Planning for Blended Families: Second or Later Marriages and Divorce of Beneficiaries

Written by TEPLG. Posted in Blog, Wealth Advisor

A brief look at statistics reveals that family structure has dramatically changed over time and that there’s an astonishing variety of family structures out there. Everything ranging from the “traditional” nuclear family to blended families of step-siblings and half-siblings headed by parents in a second or later marriage.

Most of us want to take care of our spouse, our children, and maybe the rest of our family too. But, letting everyone else work out the details after you are gone or incapacitated means chaos, and, sadly, the risk of a family being torn apart.

It’s not just your immediate marriage that you should be concerned about – the marriages of every beneficiary named in your plan can affect your estate planning.

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Three Tools Your Clients Can Use to Save For Skyrocketing College Expenses

Written by TEPLG. Posted in Blog, Wealth Counselor

You and your clients have undoubtedly seen the projections about college expenses. Using an average increase of 5% per year, by 2030 the annual tuition at a four year public school could soar to $41,200, and $92,800 at a private, nonprofit school.

These numbers will undoubtedly make even the well-to-do cringe. Thus, parents and grandparents are often interested in strategies to sock away money now to pay for skyrocketing college expenses.

Advisors who understand the various tools used to save for college – one of the biggest concerns for clients everywhere – will add significant value to their relationships. So, rather than an exploration of Coverdell or UGMA/UTMA accounts that you’ve all heard about before, this newsletter explores a few trust-based options that can help differentiate your practice and help your clients.

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Wills vs. Trusts: In Plain English

Written by TEPLG. Posted in Blog, Wealth Advisor

Everyone has heard of wills and trusts. Most articles written on these topics, however, often presume that everyone knows the basics of these important documents. But, in reality, many of us don’t – and with good reason – as they’re rooted in complicated, centuries-old law. Let’s face it, if you’re not an estate planning attorney, these concepts tend to remain merely that – concepts. So, if you’re “fuzzy” about wills and trusts, know that you are not alone. After we show you the difference between these two documents, we’ll tell you why a trust is the better choice.

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Friends As Fiduciaries?

Written by TEPLG. Posted in Blog, Daily Plan-It

Clients often choose a relative or a close friend as executor or trustee (a fiduciary) of their estate. It makes sense, they trust them during life and trust their judgement when they stand in their shoes so to speak. However, the job can prove more difficult than either of them imagined. A fiduciary must carry out the terms of your client’s plan at the very time she is grieving, and many times she is unfamiliar with the ins and outs of the job’s responsibilities. She may not have enough financial knowledge to understand what’s expected or may miss important deadlines due to a lack of understanding, often costing some serious penalties for the estate.

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Clients Should Include Pets in Estate Plan

Written by TEPLG. Posted in Blog, Daily Plan-It

What if Fido or Fluffy outlive your client? Have your clients made plans for what happens to their “furry children” if they die or become incapacitated? Or are they just assuming someone will step in and give their animals the same level of care and attention? As advisors, it’s important to discuss animals care as part of your clients’ estate plan. In the past, people made designations for ownership and care of their pets in a will, but their wishes were not enforceable. However, pet trusts are gaining more ground in the courts and are becoming more prevalent with clients who have no adult children as beneficiaries of their estates.

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Five Ways to Make Trusts More Flexible

Written by TEPLG. Posted in Blog, Wealth Counselor

Trusts that continue for the benefit of a surviving spouse’s lifetime and then for the benefit of several generations have become the norm.  Drafting trust agreements that will cover the administration, investment, and distribution of trust property over the span of multiple decades is challenging.  In this issue you will learn how trust agreements can be made flexible to address changes in the lives of beneficiaries and governing laws by: 1.      Carefully selecting trustees. 2.      Defining trust beneficiaries. 3.      Including powers of appointment. 4.      Allowing for trust decanting. 5.      Providing for the appointment of a trust protector. If you would like us to review any of your clients’ trust agreements and make recommendations for improving their flexibility, please call our office now.

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Families amend trusts with letter of wishes

Written by TEPLG. Posted in Daily Plan-It

Congress waited until the last minute but some of your clients couldn’t take that risk. As 2012 wound down with a real possibility of big cuts to the federal gift and estate tax exemptions, wealthier families scrambled to set up trusts to protect assets from the Internal Revenue Service. Setting these trusts up so quickly, The Wall Street Journal says, meant not every contingency was accounted for, and now some of those families are going back to give trustees more complete details about how they want their money to pass to their heirs. http://tinyurl.com/m8vp4xg These addendums, called “letters of wishes,” are not legally binding. They do, however, give guidance about priorities when doling out funds, and they’ve grown in importance since the 2012 scramble, experts say.

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How to Protect Inherited IRAs After the Clark v. Rameker Decision

Written by TEPLG. Posted in Blog, Wealth Counselor

In a landmark, unanimous 9-0 decision handed down on June 12, 2014, the United States Supreme Court held that inherited IRAs are not “retirement funds” within the meaning of federal bankruptcy law. This means they are therefore available to satisfy creditors’ claims. (See Clark, et ux v. Rameker, 573 U.S. ______ (2014)) The Court reached its conclusion based on three factors that differentiate an inherited IRA from a participant-owned IRA: 1. The beneficiary of an inherited IRA cannot make additional contributions to the account, while an IRA owner can. 2. The beneficiary of an inherited IRA must take required minimum distributions from the account regardless of how far away the beneficiary is from actually retiring, while an IRA owner can defer distributions at least until age 70 1/2. 3. The beneficiary of an inherited IRA can withdraw all of the funds at any time and for any purpose without a penalty, while an IRA owner must generally wait until age 59 1/2 to take penalty-free distributions.

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Estate Planning – A Process, Not an Event

Written by TEPLG. Posted in Blog, Wealth Advisor

You have signed all of your estate planning documents and, if your plan includes trusts, completed their funding. You sit back, relax, and enjoy the peace of mind that comes with completing that task. But don’t bask in that feeling for too long—estate planning is an ongoing process, not a one-time event.  

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Using Advanced Irrevocable Trusts for Income and Estate Tax Savings: Making 2012 Count

Written by TEPLG. Posted in Blog, Wealth Counselor

The next nine months are an exceptional window of opportunity for your clients to make family wealth transfers. The federal gift and estate tax exemption is $5,120,000, and both income tax rates and interest rates are at the lowest point in a generation. With federal deficit spending also at record levels, tax and interest rates seem sure to rise. Unless the President, the Senate, and the House of Representatives all agree otherwise, income and estate taxes will increase dramatically on January 1, 2013.

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