A life estate is often created by an older parent when they sign over the house to their adult children but stipulate that the parent can remain in the house until they pass away. In some estate planning cases, this is the easiest and most advantageous way to transfer property. The resident is called the Life Tenant and the beneficiary is the Remainder Owner. One of the most daunting threats to elderly people is the risk an extended care need. Continue reading...
A primary difference between a will and a trust is that a will goes into effect once you die, but a trust goes into effect when you create it. Beyond that, a will is a more basic estate planning document/tool that determines how your assets should be divided upon your death. On the other hand, a trust goes further in controlling how the assets are distributed. It may stipulate when, how, and to whom the assets will be distributed, and those distributions may not happen immediately but rather over a long stretch of time. Continue reading...
Real estate mutual funds invest in publicly-traded companies in the real estate industry, and are slightly different than REITs. A real estate mutual fund invests in companies in the real estate industry. These companies will include real estate brokerage companies in the commercial, residential, or raw land sector, as well as the lending institutions that are involved in such transactions, among other holdings. Continue reading...
A Real Estate Investment Trust (REIT) is a pooled investment with a high dividend yield that invests in real estate. REITs give investors an opportunity for participation and diversification in real estate investments, while also offering much higher degrees of liquidity and lower buy-in amounts than can be found in other real estate investments. A REIT operates much like a mutual fund, and would technically be taxable as a corporation if it weren't for its REIT status. Continue reading...
IRS Link to Form — Found Here The Form 706 is required not only if there is a tax implication for an estate, but also to claim exclusions. Each person has an exclusion of 5.49 Million as of 2017. For married couples, that goes double, such that heirs to an estate under $11 million probably will not owe any estate taxes. A surviving spouse should still report the inherited portion of the deceased spouse’s estate up to the exclusion amount, otherwise the exclusion will be lost. There are also lines for the lifetime gift exclusion amount and the generation skipping transfer tax. Continue reading...
After a person’s death, their will is typically reviewed by probate court which will enforce the terms of the will and ensure the assets are distributed according to the wishes of the deceased. Any disputes or contest to the distribution of assets will likely be heard by probate court, and can be costly if dragged out over long stretches of time. What is the Difference Between a Will and a Trust? Do I Need a Will? Continue reading...
Real estate has long been used as an alternative investment, to give investors a non-correlated asset that can give a portfolio increased diversification. In the last 15 years or so, with the prevalence and popularity of REITs and real estate industry funds, real estate investments are considered by some to be a core holding instead of an alternative investment. Real Estate investments are so accessible now that they should be considered an indispensable part of any portfolio. Continue reading...
There are thousands of attorneys that specialize in estate planning, so choosing the right one for you can be a challenge. If possible, referrals are the best approach. Your Financial Advisor should definitely have resources and a network available to recommend a reliable estate and/or tax attorney for you — someone he or she has been working with for a number of years at least. Ultimately, the best source is a referral from a friend or someone else you trust. Continue reading...
Real estate can be purchased in a form you can see, touch, and pay maintenance costs on, or it can be purchased indirectly through the use of REITs and other securities tied to the real estate industry. Real estate investments fall into a wide spectrum of subsets. You can invest in residential property, commercial property, development projects, raw land, etc. Within the residential sphere are multi-family residential complexes, rental houses, foreclosure flips, and vacation rentals with property management. Continue reading...
Any item of economic value that a person or entity owns, benefits from, or has use of in generating income. Assets can generally be converted to cash, but economic circumstances often determine whether the asset can be sold at fair value. Some common examples of assets are cash, stocks, paid-for real estate, inventory, office equipment, jewelry, artwork, or other property of value that can be counted towards a person’s estate or a corporation’s balance sheet. Continue reading...
Probate is the legal process that takes place after a person’s death, during which legal documents (such as wills and trusts) are reviewed and enforced. A person’s will generally must be validated by the court, after which the person’s assets are distributed to the heirs accordingly. If there is no will, then the probate court will decide how to distribute the assets, which may not be consistent with the deceased’s actual wishes. Continue reading...
