Category: Estate Planning & ...

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Monday January 10th, 2022.

When you’re young, healthy, and beginning a family, you may not think about estate planning, but your child needs you to make decisions now that will ensure a secure future for him or her, even if the worst happens.

There are a few critical estate planning actions that every parent should take to ensure that their child is secure, no matter what the future holds.

Make a Will

Making a will is crucial for parents, but did you know that each parent should have their own legal will? Even if generating only one document may be more efficient, a joint will doesn’t make much sense.

A shared will ties the survivor to the original terms, leaving little room for the surviving parent to make revisions if circumstances drastically altered.

Name a Guardian

Your will should name your spouse or partner as the guardian of your children, and their will should name you. Having it written down prevents someone from stepping forward and challenging your children’s custody.

If both of you die or the surviving partner is unable to care for the children, you will need to have an alternate guardian. The most difficult task for parents is deciding on a guardian. It’s difficult to envision anybody else raising your children, yet it’s one of the most crucial things you can do to assure their future happiness.

Set Up a Trust

A child trust fund allows you to decide what your children will receive and when they will receive it. A trust fund is a place where you can keep the assets you want for the beneficiaries you pick.

The trustee is legally accountable for the child trust fund’s management and must fulfill your desires precisely as stated in your will.

For example, you might wish to give your child a lump sum of money on their 18th birthday or want them to inherit one of your most valuable things after you die.

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Friday December 10th, 2021.

If you are dealing with an estate in probate, it can feel like you need to learn a whole new language to understand the proceedings. To help you better understand the process, we have created a glossary of the most commonly used terms in Probate proceedings, except for the term “executor”. In Florida, an executor is referred to as a “Personal Representative”. 

BENEFICIARY: n. a broad definition for any person or entity (like a charity) who is to receive assets or profits from an estate, a trust, an insurance policy or any instrument in which there is distribution. There is also an “incidental beneficiary” or a “third party beneficiary” who gets a benefit although not specifically named, such as someone who will make a profit if a piece of property is distributed to another.

DECEDENT: n. the person who has died, sometimes referred to as the “deceased.”

EXECUTOR: n. the person appointed to administer the estate of a person who has died leaving a will which nominates that person. Unless there is a valid objection, the judge will appoint the person named in the will to be executor. The executor must ensure that the person’s desires expressed in the will are carried out. Practical responsibilities include gathering up and protecting the assets of the estate, obtaining information in regard to all beneficiaries named in the will and any other potential heirs, collecting and arranging for payment of debts of the estate, approving or disapproving creditor’s claims, making sure estate taxes are calculated, forms filed and tax payments made, and in all ways assisting the attorney for the estate (which the executor can select).

INHERITANCE TAX: n. a tax imposed on someone who inherits property or money.

INTESTATE: adj. referring to a situation where a person dies without leaving a valid will. This usually is voiced as “he died intestate,” “intestate estate,” or “intestate succession.”

PROBATE: n. the process of proving a will is valid and thereafter administering the estate of a dead person according to the terms of the will. The first step is to file the purported will with the clerk of the appropriate court in the county where the deceased person lived, along with a petition to have the court approve the will and appoint the executor named in the will (or if none is available, an administrator) with a declaration of a person who had signed the will as a witness. If the court determines the will is valid, the court then “admits” the will to probate.

SETTLEMENT: n. the resolution of a lawsuit (or of a legal dispute prior to filing a complaint or petition) without going forward to a final court judgment. Most settlements are achieved by negotiation in which the attorneys (and sometimes an insurance adjuster with authority to pay a settlement amount on behalf of the company’s insured defendant) and the parties agree to terms of settlement. Many states require a settlement conference a few weeks before trial in an effort to achieve settlement with a judge or assigned attorneys to facilitate the process. A settlement is sometimes reached based upon a final offer just prior to trial (proverbially “on the courthouse steps”) or even after trial has begun. A settlement reached just before trial or after a trial or hearing has begun is often “read into the record” and approved by the court so that it can be enforced as a judgment if the terms of the settlement are not complied with. Most lawsuits result in settlement.

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 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.