Smart Estate Planning
You may own a small amount of assets, but that doesn't mean you can neglect your estate planning. Though very few people are subject to federal estate taxation, planning your estate is important. Law Office of Todd A. Wilson is here to help!
Planning a property estate helps in a lot many ways:
- Ensuring that your assets are handed over to your loved ones or whoever you wish to give after you pass away
- Protecting your minor children by assigning your trusted individuals as guardians of the minors when you are not alive
- Directing your properties and caring for your loved ones when you are not capable of doing so yourself
- Privately keeping your dispositions, wishes, and assets away from the public eye
- Passing on the foundation of any business you have founded through hard work
- Safeguarding your pet friends (dogs, cats, etc.)
- Shielding your property from creditors
- Never keeping your assets tied up longer than usual
- Reducing the costs of probate and other administrations
- Discouraging any contests to your estate
Asset Protection and A-B Trusts
An A-B Trust structure is used by married couples who want to reduce taxes on estate. This is done by both of them placing their assets into the trust and naming an external person other than their respective spouse as the beneficiary.
When the first spouse passes away, the trust gets divided into two - Trust A (survivor's trust) and Trust B (decedent's trust). The surviving spouse can control the survivor's trust containing their own assets completely, but control over the decedent's trust is limited.
However, the surviving spouse can still live in their house and draw income from the trust if that is stipulated in the trust. When the second (surviving) spouse passes away, the assets are passed on to the registered beneficiary.
In this way, double taxation is avoided because the property is then legally considered not to be a part of the second spouse's estate. You'll also need A-B Trusts in circumstances like these:
- You are not legally married
- You want your children to receive the property after your death
- You owe state taxes
- Congress changes the estate tax laws again
There have been some recent changes in the law regarding 'portability' which essentially mean that the surviving spouse can use the exemption amount of the deceased spouse as well without having to pay federal estate tax.
Guardianship and Estate Planning for Minors
Caring for your minor children is an important part of your estate planning process. Put enough assets in place, which is required for the upbringing and protection of children as well as the guardians, are for us to decide.
- How can you not make the state act as a guardian to your children?
- Who do you want raising your children?
- Should that guardian be the sole decision maker?
- Can that person access your money or should the financial decisions be given to somebody else?
- What if your chosen guardian declines raising your children?
- How do you prevent your children from accessing and squandering your assets until they are mature enough to handle their inheritance?
Power of Attorney (POA) and Medical Directives
When you are unable to make decisions regarding your own medical problems, Powers of Attorney and medical directives come to the rescue during such unfortunate circumstances. If you are incapacitated, you would surely want your doctor to look for specific directions regarding your care.
In lieu of such specific directives, you may plan in designating and empowering a particular individual (or more) you can trust to take those crucial medical decisions for you. Give us a call at 512-827-9212 if you require any help.
Business Succession Planning
In America, family businesses constitute 60% of all jobs. If you are an entrepreneur or a small business owner, you should decide responsibly on what would happen to your business, legacy, and family after you pass away.
Many businesses never make it to the next generation for a lot of reasons. You should know how to avoid such mistakes and adequately create buyout agreements so that you can transfer the business without much dispute among your family members.
Also try to avoid estate and inheritance taxes as much as possible during the process. Planning for a business succession requires careful thinking and making smart transition plans to prepare the eventual successor for continuing your business.
We often disregard our pets when planning for the unfortunate event of death. After all, your pet is a part of your family too. Who's going to care for them when you are gone? How will the person entrusted afford to care for your pet?
For easy answers to all these, you need an expert attorney who can plan your pet trust and establish the necessary ownership and assets for the benefit of your pets. In this way, you can also pay the caregiver. Visit us at 401 Congress Avenue, Suite 1540.
Frequently Asked Questions
What is estate planning?
Protecting children and assets from the government, creditors, and others while maintaining control of your possessions during your lifetime and passing those assets to loved ones upon death.
What is comprehensive estate planning?
Comprehensive estate planning means going beyond simply setting up your will and thinking you are covered. It involves the establishment and funding of trusts (where appropriate) to protect your assets from unwanted creditor and young or untrustworthy heirs.
It also includes the creation of Powers of Attorney to allow a trusted friend or family member to handle your affairs in the event unforeseen circumstances prevent you from managing your affairs. Medical Directives, Living Wills and HIPPA forms are also included to allow you to direct medical treatment during times of crisis when you are unable to speak with a doctor.
Do I need a will or trust?
Almost everyone needs a will or trust. Many people mistakenly believe they do not need estate planning because they do not have enough assets for it to be a concern. However, if you have minor children, you want to direct who takes care of them and ensure they have the money to do so.
If you have purchased a house, car or any other major asset, you want to give that asset to the person you believe most deserving, not the State. If you have a small business, you want to preserve that business that you have fought so hard to build over the years. If you have pets, just like minor children, you need to specify who will care for them and from where the necessary money will come.
What happens if I die without a will or trust?
If you die without a will or trust (dying intestate), the State will divide your assets among the individuals it believes most deserving by default. The State makes its assumptions based solely on how the legislature believes most people would want their belongings distributed. It does not make any independent inquiries to determine what your wishes may have been or who was actually closest to you in life.