Estate Planning: Living Trust Not Always Best Financial Choice

Filed under: estate planning Tags:

Living trusts are often advertised as a solution to avoid probate, which involves a court overseeing the allocation of an estate and related financial and time costs. When such a trust is created, property is not part of a decedent’s estate but instead, it is part of the trust itself. However, sometimes living trusts may not save time and money in the end, as they can cost up to thousands of dollars, often more than probate costs, to set up. In addition, many simple estates distributed by wills never enter probate, unless there are problems raised by heirs or creditors.

One important consideration involved with making the choice between a living trust and a will is whether or not an estate would be likely to enter probate. If so, next consider whether the associated probate costs are likely to exceed those of setting up a living trust and whether or not other ways to avoid probate exist. It is important to realize that upon setting up a living trust it must be funded and assets must be transferred before one’s death. In addition, the creation of a living trust will not protect assets from creditors.

Before creating a living trust, it is important to consider whether one will effectively work in your situation. If it seems to be a good match, a probate or an estate-planning attorney can assist in creating a living trust. Those interested in creating a living trust should beware of those who call themselves trust specialists or certified planners, whose real goals often are simply to sell unneeded annuities and encourage the spending of savings.

For more information about Estate Planning or Contact Us.

Employee Adoption Benefit Packages

Filed under: Adoption Tags:

According to recent polls, 47% of chief U.S. companies offer some form of financial support to adoptive parents, increased from 12% of companies in 1990. The specific packages offered vary greatly; in a 2007 survey of 762 companies, the average adoption benefit package includes five weeks of paid leave and a reimbursement of $4,700. Other companies offered anywhere between one week of paid time off and a $500 stipend to 16 weeks of paid leave and a reimbursement of $20,960, allowing for total coverage of an average international adoption. In addition, companies also supply employees with outside adoption information, support groups, and agency contacts.

Though a company must fund 100% of adoption benefits without insurance assistance, the cost of providing these benefits is relatively low, as they are not an ongoing cost. In addition, the benefits for employers who offer increased adoption benefits are numerous. These packages allow for the promotion of a family- friendly image among the community and to potential new employees, and, as 50% of Americans have either adopted children themselves or have close relationships with adoptive parents, adoption benefits allow companies to stay current with the changing American family.

Some adoptive parents report that without employer adoption benefit packages, adoption would be more difficult due to high costs. In addition, as more and more people consider adopting children, whether or not employers offer assistance is an important issue for potential employees.

A 3-5% increase in companies offering adoption benefit packages is expected in the coming years as well as continued expansion of benefits offered, such as increased incentives for parents who adopt foster children. Employers interested in creating employee adoption benefit packages are offered free assistance on The Dave Thomas Foundation’s website.

For more information on Adoption or Contact Us.

Estate Planning: Creating a Will or Living Trust

Filed under: estate planning Tags: ,

Approximately 60% of Americans do not have either a will or living trust, leading to numerous problems for heirs upon their death.

Generally, a trust exists when a person, or the grantor, gives property to another, the trustee, to hold and manage for other persons, called beneficiaries. A living trust is one that can be amended or revoked by the grantor during his or her lifetime and he or she maintains all benefits of the property placed into the trust. Advantages to creating a living trust instead of a will include avoiding probate and its ensuing costs and privacy in administration. However, a living trust is more time consuming than creating a will and will not be supervised or reviewed by a court.

A will, though less expensive to create, is subject to probate and therefore additional costs such as court costs, appraisal fees, executor’s commissions, and attorney fees. In addition, terms of a will, including names of beneficiaries, are a matter of public record once it is filed with the probate court. Even when a living trust is created, a will is still necessary, as it is the appropriate document to name guardians of minor children or to name an executor to allocate assets not transferred to the trust during the grantor’s lifetime.

Heirs and beneficiaries can challenge the validity of both living trusts and wills, though the time periods in which to do so differ. A living trust can typically be challenged for up to two years, while contesting a will must be done within three months. These documents can be found invalid for incompetence at the time of creation or for undue influence from others.

Consulting with an attorney can help determine whether a living trust or will is more appropriate and likely to accomplish personal goals. Though many online companies offer assistance in creating wills or trusts for a small fee, these services usually lack the ability to handle complex estates. Other inexpensive estate planning resources can be found through Legal Aid and Bar Associations.

For more information about Estate Planning or Contact Us.

ESTATE PLANNING IN THE DIGITAL WORLD

Filed under: estate planning Tags: ,

Many aspects of our lives are now online.