IRS Link to Form — Found Here Form 706 is the Estate Tax return, and it has a section concerning Generation-Skipping Transfers. 706 GS (D), specifically, is the form which 706: GS (D-1) is the corresponding form if the transfer is associated with a trust, which is filed by the trustee. The Generation-Skipping Tax attempts to prevent an estate from transferring too many assets directly to grandchildren instead of children for the purpose of shielding heirs from estate taxes. The form for reporting Generation Skipping Transfers is 706 GS (D), where 706 is the Estate Tax Return filing. Continue reading...
Whether you need professional help depends on the size of your estate and the complexity of your wishes for how to distribute your assets. Generally speaking, however, it makes sense to hire legal help to create your last will and any related trusts, as often times the cost to doing so is less than the cost of probate court and duress to your heirs in settling the estate themselves. What is a Living Will? What is the Difference Between a Will and a Trust? How Much Does it Cost to Prepare a Will? Continue reading...
Whether or not you need a trust depends on several factors, some of which include: your level of assets, the complexity of your estate planning goals, the control you wish to exercise over your assets after your death, your need for creditor protection, amongst others. Trusts have many features that make them an attractive option for wealthy people – it allows them to avoid taxes in some cases, avoid probate court for heirs, and the ability transfer control of your assets to someone you trust (your selected trustee). It also affords the ability to have the assets span multiple generations, if managed properly. Continue reading...
Yes, generally speaking any person that has assets and liabilities needs a will. In the absence of a will, a deceased person’s assets will be distributed by a court, which may not handle the assets as the deceased would have desired. Not having a will also subjects a person’s estate to legal disputes from heirs, creditors, and sometimes non-family members seeking to make a claim. The court costs to settling an estate without a will can be very high and taxing to the deceased’s immediate family and loved ones. Continue reading...
While it is possible to sell your house without a broker, it may prove to be more trouble than it’s worth. If a person can sell their own house or property without a real estate broker, he or she can avoid paying broker’s fees out of the proceeds. A person should realize, however that brokers are well-acquainted with the real estate marketplace, and may possibly already have some potential buyers in their pipeline.They are also ready to spend the time and money to market and show your property. Continue reading...
A Revocable Trust is also known as a Living Trust, and it is an estate planning vehicle that allows you to determine how your assets are dispersed to heirs or other entities. While you are alive, you can modify the trust without restriction. When setting up a Revocable Trust, you generally name a Trustee (the person that will care for the assets in the trust and oversee distribution) and define the terms and conditions of the Trust. It is also possible to name yourself the Trustee in a Revocable Trust while you’re alive, but you should also name a contingent Trustee in the event of your death. Continue reading...
An Irrevocable Trust is one in which the grantor (the person who creates and funds the trust) cannot modify the trust once created. An irrevocable trust can only be modified or terminated if the beneficiary of the trust authorizes such changes. An Irrevocable Trust allows you to name a Trustee (the person that will handle your assets and will oversee their distribution to your heirs in the event of your incapacitation or death) and define the terms and conditions of the Trust while you’re alive. You can name yourself as the Trustee so you can manage your assets while you’re capable of doing so, and name a secondary Trustee to take over when you’re not. Continue reading...
In general, a will must be signed in the presence of two witnesses, each of whom must also sign your will. Whether or not a notarized will is accepted by the court depends on the rules of the state in which you live. You should cross-reference the rules of your state and comply to them, or simply consult an estate planning attorney for the best approach. How is a Will Implemented After my Death? Do I Need Professional Help to Prepare a Will? What is Probate? Continue reading...
While online will templates may be useful for those with straightforward estate plans, they lack customization and legal guidance. To avoid the risk of creating a contested or unenforceable will, individuals should only use templates from trusted sources and consult an estate planning attorney for complex estate plans, significant assets, or unusual circumstances. Ultimately, a well-crafted will provides peace of mind and security for loved ones, and individuals should take the time to make informed decisions when creating a will. Continue reading...