You have worked your entire life accumulating assets. These hard earned achievements can be lost in a short period of time if they are not protected. If you are sued, all of your assets are at risk. They are also at risk if you file for bankruptcy. Seeing as the best thing to do is to protect those assets, lawmakers have passed various acts that will protect certain assets.
Regardless of what you read in asset protection blogs, many people believe only the wealthy are targets. This is far from the truth. No matter how many assets you have, whether your IRA & retirement plan investing account is $10M or $200,000, you are a target as long as you own those assets in your name. There are many legal circumstances that can place your assets at risk. Civil lawsuits and divorce can be perfect examples of where people lose their unprotected assets. No matter how safe you think you are from being sued, it is almost always best to take extra precaution. This is why asset protection is so important. It will help you safeguard those assets if there ever is a time where a lawsuit is filed on you.
There are various state and federal laws that determine what type of protection many of your assets can have from judgments and creditors. For example, your Traditional and Roth IRAs have a protection cap of $1 million from any bankruptcy proceeding. Any money that has been rolled over from other retirement accounts, such as 403(b) and 457(b) plans, are completely protected by law. It is important to remember that this protection is only in effect during a bankruptcy proceeding. They will not be protected from other court judgments.
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Sometimes it’s the things you don’t do that will become your lasting legacy – like failing to make a will. If you care for your family enough to prepare for your inevitable death, you will enable them to grieve and heal together during a very emotional and difficult time while sparing them from dealing with potentially divisive disagreements that can occur from unresolved legal matters. That’s why a will is the greatest gift that you can leave your family.
On the other hand, if you fail to leave a will, you may be setting your family up for disaster as the old saying “families and money are like oil and water,” is never more true important than when applied to estate matters. There is nothing warm and fuzzy about money and families – it’s a recipe for war and it gets ugly fast and frequently causes lasting damage.
Real Family Tragedies
I have witnessed this scenario firsthand more than once. One of my first “real” jobs’ was as a legal secretary and paralegal working for family law attorneys who did real estate closings, wills, and divorces. I will never forget my first experience with the fireworks that can result when someone dies without a will. In this instance, an elderly woman died without a will and Jeff, one of the attorneys, was meeting with her two adult children to try and sort things out. Less than 20 minutes into the meeting, I heard a loud noise and Jeff came charging out of his office, holding his handkerchief to his bleeding forehead, as he asked me to drive him to the emergency room to get stitches.
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You have worked your entire life accumulating assets. These hard earned achievements can be lost in a short period of time if they are not protected. If you are sued, all of your assets are at risk. They are also at risk if you file for bankruptcy. Seeing as the best thing to do is to protect those assets, lawmakers have passed various acts that will protect certain assets.
Regardless of what you read in asset protection blogs, many people believe only the wealthy are targets. This is far from the truth. No matter how many assets you have, whether your IRA & retirement plan investing account is $10M or $200,000, you are a target as long as you own those assets in your name. There are many legal circumstances that can place your assets at risk. Civil lawsuits and divorce can be perfect examples of where people lose their unprotected assets. No matter how safe you think you are from being sued, it is almost always best to take extra precaution. This is why asset protection is so important. It will help you safeguard those assets if there ever is a time where a lawsuit is filed on you.
There are various state and federal laws that determine what type of protection many of your assets can have from judgments and creditors. For example, your Traditional and Roth IRAs have a protection cap of $1 million from any bankruptcy proceeding. Any money that has been rolled over from other retirement accounts, such as 403(b) and 457(b) plans, are completely protected by law. It is important to remember that this protection is only in effect during a bankruptcy proceeding. They will not be protected from other court judgments.
(more…)
You have worked your entire life accumulating assets. These hard earned achievements can be lost in a short period of time if they are not protected. If you are sued, all of your assets are at risk. They are also at risk if you file for bankruptcy. Seeing as the best thing to do is to protect those assets, lawmakers have passed various acts that will protect certain assets.
Regardless of what you read in asset protection blogs, many people believe only the wealthy are targets. This is far from the truth. No matter how many assets you have, whether your IRA & retirement plan investing account is $10M or $200,000, you are a target as long as you own those assets in your name. There are many legal circumstances that can place your assets at risk. Civil lawsuits and divorce can be perfect examples of where people lose their unprotected assets. No matter how safe you think you are from being sued, it is almost always best to take extra precaution. This is why asset protection is so important. It will help you safeguard those assets if there ever is a time where a lawsuit is filed on you.
