Category: Estate Planning & ...

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Tuesday November 9th, 2021.

While it can be difficult to focus on your finances after the death of a loved one, there are tax planning issues that need to be sorted out. This is especially true if you are your loved one’s 401k beneficiary.

401k and Taxes

Upon a person’s death, their 401k plan transfers to their taxable estate. If there is a living beneficiary, the money can probably be disbursed without waiting for probate unlike the rest of the estate.

Taxes will be due on any monies received from a 401k, in addition to estate taxes. However, a few strategies can be used to delay the burden or spread it out. 

Understand the Rules

Many people do not realize that different 401k plans can have different rules. While the IRS does have a set number of limits, a plan can ultimately be more restrictive. For instance, the IRS allows you to leave the money alone without paying taxes, for up to 10 years. But, the plan itself may not allow that length of time.

There may be other rules regarding who inherits the plan. For instance, a surviving spouse may have different restrictions than a surviving child. 

For most people, the 401k will need to be taken out all at once in a lump sum distribution. If this happens, then you will need to pay state and federal income taxes. However, you may not be subject to the early withdrawal penalty.

A surviving spouse may have the option to roll the money over into a different retirement account such as an IRA.

Periodic Payments

Some plans will allow you to spread payments out over the course of a few years to prevent a significant tax burden all at once. This isn’t always allowed by the plan because there is an administrative cost involved for them.

It is more likely to be allowed if the original account holder was already receiving payments before their death.

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Tuesday November 9th, 2021.

According to the Education Data Initiative, the cost of higher education in the U.S. has tripled in the last 20 years. In Florida, the average cost of tuition and fees for a four-year institution is $15,511 and the national average for student loan debt is $37,584.

Have you considered the cost of higher education for your children in your estate planning? Here are a few options that can help you plan for their future.

529 Plans

Savings plans called 529 plans are intended for educational purposes and they come in two different types. The first type is a prepaid tuition plan, which allows for the purchase of future tuition fees at the current price. The money is meant for college or university tuition only and cannot be used for room and board.

The second is an education savings plan which allows for investment accounts that can be used for higher education expenses. This plan allows the money to be used for room and board and school supplies like laptops or books. 

Revocable Living Trust

With a revocable living trust, the provisions can be changed as often as you want while alive and define how the money should be spent. Should you wish some or all of the trust to be dedicated to education, you can define what is eligible in terms that you like. These provisions for education will stand even after your death, ensuring that your child’s education needs are met.

HEET: Health and Education Exclusion Trust

There is an irrevocable trust that can help you avoid paying a gift tax called a health and education trust or HEET. This trust is meant for your younger relatives, two or more generations after you. Any payments made to an educational institution from a HEET are not subject to gift taxes. 

Irrevocable Gifting Trust

If you want your gifts to extend beyond education, an irrevocable gifting trust may be the right option. You can shelter your gifts to beneficiaries with the annual gift exclusion if you include a Crummey power that allows gifts that normally wouldn’t be eligible for the exclusion. 

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Tuesday October 12th, 2021.

Understanding the concepts of estate planning can be difficult and exhausting. First, you face difficulty while setting the tempo. Even if you get the hang of it, the extensive range of terminologies used in estate planning can make it harder for you to grasp the concept. Before getting into any field where you lack relevant knowledge, it is always recommended to get in touch with an expert who can guide you through the particular terminologies and the estate planning procedure. 

Here are some of the most repeatedly used terminologies, which will certainly help you go through a simple estate planning document.

Decedent

This term indicates the deceased person whose will is to be considered in front of the authorities. 

Beneficiary

The word ‘beneficiary’ indicates the person who is the authorized person to deal with relevant matters. In the cases of estate planning, the beneficiary is the person who receives control over the deceased’s possessions such as property, money, or other assets. This person can be a spouse, children, or other relatives (if mentioned in the will).

Executor

The executor is the person trusted to execute all the instructions written down by the decedent in their will. In most cases, this executor is a trained attorney. However, it can also be a relative or a friend. 

Testator 

The person assigned to pen down the will for the person in question is called a testator. While testator refers to a male writer, testatrix is a female writer.

Conservator

The court appoints a conservator for someone who is disabled, either mentally or physically, to take care of their assets and set up a will for them to be executed after they pass away. 

Power of Attorney 

If the relevant person in question cannot attend court hearings and deal with other formalities in an estate planning decision, a power of attorney is given charge to deal with all such aspects on behalf of the decedent. 

The Law Office of Wickersham & Bowers deals with all kinds of cases associated with Estate Planning. Contact now or get in touch with our 24/7 customer live support to know more. 

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Monday September 13th, 2021.

What Is a Prenuptial and a Postnuptial Agreement?

