For many people, inheritance taxes can impose a substantial burden during a time of grief where there is enough stress and change to navigate already. They can seriously impact one's ability to ensure that one's heirs and beneficiaries are well provided for, and they also create financial planning hurdles that often need to be overcome. While creative solutions like moving across state lines to avoid inheritance taxes have become increasingly popular, family trusts are often more secure, more predictable, and easier to manage in the long run.
More than six years after the death of legendary soul singer James Brown, the South Carolina Supreme Court issued a critical ruling that may finally allow a legal dispute to wind down. At his 2006 death, Brown left a detailed will and trust indicating that he wanted his personal and household possessions divided between his six adult children, two million dollars to go to a trust for the education of his grandchildren, and the rest going to a charitable trust.
Establishing a revocable living trust can prove wise, according to one estate planning attorney. What is a revocable living trust? It's a living trust established with your own assets and under your terms. It can be changed or terminated at any time before your death.
Caring for a child with special needs is something that is close to the heart of a good number of Americans. This is a particularly important issue dealt with in estate planning. Many parents facing this issue aren't sure where to begin, though. While there are various facets and approaches to special needs planning, we'll offer some suggestions here for the issue as a whole.
Our New Jersey readers may have heard of the troubles regarding Whitney Houston's estate, particularly with respect to her daughter Bobbi Kristina. Houston left a total of $20 million in trust to her now 19-year-old daughter, and this has been a source of contention in the family. Whitney Houston's mother, Cissy Houston, and her sister-in-law, Marion Houston, have filed a petition as executors of her estate urging a Georgia probate court to put restrictions on Bobbi Kristina's inheritance payments.
In our last post, we began speaking about specific ways to keep your estate out of probate. Probate, depending on the state one is in, can be a time-consuming process and expose one's family affairs to legal battles open to the public eye.
Even as we age, we never stop filling out paperwork. This is especially true for parents of children with disabilities seeking to set up a trust for their child. Decisions about this process may affect the parent's own eligibility for Medicaid. To qualify for Medicaid benefits for a nursing home, an unmarried individual is only permitted to retain $2,000 or $4,000 depending on the Medicaid program. Transferring assets at less than what is considered fair market value comes with a penalty enacted by Congress, which results in the person who transferred those benefits being denied Medicaid for a period of time. This is something for older parents to bear in mind to protect themselves for when they may need those services.
Establishing a living trust has its benefits, but not necessarily all those typically hoped for. While some people may want to avoid probate court by having a living will in place, this may not be the best reason. In New Jersey, the costs of probate relate directly to the length of the will, specifically the number of pages, and have no connection to the value of the estate. This is something to keep in mind when doing estate planning, as is the fact that spending money to establish a revocable trust does nothing to save on death taxes.
In our previous post, we began looking at some things to take into consideration when selecting a person to manage trust assets. As we've already mentioned, the size and complexity of trust assets can be a large factor in determining who will be the best selection. Another consideration is whether any family members would be able to perform the task of managing trust assets.
Trusts are a common instrument used in estate planning, and are very versatile. Trusts can be used for businesses, protecting children, and tax planning benefits, but regardless of the reason a trust is set up for, a trustee will have to be selected to be in charge of the trust.