will and determine how your assets will be divided up. This will include naming a guardian for your possible children as well as an executor who will be given the duty to carry out the will.
· Purchase life insurance as a safety blanket for the future.
· Make sure to update this information if need be.

Sources: http://www.bloomberg.com/invest/glossary/bfglose.htm
http://wills.about.com/b/2009/02/09/estates-planning-tips-for-2009-do-you-have-a-debt-plan.htm
http://www.pueblo.gsa.gov/cic_text/money/estateplan/planning.htm

Estate Planning Softwares

2009-04-27T11:48:00.000-07:00

By Yulun Hung

Estate planning software can be a smart way for people to save thousands of dollars on lawyers but it is not for everyone. Estate planning software is usually more suited for people that have estates worth less than $2 million, which is the amount federal estate tax is involved. Another recommendation is that people who have more than one marriage should not use estate planning software. Basically, if your estate plan is going to be complicated, a lawyer will be the better at handling your case. Estate planning softwares usually only cover the basics. If you think software can be right for you, here is a list of programs I got from The CPA Technology Advisor website that you can consider:

CCH Tax and Accounting - ViewPlan Advanced
"CCH Tax and Accounting’s entry into the estate planning market, ViewPlan Advanced, runs under Windows 95 or newer operating systems and requires a Pentium processor, VGA display, CD-ROM drive and a minimum of 14MB of hard disk space. I interviewed several users who were happy with the product."

BNA Software - BNA Estate & Gift Tax Planner
"The BNA Estate & Gift Tax Planner is the leader in estate tax planning, which is something we have come to expect from a recognized name and leader in all types of tax planning. This spreadsheet program is driven by solid foundations. The BNA Estate & Gift Tax Planner is a consistent application, enabling confident presentations. If you have used any other BNA program, you will immediately be ready to use the BNA Estate & Gift Tax Planner."

Thomson Fast-Tax — zCalc Tool Box Suite
"Thomson Fast-Tax offers the zCalc Tool Box Suite, a collection of analytical programs and other tools that act as an add-on to Microsoft Excel, providing additional assistance to estate planning professionals through features that enhance tax and estate planning strategies. "

Emerging Information Systems, Inc. ' NaviPlan Extended
"EISI introduced NaviPlan in 1996 and boasts a user base of more than 70,000. NaviPlan is another product in this review lineup that takes a broader approach to the planning process, including both goal-based financial planning as well as cash flow-based estate planning, which focuses on tax reduction and maximizing the amount of assets that can be passed to heirs. Since this review series features Estate Planning software, only the estate planning features will be highlighted. However, this package includes a lot more that you can learn about by reviewing the company's online information or by requesting a 30-day demo."

Sources:
http://www.cpatechnologyadvisor.com/article/article.jsp?id=731&pageNum=2
http://www.getrichslowly.org/blog/2007/10/31/a-brief-overview-of-estate-planning-software/
http://www.cpatechnologyadvisor.com/print/The-CPA-Technology-Advisor/Estate-Planning-Software-Review---2004/1$269

What are the components of an Estate Plan?

2009-04-24T09:27:00.000-07:00

Written by: Liwin Troy Lee

Even though most estate plans are different from one another, they have similiar components. They include a will, a living will, a letter of last instruction and any trust instruments deemed necessary.

Will
The most imporant part of the estate plan is the will. A will is a legal document that transfer property when the property owner dies. The person who receives something from the estate is the heir. The will can also specify who will care for the minor children or dependent of the person who died.
In most states it is required that the assets be distributed after the person has died. If the person dies intestate, that is without a will, there are rules within each state to decide how the assets of the deceased will be distributed. If a person dies without a will and no living relatives, the assets of the deceased will become property of the state government through a legal rule called escheat.

Living Will
A living will is a document that specifies a person's preferences as to the medical care he or she would want to receive is they are unable to make the decision for themselves due to terminal illness, physical or mental disability.
The most difficult part in drafting the will is deciding what limitation to place on the medical care you're willing to receive.
A durable power of attorney is a legal document which designates that another person makes a decision for you in an event that you are unable to do so.

Letter of Last Instruction
The letter of last instruction is not a legal document. It provides useful information for the survivors of the deceased. The letter could be used to communicate the funeral arrangements, identify people to notify and important information such as bank account information. The letter should be copied and be distributed to everyone so everyone can find it when the deceased dies.

Trusts
Trust is an entity that holds and manages assets on behalf of someone else.

Sources
Top things to know
Estate Planning for Everyone
The Estate Plan

Estate Planning for Owners

2009-04-23T07:57:00.000-07:00

Posted by Yulun Hung
Written by Burns Associates

If you’re a business owner, you probably have plenty on your plate just meeting each day’s challenges, but you’d be well advised to do some longer-range planning. About 70 percent of family-owned businesses fail to make a successful transition into the second generation. About 90 percent fail to be successfully transferred to a third generation of family members. These statistics reveal both the difficulty of transferring from one generation to the next and the lack of planning for successorship.

Small business owners have a host of special needs. Who will take over the business after you die? Do the surviving spouse or the children get control of the stock? Which ones run the company, and which merely share in the profits?

