Your choice of a trustee can mean the difference between efficient and professional handling of the trust you leave behind and one that is riddled with conflicts and misappropriation.
You can designate an individual, a company or a combination of both to serve as trustee over any trust left by your estate. While naming a family member as a trustee has some benefits, it is important to note that a corporate trustee offers expertise that you may not find in a family member. This is why it is important that you weigh your options carefully.
Here’s why a professional trustee may be best:
An individual trustee can easily make costly mistakes or, worse still, mismanage your trust assets. And since auditors do not review individual trustee decisions, significant mistakes can go noticed for years. This can result in fines and lawsuits if the errors had something to do with taxes.
Trustee companies, on the other hand, employ expert auditors who ensure that trusts under their care are properly managed. These auditors carefully review compliance procedures, account management processes as well as fiduciary and fulfillment duties.
Most people believe that individual trustees are cheaper than corporate trustees. This may not be entirely true, especially when dealing with complex assets. An individual trustee must bring on board other professionals like certified accountants, attorneys and investment managers to help them execute their trust-related duties.
When you add up the costs of these professionals to the trustee fee, you might end up paying more than you otherwise would if you hired a professional trustee. Most corporate trustees bundle up their fees into a single comprehensive fee.
A trust is one of the most important estate planning tools you can have. Before nominating a trustee to oversee your trust’s assets, it is important that you take these and other factors into account.
]]>It is true that all of these things are important, but don’t let that importance make you think you don’t need to address your low-value assets. The truth is that a more comprehensive estate plan is always going to be more beneficial. In the case of many low-value assets that have a lot of sentimental value, you may even be able to reduce the odds of a dispute between your heirs.
It may seem counterintuitive that the low-value assets often spark more disputes than the high-value ones, but the fact is that this is an emotional time for your heirs. They are going to cling to things that they have an emotional connection to, and those things are going to seem more important than money.
For instance, people have gotten into estate disputes over minor family heirlooms, like a bowl or a painting or a book. The value to them is that this was an item that their parents owned that was important to them. They want to make sure that they get it because they want that connection with the person that they’ve lost.
With other assets, that don’t have a sentimental value, an easy way to solve disputes is to sell those assets. The heirs can then divide the money that they make in that sale. However, with family heirlooms and other things that cannot be replaced, selling is not really a viable option. An heir isn’t going to get into a dispute over a book because they can’t go out and buy their own copy of the book; they’re going to do it because they want that very specific copy.
With few options, these types of disputes can really drag on.
At the end of the day, the most important thing you can do is to strive to create a plan that focuses on what is really best for your family. It’s not all about money. You just need to know how to set the plan up so that it works for the people you love.
]]>It can also leave their closest family members in a dangerous situation. Even if do you trust that your spouse could take care of your kids if anything happened to you, you should really consider creating an estate plan to help protect your kids in case anything does happen. What are some of the ways an estate plan benefits your children as you get older?
If you die without naming someone to serve as a guardian for your children, they could wind up in foster care or even a state home after your death. Something could happen to your spouse or the other parent of your children, putting them in a very vulnerable position. You have the right to name a guardian in your will, and doing so protects your children during what could be the most difficult time of their lives.
If your children aren’t yet adults when you die, the person who takes over their care will control their inheritance. That could be a guardian you name or maybe your ex-spouse. That other person could use up all of the assets you wanted your children to benefit from after your death. Creating a trust helps preserve assets for your children to use in the future even if they are quite young when you die.
If your children are older, then they may find themselves in a difficult position in the event of an emergency. Especially if you delegate authority to them in any of your documents, such as a medical power of attorney, they may need to make difficult decisions on your behalf.
A thorough estate plan that includes information about your medical preferences takes the pressure off of your children. Even if you didn’t trust them to one of those crucial roles in the event of your incapacitation, the guidance that you provide will give them peace of mind and let them know that they will follow your wishes rather than imposing their own preferences on your situation.
Understanding how estate planning helps protect your children could motivate you to create documents earlier in life.