When one becomes disabled or dies, access to personal or financial online accounts and contacts can be lost or are of little value if a family member doesn’t know of their existence. Even if they have account information, access can be problematic.

As businesses move away from paper, it becomes more difficult to locate and access online information, especially if someone dies without sharing this information. Most internet companies have strict privacy policies that might complicate internet access, which will delay the release of username and password information without a fight.

Consider giving your heirs (or someone you trust) access to information that may be stored online, such as photographs, videos, letters, etc. These things may not have monetary value but may be priceless to loved ones. This includes e-mail accounts, online banks and brokerages, automatic bill-paying arrangements, and Facebook, Linked-In or Twitter pages.

As our computer literate population ages, lawsuits after disability or death are likely to increase and could end up forcing family members to unnecessarily deal with these issues.

So, in preparing your estate planning documents consider who will have access to your computer and online passwords.

For more information about Estate Planning or Contact us.

ESTATE PLANNING: THE DIFFERENCES BETWEEN A WILL, A LIVING WILL AND A LIVING TRUST

Filed under: estate planning Tags: ,

When you are thinking about estate planning, almost every single adult person should have a Will, a Living Will, and possibly a Living Trust.

A Will is a document that declares what your intentions are with respect to your estate after you pass away. A Will can decide how your assets are distributed after your death. If you die without a Will, then this is called dying “intestate” and the laws of your State will determine who gets what and at what age. A Will can also designate a Guardian of a minor child and who controls the money for that minor child until adulthood.

A Living Will deals more with healthcare and right-to-die issues if the individual is no longer capable of making these decisions for themselves and the person they have designated cannot or will not make end-of-life decisions. A Living Will is a statement and a declaration to the world of what your intentions are with respect to the termination of life support and/or the provision of life support.

A Living Trust is a document that you create during your life which allows you to control distribution of your estate. With a Living Trust, it can be funded during your lifetime or after you pass away if a Pourover Will exists to fund any other assets that may not have been funded during your lifetime. A Living Trust can assist in avoiding or minimizing estate taxes. A Living Trust can also prolong distribution beyond the age of 18 or 21 for a beneficiary. The Living Trust holds title to the assets and not the individual. A properly funded Trust can also help to avoid probate.

For more information about Estate Planning or Contact us.

When is Probate Necessary?

Filed under: estate administration Tags: ,

On some occasions the probate process can be avoided. Typically this happens when assets have been transferred prior to death or proper beneficiary designations have been made.

However, the probate process may be necessary where there is an issue involving the validity of a Will or Trust and/or the terms of the same. There may be an issue on whether the Will or Trust was properly executed or whether the testator or grantor had the requisite mental capacity. If there are issues in dispute, then the probate process will be necessary.

Probate may also be necessary if the decedent did not have a Will or Trust and legal process must be followed in order to transfer title to assets that were not transferred prior to death. Probate is also required where assets were owned solely by the decedent and there were no other owners or designated beneficiaries of the asset. Probate may also be necessary in order to get the decedent’s name off of an asset and into a beneficiary’s name, such as real estate, car, or other assets.

Probate may be required if an asset was owned in a tenancy in common or joint tenancy and there was no designation regarding any survivorship interest for the passing of the same.

To summarize, probate is typically required where there is no designated beneficiary or surviving tenant on an account.

For more information about Probate/Estate Administration or Contact us.

Adopting Children From Haiti, Your Questions Answered

Filed under: Adoption Tags: ,

By CHRIS FRANCESCANI with ABC News

In the wake of the earthquake that devastated Haiti earlier this month, thousands of “Good Morning America” viewers have contacted the show, asking how they can help the many children orphaned by the quake. ABCNews.com spoke with U.S. government officials, aid organizations and non-governmental organizations to get the latest information on adoption of Haitian orphans.

Question: Can I adopt a Haitian Orphan?
Answer: No, not at present. In the wake of the earthquake that devastated the island nation earlier this month, new adoption applications for Haitian orphans are not being processed and are on hold indefinitely, according to the U.S. State Department. It’s unclear when the process will begin again.

Question: Why won’t the Haitian government allow the adoption of orphans?
Answer: The Haitian government is still in the process of identifying and registering children who were orphaned after the earthquake. In addition to concerns about child-sex trafficking, officials in Haiti need time to clearly identify a child as an orphan. Because of the number of missing and displaced Haitians, the process is long and arduous.

Question: Are any adoptions of Haitian orphans underway?
Answer: Yes. About 700 U.S. families who were already “far along” in the process are being allowed to complete their adoptions, according to Chuck Johnson, vice president of the National Council for Adoption in Washington, D.C. About 1,000 children are expected to be taken out of Haiti under the initiative, according to the U.S. State Department.

