One seeks the assistance of an estate-planning attorney to create an estate plan that properly holds assets and transfers them upon your death, or thereafter, as you desire (ie. in trust). Many people focus their energy on accumulating assets. It is just as important to stop and ensure you have the best plan to protect those assets and then to transfer them according to a sound estate plan in the best, tax-efficient, cost-effective manner. Not doing so may only harm your loved ones.
ESTATE PLANNING FACTORS TO CONSIDER:
- taxes – income, estate, gift and capital gains
- creditors
- business partners – retirement and death
- spouse’s / partner’s death
- divorce
- re-marriage
- guardianship of minor children or adoption by non-biological parent(s)
- disinheriting children from previous marriage/relationship upon death
- charitable giving – decreases income taxes, limits capital gains
and increases cash flow - real property ownership in more than one state
- the size of your estate
- how you hold/title your assets
- your desire to provide for partner/spouse, children and loved ones
- disability – both regarding you personally and regarding the continuity of
management of your assets. - your privacy
- Probate court/process – its time (1-2 years), public nature
and costs (about 5-7% of estate) - difficulty/ease in contesting your estate documents
- your own management style and objectives
- capital gains and the limit on step-up basis of assets upon death
- civil union recognition
- USA citizenship
A sample Basic Estate Plan may include the following:
- A Last Will & Testament (or Revocable Living Trust) to transfer assets at death. Include provisions in trust for transfer of assets to minors and what age such minors should get the assets outright as opposed to the trustee of the trust providing for their needs.
- A Living Will
- Appointment of a Health-Care Representative
- Appointment of a Conservator
- Durable Power of Attorney
Advance Estate Planning matters:
- Irrevocable Life Insurance Trust (ILIT)
- Charitable Trust (CRUT, CRAT, GRIT)
- Qualified Personal Residence Trust (QPRT)
- Family Limited Partnerships
- Credit Shelter Trusts
A Revocable Living Trust (R.L.T.) is often called a Will substitute because it accomplishes the same objectives of a will (plus more!). An R.L.T. is a very attractive estate-planning tool. Assets put into the trust are private and avoid Probate court and its time delays and public exposure. It retains title to real property, making probating the real property unnecessary. This fact is especially beneficial if one owns property in two or more States. Without the ownership being in a trust, one's executor must open another “ancillary” probate in the State where the other property is located, resulting in more time delays and expense. If one has children from a prior relationship, an R.L.T. is an excellent means to provide for a non-parental partner and still provide for the children. But, perhaps the greatest benefit of an R.L.T. is it allows a married couple to own double the Federal Government’s applicable exclusion amount -- without incurring Estate Taxes.
Elder Law
One of the first questions asked regarding elder law issues is: “How do I protect my home?” Medicaid (referred to as Title 19 in Connecticut) planning is very complex requiring professional, learned assistance in preparing one’s estate before applying for Medicaid assistance. Not knowing a permissive expense from a disqualifying transfer may create grave and unforgiving circumstances to the potential Medicaid recipient. Professional assistance and planning is essential in this area.
For Financial Consultants:
www.successec.com
www.vista-financial.com
Email to Ralph Minichino at Minichino Financial Group, LLC at: ralph@minichinofinancial.com
