Estate Planning

Creating an Estate Plan: How should you establish your estate? For that matter, should you?
Wills: Learn how to best set up a will and what we can do to provide a professionally crafted document.
Power of Attorneys: If something should happen to you, that makes you unable to care for your finances, who will step up and help in your time of need?
Trusts: A powerful tool to plan for and provide for the future.
Health Care Directives: Much like the Power of Attorney, your Health Care Directive can plan for the future and appoint someone as a proxy to speak for you, if you’re ever in such a position that you can no longer speak for yourself.
Reduce Estate Taxes: If you think you’ll be required to pay estate tax, learn what you can (and should) do to reduce or eliminate these taxes, so as not to burden your heirs.
Business Continuation: If you’re a business owner, you will need to set up a plan to continue or wrap up your business if something should happen to you. Find out why and how to do it.


Creating an Estate Plan

Here is a step by step plan for creating an Estate Plan that works for you:

1)Calculate you Net Worth

It’s easy to make a quick calculation of your personal net worth by adding up rough estimates of the values of all your assets. Add the values of your bank investments accounts, any personal property, retirement plans, face values of life insurance, business interests, debts owed to you, and real estate. Then, subtract from that amount all of your liabilities, such as credit care debt loans, mortgages.

Once you’ve calculated your net worth, you’ll need to figure out if you estate will be liable for federal estate taxes. Even if you’ve determined that you won’t owe any federal estate taxes, you may still owe state estate taxes and/or inheritance taxes.

2) Determine Your Financial and Family Needs for an Estate Plan

If you own one or more businesses, have significant retirement assets, or will be expecting a large inheritance, then you’ll need an estate plan to insure that your property goes where you want it to go without and judicial interference.

And, regardless of your net worth, you still need to figure out if your estate will be liable for federal estate taxes. Even if you determined that you won’t owe any federal estate taxes, you may still owe state estate taxes and/or inheritance taxes.

3) Find a Qualified Estate Planning Attorney

Estate planning is complicated enough without trying to do it alone. The help of a qualified estate planning attorney can provide you with the options available to you for your estate planning needs and will offer the peace of mind that comes with knowing that you are in good, professional hands.

Do-it-yourself, homemade wills can be a bad idea, because one wrong or missing word can change the entire meaning of a Last Will and Testament, or invalidate the entire estate plan. Failure to observe the appropriate formalities when signing estate planning documents could also invalidate them.

The best way to insure that a Last Will, Revocable Living Trust, or other legal estate planning document will work when it’s needed is to find and hire a qualified estate planning attorney.

4) Determine Your Needs

The next step is to determine if you need to go beyond a simple will, and set up a Revocable Living Trust. With the help of your estate planning attorney, you’ll be able to weigh the pros and cons of using a Revocable Living Trust in your particular situation.

5) Plan in case You Become Mentally Incapacitated

It may not be pleasant to thing about, but there is a chance that many individuals may suffer from Alzheimer’s, or dementia, or some other debilitating mental incapacity. Planning ahead for this possibility is an important part of an estate plan, one that is often given less attention than it deserves. Without a disability plan, your assets may end up in a court supervised guardianship or conservatorship and, in turn, your loved ones will lose control over you and your property. It is better to plan accordingly for this possibility, to ensure that you and your family remain in control, even if you lose capacity at a later time.

6) Create a Plan for What Happens After You Die

This planning includes deciding who will inherit what, and when they’ll get it. Only you can decide if you want to leave your estate family, friends, and/or charity. Once you decide who, you’ll need to make a plan for when they’ll get it.

Aside from this, if you’re married then you’ll need to understand the elective share laws of your state regarding how much your spouse is entitled to inherit. In 49 states and the District of Columbia, you cannot completely disinherit your spouse, unless he or she waives all inheritance rights in a prenuptial or post-nuptial agreement (Georgia is the only state that doesn’t have an elective share law).
You also need to think about your funeral arrangements (burial or cremation?) and make a plan for where the cash will come from to pay your final expenses, including estate tax bill if your estate is taxable at the federal and/or state levels.

7) Choose Your Personal Representative

As part of putting your estate plan together, you’ll not only need to decide what should happen to your and your property if you become disabled and what should happen to your property after you die, but you’ll also need to decide who should be in charge of carrying out your wishes.
Selecting the right person as your Personal Representative is probably more important than deciding who gets what and when they’ll get it. Why? Because if the person you’ve chose doesn’t want to or simply can’t serve, or if the person you’ve chosen does a poor job, then your beneficiaries will be unhappy and important decisions can then be decided by a judge. One of the major goals of estate planning is to completely avoid the courts, and in the case of judicial disposition, all of that money that you spent on your estate plan will have been wasted because of a poor choice of representative.