Question: What are the Haitian government’s requirements for prospective adoptive parents?
Answer: “It’s quite a lengthy and detailed process [with] a lot of very strict and rather unusual requirements that do not apply in most countries,” Michele Bond, the U.S. State Department’s deputy assistant secretary for Overseas Citizens Services, said. “You have to be married at least 10 years; you can’t be accepted as [adoptive parents] in Haiti if [you] already have a biological child, and you can’t be accepted if one parent is less than 19 years older than the child.”

So, for example, an adoption of a 10 year old would not be allowed if one spouse is 35 and the other is 28. Should prospective parents fall into any of these categories, they would need a presidential dispensation. “They would have to wait for the [Haitian] president to review your file, and then it goes to the courts there,” Bond said, adding that she doesn’t know of any other government that has such criteria. Information on same-sex couples was not immediately available, according to State Department officials.

Adopting Haitian Orphans

Question: How long does the process of adopting a Haitian orphan take?
Answer: It could take up to three or more years to adopt a Haitian orphan under pre-earthquake conditions. It’s unclear how long it would take now.

There are two parts to the process. The first part is a petition to the U.S. government to be declared eligible to adopt a child. That process, known as the I-600 process because of the name of the form, takes between 60 and 90 days, according to U.S. government officials and aid organizations. It involves a criminal background check, a medical background check and a suitability determination that involves visits to the home and interview with the prospective parents.

The second part of the process involves gaining approval from the Haitian government. That process takes two to three years, once the U.S. government approves the I-600 petition, according to U.S. government officials and aid organizations.

Question: Is that a long time compared to adoptions from other countries?
Answer: It is relatively long. Ethiopia, for example, matches adoptive parents to orphans in as little as 14 months, Johnson said, while countries such as China can take up to five years.

Question: Approximately how much does it cost to adopt a Haitian orphan?
Answer: The cost of adopting a child from Haiti can range from $10,000 to $25,000, according to Kathleen Strottman, executive director of the Congressional Coalition on Adoption Issues.

“The costs vary depending on the agency used and the services they provide (some are a one-stop shop, others do basic services) [the] State Department reports that the cost of the adoption itself is approximately $3,000 and the remaining are travel and agency fees,” Strottman wrote in an e-mail.

For more information about Adoption or Contact us.

Haitian Adoption: What It Says About America

Filed under: Adoption Tags: ,

Written by Jeff Katz, The Huffington Post

The New York Times published a magnificent story about the Heaton family of Roca, Nebraska (population 130), who are in the process of adopting two Haitian girls, ages 7 and 2. Like 900 other Haitian children just flown to the United States, these children had been in the adoption process for years, stymied by bureaucracy and inertia. Spurred by the humanitarian crisis of the Haitian earthquake, the United States has eased its visa requirements for Haitian children in the final stages of the adoption process. According to the Times story, when the Heatons landed in Omaha with their new daughters, they were “greeted by throngs of well-wishers toting teddy bears and balloons.”

I was moved by this but not surprised. The United States is the most open country in the world when it comes to adoption. In many parts of the world, blood means everything and people would never adopt outside their family. In the United States, we have a far more expansive view of family. In fact, half of all adoptions in the world are by Americans.

And it’s not just that Americans adopt. Americans adopt children that might be shunned in other countries. The younger of the children being adopted by the Heatons had a medical condition that left her brain partially exposed. The family made numerous trips to Haiti and hosted the child when she came to the United States for a medical procedure to correct the problem.

Kathy Heaton described her reasons for adopting. “We can’t think of anything we’d rather do than raise these children and make a difference.” The Heaton family is like tens of thousands, if not hundreds of thousands, of Americans, driven to adopt out of a sense of altruism. Last year Americans adopted 55,000 abused and neglected children from foster care. It is as simple as wanting to help a hurt child.

Perhaps the most interesting aspect to the story of the Haitian orphans is that it took a natural disaster of such tragic proportions to shake the bureaucracy. Many, like the two girls being adopted by the Heaton family, have spent much of their lives in an orphanage while waiting for the “system” to work. Why did it take such a tragedy to free these 900 children?

Unfortunately, there is a sad parallel between the plight of Haitian children waiting in orphanages and the 125,000 American children waiting in foster care to be adopted. That parallel is a system that too often acts as a roadblock instead of an emergency service responding to the urgent need of a child without a family.

