Posted on Thursday, January 17th, 2019 at 4:22 am
The changing circumstances of and amendments in laws from time to time are fair reasons to prepare for the estate planning. The in-time estate plans give you a clear roadmap for two of the most important decisions of life- assets, and health. Estate plans include health care directives and financial power of attorney, trust or will, and assigning the beneficiaries to the assets.
If you don’t prepare a plan and die, the laws of the state will decide the fate or future of your assets and medical care which can be against your wishes. Planning estate can become a costly and time-consuming affair which involves running to the courts, or arranging an attorney as the circumstances change. Given the changes events in your life, you can plan your estate defensively in a way that it can accommodate several options whenever you feel necessary.
Following are a few strategies that you can pick for your estate plan:
- Unpredictable Events of Life:
On the account of unanticipated life events, few needs may arise by a beneficiary. For instance, if the child who is the beneficiary develops disease or injury which makes him mentally weak or disabled, he or she could be disqualified. In order to prepare for this situation, a trust with provisions for ‘springing’ special needs trust can be formed which comes into play when a beneficiary receives needs-based government assistance; this trust preserves the right of inheritance of the debilitated child without disqualifying him or her from the government assistance.
- Marital Status after Death of the Spouse:
Spousal trust is usually established during the lifetime of a spouse in order to provide a source of income reduce the estate tax. In case a spouse dies and surviving spouse remarries, the trust will be transferred to the children of the first marriage. In case of unforeseen scenarios, for instance, disinheriting the children or leaving the surviving spouse weak and vulnerable, a trust may be set up for the protection and benefit of the surviving spouse and fulfillment of the premarital agreement which involves distribution from the trust- it can be molded given the status of the spouse.
- Beneficiary Controlled Trusts:
In order to protect the asset from the ex-spouse or the creditors, many people draft beneficiary controlled trusts for a certain portion of their estate, which can also have tax benefits. A situation may arise when the creditors sue the beneficiary-trustee and demands that the distribution should be in favor of the creditor, the chances of the creditor or ex-spouse increase in terms of reaching the assets of the trust. If you are living in California, it may be difficult to avoid such a scenario. In this case, the duties of beneficiaries are bifurcated into two categories i.e. distribution and administration. The distribution trustee may be named as beneficiary controlled trusts, and according to circumstances, the trust may give liberty to the beneficiaries or third-party control. Your California Estate Planning Attorney can guide you well regarding these circumstances especially when it is difficult to avoid the creditors.
- Other Unanticipated Circumstances:
Apart from the above-mentioned scenarios, the changing life circumstances must be kept in mind while preparing the estate planning documents. This may include authorization of gifting down the estate of a handicapped person, reducing the income tax from a distribution from an IRA account, prevention of conflict from the displeased beneficiaries by no-conflict clause of the draft or minimizing the property taxes.
Minimizing the Future Costs and Efforts:
As most of the trusts don’t contain the escape hatches, the attorneys have to go to court in order to solve the matter as may arise. The visits to the court increase the fees as well as costs relevant to the estate administration, so, it is advisable to hire a skilled estate planning attorney who can thoroughly anticipate the future problems and is knowledgeable of the strategies necessary to solve these problems.
Fair Oaks Estate planning attorney have dedicated their lives to the craft and stand by your side throughout the entire case, should you have any questions or concerns about the process.