8) Fund Your Revocable Living Trust

If you’ve made it this far and decided to use a Revocable Living Trust as the foundation of your estate plan, then you’ll need to get your assets titled into the name of your trust and update the beneficiaries of your life insurance policies and retirement accounts to coincide with the provisions of your trust. If you don’t, then all of the hard work that you put into the first steps will have been for nothing. Funding the Revocable Living Trust could realistically could take a few weeks to several months to complete.

9) Review & update the Estate Plan

Things will happen in daily life that will have a direct impact on your estate plan. In other words, the estate plan that you create today will be the perfect plan for you and your loved ones at this given point in your lives. But next week, or next month, or next year, your life will go through a multitude of experiences, both good and bad, that will make today’s perfect estate plan not so perfect tomorrow.
All of these things will have a direct impact on your estate plan, and so you’ll need to keep on top of these things in order to update your plan so that it will continue to work as you expect it to work.
Be sure to review and update your estate plan yearly, every few years, or on a more frequent basis, as often as you and your estate planning attorney determine is appropriate for your situation, otherwise your perfect estate plan for today will only be worth the paper it’s written on tomorrow.

Do you need help with any of these steps? Contact us today if so, and we’ll be able to assist you in creating an effective Estate Plan to suit your needs.


A Last Will and testament is a legal document that directs how your estate (personal possessions, money, real estate) are distributed after your death. It’s an important document because it allows you final control over the things in your life that you worked so hard to acquire.


An executor is entrusted with responsibility for winding up someone’s affairs. Essentially, an executor is charged with protecting a deceased person’s property until all debts and taxes have been paid, and seeing that what’s left is transferred to the people who are entitled to it.

Executors have a number of duties, depending on the complexity of the deceased person’s financial and family circumstances. Typically, an executor’s duties are but not limited to: Find the deceased person’s assets and manage them until they are distributed to inheritors, figure out who inherits property, pay debts and taxes, and supervise the distribution of the deceased person’s property.


Your Will may name guardians for your minor children as well as name the beneficiaries of your estate, so that upon your passing those choices are determined in accordance with your wishes. A guardian is a person who has the legal right to make decisions on behalf of a minor (someone under the age of eighteen).

Typically, parents are guardians for their children. In Wills, parents may designate guardians who would act on behalf of minor children in the event both parents pass away.

A trustee is a person who is also usually your Executor. A trustee is a person who holds your property on behalf of others while your estate is being administered. Frequently, Trustees are appointed to hold your estate for the benefit of infants until they reach the age of eighteen.

Power of Attorney

Even if you do not think you need w ill, you should still see an estate planner to draw up powers of attorney for health care and financial matters. If you become incapacitated by illness or accident, a power of attorney will be critical to allow a friend or loved one to pay your bills and make health care decisions for you. These simple documents not only save money later, but they give you the security of knowing things will taken care of in your absence.

Business Continuation

There will come a point where every business owner will want to retire from their business. Other times, the owner may not be able to leave voluntarily, but instead be forced to do so due to incapacity or death. Inthese instances, the loss of such and individual can wreak havoc on a business. Therefore having an appropriate “exit strategy” could be vital to a business owner’s financial and estate planning. This type of planning is referred to as a “business succession planning,” or “business continuation planning.”
The goal of this type of planning is to ensure a seamless succession as the business owner withdraws, whether voluntarily or involuntarily. IT involves various areas of law, such as tax, employment, and corporate law. It may additional require the help of other professionals, such as valuation experts and compensation specialist, to further help establish a solid plan for transfer of power.

There are six important steps to business continuation planning:

1. Establish Long Term Financial Goals

The first in creating a viable business exit plan and strategy is to determine the owner’s long term income needs and retirement goals. From this, the owner will be able to detmering how much money the sale of the business must generate in order for te owner to retire comfortable.

2. Determine the Current Value of the Business

Once the owner’s long term financial goals have been determined, the nest step to creating a viable business exit plan is to figure out the current fair market value of the business. This is done by analyzing the books of the business and comparing its profits with similar businessed in the area. The current value will then determine whether or not Step Three – Creating Additional Business Value – is necessary and, in turn, the approximate time-frame for the owner’s exit from the business.

3. Creating Additional Business Value

If the value of the business is what the owner expected, then the owner’s will most likely fall in line with the financial goals established in Step One. If, however, the value of the business is not as high as the owner expected, the owner will need to stay active in the business for a longer period of time in order to bring the value up the level that will allow the owner to exit the business comfortably. This will be the time for the owner to look at ways to increase the value of the business through expense and debt reduction, tax planning, and creative accounting.

4. Sale of Business

Once the owner’s time frame’s time frame form leaving the business has been determining, the owner should examine the pros and cons if selling the business to an outside third party or insiders, such as family members or key employees. The type of purchaser will dictate future employee compensation incentive packages, and tax planning strategies for minimizing capital gains.