Contrary to conventional wisdom, in the United States, there are far, far, more people interested in adopting children from foster care than there are children in need of families. Talk to people trying to adopt from foster care (and I have spoken to thousands) and you will quickly learn that there are far too many places in the child welfare system where the incentives for inaction outweigh the incentives for action. So children wait.

I have worked in this field for 20 years and I have seen countless examples of good people wanting nothing more than to help a hurt child heal. I have seen children in wheelchairs adopted. I have seen a child scarred by cigarette burns adopted by a woman who recognized those scars from her own childhood abuse. Last year I met an 18-year-old kid with “thug life” tattooed on his arms. He had just been adopted and when he spoke about his “mama” he wept.

We are blessed in this country to have an overabundance of families who want to provide homes to children in need. It should not take a catastrophic natural disaster to motivate us to sweep away the barriers that prevent children in need from having the families they deserve.

For more information about Adoption or Contact us.

Five Ways to Avoid Probate and Trust Litigation

Filed under: estate administration, estate planning Tags: , , ,

Written by Wight Auction

Litigation after the death of a loved one is never easy. It often pits relatives against relatives and can be very stressful. It is not something you want to happen when your loved ones are already dealing with their loss. How can you make sure your loved ones don’t fight or become involved in litigation over your estate?

Here are some things you can do to help avoid litigation:

1. Communication.  Inform your heirs if you are making a distribution that is “not natural.” A “natural” disposition is when you leave your estate to your heirs such as your children and grandchildren. An “unnatural” disposition is where you disinherit your natural heirs and leave your entire estate to someone you have known for 6 months, for example, or a caregiver, or other distant family members or charities. It is of course up to you who you choose to inherit your estate but it will help to avoid discord later if you tell your heirs what you are doing. You can discuss it with them or leave them a letter of explanation. Litigation develops when the individuals who thought they would be receiving an inheritance find out after your death that they were disinherited or will not be receiving an asset or a portion of your estate that they thought they were getting. So if you do want to exclude a child, for example, or make an uneven distribution of your estate among your children, tell them about it or in some manner explain it so it doesn’t come as a complete shock.

2. Have properly prepared legal documents.  Make sure your estate planning documents are properly prepared. So often, litigation arises because of wills or trusts that were not properly drafted in the first place. If you are concerned about someone contesting your will or trust, you certainly don’t want to do it yourself or use a “trust mill” or online service. You want customized properly drafted documents so there is no ambiguity as to your wishes. Also, most estate planning lawyers also do trust administration. Frequently it is the case that surviving family members will call the lawyer that drafted the estate plan, so choosing a trusted lawyer that you can work with during your lifetime may also be someone that can assist your family upon your death.

3. Keep your estate planning documents up to date.  If you have neglected to update your trust to add or remove beneficiaries after a death, divorce, or other changed circumstance, or worse yet, neglected to change payable on death designations, you are asking for trouble. An up to date estate plan (which includes a trust, pour over will, and powers of attorney for asset management and health care) makes it less likely for uncertainty upon your death. Also necessary as part of the periodic review of your estate plan is to have the beneficiaries updated as necessary on life insurance polices, IRAs, pension plans, etc. The last thing you probably want is your ex-spouse receiving life insurance benefits when you were divorced 10 years ago.

4. Include “no contest” clauses in your estate planning documents.  Most wills and trusts have a “no contest” clause. This can discourage disputes over a will or a trust because it provides that someone who contests certain provisions in your estate plan will not be entitled to an inheritance. Depending on where you live, some “no contest” clauses can be easily overcome.

5. Don’t forget to provide for your personal property.  Dividing up personal property and family heirlooms is another area which, believe it or not, can become a battleground. Family members sometimes hold up the rest of the estate administration over property that has little monetary value but has great sentimental value. Unless you have left specific instructions, your personal property will be divided up among the beneficiaries. But how does you executor or trustee know how to determine an equal distribution of items that have sentimental value? What do you do if both daughers want (and may have been promised) grandmother’s ring? If you have personal property and you want it to go to a certain family member or a friend, there are several ways to do it. You can make a specific bequest of an item in your will or trust. This is a preferable way for items of value. You can also execute a personal property memorandum listing each item and who is to receive it. This can be changed or added to at any time before your death. There are even online auction sites that will divide up the personal property among family members if you sign up before your death.

Taking the time to incorporate some of these ideas into your estate planning can avoid disputes over your estate that are not only costly in terms of money but also in terms of family harmony.

For more information on Estate Planning, Estate Adminisitration, or Contact Us.

Thomas Taneff | 600 South High Street, Suite 201 | Columbus, Ohio 43215 | Phone: (614) 241-2181 | Fax: (614) 241-2160