Are you unsure about your current legal affairs and wondering if you should be seeking professional advice? Take a look at some common questions below, so you can find the answers you need. If you're still struggling to find the hard facts about some common legal misconceptions, then make sure to give our office a call.
• Living trusts
Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.
YES. But your family may not like it. The government’s estate plan is called “Intestate Probate” and guarantees government interference in the disposition of your estate. Documents must be filed and approval must be received from a court to pay your bills, pay your spouse an allowance, and account for your property–and it all takes place in the public’s view. If you fail to plan your estate, you lose the opportunity to protect your family from an impersonal, complex governmental process that can become a nightmare. Then, there is the matter of the federal government’s death taxes. There is much you can do in planning your estate that will reduce and even eliminate death taxes, but you don’t suppose the government’s estate plan is designed to save your estate from taxes, do you? While some estate planners favor Wills and others prefer a Living Trust as the Estate Plan of Choice, all estate planners agree that dying without an estate plan should be avoided at all costs.
A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for “prove the Will.” Upon your death, the Will becomes a public document available for inspection by all comers. And, once your Will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys. Probate can be cumbersome, time-consuming, expensive, and emotionally traumatic during a family’s time of grief and vulnerability. Con artists and others with less-than-pure financial motives have been known to use their knowledge about the contents of a will to prey on survivors. A Living Trust avoids probate because your property is owned by the trust, so technically there’s nothing for the probate courts to administer. Whomever you name as your “successor trustee,” gains control of your assets and distributes them exactly according to your instructions. There is one other crucial difference: A Will doesn’t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Living Trust can help you preserve and increase your estate while you’re alive, and offers protection should you become mentally disabled.
Unfortunately, you would be subject to “living probate,” also known as a conservatorship or guardianship proceeding. If you become mentally disabled before you die, the probate court will appoint someone to take control of your assets and personal affairs. These “court-appointed agents” must file a strict accounting of your finances with the court. The process is often expensive, time-consuming and humiliating.
YES. In fact, people who create most Living Trusts act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally-disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court’s appointee
NO. The purpose of creating a Living Trust is to avoid living probate, death probate, and reduce or even eliminate Federal estate taxes. It’s not a vehicle for reducing income taxes. In fact, if you’re the trustee of your Living Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.
YES. In fact, all real estate should be transferred into your Living Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Living Trust, there is no probate anywhere.
NO. A Living Trust can help anyone protect his or her family from unnecessary probate fees, attorney’s fees, court costs and Federal estate taxes. In certain circumstances, even individuals with small estates can derive meaningful benefits.
YES, but you would be better off choosing an attorney whose practice is focused on estate planning. Look for an attorney who also receives continuing legal education on the latest changes in any law affecting estate planning, allowing them to provide you with the highest quality estate planning service. As a member of the Estate Planning and Elder Law sections of the Michigan Bar Association and the Institute for Continuing Legal Education, Bill Wieringa, stays current with the latest changes in the law as well as the most effective strategies for assisting clients.
Disability compensation is a benefit paid to a veteran because of injuries or diseases that happened while on active duty, or were made worse by active military service. It is also paid to certain veterans disabled from VA health care. The benefits are tax-free.
You may be eligible for disability compensation if you have a service-related disability and you were discharged under other than dishonorable conditions.
You can apply by filling out VA Form 21-526, Veterans Application for Compensation and/or Pension. If you have any of the following material, attach it to your application:
• Discharge or separation papers (DD214 or equivalent)
• Dependency records (marriage and children’s birth certificates)
• Medical evidence (doctor and hospital reports)
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Mr. Wieringa does not seek clients from outside of the state of Michigan. If you require legal advice, please contact an attorney licensed to practice in your state. We will be happy to assist you, if possible.