5. Establishing a Contingency Plan

Even with a comprehensive business exit plan in place, things can go wrong. The owner could become physically or mentally disabled, a key employee could leave or die, or a fire or hurricane could completely destroy the business. The business owner should be prepared for such possibilities, and always have a prepared contingency plan, or a Plan B. Planning for these and other types of unexpected situations should be built right into every business exit plan. Things the owner should consider as part of a contingency plan include buy-sell agreements, key employee incentive programs, and purchasing business, disability, and life insurance.

6. Planning for Death

Once the owner has both a comprehensive business exit plan and a contingency strategy in place, the owner will be able to focus on their overall estate planning goals. Much of the estate plan may be tied directly to the sale of the business if it is to be sold to one or more family members, and this, in turn, will have a significant impact on the owner’s estate plan. On the other hand, once the business is actually sold, the owner’s financial position and holdings will change drastically from what they were while the owner still owned the business. Therefore, the owner must look at their estate plan at each and every phase of the business exit plan and update their estate plan accordingly.

Health Care Directives

Advanced Health Care Directive

Completing an Advance Health Care Directive is important for all individuals over 18 years of age as they may unexpectedly be in position where they cannot speak for themselves, such as an accident or sever illness.

An advanced Health Care Directive allows individual to appoint an agent who has power of attorney to make care and treatment decisions on their behalf, and give instructions about their health care wishes?

An Advance Health Care Directive lets your physician, family and friends know your health care preferences, including the types of special treatment you want or don’t want at the end of life, your desire for diagnostic testing, surgical procedures, cardiopulmonary resuscitation and organ donation.

By considering your options early, you can ensure the quality of life that is important to you and avoid having your family “guess” your wishes or having to make critical medical care decisions for you under stress or in emotional turmoil. If you are unsure about your options it is essential to speak to trusted individuals such as family or legal advisors.

There are a few other important things to be sure to do. First, gather information for decision making by speaking to your physical about end-of-life decisions. Then, speak to key people about your end-of-life decisions. It is important for them to know this information for the future. Then, designate the people to carry out your wishes by selecting who would be best to handle your health care preferences. Finally, inform your family, friends and physicians, of your preferences ensuring that they are carried out during an important time.

Living Wills

A living will is a legal document that a person uses to make known his or her wished regarded life prolonging medical treatments. It can also be referred to as an advance directive, health care directive, or a physician’s directive. A living will should not be confused with a living turst, which is a mechanism for holding and distributing a person’s assets to avoid probate. It is important to have a living will as it informs your health care providers and your family about your desires for medical treatment in the event you are not able to speak for yourself.

Reduce Estate Taxes

Ways to Reduce Your Estate Taxes

The estate tax, sometimes negatively referred to as the “death tax,” is imposed on an estate that exceeds a particular dollar amount threshold. If an estate’s size is sufficiently large enough to incur this tax, there are a number of ways to reduce the potential tax liability.

It may be possible to make transfers to spouse, or to make gifts to children and / or grandchildren. Rather than passing through probate, an intervivous transfer can prevent this amount from being included in the taxable amount subject to the estate tax. Neither rlifetime gifts nor bequests at death to a spuse are subject to estate tax. As for children, an individual can make gifts of up to $12,000 ($24,000 for a couple) to another, without incurring a gift tax.

Another form of gifting is the Uniform Transfer to Minors. The gift will be given to a custodian, for the benefit of the minor child, and will be distributed to the child when he or she reaches adulthood.
An irrevocable life insurance trust could also reduce tax liability. By transferring portions of the estate to an irrevocable life insurance trust, a person can reduce the size of the taxable estate, while creating a much larger asset that exists outside of the estate.

A private annuity is the sale of an asset to another exchange for an unsecured promise to pay annual amounts to the seller for the seller’s lifetime. The asset is removed from the seller’s estate, though it is replaced with the payments made to the seller, unless they are spent beforehand.

Charitable transfers during life, or gifts to charities upon death can reduce the size of the estate taxes. Lifetime gifts also provide the benefit of an income tax deduction. Gifts can also be made in such a way that allows the donor to retain the right to use the gifted asset or income until death.

Another option available is the use of a family limited partnership. This permits families a great deal of leeway in transferring ownership of family-owned closely held businesses to their children or grandchildren. It also allows taxation of partnership income at the children’s lower tax rates. Additionally, the family limited partnership is revocable.


What is a Trust?

A trust is a legal device that allows property to be transferred from one holder to a new holder, from the benefit of a third person. The first holder is referred to as the “Settlor,” who transfers property to be held in trust to another party, the “Trustee.” The property is held in trust for the benefit of the third party, called the Beneficiary.”

Types of Trusts

Express Trust

A Settlor and Trustee agree, and sign documents detailing the agreement, that the Trustee will hold some property. Where property is held by someone on trust, this forms and express trust.