Prenuptial and postnuptial agreements are commonly confined to the events of marriage and engagement. Though, there is a common misconception that needs to be addressed. In the olden times, these agreements were discouraged. They were thought to encourage the dissolution of relationships. However, with all the advancements in today’s world, people realize the importance of the protection of their assets for themselves and the generations to come.

Prenuptial Agreement

People considering a second marriage and having major assets can benefit greatly from a prenuptial agreement. Not only that, people who are getting married at a very old age and want to secure some of their assets for their children can make good use of prenuptial agreements.

Sorting such details before getting married can be very useful to avoid marital disputes and divorces in the future. If things are already classified as shared property and separate property before marriage, the property division is easier. This applies to divorce or the death of the significant other.

However, all the assets possessed by both partners must be fully disclosed to form an agreement. In addition, the presence of an attorney at the time of constructing a prenuptial agreement will be helpful in case one of the partners has been dishonest about their possessions.

Postnuptial Agreement

A postnuptial agreement, as opposed to a prenuptial agreement, is drafted after a couple engages in marriage. It can be useful to finalize the distribution of assets in case of sudden demise and other prominent events.

One can opt for a postnuptial agreement to secure savings and assets after a major financial crisis. For instance, the wife may want to ensure a sizeable amount of money to avoid turning into debt because of her husband. Similarly, many other reasons can be the cause of drafting a postnup between couples.

Insufficient knowledge about these legal proceedings may cause you huge losses. Therefore, having an attorney on your side in such matters is always recommended. For that reason, we are here to assist you every step of the way at Wickersham & Bowers.

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Wednesday August 11th, 2021.

Planning an estate is both a sad time and a complicated time for many families. Depending on the size of the estate and beneficiaries involved, the entire process can feel overwhelming. While it is entirely possible to handle the planning of an estate on your own, there are dozens of legal matters that can come up that can make the entire process even more confusing and take much longer than it should. 

Here are a few things to consider when deciding whether or not you need an estate lawyer on your side. 

How Much Does the Executor Know About the Estate? 

When putting together an estate, there is always someone who is put in charge of all the finances, the assets, and the distribution of the estate. This requires not only an understanding of any wills or other instructions left for the estate, but a deep understanding of the finances surrounding the estate and how best to manage and distribute wealth for all parties involved. 

Because of tax laws surrounding inheritance, the age of the benefactors, and other issues, it is generally a good idea to have an estate lawyer there to assist with planning the estate. 

Are There Minors Involved? 

In the case where part of an estate is to be left to children under the age of 18 (or in some cases 21) then it is necessary for a conservator to be assigned. This person is responsible for managing the assets of the children until they reach legal age. 

Depending on the size of the estate, the way monies are assigned and divided, this can be quite complex and requires the aid of a trained legal professional to execute properly. 

Is Probate Necessary? 

In instances where there is not a clear line of inheritance or when assets are discovered outside the purview of the will, it is generally necessary for these items to go through probate. It is always advised to have a legal representative handle these matters as they can help prevent delays and make sure everything is processed properly. 

At Wickersham and Bowers we know how stress estate planning can be. That’s why we want to be there by your side to make the process as simple and easy as we can. 

Contact us today for a consultation. 

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Monday June 14th, 2021.

The number of people who can contest a will is limited. Only someone who would be personally and financially affected by the terms of a will may bring a lawsuit to challenge the will’s validity. Someone in this position is considered to have “standing” by the courts. With this in mind, how does someone stand to contest a will?

Possible Heirs That Were Disinherited

Someone so closely related to the person who passed that they would have received a portion of that person’s estate if they did not have a will is known as an “heir-at-law.” Heirs-at-law are usually considered to have standing to challenge a will.

Beneficiaries Mentioned In A Prior Will

If a person (or an entity) was named in a previous, older will, this would provide sufficient standing to contest the newer will if it removes them from the document. They would also have standing if their share of the estate was smaller in the newer will. In the same way, if an executor of the estate was in the older will but removed in a subsequent will, that person will likely have standing to contest the newer will.

In each case above, each person listed would still have to demonstrate the will in question is for some reason invalid.

Who Cannot Contest A Will?

If you are not a beneficiary in a previous will, or not an heir-at-law, you are unlikely to have legal standing to challenge a will. This applies even if you believe the will is not valid. Minors are another group that usually cannot have standing to contest a will. In most states, however, a parent or guardian is permitted to challenge a will on a child’s behalf.

What Should You Do?

Contesting a will is complex series of laws. If you are considering contesting a will, your first step should be to consult a lawyer that specializes in these kinds of probate matters to see if you may have grounds. Contact the Law Office of Wickersham & Bowers to set up an appointment with one of our experienced lawyers.