Law Offices of Nelson ChangSaugus Estate Planning Attorney | Probate Lawyer | Wills & Trusts2024-01-30T05:46:16Zhttps://www.nelsonchanglaw.com/feed/atom/WordPressOn Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=470052024-01-30T05:46:16Z2024-01-30T05:46:16ZCredit shelter trusts
To lessen the impact of the estate tax reductions, many families with sizeable estates are adding credit shelter trusts to their estate plans. Assets placed into these irrevocable trusts are no longer part of the creator’s estate, so they are not subject to estate taxes. CSTs, which are also called family or bypass trusts, are created when a spouse dies to transfer estate assets to the surviving spouse. When the surviving spouse passes away, the assets pass to the couple’s beneficiaries.
Transferring assets
Other estate planning strategies that individuals and married couples can use to transfer assets include making gifts, placing part of the current gift and estate tax exemption into an irrevocable trust that benefits their heirs and leaving some of their assets to charity. The annual gift tax exemption in 2024 is $18,000 for individuals and $36,000 for married couples. When determining whether or not to take these steps, individuals and couples should consider how much their assets are likely to be worth when the BEA changes go into effect in 2026.
Revisiting and revising estate plans
Estate plans should be revisited on a regular basis. Many people are revising their estate plans because estate tax exemptions are scheduled to be almost cut in half in 2026, but it is also a good idea to revisit estate plans when economic circumstances change or after major life events.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=470032023-11-07T03:58:45Z2023-11-07T03:58:45ZCreates a personal medical plan
You can’t always speak for yourself during a medical emergency. Including an advance directive in your estate planning can document the plans you have for your own medical treatment. Those plans can include instructions for physicians’ orders for life-sustaining treatment and DNRs or do-not-resuscitate orders. These instructions help prevent mistakes when you’re unable to discuss your treatment.
Designates powers of attorney
When you can’t speak for yourself, you need someone who can step in on your behalf. Designating a medical power of attorney can give you that peace of mind. A medical power of attorney can make medical decisions for you in an emergency.
Establishes end-of-life wishes
End-of-life decisions can be hard for loved ones to make. One way to make the process easier is to communicate your wishes to your loved ones ahead of time. Then, include your end-of-life wishes in your estate plan.
These instructions can become part of your advance directive. Adding your end-of-life instructions to your advance directive can help reduce family distress.
Advance directives can alleviate your family's need to make painful decisions about your care during a crisis. Additionally, they will not have to contend with unnecessary guilt later on and wonder if they did the right things.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=470012023-08-07T22:17:16Z2023-08-07T22:17:16ZWhat is a spendthrift trust?
For estate planning purposes, individuals can choose from many types of trusts. A spendthrift trust is a specialized variant that moderates a beneficiary's access to the funds or assets within the trust. This kind of trust allows you to provide assets to your heirs while maintaining control over the timing and amount of distribution.
Unique features
Unlike conventional trusts, a spendthrift trust has a unique feature called a spendthrift clause or provision. The provision allows the trust entity to become the sole owner of the assets contained within it. This action prevents their immediate transfer to beneficiaries upon your passing.
The trust assets are transferred gradually over time, following the schedule established by you and the trustee you appointed. Using this type of trust, you can control its disbursements using simple rules or more complex directives while allowing for extenuating circumstances. For example, you can allow the beneficiary to receive additional funds if an emergency arises.
Protecting assets
A spendthrift trust's primary advantage is its ability to protect your assets from a beneficiary's potential financial instability or irresponsibility. Its mechanism protects your estate from overspending while still allowing your loved one to receive the intended inheritance, which can safeguard their financial future. For example, you can release the individual's inheritance in monthly sums, which may help them exercise more prudent financial judgment.
Like some other types of trusts, a spendthrift trust can also provide additional protection for your assets against creditors, divorce and other legal actions. Because of the trust's ownership structure, the assets are not considered part of the beneficiary's personal assets, which protects them from legal claims.
A spendthrift trust offers a balance between asset protection and distribution. Finding the trust structure that best fits your needs can help you achieve your overall estate planning objectives.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=469902023-05-04T04:57:02Z2023-05-04T04:57:02ZGiving assets away to qualify for Medicaid
Seniors often give away assets before moving into a long-term care facility. The value of those items can stop them for a time from qualifying for Medicaid. They may have too many assets to be eligible for the program if they hold on to the assets. Finally, if they hold onto the assets and qualify, the state can come after those assets at their death to sell them and recoup the money spent on the senior’s care. Therefore, seniors need to do estate planning.
