The rudimentary purpose of estate planning from a financial standpoint is to take control and make sure that your assets are distributed according to your wishes rather than the will of the court. However, there are other matters that can be left up to the court if your estate plan does not address the possibility of future incapacitation. No one would debate the fact that considering such a scenario in not especially pleasant, but it is necessary all the same.

If you look at the statistics people are living longer, and the fastest growing age group is people 85 and over. Once you start advancing past that age you may indeed start to find it difficult to make sound decisions even if you are not physically incapacitated, and this is no badge of shame. Aging is something that we all experience and it is as natural as being born, but you do have to address the realities that you may face and make the appropriate preparations.

Let’s say you were to reach the point where you were having trouble making sound personal and financial decisions and did no planning to address this eventuality. Any interested party could then petition the court to appoint a guardian of the person to make personal decisions for you, and this would include sensitive medical choices. The court could also be asked to appoint a guardian of the property(which could be the same person as the guardian of the person), and this would be an individual or entity that would manage the assets in your estate.

Most people would prefer to select their own representatives to take on these roles if they were to become unable to make decisions on their own. This can be done by executing a health care proxy and a durable financial power of attorney. When you do this you take control of your own future, name the representatives of your choice, and gain the peace of mind that comes with knowing that your affairs are in trusted hands.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

Depending on your intentions, financial planning and estate planning can go hand in hand, and there are two different perspectives that people tend to take. Some folks plan for the future from a financial standpoint with their eyes fixed firmly on retirement. Their goal is to make sure that they have the financial resources that they need after their working days are through, and they don’t really consider their estate plan as being part of their financial plan along the way. They see their estate plan as a way to divide any assets that may be left over upon their passing without having any particular goals in place

But there are other people who take a more comprehensive viewpoint. They have very specific estate goals in mind, and they make long term plans to achieve these goals. They are not simply planning for their own retirement; they are also making plans regarding their legacies after they pass on. Some people may want to make sure that their grandchildren have the means to attend college, or they might want to provide a trust fund for their children. People who have specific estate goals can include them as they make financial plans for retirement, and this can impact some of the decisions that they make along the way.

So for many people, financial planning as it applies to retirement and estate planning intersect. When you evaluate your life’s work after it is all said and done, it is a very satisfying feeling to know that one of the rewards is the ability to do something nice for your loved ones after you pass on. Smart planning can provide you with the best of both worlds: a comfortable retirement and a lasting legacy, and this is the ultimate goal for many of us.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

When you are making plans to distribute your financial assets at the end of your life you may also be taking stock of your broader, deeper legacy as a human being. Anyone who has seen the movie It’s A Wonderful Life understands the fact that we play an integral role in the world around us. When you die you are not just erased from the picture…the entire picture changes. Death is inevitable and nothing to fear, but life is to be celebrated and chronicled so that others can benefit from the many things that you have learned along the way.

The way that you chronicle your life in celebration and sharing is by writing or recording your life story and making it part of your estate. The point is not to be self aggrandizing or didactic in this effort, but rather to share a sincere and heartfelt rendering of your life and times. Writing your autobiography is actually a selfless act that can be at once useful, instructive, entertaining, explanatory, and emotionally moving to the eventual readers while being cathartic for you as your life winds its way toward culmination.

We are all links between the future and the past. For example, your grandmother may have identified very strongly with her ethnic heritage, cooking in the traditional manner and keeping customs alive that she learned from her mother. You may be the only flickering ember that remains to remind succeeding generations of this family hearth. Writing your autobiography can connect your great-grandchildren with your grandmother and her mother before her, and making the effort to keep these roots intact is a worthy endeavor.

When you write your autobiography you also get the chance to provide your loved ones with the background information they need to fully understand you. And as you undertake the task, it is a sure bet that you will come away understanding yourself a lot better as well.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

There are certain benefits that go along with doing your part to defend our country, and one of these is the retirement pension that service members are entitled to after spending at least twenty years on active duty. However, there is another type of pension that many people qualify for without even knowing it called the Veterans Aid and Attendance Pension.

This pension is available to veterans who can prove that they need assistance tending to their day to day personal needs, things like eating, dressing, and taking care of their daily medical routines. If you qualify, you can use your monthly Veterans Aid and Attendance Pension check to help to pay for nursing home or assisted living facility costs or cover care that you are receiving in your home.