This article will look at some of the issues that you and your lawyer should discuss if you want the business to continue after your death. In a later article, we’ll look at some of the issues involved in selling your interest in the business and the best way to transfer ownership to the new owners.

Click Here to Read More.

The Trump tells us how it is done

2009-04-22T15:12:00.000-07:00

By: Xavier Guerrero

Estate Planning: What You Need to Know

2009-04-21T12:51:00.000-07:00

Posted by: Liwin Troy Lee
BY: Paul Sullivan

Estate planning rarely gets the attention it should get.

Saving for your children’s education, purchasing a second home, deciding when and how to retire — these are all topics that people talk about with their friends and their financial advisers. But deciding what happens to whatever is left of your money when you die is often passed over. It shouldn’t be, though, because it is crucial to a financial plan.

But not discussing something that is going to happen will not stop it from happening. And at some point, someone is going to have to sort out your estate — regardless of how big or small it is. Here are some of the key issues that should be addressed:

WILLS Everybody should have a will, and people who are married and/or have dependent children are inexcusably foolish if they do not. There are significant issues that only a will can clarify. One of the biggest is who will take care of the people you love, and how? You may have told your best friend that he will be the guardian of your children if you and your spouse die in a plane crash, but unless you spelled out your wish in a will, there is no guarantee this will happen. If both parents die, it will be up to the state to decide, and they will chose based on family.

If you say this is what you wanted anyway, you’re missing the point. Which parents would you want to raise your children — yours or your spouse’s? Or if it is a sibling, do you care if your children go to the wealthy one in Seattle whom you always fought with or to the financially strapped but loving one in Memphis with two children of his own?

Some may argue that wills are expensive. But there are plenty of online sites to help write a legally binding one for little cost. Two popular destinations are RocketLawyer and LegalZoom.

If you are wondering what will happen to your money if you die without a will, go to mystatewill.com. It shows what happens to your assets in each state if you die without a will. The picture it paints can be scary and may convince the holdouts that paying a fee online or spending $1,000 for an actual lawyer to draft a basic will is well worth it.

Click here to read more

How to become an estate planner?

2009-04-17T19:03:00.000-07:00

Written by: Liwin Troy Lee

An estate planner is someone who plan for individual or corporate estates. Estates are collection of assets a person or entity obtained during their lifetime. Estate planning include drafting a will or trust fund, tax planning and planning for the amount of money you contribute to charity after you die.

1) Complete an advanced degree in law, finance or accounting. All three of those degrees gives you an education to make you qualify to work as an estate planner.

2) Enroll in a Certified Estate Planner Program. One of the most prestigious programs is National Institute of Certified Estate Planners.

3) Complete the course work to receive your Certified Estate Planner Degree. Some of the coursework will cover estate planning, gifting, joint ownership accounts.

4) One you pass all your coursework, you are qualified to sit for the Certified Estate Planner Exam. the exam consist of 100 multiple that covers all the material you have learned in your course work. You can take the test as many times a you want. There is, however, a $10 retesting fee.

5) After you get your certification. You must meet all the degree requirements. Generally you have to take 8 to 16 CPE credits every two years. An example of a CPE course includes advanced estate planning.

6) Agree to follow ethics set by the National Institute of Certified Estate Planners. This includes reading issues on professional ethics held by the organization such as not revealing you client's confidential information or engage in illegal activities. You have to sign a statement saying you have read the document.

7) Start promoting yourself as a certified estate planner.

Sources
National Institute of Certified Estate Planners
How to become an estate planner
Accredited Estate planners

A little story about estate planning 101

2009-04-16T19:35:00.000-07:00

Posted by: Liwin Troy Lee
Written by: Chelsea Victor

LYONS – A guy walks into a bar. He recently found out that his elderly father will be passing away in a few years and leaving him a very large inheritance. Using this new information as leverage in the dating market, he decides it’s time to find someone to settle down with.

So guy looks around the room and locks eyes with this stunning young woman. He figures she’s probably out of his league, but walks up to her with his new boost of confidence and says, “I may not look like much now, but in a few years my father will pass away and I will have millions. Would you be interested in going to dinner sometime?” She’s interested, and gets his name and number. A week later, she became his step-mom.

What does this story illustrate? Sometimes women are better estate planners than men. Or, more appropriately, effective estate planning can protect your children’s inheritance. According to recent statistics, seven out of ten Americans do not have a will. This is a staggering amount considering the importance of having a will and medical durable power of attorney, the incentive to simplify the probate process, and the overwhelming availability of estate planning attorneys.

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Plan Ahead

2009-04-09T09:20:00.000-07:00

By Yulun Hung

It is very important for people to take action on estate planning ahead of time. A lot of people tries to avoid the topic until something bad happens when they end up in the hospital. By then, it might already be too late. Even if they are still able to make their wills, the legal system of United States might prevent you from doing so!

For example, if a person is send to a nursing home and has symptoms of dementia from Alzheimer's, there is a law that states in order to sign legal documents, one must be able to think clearly and understand the nature of his or her actions. To have the mental capacity to sign a will, one must know simple things such as the who, what, and where.

