A lot of people find that they would like to give something to charity when they are making long-term financial plans. There is no substitute for the positive feeling that you get when you are able to assist worthy causes and as they say, giving is its own reward.

However, in many cases you will indeed get an additional reward in the form of tax benefits. There are a number of different estate planning instruments that can allow you to satisfy your philanthropic urges while simultaneously providing you with tax efficiency. One of these is the CRUT or charitable remainder unitrust.

The way that it works is you fund the trust and name both a charitable and a non-charitable beneficiary. The non-charitable beneficiary receives annuity payments at least annually from the trust that must equal between 5% and 50% of its value. Most people who create such a trust will act as the non-charitable beneficiary.

You can set it up so that these annuity payments are made to you for the rest of your life or for a prescribed term. At the end of the term, at least 10% of the contributions into the trust must remain and these resources will become the property of the charitable beneficiary.

When you create the trust you are removing those benefits from your estate for estate tax purposes. You are also entitled to a charitable deduction based on some complex IRS rules. And, if you act as the beneficiary there are no gift tax implications.

To learn more about charitable remainder unitrusts simply take a moment to arrange for a consultation with a good estate planning lawyer.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

There are numerous different legal instruments that are routinely implemented into modern estate plans. This is one of the reasons why you would do well to seek professional guidance when you’re making preparations for the future.

With this in mind let’s take a look at the QTIP or qualified terminable interest property trust. Let’s say that you get divorced from your first wife and have children from that marriage. You and your former spouse agree on a distribution of community resources and go your separate ways.

So you are holding assets that are yours and yours alone as you embark on life as a single individual, and perhaps your former spouse played a significant role in helping you accumulate your portion of the assets.

Eventually you decide to remarry, but you want the lion’s share of the assets that you are bringing into your marriage to go to your children after your death. You can make this happen through the creation of a qualified terminable interest property trust.

With these trusts you set it up so that your spouse can benefit from trust earnings and perhaps have access to some of the principal if this is what you want while he or she is alive. But your spouse has no say regarding who inherits the trust after his or her death. You name this beneficiary when you are creating the trust, and it would presumably be your children.

If you would like to learn more about the QTIP and other strategies for blended families, don’t hesitate to contact a good Mobile estate planning lawyer to set up an initial informational exchange.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

There are a number of different ways to transfer assets to your heirs when you are planning your estate, and the best way to go about it is to use “the right tool for the right job” as they say. Because most laypeople aren’t aware of everything that is in the toolkit, this is something that is best achieved with the assistance of an experienced and savvy estate planning attorney. This having been said, let’s take a look at two of the trusts that are commonly utilized.

Generation Skipping Trusts

If you were to leave an inheritance to your children it would be subject to the estate tax. If they in turn left the remainder to their children, your grandchildren, the money that you left your children would be taxed a second time. This can be avoided by creating a generation-skipping trust. Briefly explained, your grandchildren assume ownership of the assets in the trust upon the death of your children but your children can benefit from these assets while they are still alive without actually owning them. Though the generation-skipping transfer tax is applicable one round of taxation is avoided.

Qualified Personal Residence Trusts

The value of your home may represent a large portion of your estate. You can remove the value of your home from your estate for estate tax purposes by placing it in a qualified personal residence trust. Doing this does constitute a taxable gift, but the value of the gift is reduced by the interest that you retain in the home while you continue living in it. Ultimately the taxable value of the property is going to be far less than the true fair market value, and if it falls within your available unified gift/estate tax exclusion your beneficiary will assume ownership of the house in a tax-free manner.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

Estate planning is not a one-size-fits-all endeavor. This is one of the reasons why it is always a good idea to involve an estate planning attorney when you are making preparations for the future. There are a number of different ways to transfer assets to your loved ones, and the ideal solutions are going to vary depending on a number of different factors. One of these is going to be the exact form of the assets that you have to pass along, and of course whether or not you are exposed to the estate tax is an important factor as well.

In addition to preparing to give, it is important to consider the receiving end as well. You may have some people on your inheritance list who are very well-established in their own right. They have demonstrated the ability to handle their own financial affairs responsibly and successfully, so you may have no compunction about leaving these individuals direct inheritances with no strings attached.

