Proceeds from life insurance policies are distributed directly to the named beneficiaries upon your death. They are not governed by your Will and do not have to be probated before being distributed. But that doesn’t mean your heirs won’t pay tax on those proceeds. Quite the contrary, the value of the policies will be added into your estate specifically for estate tax purposes. Fortunately, there’s a way to avoid paying those extra taxes. An Irrevocable Life Insurance Trust can act as a … [Read more...] about What is a Life Insurance Trust?
Are you considering opening an Individual Retirement Account? There are several types to choose from, but the two most common are Traditional and Roth IRAs. Both are excellent savings opportunities, but they vary in several ways. Tax Deferred versus Tax Free Earnings A traditional IRA allows you to save non-taxed income for your retirement. When you contribute to this type of account, the amount is deducted from your yearly taxable earnings. This allows you to defer taxes on this money and to … [Read more...] about IRAs: Traditional vs. Roth
If you have traveled in estate planning circles, the term Revocable Living Trust may be familiar to you. Revocable means that the Trust can be changed by you – the “trustor” – at any time. You can also cancel or revoke the Trust if you choose. This type of Trust is created while you’re alive and benefits both you and your heirs. There are three basic stages to a Revocable Living Trust: While you’re living and are of sound mind, you can continue to manage the assets within your trust. You’ll … [Read more...] about How A Revocable Living Trust Works
A Health Savings Account (HSA) is a great way to plan for high medical costs. If you have a high deductible health coverage plan and are considering opening an HSA to supplement the deductible cost, here is what you need to know. How to Get Started Before you open an account with a bank or insurance agency, check to see if your employer provides an HSA. This may be the case if their offered health coverage is high deductible. When you open your account make sure it pays interest. You may have … [Read more...] about How A Health Savings Account Works
The choice to disinherit a child is never an easy one. Disinheriting or failing to provide for a child in your Will, sends a clear signal about your feelings towards that child. Perhaps they cannot hold a steady job, are addicted to drugs and alcohol or are prone to criminal acts or violence; perhaps they are of financial means great enough that they do not need an inheritance as much as your other children. Whatever the reason, you risk creating a strong rift in the family if all of your … [Read more...] about Disinheriting a Child
Many people don’t realize that their Wills can’t control what happens to some of their most important assets. Houses, retirement accounts, proceeds from life insurance policies, and brokerage and bank accounts can all pass to others, regardless of what your will might say. Your will also doesn’t affect certain property that you own with others. Some property for example, is titled so that the surviving owners automatically inherit the property when one owner dies. Known as “joint tenancy with … [Read more...] about Joint Tenancy and Your Will
An incentive trust is basically an irrevocable trust that provides a monetary incentive for an heir to behave according to standards set forth in the trust document. Typically, incentive trusts can be used for heirs that you wish to provide for, but who may be addicted to drugs or alcohol, display criminal behavior, have trouble holding a job, or engage in other undesirable behaviors. An incentive trust must state the behavior that must be adhered to before trust assets are dispersed. You may … [Read more...] about What is an Incentive Trust?
Even if you have been planning your retirement for years, you may not actually be ready. Not only are people living longer these days, but they are also far more active during their retirement years. And more activity often means more money. But if you take a few steps now to avoid some of the most common mistakes people make when planning for retirement, you could avoid financial disaster in your later years. Understand That It’s Never Too Late – No matter how old you are, it is never too … [Read more...] about Avoiding Costly Retirement Mistakes
A Living Trust is a legally-binding document that essentially holds title to your assets to simplify the distribution process after your death. As the person creating the Trust, you are known as the Grantor and should you choose, can also be the designated Trustee, the person responsible for managing the Trust. This allows you to maintain complete control over your assets, even though they are no longer titled in your name. The Trust also has designated beneficiaries. While you’re alive, you … [Read more...] about What is a Living Trust?
We all know the importance of planning for a time when we’re no longer here, but about planning for a time when we’re unable to speak on our own behalf? It’s a scary notion to be sure, but about 60% of Americans will need some form of long-term care during their lifetime. For many, this will be due to mental disability or other forms of incapacitation. And if you’re not competent, you won’t be able to voice your wishes about medical treatments, end-of-life measures or even your personal … [Read more...] about What Are Advanced Directives?