If a person is not qualified to sign his or her will, a family member, relative, close friend, the attending doctor, or a court appointed guardian may be asked to make the decision on your behalf! Most people will probably not want someone else make such an important decision for them, so planning ahead is a very smart move. It will give the person a peace of mind to know that your wishes will be carried out.

Sources:
http://www.url.biz/Articles/Article-3498.html
http://www.thetimesherald.com/article/20090405/NEWS01/904050317
http://wiserwomen.blogspot.com/2008/02/estate-planning.html

Estate Planning for Pets

2009-04-09T09:14:00.000-07:00

Posted by Yulun Hung

Written by Jessica Rivelli

St. Petersburg, FL -- Many people will remember the infamous recent story of heiress Leona Helmsly and her dog "Trouble," who inherited a fortune when Ms. Helmsly died.
In the real world, when everyday pet owners become incapacitated or even worse, pass away, what becomes of their pets? Without estate planning, the pets may be taken to shelters or even left for dead.
Starting at around $250, some tax and estate attorneys can help plan pet trusts and pet care. In this planning, an attorney can help designate a "backup person" who will care for a pet, which includes feeding, housing and paying for medical expenses. Usually a caretaker is a family member for friend.

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Do I need Estate Planning?

2009-04-08T20:07:00.000-07:00

Written by: Liwin Troy Lee

What is Estate planning?

Estate planning is a long process. It involves your family, people close to you and possibly a charitable organizations. Estate planning deals with your assets (property) and determining the owner of the assets after you die.

From real estate planning, you determine how and whom will manage your asset when you are not able to manage it, when to distribute the assets, who receives your assets after death, and how your healthcare decisions will be managed when you are not able to take care of yourself.

Many people think that estate planning is just writing a will. Estate planning involves more than that. It involves financial, tax, medical and business planning. Writing a will is just the beginning. You need documents to support your will.

What is involved in estate planning?

The first thing you need to determine is your assets and their approximate value. Second, you need to determine who will receive those assets. Third, you need to determine who will manage those assets after you pass away. Fourth, you need to determine how you should be care when you are in old age and sick. Finally, you want to determine what happens to your remains when you die. Once you have all the answers to those issues, it is then time to see your lawyer.

Who needs estate planning?
You do. You need to have someone manage your assets whether it is big or small when you are unfit to do so. If you asset is small, you should decide who will get your assets after you die. If you assets are big, you should speak with your lawyer and decide how your assets should be handled.

Sources

Estate planning
Estate planning- what you need to know
estate planning

Unusual Trusts Gain Appeal in Unusual Time

2009-04-06T23:34:00.000-07:00

Posted by: Liwin Troy Lee

By: Mike Spector and Anne Tergesen

It may seem hard to come up with a financial product with a name as unattractive as an "intentionally defective grantor trust." Yet these days, in the world of estate planning, those words denote one sexy vehicle.

That's because this aggressive strategy -- which can be used to move money out of taxable estates and transfer gains to heirs tax-free -- is especially appealing at a time like now, when asset values have fallen sharply and interest rates are near historic lows.

Many estate planners warn that these trusts carry more risks than other accepted planning vehicles. The Internal Revenue Service hasn't blessed defective grantor trusts, and has challenged their authenticity in the past. What's more, if your assets perform poorly in this type of trust, you could get hit with greater losses than you would suffer with some other popular wealth-transfer techniques.

Still, most defective grantor trusts have withstood IRS scrutiny, and many estate-planning lawyers report seeing increased interest in them this year, in the wake of the tumble in the real-estate and stock markets. Neil Kawashima, a partner at McDermott Will & Emery LLP, says he expects he'll increase the number of these transactions he executes this year by nearly a third. Carl Waldman, an estate-planning attorney in Westlake Village, Calif., says he has set up about 25 of these trusts in the past 12 months, versus "probably no more than six" in the prior year.

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Do I Need Life Insurance?

2009-04-01T14:58:00.000-07:00

By Yulun Hung

Life Insurance can be extremely beneficial to some people, but it is not necessary for many people. Life insurance can be expensive, and people have to consider his or her current financial position and loved ones as well before deciding to buy life insurance.

Here is a list of questions people should ask themselves before buying a life insurace:

How many people that I care about depend on my financial support?

How much money do people that depends on me need?
How long will it take for people that depends on me become self sufficient?

After deciding how many people and the amount of money for a life insurance, people should start figuring out the assets that will be avaliable for loved ones after they pass away. It is important to figure out an approximation of time these assets will transfer over to inheritors. Make sure these assets do not have substantial debts on them. Also, avoid probate and estate taxes as much as possible.

Sources:

http://www.nolo.com/article.cfm/pg/5/objectId/8B3B468D-B586-4653-BCA59430C001C6D6/catId/359CBC3A-078B-4DB7-A9F02D9E25A13D84/309/140/ART/

http://money.cnn.com/magazines/moneymag/money101/lesson21/

http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581&id=2206

Your 5-minute guide to estate planning

2009-04-01T14:22:00.000-07:00

By MSN Money staff

Posted by Yulun Hung

Even though most estates won't owe Uncle Sam, estate planning is essential for protecting you and your loved ones.