One of the reasons why many veterans would assume that they don’t qualify for this pension without looking into it is because the length of service eligibility requirement is surprisingly minimal. One must have served for only ninety day with at least one of them being during a time of war to qualify for the Veterans A & A benefit. The only other requirement is financial. If your total assets exceed $80,000, you are ineligible, but your home and your vehicles are not included when you calculate the sum of your assets.

A single veteran who is eligible can receive as much as $1,632 every month, and this can really go a long way to defray your long term care costs. A married couple may be entitled to monthly payments as high as $1,949, and a surviving spouse who qualifies can receive as much as $1,055 per month.

If you think that you may qualify for the Veterans Aid and Attendance Pension, you will have to obtain an Application for Pension or Compensation through the United States Veterans Benefits Administration.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

Depending on the extent of your assets, you may have the power to do a great deal to help your extended family in a number of ways. And the beauty part of it is that it’s often possible to do so with resources that would have otherwise gone into the coffers of the IRS.

Exactly how you want to plan your inheritances is a personal decision, but there are those who adjust on the fly and consider the needs of family members as they unfold. Medical problems of family members are not something that you can anticipate or plan for, but you can react to them if you choose to do so. With the high cost of health care and long-term care today it is very possible that someone who is dear to you could benefit from some help paying these costs.

Many would be more than willing to step in regardless of the circumstances, but it so happens that there is a tax advantage that goes along with picking up someone’s medical expenses. According to IRS regulations you can pay the medical bills of an unlimited number of people equaling any amount of money free of the gift tax. So if the overall value of your estate exceeds the estate tax exclusion amount, which is just $1 million in 2013, any medical gifts that you give will reduce the taxable value of your estate. So medical gift giving can be a total win-win situation if certain conditions exist.

Aside from paying for treatments you can also pick up the tab for stays in an assisted living facility or nursing home free of the gift tax under certain circumstances. Plus, the IRS rules allow you to give health insurance as a gift to an unlimited number of recipients, and this can include some types of long-term care insurance.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

For most people the process of estate planning is aided by some clear-cut landmarks. You generally know in advance when you are going to retire and at that point your career has ended and you are usually not going to have any further responsibilities to the company that had employed you. Your retirement will have been anticipated and it is very likely that you played a part in grooming your successor while you were still receiving a paycheck. Exactly how the company reacts to your departure is not a matter that you have to concern yourself with in most cases.

However, when you are the co-owner of a small business you have to have a succession plan in place. When the co-owner of a small business passes away his or heirs are going to find themselves in possession of that share. It is very likely that they would want to liquidate it, especially if its value was intended to be spread among multiple family members. The remaining co-owners of the business would typically feel uncomfortable with the estate of the deceased selling that share to the highest bidder. The way that any conflicts are circumvented is through the execution of a buy-sell agreement.

The way that the buy-sell agreement is used for estate planning purposes involves life insurance. There are two primary ways that this small business succession strategy is actualized. One of them is called the cross-purchase plan, and the way that it works is that each partner takes out an insurance policy on the life of the other partners. When one of them passes away, the proceeds from the policies are used to buy the ownership share of the deceased from his or her estate.

The equity plan is the other very common buy-sell mechanism. With this approach the business entity itself purchases a life insurance policy on each co-owner, and upon the death of one of them the benefits are used to buy the share that is in inherited by the heirs of the deceased at a previously agreed upon price.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

Estate planning can be a delicate matter on the personal side, but once you have decided how you would like to distribute your assets you have another challenge. You have to find a way to get these resources into the hands of your loved ones after your death without losing anything in the process. This would seem on the surface to be a very simple matter, but in fact, it is much easier said than done in many cases.

The most draconian interloper would be the tax man who can enter the picture demanding an enormous percentage of your legacy. Unless new legislation is passed to alter the laws as they stand as of this writing, the top rate for the estate tax in 2013 is 55% and the exclusion is $1 million. So any portion of your estate that exceeds $1 million is subject to this extremely harsh federal levy.

If the value of your estate does not exceed the exclusion, the primary source of asset erosion that you are probably going to be faced with is the process of probate. When you pass away with a will as your vehicle of property transfer your estate must pass through probate. The surrogate or probate court will determine the validity of the will and supervise its administration. There are significant costs associated with this, including attorney fees, court costs, the executor’s fee, accounting fees, liquidation charges, and appraiser fees. This can all add up to as much as 6-7% of the value of your estate. Plus, probate can take anywhere from several months to several years to run its course depending on the complexity of the case.