But on the other hand, you may have a family member or members who are not good money managers, and you may be concerned about how they will handle a significant influx of financial resources. People like this are actually likely to need financial assistance at various points in their lives and you may be concerned about them burning through their inheritances too quickly and then finding themselves in a difficult situation later on.

One solution would be the creation of a spendthrift trust. With these trusts you appoint a trustee to manage the funds, and people often select a bank or trust company. The beneficiary does not have direct access to the funds and makes no financial decisions. The trustee distributes resources to the beneficiary in the manner that you set forth when you created the trust agreement.

Aside from protecting the assets from poor management, spendthrift trusts also protect the assets from creditors seeking redress from the beneficiary. To learn more about these very useful legal instruments, simply arrange for a consultation with an experienced estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

If you’re new to creating a will, you probably have many questions.  We often receive questions about the estate planning process as well as the use of wills.  We’ve taken the time to outline answers to some of these questions below.  If you have any additional questions, or if you need help creating a will, contact an estate planning attorney.

What property can I have distributed at my death in my will?

It’s important to note that you can outline how your assets will be distributed.  You’re able to include money, personal belongings, real estate, and more so long as you own the property in your individual name, alone.

If you own property jointly with another individual, you’re unable to control these assets in your will.  You’re also unable to use your will to control assets that are held in your revocable living trust.  These assets will follow your trust’s instructions.  Certain assets such as life insurance policies and retirement accounts are also unable to be controlled by your will.  These assets are given to the beneficiaries that you designate when creating and updating your accounts.

Consult with your attorney about your assets to see which items you may can control with your will.  Your attorney will be able to advise you on how to handle each asset accordingly.

I’m thinking about creating a revocable living trust.  Do I also need a will?

It’s important to create what is known as a ‘pour-over-will’ if you have a trust.  A revocable living trust does not allow you  to appoint a guardian; This is done only in a will.  In addition, if any assets are inadvertenly not titled in the name of your trust, the pour-over-will is used to pick up those assets and “pour” them into your trust.

Everyone, age 18 or older, should have a will.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

Many clients consider creating a will during their lifetime.  It can be confusing beginning the process of starting an estate plan.  We often receive many questions about the use of wills; so, we’ve outlined answers to some of these questions so that you can be better informed when making your estate planning decisions.  Don’t neglect your need for a will.  If you have any additional questions, or if you’d like to create a will, meet with an estate planning attorney.

What can I do with a will?

A will serves a number of purposes.  One of the most important reasons for creating a will is the ability to have control over your future affairs.  If you want your decisions to be respected, then you need a will.  With this document, you’re able to decide how your assets will be distributed, you will appoint an executor who will handle your estate affairs, and you’re able to appoint a guardian for the care of your minor children.  Without a will, you don’t have a control; instead, the court and state law will take control.  A will is one of the most important estate planning documents.
What happens if I don’t have a will?

It’s not smart to not have a will.  Without a will, you will have no say in your future affairs.  Dying without a will is referred to as dying intestate.  Your state’s intestacy laws will determine who gets your assets.  This means that your assets may be given to the wrong people and your executor and guardian choices will be made for you by the courts.  Many people don’t realize how costly it is not to create a will.

Take a look at our next blog post (part 2 of 2) to learn more about the use of a will.  If you have any additional questions, or if you’re ready to draft a will, consult with a qualified estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

As you begin to create your estate plan, you will likely create a will.  A will is an important estate planning document that allows you to do 4 important things.  If you are confused about the uses of a will, take a look at some of the information below.  We’ve outlined the 4 benefits of this powerful estate planning tool.  If you have any questions or if you’re ready to create your will, contact an estate planning attorney.

Choose who will handle your estate’s affairs

You want to make sure that your affairs are in good hands.  With a will, you’re able to appoint an executor who will handle your estate’s affairs after your death.  This allows you to have some control in your future affairs.  If you don’t have a will, the court will decide who will manage your private affairs and settle your estate.

Choose who will care for your children

In your will, you’re able to appoint a guardian for the care of your minor children.  This is a very important decision because you want to make sure that your children are cared for by a responsible and loving adult.  Without a will, the court will decide who will raise your children and it may not be who you’d choose.

Choose how your assets will be distributed

If you want to have control over how your assets will be passed on to beneficiaries, a will is an important tool.  Without a will, your state’s laws will determine how your assets are divided.

