Tag Archives: trusts

Updating Your Estate Plan Following A Divorce

A divorce often necessitates major estate planning. The division of property, custodial rights and the establishment of spousal support all need to be considered and finalized. In addition to economic and emotional rifts, it is often easy to overlook the estate plan. This negligence, however, can be very detrimental to all who are involved. Following are a few essential components in an estate plan that must never be ignored.

Personal Will

divorce Start modifying your estate plans by altering your will. This document may have been executed prior to marrying your partner, establishing a family and acquiring your current level of financial stability and thus, there have likely been a number of considerable changes in your circumstances. The areas of your will that will need to be amended include the appointment of a personal representative and asset distribution. It is very easy to alter your will, either by executing a codicil or by rewriting it entirely.

Trusts

Whether before or during your marriage, make certain to review the terms of established trusts with an estate planning attorney in the state of Florida. It may be necessary to name new beneficiaries or trustees. Revocable Living Trusts can be easily altered to fit your changing circumstances and needs.

Other trust types such as Qualified Personal Residence Trusts, charitable trusts and Irrevocable Life Insurance trusts can be far more difficult, if not impossible to alter. This is due to the fact that the original motivation for the inception of these trusts is the execution of irrevocable elections. Instruments like these are normally structured to provide mutual benefits for both parties. If either spouse assumes legal authority to change any elections thereunder, there is usually a reversal of tax advantages as well.

Life Insurances

If you have named your spouse as the beneficiary, you likely want to designate another party to receive the death benefits should you pass away. In many instances, it is only necessary to contact the insurer. Keep in mind that Domestic Relations courts routinely deem any cash value for life insurances as part of the marital estate. For this reason, these monies are subject to equitable division. It is additionally common for divorce courts to order that a minimal amount of life insurance be maintained for the protection of all minor children.

Learn about the payout options for death benefits that are offered by your carrier. As an example, if your children are still fairly young, think about getting a structured benefit rather than requesting a lump sum payout. This ensures continuing subsistence payments for a much longer period than a single, lump sum payout is likely to last. It is often possible to additionally include a combination of single payments and period payments in order to ensure that future living costs such as college tuition are covered.

Conclusion

The best source for accurate legal assistance and advice is a reputable Florida estate planning attorney. This professional can make a comprehensive exploration of the available revisions for your estate plan in order to find options that best suit your personal circumstances. Creating an optimal strategy makes it necessary to review complex legal documents such as estate and statutory tax previsions, prenuptial agreements, Social Security regulations and even the terms of private retirement plans like pensions and 401k plans. Avoid procrastination and oversight. Get in touch with a trusted provider to begin creating a stable foundation for a brighter and better future right now.

If you are fortunate enough to live in South Florida, visit http://wfplaw.com, call the estate planning attorneys of Wild Felice and Partners at (954) 944-2855 to set your estate plan right.

Understanding Revocable and Irrevocable Trusts

attorney and clientsWhat is a trust?

A trust is a document, made legalized through the power of an attorney and application of law principles, which specifies the assignment of declared assets upon the death of an individual. A trust should not be used as a substitute for a will but instead, in conjunction with it. Furthermore, a trust helps protect the assets that the beneficiaries would receive and so as decrease the burden of estate tax. There are different types of trust and the most common is the living trust. This type of trust is activated while the person, who applied for it, is still living. The process taken here is simple. The person would just have to move the assets into the trust and they would immediately become a part of it.
There are two categories under a living trust. These are revocable trust and irrevocable trust. The difference between the two is very clear. Revocable trust can be changed or revoked while the other one is not. However, the definition of the two is quite intricate.

Defining Revocable Trust

A revocable trust is a legal document stating that a set of assets will automatically be directed to the declared beneficiary upon the death of the applicant or trust holder. Most of the time, revocable trust includes cash but it can also be tied up with a checking or savings account. Since it is revocable, the trust holder can change the terms of the trust anytime as long as he/she is still living. Also, the holder can access the assets in the trust in case of emergencies.

The word “revocable”, when applied to financial organizations such as the IRS, refers to bank accounts with payable-on-death provisions. Interested applicants can simply fill out the forms provided by the bank and state who will receive the funds contained in the account upon the applicant’s death. This provision works similarly like a trust. Also, this is a great account management scheme where the applicant is given the power to allocate his/her account.

Defining Irrevocable Trust

An irrevocable trust is a complex type of legal agreement. It is considered as a separate entity. Here, a federal tax identification number is required. This is usually filed by the tax attorney or the accountant. The applicant would have to go to the state’s Bureau if Internal Revenue and comply with the documents needed for this transaction.

Since the trust is irrevocable and is a separate entity, the creator of the trust will have no access to the assets deposited under it. These assets will also not be owned or could not be touched by the beneficiaries until they are released. For example, if the creator has established a $200,000 trust account and the agreed term is that $10,000 will go to the beneficiary every year, no one could receive and release the money prior to that term. So, the beneficiary would just have to wait another year before he/she will get the other $10,000 until such time that the whole account will be empty.

What type of trust will work for you?

An estate plan is important in order to properly assign one’s assets to intended beneficiaries. Estate planning may cover both revocable and irrevocable trust. Considering which one is right for you would entail an understanding on how you want your assets to be handled upon death, how flexible you would want them to be while you are still alive and what type of assets you will be leaving behind. Any of these trusts has different consequences and benefits. You can consult a legal consultant (such as an attorney) in order to have a clearer view on the type of trust that you can avail and their agreements as well.