Frequently Asked Questions
Estate Planning FAQ’s
There is a common misconception that estate plans are only for the ultra-rich – the top 1 percent, 10%, 20%, or some other arbitrary determination of “enough” money. In reality, nothing could be further from the truth. People at all income and wealth levels can benefit from a comprehensive estate plan. Sadly, many have not sat down to put their legal house in order.
According to a 2016 Gallup News Poll more than half of all Americans do not have a will, let alone a comprehensive estate plan. These same results were identified by WealthCounsel in its Estate Planning Awareness Survey. Gallup noted that 44 percent of people surveyed in 2016 had a will place, compared to 51 percent in 2005 and 48 percent in 1990. Also, over the years, there appears to be a trend of fewer people even thinking about estate planning.
When it comes to estate planning, the sooner you start the better. Below are four reasons why everyone – no matter what income or wealth level – can benefit from a comprehensive estate plan:
- Forward Thinking Family Goals: Proper estate planning can accomplish many things. The first step is to ask what your goals are. They may include caring for a minor child, an elderly parent, a disabled relative, or distributing real and personal property to individuals who will appreciate and maintain these assets prudently. Understanding what your family wants and needs are for the future is a great starting point for any estate plan. If you can sit down and spend time planning your vacation, you can do the same for your estate. Your future self, and your loved ones, will thank you.
- Financial Confidence Now and After You Are Gone: One immediate benefit of having a finished estate plan in place is that you will likely feel in control of your finances, possibly for the first time ever. Many people experience a new sense of discipline in maintaining their finances which can help with saving for retirement, a big purchase, or other goal. In addition to the personal benefit of financial control, an estate plan allows you to dictate exactly how and when your heirs receive an inheritance. This is particularly important for minor heir or those who need additional guidance to manage their inheritance, like a disabled child.
- Identify Risks: An important aspect of a good estate plan is to mitigate against future and current risks. One example is becoming disabled and unable to support your family. Another is the possibility of dying early. Through an estate plan you can chose who will be in control of your personal assets, instead of the court appointing a legal guardian who will cost money and be a distraction for your family. While contemplating these types of risks is never fun, preparing ahead of time ensures your loved ones will be prepared if an unfortunate tragedy occurs.
- To Maintain Your Privacy: In the absence of an fully funded, trust-based estate plan, a list one’s assets are available for public view upon death. This occurs when a probate court needs to step in. Probate is the legal process by which a court administers the deceased person’s estate. A solid estate plan should generally avoid the need for involvement by the probate court, so your family’s privacy can be maintained.
The Bottom Line: Seek Professional Advice
There are numerous benefits to working with a professional team when it comes to estate planning. Estate planning attorneys, financial advisor, insurance agents, and others have a broader and deeper knowledge of money management, financial implications, and the law. When you work with a qualified team to implement an estate plan you can rest easy knowing your family will be taken care of no matter what happens in the future.
There are several parts to an estate plan, one of them being a living trust. Common factors that prompt someone to create a trust include privacy, tax benefits, avoiding probate, and caring for family members with special needs. Estate planning also lets you dictate how your assets will pass on to future generations after your death.
One of the primary reasons for creating an estate plan is to avoid probate. Unlike a will, a fully funded living trust will avoid probate, typically a lengthy and costly court-supervised process. Probate includes locating and determining the value of the deceased’s assets, paying off any outstanding bills and taxes, and then distributing the remaining value of the estate to the deceased’s rightful beneficiaries or heirs. Avoiding probate is often a top reason for estate planning, and there is no surprise as to why. First, probate can be a costly way to transfer your assets upon death. Second, it is very time-consuming for your family. It can take from six to nine months (or even longer) to complete the probate process. Complications, such as a contested will or an inability to find clear records of all of the deceased’s assets and debts, can extend this timeline. Finally, probate proceedings are a matter of public record so when your estate goes through this process, there is no privacy.
While a living trust can help you avoid probate, it can also provide you with tax savings, especially if your estate is subject to death taxes (also known as estate and gift taxes). Of course, there are many types of trusts. One way to think about the variety is to consider a toolbox. For example, there are numerous kinds of screwdrivers, hammers, power tools, and so on. Each tool has an intended use. Trusts are no different. When you work with us, we’ll make sure to align the type of trust with the tax-saving needs and other goals of your family.
Seek Professional Help
It is important to understand that a trust only controls assets that are in the trust. In other words, you must place these assets in the trust – commonly referred to as “funding” the trust. Moreover, because our lives are always changing (marriage, childbirth, home purchase, etc.) and so are tax laws, it is essential to continually update and monitor the funding of your trust over your lifetime. For these reasons, you will want to work closely with your estate planning attorney to make sure your assets are properly aligned with your trust. This will not only help you get organized, but it will also make things easier for your heirs when you pass away. You don’t have to go it alone. We are here to help you and your family.
