Redkey Gordon P.C.

Trust Myths Busted!

They can be incredibly useful tools, and thanks to the publicity, more people may consider using them, but many people misunderstand how trusts work. Let's take a look at -- and dispel -- three common myths about them.

Are trusts too much work? Are they only for the rich and famous? Do you really need to establish a trust before you die?

Trusts can be very useful tools, but few people understand how trusts work. Daily Financerecently posted an article titled "3 Myths About Trusts That You Can't Afford to Believe." This article examines and dispels three common myths about trusts.

Trusts really are only for rich people. Stop thinking about trust fund babies and the lifestyles of the rich and famous! There are all sorts of trusts that can be used in a variety of situations. These trusts are used frequently by regular folks just like you and me.

Trusts involve too much effort to work effectively. Some people think it is a lot of work to set up a trust. Sure, assets have to be moved into the trust, which usually means changing the formal designation of ownership from one or more individuals to the name of the trust. But creating a trust need not be complicated. As the original article notes, you can implement simple methods like naming the trust as a pay-on-death or transfer-on-death beneficiary to fund the trust without having to take immediate action. These designations keep the trust out of probate. In addition, they save on court costs and delays, but allow you the flexibility to handle your own affairs as long as possible.

You don't need a trust before death. Not so! Trusts can be a part of your financial life even while you are still around and kicking. A trust established while you are alive can manage your assets if you are incapacitated and unable to do so on your own.

Trusts offer a great deal of estate planning flexibility and let you achieve a variety of specific needs. Do not believe the myths! Read more in the original article, then consult your Sacramento estate planning attorney at Redkey Gordon regarding whether a trust might be beneficial in your own estate planning.

Reference: Daily Finance (September 20, 2014) "3 Myths About Trusts That You Can't Afford to Believe"

Is Estate Planning Only for the Wealthy?

So who needs estate planning? The answer is just about everyone. Although it is true that the planning that is required for a person with very limited wealth versus that of a person with great wealth, should not be as complex or costly, some degree of planning is required nevertheless.

Who exactly needs estate planning? Only the wealthy? Wrong! Everyone needs to do some form of estate planning.

Although the planning may vary based on the overall wealth and intentions of individuals, some degree of planning is required regardless if you are a prince or a pauper… or somewhere in between. The recent article in the Capital Gazette, titled "Estate planning, it's not just for the rich," reminds us of some very simple tasks you can do to get your estate organized. Communication is important when it comes to estate planning and end-of-life decisions. Consequently, you should talk with your loved ones and the executor of your will about your plans and wishes. You should also speak with an experienced estate planning attorney and do the following:

• Get a will. This lets you to decide how your assets will be distributed when you die and (if applicable) who will be the guardian of your minor children.
• Stay up-to-date regarding the beneficiaries of your insurance policies, retirement plans, and other documents. The original article reminds us that beneficiary designations are a very easy way to transfer property, and the designation trumps a contrary designation in a will.
• Create durable powers of attorney, which let you appoint someone you know and trust to make decisions on your behalf if you become incapacitated.

You also should calculate your net worth. If your estate is less than $5.34 million, then your estate will not be subject to the estate tax.  If your net worth is more, then you should speak with Robert A. Gordon your Sacramento estate planning attorney to develop a strategy to minimize or eliminate the estate tax burden. Proper estate planning will make sure more of your estate goes to your loved ones and not to paying taxes.

Reference: Capital Gazette (September 19, 2014) "Estate planning, it's not just for the rich"

Should You Use Mediation To Discuss Elder Law Issues?

Mediation has emerged as a valuable tool for seniors and their families as an alternative to costly litigation. Mediation can be a useful instrument to prevent post death conflict by dealing with a family's issues during the senior's life.

A recent issue of the New York Law Journal, titled "Mediation: Prevent Estate Litigation, Preserve Relationships," explains when a family has a positive relationship and is making decisions together, difficult issues can be dealt with little or no hard feelings. On the other hand, if family members disagree or have competing interests, there is a chance that conflicts may arise. These disputes can lead to contested guardianship proceedings when the senior is alive and contested estate proceedings after he or she is gone. Either one of these disputes can take an immense toll financially and emotionally on a family.

Elder law attorneys help seniors address and resolve the issues that face them at their stage of life. This can include long-term care matters, retirement benefits, estate planning, housing, abuse and neglect of a vulnerable senior, potential guardianship, and health care. Elder law attorneys can also assist with post-death issues relating to probate and estate administration.

The original article notes that mediation is becoming a valuable tool for seniors and their families. This is preferable to the expense and pain of litigation. Mediation can be useful to avoid post-death conflict in the family and to discuss issues during the senior's life.

Mediation is one way to solve these types of issues. Speaking with an experienced Sacramentoestate planning attorney at Redkey Gordon P.C. can also help you to clarify the senior's wishes and get the entire family on the same page. Who needs more stress when a loved one has become incapacitated or passed away?

Reference: New York Law Journal (September 22, 2014) "Mediation: Prevent Estate Litigation, Preserve Relationships"