Irrevocable trust
If you know someone with the time and talent to manage your affairs, you may want to create an irrevocable trust. Then, retitle your assets so that the trust owns them. If you have already made a will and are of sound mind, you can even redo it to put the assets named in the will into the trust. Remember that you give up control of your assets when you put them in an irrevocable trust. If you structure the trust so that you receive income from that trust, that income must be used to pay for your care.
Testamentary Trust
A loved one can set up a testamentary trust to care for the senior, but the senior cannot put funds into a testamentary trust. The funds in the trust are discretionary and be used in any way to benefit the senior. Assets in this type of trust do not affect if a senior qualifies for Medicare.
Both options may be available to protect a senior’s assets while still allowing them to qualify for Medicare. Therefore, seniors should weigh their options carefully.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=469892023-01-30T21:25:31Z2023-01-30T21:25:31ZTrustworthiness and reliability
Note that an executor can be a family member, friend or professional. Whomever you choose, it is important that this person is trustworthy and reliable. Your executor's responsibility will be to make sure your wishes are handled in an orderly and timely manner, so choose someone who understands the importance of this role.
Knowledgeable about estate law
Your executor should also have a solid understanding of estate law. This is essential to ensure that your wishes are properly carried out according to the law, and there are no legal issues. Even if you choose a professional executor, he or she must have experience with estates and understand how to handle them properly.
Ability to manage finances
Your estate's executor will also be responsible for managing and distributing any assets or finances among heirs. Therefore, the executor must have the ability to manage finances responsibly and make decisions in line with your wishes.
Willingness to work with other professionals
Estate planning often involves working with a number of professionals, including accountants and lawyers. Your executor should be willing to work with these professionals and make sure that everyone is on the same page when it comes to fulfilling your wishes. This can especially be important if there are complex issues or legal disputes that need to be addressed.
What happens if you don’t have an executor? In this case, the court will appoint someone to oversee your estate. You may not be comfortable with someone who is appointed by the court, so it is important to plan ahead and choose your own executor who can fulfill all the requirements.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=469862022-11-04T21:51:24Z2022-11-04T21:51:24ZReview your plan after a major life event
It is a good idea to review your estate plan after a major life event such as a marriage or divorce. After getting divorced, you may want to remove your former spouse as a beneficiary on a bank or brokerage account. If you get remarried, you can add your new spouse as a beneficiary to those accounts and other assets that have beneficiary designations applied to them. It may also be a good idea to put assets intended for your children or grandchildren into a trust.
Consider making gifts now
Making gifts while you're still alive may make it easier to ensure that your kids or other heirs get their inheritance. In addition, it may reduce the value of your estate, which may reduce the amount that you owe to state or federal tax authorities. An irrevocable trust may be an effective vehicle for those who are trying to gift assets prior to their passing.
Everyone's needs are different
You shouldn't feel compelled to treat your new spouse's children the same as your biological children. This may be especially true if your current spouse has children who have gambling problems or other issues that make it difficult to manage money or other property effectively.
Taking the time to properly execute and review your estate plan may make it easier for loved ones to carry out your final wishes after you pass. An estate plan may also be used to appoint a guardian for your kids or to ensure that your affairs are properly managed if you become incapacitated.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=469842022-08-05T20:55:31Z2022-08-05T20:55:31ZRegular review
Assets, family relationships and laws that might affect a person's estate planning strategy all change over time. For this reason, it is a good idea to make a regular practice of reviewing the plan every few years. However, there are also specific incidents that should trigger a review.
Family changes
Within your family, big events such as births, deaths, marriages and divorces may mean it's time to review the plan. Your relationship with family members might also change even without these types of events. You might grow closer to or away from the some loved ones, so you may need to change your executor, beneficiaries, the guardian you have appointed for your children or the people you have named on your powers of attorney to manage your medical or financial affairs if you are unable to do so.
Changes in law
For some people, there may be changes in tax laws that necessitate a review and change of the plan. You may no longer need the strategies that you have employed, or you may need a new plan.
Moving
If you move to or away from Massachusetts, you need to find out whether there are changes that need to be made to the plan based on different state laws. In addition, if you begin spending a substantial amount of your time elsewhere, you should make sure that you still meet state residency requirements for the purposes of your estate plan.