You can save a lot of time and money by creating an revocable living trust to avoid probate. With these trusts you maintain complete control of your assets while you are living. But upon your death your appointed trustee administers the distribution of these assets to your heirs according to your wishes. Through the implementation of this strategy your loved ones receive their inheritances quickly, there is no red tape, and you have the power to determine the details of the distributions. Many people choose to stipulate that the principal shall remain untouched and only the earnings from the trust will be distributed to the beneficiaries to ensure the long-term viability of the trust as a source of ongoing income.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

The primary motivation behind the process of estate planning is to make sure that your family is provided for in any eventuality and there are no guarantees with regard to the timetable. When you go to your favorite news site, read the local paper, or tune into a news network on television you hear about people of all ages passing away suddenly each and every day. None of these people or their families expected the unthinkable to take place. As heartbreaking as it is under any circumstances, the consequences of an unexpected tragedy are compounded when no preparations have been made.

This is especially true when there are young children left behind. If you and your spouse are the parents of dependent children there are two essentials that must be included in your will. For one thing a guardian for the children should be named so that the person of your choosing will adopt that role should it become necessary. This gives you peace of mind and it prevents any disagreements that could arise among family members.

The way that you provide for your children financially is through the purchase of life insurance coupled with the inclusion of a testamentary trust in your will. Each spouse will be the first beneficiary of the other, but you then make the trust the secondary beneficiary of the policies and you name a trustee. This person should be someone who has the best interests of the children at heart who is willing to take on a long term responsibility because the trustee will be administering the trust until the beneficiaries reach adulthood. Should you and your spouse perish together the trust will be funded by the policy proceeds, and though no words can describe the impact of losing your parents at a young age, your children will at least be left with some financial support.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

Nobody wants to be required to pay excessive taxes, but if you are going to be faced with this type of burden you would at least like to know how heavy the load is going in be. In estate planning circles the details of the estate tax for 2011 have been somewhat of a mystery throughout the 2010 calendar year, and this has made it difficult to act with full certainty. Under the laws as they have existed throughout 2010 the estate tax exclusion was set at $1 million, and the rate of the tax was scheduled to come in at 55%. So any portion of an estate that exceeded one million in value would be taxed at a 55% rate.

Estate planning attorneys and other interested parties have been keeping a close eye on the news regarding the 2011 estate tax parameters. Throughout 2010 there were various proposals being discussed by lawmakers, with the matter of the estate tax being a part of a broader tax debate. The tax cuts that were a part of the Economic Growth and Tax Relief Reconciliation Act of 2001 were set to expire at the end of 2010, and many people wanted to see them extended. Over the course of the year it became clear that whether or not this was to take place had a lot to do with the outcome of the midterm elections.

After the election results were in, the Congressional environment began to bode well for a possible extension of the Bush era tax cuts and a reduction in the estate tax. This possibility became a reality when Congress passed a sweeping new tax bill in the middle of December and the president subsequently signed it into law. The estate tax exclusion is now $5 million for individuals and $10 million for couples and the top rate of taxation has been reduced to 35%. These changes will be in place for two years, and where things will go from there would appear to be largely dependent on the way the political winds blow as 2012 approaches.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.

Leaving someone an inheritance is not as simple as adding some zeros to his or her bank account balance. It can be…but this is not always in the best interests of your loved ones. It’s likely that some of your heirs are mature and established with a history of being able to handle their own affairs appropriately, and you may have no concerns about them. But you may also have some younger heirs who have not yet made their marks in life, or some family members who have personal problems or a history of handling money unwisely. This can make you take pause when you are engaged in the process of inheritance planning.

An estate planning vehicle that many people who are having these types of concerns choose to utilize is the incentive trust. These trusts operate like any other, where you name a beneficiary to receive distributions out of the trust and a trustee to handle the funds. But the difference lies in the fact that you include stipulations in the trust agreement that must be met before distributions will be made in an effort to guide your heir toward positive choices.

One example of how an incentive trust might be used would be to encourage your heir to get a good education. You could stipulate that distributions from the trust will be made as long as this individual is a student in good standing at an accredited college or university. One may choose to offer additional lump sum contributions each time your heir obtains a degree.

You can place any stipulations you want to on the distributions, and many people will use these trusts to discourage self destructive behavior in their family members. You may require drug testing of an heir who has a history of abuse, or open up ongoing distributions only after your heir quits smoking.

Incentive trusts are not the right choice for every situation because many people would prefer not to be forced to do things they may or may not want to do in order to receive their inheritances. But, these trusts are something that is available to you and they may provide you with the solution you are seeking for a particular heir or heirs.

The Edwards Law Firm is a member of the American Academy of Estate Planning Attorneys.