There are various state and federal laws that determine what type of protection many of your assets can have from judgments and creditors. For example, your Traditional and Roth IRAs have a protection cap of $1 million from any bankruptcy proceeding. Any money that has been rolled over from other retirement accounts, such as 403(b) and 457(b) plans, are completely protected by law. It is important to remember that this protection is only in effect during a bankruptcy proceeding. They will not be protected from other court judgments.
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Seeing as Americans are living longer, it is essential to plan for life after retirement. This includes medical coverage and Medicare or Medicaid. Medicaid planning is an important part of life for older individuals.
We all know that the cost of nursing homes is very expensive and it is costing more each year. The costs could range anywhere from $3,000 to $10,000 per month! Recent studies have revealed that people spend an average of 30 months in a nursing home. Many people pay for these nursing homes with their own money, often depleting their life savings. This is not always necessary. If you plan properly, Medicaid can help cut these costs, allowing you to leave money to your heirs instead of spending it all on nursing home costs.
Medicare Part A refers to hospital insurance which covers up to 100 days in a skilled nursing facility. However, Medicare has a restrictive definition of skilled nursing. Many times, nursing home care will not be covered under Part A. Medicaid is the only option that people have to help pay for the cost of a nursing home. Unlike Medicare, Medicaid is a program that is based on financial needs. You will be required to pass an asset and income test to become eligible for the Medicaid benefits. On the other hand, Medicare is available to anyone over the age of 65 and does not consider income or assets as part of the required qualifications.
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Now is the perfect time to plan your estate for significant tax savings.
If there is a silver lining in these dark economic clouds, it’s this: thanks to the resulting lower values of real estate, securities and businesses, now is a great time to transfer wealth. This is a very rare opportunity and you need to act quickly. Values will increase again, and when they do, a lot of these opportunities will disappear.
Here are just a few of the techniques that you may want to consider taking advantage of in the current economy.
PROPOSED GRAT CHANGES REQUIRE QUICK ACTION
A grantor retained annuity trust (GRAT) transfers property that is expected to increase in value, with little or no gift or estate tax. Since property values have dropped, future increases are almost given.
With a GRAT, you would retain the annuity for a fixed number of years. The gift value is calculated by taking the value of your transferred property, minus the value of the retained annuity (based on the monthly IRS interest rate). So basically, if the property’s value increases above the interest rate and you survive the term of the GRAT, the value passes to your beneficiaries free of gift or estate tax.
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Are you worried for your children’s future? Well, the best thing to do is to set up trust fund for them. Rearing a child requires a lot of responsibilities. You will not only feed them but as much as possible you wish them a very comfortable life. It’s OK if money will flow all the time. Sometimes, you don’t know what will happen many years from now. What if you will lose your job and see yourself broke and financially miserable. Actually, there are lots of what ifs that have been going in to your mind. To stop all your worries, you might as well invest for the welfare of your children.
Setting up a trust fund is a proper thing to do for preparation purposes. So, how do trust funds work? Basically, what you will be doing is to make an investment. There are lots of funds you can choose from. You can either invest in real estate, bonds, savings accounts or stocks. Like a typical investment, you should be very careful in choosing where to invest. It’s advisable to go for safer investments like putting your money in savings account. Although the returns are just minimal, an assurance of getting the money after an agreed period of time is higher.
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I can’t tell you how many people tell me that they are not worried about estate planning because they own everything jointly with their spouse, so it doesn’t really matter.
WRONG!
Here are a few reasons why that kind of thinking costs thousands of dollars (at least):
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Question: When discussing Living Trusts, I have often heard the following: “If trusts are so great, why doesn’t everyone have one? I don’t know anyone who has one. Maybe they are not legal in my state.” Actually, you may be surprised at how many people have living Trusts. They are more common than many people realize. Folks don’t often discuss their estate plan with others. Trusts are perfectly legal in every state (with the possible exception of Louisiana).
Answer: There are many reasons why people do not have Living Trusts.
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Q: We are finally ready to address our estate planning needs, such as our wills, trusts and protecting our assets. What are the most important considerations when selecting an estate planning attorney? What are the most common estate planning mistakes?
The Problem – Choosing the Right Estate Planning Attorney to Avoid Common Mistakes. A recent internet based yellow page search for “lawyers” lists over 80 results in Princeton, New Jersey alone. Their services range from Arbitration to Tax Law. With so many firms to choose from, matching your needs to the professional’s expertise can be an arduous task.
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