Putting together an estate plan is likely on your to-do list. You know that list. The one that also includes other fun projects like putting together a budget, double checking the health insurance policy and cleaning out the basement. This list likely gets brushed aside on a regular basis.
When most people think about estate planning, the document known as a last will and testament likely comes to mind. While a will can be used to convey one's wishes with regard to the ownership of personal belongings and the disbursement of assets, a trust is typically a better option for people who wish to avoid probate, leave property to young children and protect assets from creditors.
Every parent wants their child to succeed and do well in life. To help steer a child towards or keep a child on what a parent considers to be the right path, a parent may offer an incentive to help a child out financially. For example a parent may agree to pay a college-bound son or daughter a monthly stipend provided that he or she maintains a certain GPA. These types of incentive or conditional arrangements are fairly common between parents and children. What happens, however, if a parent dies and is no longer able to provide the nudge in the right direction that a child may need to achieve his or her goals.
Gone are the days when a couple married during their early 20s, welcomed and raised children together and lived out the rest of their lives together. Today, with the U.S. divorce rate hovering around 50 percent, familial structures within the U.S. are more complex than ever. Adding to the confusion are the estimated 42 million U.S. adults who report being married two or more times.
According to the New York City Economic Development Corporation, the city is home to an estimated 600,000 dogs and 500,000 cats. For many pet owners, a dog or cat is revered as not only a beloved companion, but also another member of the family. It makes sense therefore that, much like an individual may plan for the future of any loved one, a pet owner may choose to take steps to provide for a pet's future care and veterinary needs in the event he or she becomes incapacitated or dies.
If you have already appointed an executor, you have obviously taken steps to ensure that your financial and legal matters will be in order after you have passed away. Congratulations to you for being so proactive. Please however, keep in mind that estate planning is meant to be a “living” process. Meaning, your estate plan is meant to be revised as often as it needs to be during the course of your life.
If you have never heard of a Qualified Personal Residence Trust, you are not alone. Although this particular estate planning tool was once popular, it became less well-known over time. However, this tool may still help various Americans transfer their homes to their children or other trusted beneficiaries without incurring a substantial tax penalty. As a bonus, this particular tool allows a homeowner to keep living in his or her residence despite the technical transfer. In general, one must specify how long the terms of the trust will last.