Estate Planning Mistakes

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

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

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

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

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

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?

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

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

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.

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Estate Planning Tips

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

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!

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

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.”

Click here to read on!

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

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

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

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

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

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

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

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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