]]>While the later parts of life can be a rewarding chapter for elderly people, they are also more vulnerable in some areas. Sadly, many elderly people across the U.S. are subjected to various forms of abuse each year, some more so than others. Recognizing the factors that could increase the chances of your loved one facing abuse could assist with prevention.
Generally, the older a person gets, the more reliant they will become on receiving care and assistance. Studies indicate that people over the age of 80 are at a heightened risk of facing abuse. Abuse can take many forms, such as physical, verbal and financial. It can also occur in the victim’s own home or a residential facility. It is also important to note that while abuse may come from an employee, occasionally it can come from within the family or friend circle.
Elderly individuals are often not as mobile as they once were. This means that they might not be able to get out and see other people. In fact, research suggests that as many as 13 million elderly people in the U.S. live completely on their own. Older people who are withdrawn from society may be especially vulnerable to manipulation and different forms of abuse.
Your elderly relatives deserve to be treated with dignity and respect in the later stages of their life. If you suspect that abuse has taken place, you should gain an awareness of the legal protections offered to elderly people in Colorado.
]]>To do this, you may want to consider using a disinheritance clause. This simply means putting in language that specifies that you did intentionally cut your child out of the will. People have tried other ways to get around this, such as leaving someone a token inheritance – like a dollar – but you don’t really need to do anything that drastic. You just need to make it clear in the will that you did not want to leave them anything.
You may find yourself wondering why you need to take the step. Couldn’t you just leave that heir out of the will, allot all of the other assets to other people, and trust that it would be taken care of?
The problem is that children legally expect to inherit. This doesn’t mean that they’re going to, but they do expect to and the law also expects them to. You need to take steps to overcome this type of presumption. The disinheritance clause can do that, and it can also reduce the odds that your heir will then start a will contest on the grounds that you merely forgot or overlooked something.
As you can see, estate planning may be more complicated than you assumed. Be sure you know about all of the legal steps you’ll need to take.
]]>This is what Medicaid planning is all about, and with a sound plan in place, you may end up saving a lot of your money or assets that would have otherwise gone to taking care of the nursing home bills. Below are some common Medicaid planning mistakes you should avoid.
In a bid to qualify for Medicaid, some people may think of hiding assets. But, in the end, it may prove counterproductive when you find yourself facing fraud charges in addition to a denial of benefits. It is an offense to hide assets as much as it may be tempting.
The sooner you start planning, the better. While it’s never too late to plan for Medicaid, it is important that you begin laying the groundwork early to avoid any loose ends. That way, you can figure out the plan you are eligible for and one that will not eat away a significant portion of your assets.
A spend down is meant to get your financial assets below the Medicaid qualifying threshold. When done incorrectly, you may be penalized with a period of ineligibility that will likely affect your financial security. Giving away assets to family or friends should also be done right, or else, there is a risk of potential penalties.
Medicaid planning requires the necessary knowledge to get it right. Unfortunately, mistakes are common, and costly too. Therefore, it is crucial to make informed decisions in every step to avoid any problems along the way.
]]>Having the right plan for your long-term care can make it much easier to get that care set up when you need it. Here are a few steps to help you make the best possible plan.
To start with, one thing to do is to obtain long-term care insurance. This insurance will kick in when you need longer-term care in a nursing home, for example. Since the average cost of a nursing home for a year-long stay is approximately $48,612 (as of 2019), you can see why it’s so important to have financial coverage.
The next thing to do is to look at different care facilities and medical care options. You should decide which kinds of nursing homes or long-term care facilities that you approve of. Plan for your care based on the options you choose. Your plan may be different if you plan to stay in your own home compared to staying at a facility, and you can plan accordingly.
Finally, make sure you talk to your loved ones about your choices. Let them know if you have decided on a nursing home or in-home health care provider. Provide them with information on your long-term care insurance policy and where to find it if they need to contact the insurer after you fall ill or are injured.
Having an open conversation about long-term care will make sure that everyone is on board with what could happen in the future. Not everyone will need long-term care, but knowing that you have a plan in place in case of illness or injury can help you feel better about the future. A good plan can help reduce stress when an emergency does happen or if long-term care is needed unexpectedly.
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