Most important? Providing for minor children. Your will should name both a guardian and a financial trustee for your kids in case you and your spouse die.

To provide checks and balances, the guardian and the trustee should not be the same person.
Don't name a couple as guardian. They could split up or disagree about what's right for your child.

Your child's other parent, even if you're divorced, will get custody if you die, unless that person is unfit because of mental illness or addiction.

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How to Prepare for Real Planning

2009-04-01T11:51:00.000-07:00

Written by: Liwin Troy Lee

1. Discuss with your spouse how you want your estate to be handled if you both die or one dies before the other. You should map out both scenarios.

2. Determine if you want your estate to stay within the family. That is, do you want your children's spouse or their children to inherit any part of your estate.

3. Determine if you want you children to inherit everything. That is, do you want to give everything to your children when you die or do you want to provide the income over a period of time. If you pick the latter, you have to decide how much to give out each period.

4. Discuss what will happen to the estate if you and your spouse gets divorced later in life. That is, will the estate still include your current and children or would you include your future spouse and future children as well.

5. Decide whether you want to include charities as part of your estate planning. If so, start looking for charities you would give to and for how much.

6. Look for a reliable financial adviser and trustee to handle your affairs. This is especially important if your children are minors when you die.

7. When you have all this information. You can then prepare your will.

Sources
How to Prepare for an Estate planning Meeting
12 Easy Steps to preparing your estate plan
Preparing for an estate plan

You'll want to read this before you die

2009-03-30T13:00:00.000-07:00

By Kimberly Matas
Posted By: Liwin Troy Lee

Businesswoman Belinda Mossor was reeling from the unexpected death of her father, Harry, in 1998.

"It was total chaos," Belinda Mossor said. "My father was ex-military and ex-civil service, and he retired with 32 years in the military and 20-some in civil service. When he died, he had absolutely nothing in place. There was no will, there were no directives and it was extremely hard.

"He had not stipulated whether there was a life- insurance policy to help with the financial burdens," Mossor said. "He did not have anything in place for what he would want for burial or cremation. He just felt that Social Security or Medicare and the value of the house that they lived in would take care of her (Marjorie Mossor) and take care of everything."

It took three years for Mossor and her mother to sort out Harry Mossor's finances, insurance and other assets. Eleven years later, Marjorie Mossor is still learning new things about her late husband's finances. Recently, she received a letter from an insurance company informing her of dividends from a policy that belonged to him.

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The Smartest Investment During a Recession

2009-03-25T17:32:00.000-07:00

By Ryan Dennin

In desperate times like these everyone is focused on where they can squeeze and extra penny or two. While it may be wise to cut down on trips that take up a lot of gas, or that extra trip to star bucks, it is important to not lose focus on the one thing that is guaranteed to happen. It may sound harsh but everyone will die someday and it is important that an estate plan be completed to ensure the people most important to you are taken care of. The recession may be the ultimate time to take care of the Estate Planning process that so many people have put off for all those years. While writing a sound estate plan may be an added expense it is not something that you don’t want to have in place. The government has a plan for you if you die “inestate” (without a will or trust) and having a plan ensures that YOU make the decisions to what happens to your assets not them. Another important point is putting a plan together for what happens to your assets isn’t an investment that will lose money during this time. It will ensure those items you own are there for the ones you love the most when you pass away. While many people may ignore investing and saving during a recession, an estate plan is not something I recommend passing on during these tough economic times.

Sources:

http://www.michiganestateplanninglawyerblog.com/2009/03/estate-planning-in-a-recession.html

http://ezinearticles.com/?Dont-Let-a-Recession-Control-Your-Estate-Plan&id=1982625

http://www.familybusinessinstitute.com/index.php/recession-planning?c65a6b5fa5030f7344292032b2ced578=a316e3ef6babba5ecdaacbfc37d06ae2

Choosing an Executor

2009-03-25T13:38:00.000-07:00

Posted by: Ryan Dennin

For the most part, you're free to choose virtually anyone that you want to act as executor of your estate – within certain limits, of course. As long as your choice resides within these limits, the court is obliged to follow your preference in most cases. Generally speaking, the limits are these: you may not appoint a minor, an incompetent person or, in many states, a convicted criminal. Click here to read more

An Outdated Estate Plan is a Worthless One

2009-03-25T13:13:00.000-07:00

by Greg Lipinski

There are a number of things that can occur in a person’s life that effect your estate planning. Obviously, death is one of them; hence the purpose of this blog. In that situation, the most notable effect is the need to implement your plan. However, people might have the misconception that because they have thoroughly completely their estate planning, that everything is safe. The only thing left is to kick the bucket and have it go into effect. That couldn’t be further from the truth.

It is extremely important to update your estate planning with any major happenings in your lifetime. If you don’t, there could be a number of problems that are run into when it comes time to allocating your assets to the necessary parties. Some events might include:

• Getting married, divorced, remarried, or any other legally recognized change in relationships
• The purchase of new major assets. These might include new cars or property.
• The birth of (or discovery of) children
• Changes in laws and regulations

Essentially, any major even that occurs can have an effect. With the ones above, you are simply solidifying the fact that your new wife becomes your heir, or that your ex-wife no longer inherits. Any change in your legal status or purchase of major assets need to be allocated. It won’t be assumed that because one of your cars is going to your wife that the new car purchased a few months before your death immediately goes to her.