Implied Trust

An implied trust is created when some of the requirements for an express trust are not satisfied, but the intention of the parties to create a trust is presumed to exist.

Constructive Trust

Sometimes called an “involuntary trust.” The constructive trust results from an “equitable remedy” from the courts. It is imposed by courts to achieve justice, or to prevent unjust enrichment. If a wrongdoer has someone acquired title to some property, and cannot in good conscience be allowed to benefit from it, courts will impost the constructive trust to return it to its rightful owner.

Revocable Trust

A revocable trust can be amended, altered or revoked by the settlor at any time, much like a will. Because of the ease of use and similarity to a will, a revocable trust may be an attractive alternative to a will and the probate process.

Irrevocable trust

An irrevocable trust cannot be amended or altered until the terms of purposed of the trust have been completed. Under normal circumstances, an irrevocable trust may not be changed by the trustee or the beneficiaries of the trust. If a trust is irrevocable, it may provide tax benefits that a revocable trust cannot by reducing the overall tax liability of the estate.

Simple Trust

A trust in which the trustee’s only duty is to provide the property to the beneficiary at a time specified by the trust. All other trusts are considered “Special Trusts,” in which the trustee has duties beyond this.

Inter Vivos Trust

Also called a “Will Trust,” this is a type of trust created in an individual’s will.

Testamentary Trust

Also called a “Will Trust,” this is a type of trust created in an indivual’s will.

Private / Public Trust

A private trust has one or more particular individual as its beneficiaries. By contrast a public trust (also called a charitable trust) has some charitable conclusion as its beneficiary. Charitable trusts receive special treatment under tax and trust law.

Spendthrift Trust

A trust established for an individual who may not be able to control their own spending habits. The trustee has power over how the trust may be used for the benefit of the beneficiary.

Charitable Arrangement Trust

Charitable Arrangement Trust is an arrangement in which property or money is donated to a charity, but the donor continues to use the property and / or receive income from it while living. Beneficiaries will receive the income, and the charity received the principal of the trust after a specified period of time. The contribution is irrevocable, however the donor may exercise some control over the way the trust property is invested, and may swap one charity to another, so long they are both qualified charitable organization.

The donor will avoid any capital gains tax on the assets, and will additionally receive a charitable tax deduction for the fair market value of the remainder interest that the trust earned. Additionally, the trust property will be removed form the donor’s estate, reducing subsequent estate taxes.

The Charitable Arrangement Trust can be used to save income, gift, and / or estate taxes. Additionally, because it if tax exempt the trust can also be used to sell highly appreciated assets with reduced tax implications.

Dynasty Trust

A dynasty Trust is a trust that is designed to avoid or minimize estate taxes being applied to significant wealth with each transfer to subsequent generations. The main goal of the dynasty trust is to leave a legacy, looking beyond children, to grandchildren and future generations. A dynasty trust provides the ability to have a lasting impact beyond an individual’s own lifetime, consolidating wealth for future generations. By holding assets in trust, and making distributions to each generation, the total wealth of the trust will not be subject to estate taxes with the passing of generations.

Dynasty Trust are allowed in the following states:
Alaska, Delaware, District of Columbia, Idaho, Illinois, Kentucky, Maine, Maryland, Michigan, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Virginia, Wisconsin, and Wyoming.

Each State has its own rules. Most states limit the duration of a trust subject to the rule of perpetuities. This means that a trust will be limited to the length of a “life in being,” plus 21 years. Other states allow a specific set of years, such as 150 years in Washington State, or 365 years in Nevada. Many of states allow trust to be perpetual. This is important because the rules are typically based on where the trust is administered, and because the client does not have to live where the trust is administered.

Special Needs Trust

A special Needs trust, also called Supplemental Needs Trust, is created so that beneficiaries who are either disabled or mentally ill may make use of property intended to be held for their benefit.

Establishing such a trust has numerous practical reasons, as the beneficiary of such a trust may not be able to handle his own finances. Additionally, establishing a trust in such a way may allow beneficiaries to maintain their access to government programs, such as welfate or the Social Security Administration’s Supplemental Security Income Benefits (“SSI”).

These trusts may be run either by family members in a private trust, or by an appointed trustee. Care should be taken in appointing the right trustee to mange the trust. If no trustee is appointed, or no appropriate trustees can be found, the courts will appoint a proper trustee.

Common purposes for establishing a Trust


Trust can be created for privacy reasons. The terms of a will are public, the terms of a trust are not.
Wills / Estate Planning.

If a will seeks to leave property to children, and the children are under 18 (or under some other required age establishing in the will), a trust must come into existence until that age is reached. Generally, the executor of the will becomes the trustee, and the children are the beneficiaries.

Tax Planning

In many cases, the tax consequences of using a trust are more lenient than the alternatives, and trust are therefore frequently used to legal tax avoidance.

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