Give yourself and your loved ones a greater peace of mind

A will is a great way to give yourself and your loved ones greater peace of mind.  Knowing that your affairs are in order will allow you and your family to have less stress and feelings of uncertainty.

Take into consideration the many benefits of a will.  If you have any questions about the use of a will, or if you’re ready to execute your will, consult with a qualified estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

Have you been putting off creating your estate plan?  Many people just like you are waiting for the perfect time to start their planning.  Unfortunately, some people never even get the chance.  If you have yet to start your estate plan, now is the time to do so.

It’s important that you have a plan in place so that you’re protected for emergencies and unexpected events.  Take a look at some of the information below to better understand the importance of planning sooner rather than later. If you have any questions, meet with an estate planning attorney.

If you put off your planning, the following may happen:

• You and your family may have fears and uncertainty about the future.
• Your assets may be given to the wrong people.
• Your minor children may not be cared for by the guardian of your choice.
• Your medical wishes may not be followed.
• If you become terminally ill or disabled, your family may have to go to court in order to get permission to handle your financial affairs.
• If you become terminally ill or disabled, your family may not be able to help you make important medical decisions regarding your health.
• If you die, your loved ones may not have enough income needed to survive.
• If you die, your loved ones may argue and disagree about your funeral planning.

Don’t put off your estate planning! If you do, you and your loved ones may face negative consequences.  Now is the time to begin your planning.

If you have additional questions about the need to begin your estate plan as soon as possible or if you’d like to start your planning, consult with a qualified estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

Many people don’t fully understand the need for a will.  Everyone over the age of 17 should have a will!   This includes celebrities, authors, and regular people like you and me.

It can be interesting to learn how celebrities or other famous people outline their wishes in their will.  For example, did you know that Mark Twain took the time to create a will?  If you’re interested in seeing how a famous author outlined his wishes, read below.  If you have yet to create a will, now is the time to do so!

Mark Twain included a variety of assets in his will.  This included stock shares from the Mark Twain Company, other stocks, books, horses, and a 230-acre home.

Twain decided to leave everything to his two daughters.  His one daughter died shortly before Twain.  His other daughter ended up getting everything after Twain’s death.  Twain left some of his assets outright and held much of his assets in a trust.  He also included wording that kept the assets from potential husbands.

Twain also included his literary works in his estate plan.  He gave control over the distribution of his works to his daughter and a close family friend.  .

As you can see, even Mark Twain needed a will and it worked, meaning that it carried out his wishes.

A will can serve a variety of purposes.  You can specify how your assets will be distributed and can also appoint someone who will be responsible for managing your assets.  If you have minor children, you can also appoint a guardian for their care.  If you want to have control, you need to take the time to create a will.

If you have questions about implementing a will or if you’d like to take the time to create your own will, meet with an estate planning attorney.   Mark Twain serves as a fine example.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

If you are ready to begin your estate plan, you may feel nervous and overwhelmed about the entire process.  The good news is creating an estate plan isn’t as hard as you may think.

Take a look at some of the tips below to get started with your estate planning.  You will find that with proper planning, it can be extremely manageable.  An experienced attorney can help you throughout the entire process.

Outline your assets.

Write down the assets that you own.  This includes real estate property, bank account assets, life insurance, retirement accounts, investments, personal property, and more.

Outline your debts.

It’s important to have an idea of what debts that you owe.  This can include your current mortgage, car loan, credit cards, school loans, and more.

Choose your beneficiaries.

Who do you want to leave your assets to after your death?  Who do you want to make it a point to support?  Take the time to think about your loved ones and what you plan to leave for them after your death.

Choose who will help you handle your affairs.

You will want to choose responsible people to help you with your affairs during serious illness or disability and after your death.

This includes choosing power of attorneys who will help you make important medical and financial decisions as well as someone who will help to manage and distribute your assets after your death.  Take the time to think about who would be able to handle these responsibilities best.

Hire an estate planning attorney.

It’s important to utilize the advice and professional knowledge of an estate planning attorney.  This will help you better understand the entire process of planning your estate.  It will also allow you to make sure that your estate plan is legal and error free.

Start your estate plan today.  If you have any questions about creating your estate plan, consult with a qualified estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.