As for laws and regulations, changes in the economic environment might cause you to either protect or take advantage of new tax rates, rules, etc. The idea isn’t only to leave your heirs with your assets, it is to leave them with as much of the assets as Uncle Sam will allow.

Above are just a few examples of why you should constantly stay updated on your estate planning. If you’re not sure if an event in your life is worth changing your estate plan over, err on the side of caution and review it. Take a look at it and ask yourself if it has even a miniscule effect on it. If it doesn’t, then you’re in the clear. If it does, augment it as soon as possible. You never know when the worst could happen.

Resources:
http://money.cnn.com/magazines/moneymag/money101/lesson21/
http://speculationrules.com/philosophy/estateplan.php
http://www.walletpop.com/retirement/article/_a/bbdp/estate-planning-and-taxes/92726

Bad economy boon for tax lawyers

2009-03-25T11:06:00.000-07:00

Copied and Pasted by Rie Umano

The poor economy has many lawyers twiddling their thumbs - or getting pink slips - as legal work dries up. But the economic crisis has created a business boom for one subset of the legal industry: small to midsized tax practices.

"I am not suffering," said Charles Rubin, a tax attorney with Gutter Chaves Josepher Rubin Forman Fleisher in Boca Raton, Fla., and author of the blog Rubin on Tax. "I'm as busy as I've ever been."

Events over the past year have created a perfect storm of sorts, forcing small to midsized businesses and the people who run them to seek legal advice on a host of tax and estate planning issues.

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Estate planning mistakes

2009-03-25T10:59:00.001-07:00

Posted by Rie Umano

It is not always fun task, but estate planning is necessary to transfer your assets to your heirs effectively. You might be able to avoid high federal taxes and estate taxes if you plan properly. It is always better to plan earlier and constantly check your estate planning as things change. However, even if you planned already, there are some mistakes you might make possibly. Here are some examples.
1. Failing to make an estate plan – when it comes to basis estate planning, it seems like most people simply avoid doing it. They just do not want to deal with death, complicated family situation, misperceived expensive costs and many other reasons. However, no matter what your situations are, you should start creating your estate plan. Otherwise, you will end up paying more money and hurting your family after you die. Make sure you keep updating your estate plan, so that it will work that way you intended.
2. Forgetting about little things – many people tend to forget their personal effects to the plan. Your jewelry, art work and collectibles can affect your estate planning as well.
3. Choosing wrong fiduciaries – many people tend to chose wrong people or institution to serve as their Personal Representatives or Attorneys. Choosing the right fiduciaries is pretty significant when you create your estate planning. Your plan would not work well if your fiduciaries cannot work efficiently.

Sources:
http://www.allbusiness.com/personal-finance/retirement-estate-planning/4005-1.html
http://wills.about.com/od/estateplanning101/tp/fiveplanningmistakes.htm
http://www.bankrate.com/brm/news/Financial_Literacy/Nov07_estate_plan_mistakes_a1.asp?caret=72a

Before Your Parents Say 'I Do' Again

2009-03-25T10:21:00.000-07:00

Posted by Brian Redhead

It's rare that an inheritance passes from one generation to the next without leaving some scars. But smooth transitions are becoming even rarer thanks to the growing influence of a new player: the second spouse. As Americans live longer, they're more likely to move into second marriages, and legal experts and financial planners say the resulting friction with the kids is steadily mounting. In more cases grown children are going to court against their parents even while they're still alive, only to run up against a legal framework that leaves them with surprisingly few rights compared with their parents' new spouses. The once-sleepy field of trust and estates law is now brimming with hardened litigators. In Texas, personal-injury lawyers in search of big paydays have begun taking on will contests. And just as court squabbles are on the rise, so are prenups and sophisticated trusts that are designed to forestall them.

Naturally, there are more than bruised feelings at stake. The generation that’s growing old now is arguably the wealthiest in history, and many of their baby boomer kids are counting on inheriting some of their dough. But that legacy is under threat. The stock market’s nosedive and the housing slump have combined to wipe out $15.5 trillion in net worth in the last two years, according to the Federal Reserve. Along with this financial tumble, a growing number of would-be heirs face the biggest threat of all: a new stepmom or stepdad. According to a 2007 study by two Wharton professors, people over 65 are now more likely to be married than ever before, in large part because of a spike in late-in-life marriages. Even as the inheritance pie is shrinking, more family members are fighting for a piece of it.

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Estate Planning for Your Pet

2009-03-25T10:19:00.000-07:00

Post By: Dana Sunderlin

When dealing with estate planning, many people focus on the people and physical assets that they will be leaving behind when they die, but many of them do not take their pets into consideration. It has been found that a pet can suffer from sever anxiety when their owner dies. It is important that there will be someone around that knows your pet’s diet and medications, and that can keep them in their usual daily routines. In addition to having high anxiety, many pets wind up in shelters or on the streets after their owners pass away. To keep this from happening to your pet, make sure you include your beloved animal in your estate plan!

