Does your neighbor or best friend complain to you that if you don’t have a trust you will regret it? Everyone has heard of the word, but few people truly understand the benefits and drawbacks of trusts, let alone what kind of trust they may have. The truth is that not everyone needs a trust. The answer depends on what state you are a resident of when you die, and other factors including whether you own real estate in more than one state.
Read this handout and you will know more about trusts than that pesky neighbor who thinks you are doing everything wrong…
Kathryn Bedell 1/31/2019
Advice from a Seasoned Estate Planning & Probate Attorney
1. Don’t get your estate planning documents online. I estimate that 99% of what I do is not preparing documents, but giving tailored advice for your unique situation.
2. Use online research, but only to educate yourself, as well as to compare and contrast attorneys.
3. Interview lawyers, by telephone or at your first office meeting – shop around and ask for price.
4. Make sure to use a lawyer who only focuses on estate planning.
5. If you are afraid to interview a lawyer, use word of mouth – ask your friends.
Kathryn Bedell 12/26/2018
Starting July 1, 2019, Maine will allow a real estate deed to designate beneficiaries, the same way you would on a bank or stock account. Florida residents are already familiar with this deed and call it a “Ladybird” deed. The advantage of the new deed is that the beneficiaries will have absolutely no rights to the real estate and the owner can change the deed at any time before you die, without notice to the beneficiary.
It will minimize the need for Trusts, especially out-of-state residents with Maine real estate who want to very simply by-pass Maine probate when they die. It will also potentially eliminate probate for Maine residents who have beneficiary designations for all their assets (life insurance, IRA, bank accounts) except the house. Call today to see if this new deed is right for you!
Kathryn Bedell 12/12/2018
Many people mistakenly think that they have control over a loved one’s property by virtue of being a parent, a child, or a spouse. This is wrong! If you are disabled (hospitalized, nursing home) and unable to act for yourself, no one else can deal with your property. No one else can speak with social security, the IRS, the bank, even a utility provider if the account is solely in the unavailable person’s name. This even includes assets that are jointly held. Everyone, even young adults, should have a Durable Power of Attorney appointing someone they trust to immediately step into their shoes. Otherwise that loved one will need to get a guardianship and/or conservatorship to gain access, which is time consuming, burdensome, and extremely expensive.
Durable Powers of Attorney have strict requirements from state to state. For example, Maine has statutory notices that must be in every Maine Durable Power of Attorney. Grabbing a Durable Power of Attorney on-line is not a good solution and puts you at risk for having invalid documents.
Don’t ignore this critical document and leave your assets unprotected. EVERYONE must have a Durable Power of Attorney today.
Kathryn Bedell 12/12/2018
Do you own an IRA/401K/Annuity or other retirement “pre-tax” account? When was the last time you checked the beneficiary designations on those accounts? You could be wasting your retirement money on unnecessary taxes.
We often forget that giving retirement accounts to our heirs comes with a tax. Most of these accounts are “pre-tax,” meaning that you have taken a pass on paying income tax until later. That promise to pay carries over to your beneficiaries. Most companies will prompt you for a beneficiary when you set up the account, but that could have been years ago. Things change, a beneficiary may have died, you may have divorced, etc. You always want to make sure you have “primary” AND “contingent” beneficiaries on these accounts. The tax savings you will pass to your heirs is significant. If your primary beneficiary predeceases you, in a common accident, for example, and you don’t have a contingent beneficiary named, that account will default to your “Estate” when you die. Estates are taxed (Federal and State) at the very highest income bracket there is. Moreover, individuals can usually spread out the tax liability over the rest of their lives. Estates have to take the money in a set time frame, meaning potentially one-half of the money will needlessly go to pay completely avoidable income tax.
So, update those beneficiary designations and make sure you have a contingent beneficiary named on all these types of accounts.
Kathryn Bedell 12/3/2018