You may also want to discuss the specifics of your estate plan with family members so that they better understand your goals and reasons. At minimum, you should make sure that everyone who has a role in the plan is willing to take on those responsibilities.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=468172022-06-06T06:04:45Z2022-05-03T21:13:10ZNot communicating your plans to your beneficiaries
The essence of estate planning is to make it easy for your loved ones to receive your assets and know how they should deal with you and your property if you become incapacitated. It's only fitting to give them an insight into what to expect in the future. This way, you can help avoid confusion and surprises when you are not around. Plus, it can help them prepare to handle legal, technical and emotional aspects of your estate and wishes.
Not updating your beneficiary designations
Life is bound to have unexpected changes over time. Perhaps your child marries, divorces, has kids or meets accidental injury or death. You must account for any of these changes in your estate plans. Besides, you might get a change of heart on what you designated for a loved one to receive. If that happens, you should address it in your plans.
Not understanding how beneficiary designations
Many people don't take the time to learn how beneficiary designations work. As a result, they make mistakes that can have costly consequences. If you are unsure how you should name or update your beneficiaries, legal and financial advisors can help ensure that your assets are distributed according to your wishes.
Forgetting about your digital assets
In this digital age, more people are embracing investing and storing their assets online through cryptocurrency wallets, NFTs, and other internet platforms. It's equally important to designate beneficiaries for these assets just as you would for physical property. Since these assets are rather more difficult to access, you may want to tell your loved ones where your private keys or other key phrases they might need to open those accounts are.
Some professionals advise estate planners not to name their spouses as their primary beneficiaries for their insurance policy or trusts, especially if they have a blended family, in order to make sure the children aren't disinherited. If you want to protect everyone, it may be best to designate a neutral party as a trustee, guardian or executor and your children as primary beneficiaries.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=468162022-06-06T06:04:52Z2022-01-29T03:00:04ZMake sure your will is up to date
Many things may have changed in your life since you created your will. You may have married a new spouse, had more children or even made changes in property ownership. Be sure to review your will regularly and update it as needed to ensure that it accurately reflects your wishes. If your will doesn't reflect your current wishes, it could end up getting contested in court. This can lead to years of legal battles and a lot of money wasted on attorney fees.
Choose the right executor
The executor is responsible for carrying out your wishes after you die. Choosing the wrong executor can lead to many problems. For instance, if the executor doesn't have the time or resources to handle the job, your estate may not get handled properly. Or, if the executor is a relative of yours and there's bad blood between them and other members of your family, things could get ugly. It's important to choose an executor you can trust will carry out your wishes faithfully. You may also want to name an alternate executor in case your first choice is unable or unwilling to take on the role.
Don't forget about taxes
One of the biggest estate planning mistakes is ignoring or forgetting to take taxes into account. When you die, for instance, your estate will likely owe federal and state taxes on the value of your assets. If you don't have a plan in place to deal with these taxes, they could end up costing your heirs a lot of money. Work with an accountant to come up with a plan that minimizes the tax burden on your estate.
There are many other common errors people make when it comes to estate planning, but these are some of the most important ones to avoid. Take the time to create an effective plan for your needs to save you and your loved ones a lot of stress, confusion and money down the road.]]>On Behalf of Law Offices of Nelson Changhttps://www.nelsonchanglaw.com/?p=468152022-06-06T06:05:00Z2021-11-01T18:53:59ZWhen you die, your estate will face claims from MassHealth
Obviously, if someone is in a position of financial hardship and cannot pay their own bills, they are not in a position to repay the state for the medical care that they receive. MassHealth recipients can generally qualify for benefits even if they have valuable assets in their name, like a house.
Once a MassHealth recipient dies, anything in their name is vulnerable to claims by the state. The MassHealth estate recovery program will bring claims against the estate of a benefit recipient, up to and including claims against their primary residence. Those who don't plan ahead to minimize which assets are vulnerable to estate recovery efforts may ultimately leave nothing for the people that they love, such as their children or their spouse.
Careful planning minimizes what you lose if you need Medicaid
People may decide against Medicaid planning because they don't think they need to undertake the process. They might believe that they won't need benefits or that if they do, they can qualify with ease.
What they fail to consider is that Medicaid planning is about not just getting benefits but minimizing the long-term impact of those benefits on your legacy and your loved ones. Thinking about the assets you have and the legacy you want to leave behind can help you determine if Medicaid planning is necessary for you.]]>