The simplest way to ensure the safety of your pet after your death is to find a friend or family member who is willing to take care of them, and to have an attorney draft a will leaving them to that person. You could also give the right to the executor of your will to choose amongst a number of people when the time comes. Another important thing to remember is that it will greatly help the person who is willing to take care of your pets if you leave them a certain sum of money to help with the cost of doing so. Creating a trust for your pet is also an option. Many states now have “pet trust statutes,” which allows you to set up a trust along with name a trustee and caretaker for your pet (s). Although there are two different types of pet trusts, many pet owners choose to use a traditional trust, which gives you more power and control over the terms of the trust.

Sources:

http://www.professorbeyer.com/Articles/Animals.htm

http://www.newyorktails.com/estateplanning.htm

http://www.mypeticulars.com/

Living Trusts vs Wills

2009-03-25T09:41:00.000-07:00

By Steven Muller

A living trust is a legal entity that can own property and direct distribution of that property after a person's death. One of the benefits of a living trust is that it isn't subject to probate, or its associated costs and delays.

If you establish a trust, you appoint yourself as the initial trustee and primary beneficiary of the trust. You retain full and complete control over the property during your lifetime. In the living trust document, you appoint the individual or charities that will take on the role as successor trustee when you can no longer act as the initial trustee. After death all your assets are given to your beneficiaries without the hassle of probate. Probate is the process of properly transferring the estate to the rightful beneficiaries. This process is also used to collect any taxes due on the transfer of the property.

The property from the estate can be also transferred to the intended beneficiaries via a will. A living trust is sometimes referred to as a "will substitute." Although, in some respects, it does take the place of a will, a will is still usually necessary to distribute assets outside the trust, and to nominate guardians for minor children. The major difference between a will and a living trust is a will does not avoid probate and does not protect the management of your assets in the event of you should become debilitated during your lifetime.

Sources:

http://www.legalzoom.com/legal-articles/will-vs-living-trust.html

http://www.livingtrustvswill.com/

http://www.legalhelper.net/living-trust-vs-wills.aspx

In Rough Economic Times Don't Panic

2009-03-25T09:36:00.000-07:00

By: Jeremy Radnor

In life, it is only natural to react to the environment around you. In todays financial environment, people are reacting negatively. The news torments viewers daily with poor economic performance, dipping stocks, and major financial institutions falling apart and behaving poorly. In the past year, the net worth of American households have dropped by the most ever in over half a century. The FED reported a 9% drop in American net worth in the third quarter. America's net worth as of April-June 2007 was valued at over $64 trillion. Today, that value is down to just over $51 trillion.

Despite things being so bad, it is important that investors not over-react. Financial professionals have identified 5 investing mistakes not to make during this rough patch in the economy:

1. Dont wait it out - This doesnt mean dump your portfolio but it may be a good time to reallocate your current funds. Also, make sure to diversify your current position.

2. Dont dump your 401(k) - Dont pay too much attention to its current situtation but dont forget about it either. Dont pass up the chance for free money with employee matching plans. Consider just putting in up to the matching point.

3. Dont hide behind CDs - Although they are relatively safe, they yeild very low returns and should be considered short term.

4.Dont think outside the box - Get back to basics. Now is not the time to get creative and maybe refer back to investments that do well when stocks are performing poorly (such as gold).

5.Dont favor yor mortgage over your emergency fund - In case you lose your job, investors need to make sure that emergency stash is still there and available for at least 6 months.

Finally, it is always tempting to focus on the now. However, it is more important, especially financially speaking, to plan for the long term and the future. Keep track of your investments. Based on your current financial position, try to predict where you will be by retirement and if you will have enough to live the way you want to when that day comes.

Links:

http://www.msnbc.msn.com/id/29657771/

http://www.msnbc.msn.com/id/29467436/page/2/

http://www.msnbc.msn.com/id/21563675/

Estate Planning in a Down Market

2009-03-24T16:19:00.000-07:00

by Amy Feldman
Posted by Greg Lipinski

When times are tough, people tend to hold on to what they have that much more tightly. But for those who can get beyond that psychological response, there's a silver lining in today's combination of depressed asset values and low interest rates: Transferring assets to the next generation has rarely been less costly.

That's because depressed valuations allow you to get those assets out of your estate and over to your kids with less gift tax, while low interest rates create additional advantages for those who use certain wealth-transfer vehicles or intra-family loans. In fact, with the Federal Reserve cutting interest rates, the rates set by the Internal Revenue Service for use in one of the most popular wealth-transfer vehicles, known as a grantor retained annuity trust, or GRAT, is now at an historic low of 2.4%, down from 3.4% in December. The rates for intra-family loans are at similar historic lows, now just 0.81% for a short-term loan.

"If the markets are going to recover, then let that recovery be on your kids' balance sheet rather than yours," says Don Weigandt, a wealth adviser at J.P. Morgan Private Bank in Los Angeles. "The major issue is psychological. It's the brain battling the heart."

