Estate Planning

The Executor's $1.2 Million Mistake

Posted on: March 6th, 2015
Here’s a tale of caution about being an executor, the person you appoint in a will to oversee your estate after your death....

Death and War in Families

Posted on: February 10th, 2015
Ever since Leah stole Rachel's promised husband and Cain Killed Abel, sibling rivalry has fostered emotions from anger, jealousy and depression to a lifetime of estrangement. Let the parent of such adult children die and leave a will designating that those adult offspring must settle the estate together as executors or choose one over the others….watch out….World War III erupts. ...

Philip Seymour Hoffman’s Will: 3 Critical Mistakes

Posted on: November 5th, 2014
Oscar-winning actor Philip Seymour Hoffman died from a drug overdose in February 2014. Sadly, he left behind three young children - and a fortune estimated to be worth $35 million. ...

10 Tips for Helping Families with Special Needs

Posted on: November 5th, 2014
Many disabled people rely on SSI, Medicaid or other government benefits to provide food and shelter. You may have been advised to disinherit their disabled child - the child who needs their help most - to protect that child's public benefits....

IRS Raises Limit on Tax-Free Transfers

Posted on: November 3rd, 2014
As many estate planners anticipated, The Internal Revenue Service has raised the limit on tax-free transfers during life or at death. Beginning in 2015 that amount, known as the basic exclusion, will increase to $5.43 million per person, up from $5.34 million this year. ...

Asset Protection Tips

Posted on: September 27th, 2014
3 Asset Protection Tips You Can Use Now A common misconception is that only wealthy families and people in high risk professions need to put together an asset protection plan. But in reality, anyone can be sued. A car accident, foreclosure, unpaid medical bills, or an injured tenant can result in a monetary judgment that will decimate your finances. Below are three tips that you can use right now to protect your assets from creditors, predators and lawsuits. What Exactly is Asset Protection Planning? Before getting to the tips, you need to understand what asset protection planning is all about. In basic terms, asset protection planning is the use of legal structures and strategies to transform property that creditors might snatch away into property that is completely, or, at the very least, partially, protected. Unfortunately, this type of planning cannot be done as a quick fix for your existing legal problems. Instead, you must put an asset protection plan in place before a lawsuit is imminent, let alone filed at the courthouse. So, now is the time to consider implementing one or more of these tips. Now, on to the three tips. Asset Protection Tip #1 – Load Up on Liability Insurance The first line of defense against liability is insurance, including homeowner’s, automobile, business, professional, malpractice, long-term care and umbrella policies. Liability insurance not only provides a means to pay money damages, it often also includes payment of all or part of the legal fees associated with a lawsuit. If you do not have an umbrella policy, then now is the time to get one since it is relatively inexpensive when compared with more advanced ways to protect your assets. You should also check all of your current insurance policies to determine if your policy limits are in line with your net worth and make adjustments as appropriate. You should then review all of your policies on an annual basis to confirm that the coverage is still adequate and benefits have not been stripped to keep premiums the same. Asset Protection Tip #2 – Maximize Contributions to Your 401(k) or IRA Under federal law, tax-favored retirement accounts, including 401(k)s and IRAs (but excluding inherited IRAs) are protected from creditors in bankruptcy (with certain limitations). Therefore, maximizing contributions to your company’s 401(k) plan is not only a smart way to increase your retirement savings, but it will also keep the investments away from creditors, predators and lawsuits. On the other hand, if your company does not offer a 401(k) plan, then start investing in an IRA for the same reasons. Asset Protection Tip #3 – Move Rental or Investment Real Estate into an LLC If you are a landlord or a real estate flipper or investor, then aside from having good liability insurance, moving your real estate into a limited liability company (LLC) can be a great way to help protect your assets from creditors, predators and lawsuits. There are two types of liability that you should be concerned about with rental or investment property: (1) inside liability (where the rental or investment property is the source of the liability, like a slip and fall on the property, and the creditor wants to seize an LLC owner’s personal assets) and (2) outside liability (where the creditor of an LLC owner wants to seize LLC assets to satisfy the owner’s debt). An LLC will limit your inside liability related to the real estate, such as a slip and fall accident on the front stairs of the property or a fire caused by faulty wiring located at the property, to the value of the property. In addition, in many states the outside creditor of the member of an LLC cannot get their hands on the member’s ownership interest in the company (in some states this will only work for multi-member LLCs, while in others it will also work for a single member LLC). This type of outside creditor protection is often referred to as “charging order” protection. This means that a creditor will have to look to your liability insurance and any unprotected assets to collect on their claim. If you are interested in asset protection planning for your investment real estate using an LLC, then you will need to work with an attorney who understands the LLC laws of the state where your property is located to insure that your LLC will protect you from both inside and outside liability. ...
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