To read on, click here.

No More Too Big to Fail

2009-03-23T15:00:00.000-07:00

Posted by Brian Redhead

The Obama administration is on the verge of rolling out a series of new regulations to prevent a repeat of the still rampaging financial crisis. But it’s not enough for policy makers to simply propose expanding the Federal Reserve’s enforcement power, or putting forth new rules for regulating derivatives, exotic securities and hedge funds.

What’s needed now more than anything, is a plan to ensure that no financial institution is ever again “too big to fail.’’ The seemingly endless bailouts of American International Group(AIG), Citigroup(C)and Bank of America (BAC)are all premised on the fear that if any one of these financial services giants were to fail, the global economic fallout would be catastrophic. And as distasteful as it may be, regulators and policy makers are correct that there’s no other choice than to save these firms.

But once these financial behemoths no longer pose a systemic threat, they need to be dismantled and dramatically shrunken. And the same must go for banks that aren’t on the critical list. So far, JPMorgan Chase & Co. (JPM)has managed to avoid becoming a financial basket case like Citi or Bank of America. But the world economy cannot risk a situation where some future crisis puts JPMorgan on the edge of disaster. If that means forcing relatively healthy banks to get smaller—either through voluntary divestures or old-fashioned trust busting—so be it.

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Bolting the Stable Door

2009-03-23T14:56:00.000-07:00

Pasted by Brian Redhead

“THE TEMPEST”, or “A Midsummer Night’s Dream”? Scenes from both plays looked down on Lord Turner in the Drapers’ Hall as he explained on March 18th how the Financial Services Authority (FSA), the financial watchdog he chairs, will change and get much tougher. He chose to speak in the heart of the once-glorious City rather than in the casino-country of Canary Wharf, London’s wholesale financial district. There, the FSA has made itself perhaps too much at home.

His review anticipates a meeting of G20 leaders in London on April 2nd, which has financial regulation high on its agenda. European, indeed global, co-ordination is an important component of any effective new approach. But no matter what anyone else does, the FSA, whose reputation has been battered by the collapse of various banks under its supposedly watchful eye, must clean up its act at home, as it freely admits. This is a start.

Click here to read more.

U.S. Rounding Up Investors to Buy Bad Assets

2009-03-23T14:29:00.000-07:00

Copied and Pasted by Rie Umano

WASHINGTON — Obama administration officials worked Sunday to persuade reluctant private investors to buy as much as $1 trillion in troubled mortgages and related assets from banks, with government help.

The talks came a day before the Treasury secretary, Timothy F. Geithner, planned to unveil the details of the administration’s long-awaited plan to purchase troubled assets, meant to remove them from the balance sheets of banks and, in turn, spur banks to lend more money to consumers and companies.

The plan relies on private investors to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk.

As part of the program, the government plans to offer subsidies, in the form of low-interest loans, to coax private funds to form partnerships with the government to buy troubled assets from banks.

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A.I.G. The Brand is Tarnished

2009-03-23T14:24:00.000-07:00

Copied and Pasted by Rie Umano

The government’s fourth round of assistance to the American International Group this month was a play for time — for languishing markets to rebound, for pockets to fill up again and for buyers to emerge for the sturdy insurance companies under A.I.G.’s tattered corporate umbrella. Only when those insurance companies are sold will there be money to repay American taxpayers.

But after the latest uproar, time does not look like A.I.G.’s friend. The problem now is not a toxic spiral of derivatives like the one that crippled the company last fall, but the damage done to A.I.G.’s brand, first by the financial troubles and then by the recent wave of hearings, subpoenas, late-night television jokes and even a bus tour past executives’ homes.

A strong brand is something no insurer can afford to put at risk. Insurance companies trade, more than anything else, on their image of strength and stability.

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Toxic asset plan nears completion

2009-03-23T14:23:00.000-07:00

By: Jeremy Radnor

WASHINGTON - Treasury Secretary Timothy Geithner could announce as soon as Monday his much-anticipated plan to get toxic assets off the books of the country's struggling banks, administration and industry officials said.

The plan will use the Federal Reserve and the Federal Deposit Insurance Corp. to make the resources of the government's $700 billion financial rescue fund go further, the officials said Friday.

Geithner is being forced to tap the Fed and the FDIC for support because the prospects for getting additional money from Congress for the bailout effort have dimmed significantly given the recent uproar over millions of dollars in bonuses provided to troubled insurance giant American International Group Inc., the largest recipient of government support.

To read more click here.

Link:

http://www.msnbc.msn.com/id/29807119/

Re-evaluate your estate plan

2009-03-23T14:06:00.000-07:00

By Jennifer Ng

Reevaluating your estate plan is crucial and necessary in order to not have your property and money ending up in the wrong hands in the future. It is said that you should update your estate plan when major changes happen in your life, such as financial changes, additional children, marriage/remarriage, and moving. Throughout everyone’s lives there will be changes that can significantly affect their estate plan; so it is important one revise their estate plan to make sure their wealth be distributed to the people they want. The estate tax is going to stay and cannot be taken away. Of course this is no big issue for those who have less than $3.5 million for that is the minimum a person can die owning before they are subject to the tax. But those who are/were to pay the estate tax lost a good amount of their wealth. This also meant their inheritors lost a good amount of wealth due to the estate tax. These factors cause problems in today’s estate plans that may not have been problems when first drafted. What caused these problems was that whoever drew up the estate tax did not prepare for the changes in economy.

Sources:
http://www.finweb.com/financial-planning/keep-your-estate-plan-up-to-date.html
http://www.nytimes.com/2009/03/21/your-money/estate-planning/21wealth.html
http://www.alllaw.com/articles/wills_and_trusts/article1.asp

Today's Job Market and Your Work-Life Balance

2009-03-23T14:00:00.000-07:00

By: Jeremy Radnor

Everywhere you look today, it seems there is more evidence of the poor job market and weak economy. The media would lead you to believe that things cannot get any worse and we are facing the end of the world. This is obviously an exageration but the current situation should not be taken lightly. It is time to take a closer look at the job market and how people are coping and behaving.

To begin with, recently the unemployement rate has reached a 17 year high. As terrible as this is, people are quick to forget that still over 90% of the US is employed. This means that more than 9/10 people have a job. None-the-less, as things seem to turn increasingly worse, the work-life balance that has been stressed in the past is quickly being forgotten. Employers and employees used to promote a balanced approach to work and life. This has benefits for both the employee and employer. Employees have more free time and feel better. This leads to better work in the work place. Today, there is no balance. It would appear the work force has been divided into two segments, work and life.

The work group can be divided into two additional segments. The first group being those who work to ensure they are employed. This group consists of employees who work ridculous hours in a day just to ensure they arent fired. The second group are those who work out of love. With the job market as it is, many people have been forced to try new and different careers (careers of passion). Employees are finding themselves feeling happier and more fulfilled.

As for the life group, these people have decided to simply ignore the current situation. This is extremely evident within generation-Yers. Many generation-Yers are taking the current situation as an opportunity. Yers have been using their severance pay or unemplyoyment aid to simply live it up. Yers have been quoted saying they are gonna take their severance and backpack through India or they use it to go out and party. Although these may not be good fiscal decisions, they are definitley enjoying life.

This leads me to the point of this article. Just because things are a little worse than usual, it doesnt mean everything changes. Work-life balance is still a vital aspect of a successful life (professionally and personally).

Links:

http://www.msnbc.msn.com/id/29832932/

http://www.msnbc.msn.com/id/29306449/

http://www.msnbc.msn.com/id/29662606/page/2/

Estate Planning Without Anxiety

2009-03-23T13:54:00.000-07:00

Copied and Pasted by Jennifer Ng

With the markets in constant turmoil, planning for the here and now seems daunting enough; planning for the after-I-die is even less appealing. Nobody likes talking about death, telling relatives what they’re going to inherit or wading into jargon like terminable interest property. But if you haven’t figured out where you ultimately want your investments and property to go, you won’t control what happens to your savings when you die—and your family will be forced to make hard decisions without your guidance. The stretch between Thanksgiving and New Year’s is a great time for reflection and resolution. Here’s how to get on the ball.

First, take stock of everything you own: Your estate includes not just your personal belongings and investments but also your home, life insurance and retirement savings plan assets, as well as your share of any jointly owned property. You must not only decide where you want each piece to go after you die but also inform your loved ones. If this sounds difficult, start by literally cataloging how you have piled up your most important possessions; connect the work you’ve done with the things in your life that hold the most meaning. Using your life story as a narrative, write down what you’ve accumulated and develop a list of your most significant purchases and investments. Then when you divide up your estate, you will be working from a sense of pride in your accomplishments, not anxiety about death—and your heirs may be fascinated by the details that emerge.

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Toxic Asset Plan

2009-03-23T13:21:00.000-07:00

Post By: Dana Sunderlin

President Obama’s administration recently drew up a plan to use capital injections as an incentive, in order to get private investors to buy up a trillion dollars worth of bad assets from those banks who are currently reluctant to give out loans to different consumers and companies. Along with these incentives, private investors would receive federal loans to buy the assets. Treasury Secretary Timothy Geithner feels that it would be “cheaper to provide taxpayer financing than have the government buy the assets outright.”

Many people feel that the toxic asset plan is not the answer for a revival of credit markets. It has been found that this new prospect that taxpayers may need to pay for underperforming assets is making banks reluctant to sell these bad assets off to lower bidders. The plan has made banks afraid to buy and to sell, since the government’s plan for these toxic assets has created additional value for them; “As long as there’s the prospect the federal government will overpay for the toxic assets…these banks would be insane to sell in the private market.” As a result, the plan is not resolving anything.

However, President Obama’s take on the plan is that it is a critical element in the revival of our economy and he is confident that it will work. Treasury officials reportedly have no solid forecast on when these asset purchases will actually begin, although many believe that it will be within a few weeks.

Sources:

http://www.msnbc.msn.com/id/29817617/

http://www.reuters.com/article/newsOne/idUSTRE51B27A20090212

http://www.financialexpress.com/news/us-could-use-capital-injections-for-bad-asset-plan/434279/