Let’s consider a few things to watch regarding estate planning under the new tax law, so you and your family can be completely protected.
● The death tax. The death tax has been in a state of flux ever since the early 2000s when the Bush administration’s first tax cuts changed the exemption and tax rates. The 2018 Tax Cuts and Jobs Act is the latest significant change. With the new tax law, state tax exemption amount will double to $11.2 million per person (married couples have $22.4 million of combined exemption). Like the current exemption, this amount will adjust annually for inflation. However, this enhanced exemption expires on December 31, 2025, at which time it will return to an amount similar to the $5.49 million per person exemption we had in 2017. Similar to what happened when the Bush tax cuts phased in (and were scheduled to expire) during the 2000s, we’ll face the same situation over the coming years – the law provides a deadline and timetable, but political activity may result in something entirely different. Regardless of your stance on this new tax law, if you have a plan based around the now-old rules, it’s time to visit with us, so we can make sure the plan still meets your needs and goals while maximizing the benefit to your family, charities, or other beneficiaries.
● Incapacity planning. What happens if you don’t die? Historically, much of estate planning focused on what happened to your assets after your death. With cognitive impairment at near epidemic proportions, you must plan for the contingency that you don’t die and instead require assistance managing your affairs. Depending on your circumstances, this could range from a relatively simple matter of ensuring you have a trusted person authorized to make decisions to extensive planning to become eligible for help paying for nursing home care. Either way, now is the time to work with us to ensure that your plan protects you, even if you don’t die.
● Giving your family lifelong financial security. Although you may not have a “large” amount of wealth now, you probably have an IRA or a life insurance policy. A modest IRA or life insurance policy could be the foundation for lifelong financial security for your family. To make this a reality, you need to set up your affairs with the proper structures to ensure money avoids costs, taxes, and the risk of financial immaturity or ignorance. We are here to help you ensure that the savings you’ve spent a lifetime building will be there for your family.
● Fixing broken or old trusts. Many people have inherited assets from parents, aunts, uncles, and others through a trust. Some of these trusts may use old strategies or be expensive or difficult to administer. The law recognizes that old trusts may need some refreshing. There are many options available to modernize an old trust, and the best way to get started is to meet with us so we can explore which option is best for you and the trust you inherited.
No matter where you are on the estate planning journey, carve out some time to talk with us to make sure that you and your family are fully protected. Give us a call today.
You have worked hard for years, have family members and friends you care about, and have approached a time in your life when “estate planning” sounds like something you should do, but you are not exactly sure why. You may feel that you are not wealthy enough or not old enough to bother or care. Or you may already have a Will and feel that you are all set on that front. Whatever your current position, consider these common misconceptions about estate planning:
1. Estate planning is for wealthy(ier) people.
False. Anyone who has survived to age eighteen and beyond has likely accumulated a few possessions that are of some monetary or sentimental value. While things like your home, your car, and financial accounts are self-evident assets, that collection of superhero figurines or your iTunes library also deserve proper attention. There is no minimum asset value required to justify having a Will, especially since there are many low-cost options, including estate planning attorneys who will not charge an arm and a leg for a basic Will.
2. Estate planning is for old(er) people.
False. Tragedy can strike at any moment, and it is best to have your affairs in order so as not to put your loved ones in a financial or bureaucratic bind while they are grieving. Young parents should ensure that proper guardians are in place to take care of their children if they are no longer around, lest the children end up with the most irresponsible member of the family or, worse, a complete stranger.
3. Estate planning means having a Will.
False. Having a Will is smart because it puts you in charge of the disposition of your assets. A Will allows you to pick your executor, designate the guardians for your minor children, and name any individuals and charitable organizations as beneficiaries of your estate. If you were to die without a Will (i.e., intestate), the law of the state where you reside at your death would govern who receives what part of your estate, who administers your estate, and who takes care of your children. There are some situations where state law may override the provisions in your Will (e.g., a spouse’s elective share), but for the most part, you are in the driver’s seat.
However, a Will is only one tool in the estate planning toolbox. There are other vehicles that allow you to remain in control of your possessions and family’s future during life and upon death. Depending on your situation, a Will alone may not be the most efficient or the most cost-effective means to achieve your goals.
Upon your passing, your Will has to go through probate – a process whereby a court reviews your Will and determines its validity. It is a lengthy and often costly process in many states to begin with and can become even lengthier if a Will is contested (e.g., on the grounds that someone coerced or cajoled their way into an inheritance). The delay in disposition of your assets and the accompanying legal costs may put your family members in financial straits. If your goal is to ensure that your survivors’ cash flow is uninterrupted after your death, it would be wise to incorporate a trust or a life insurance policy into your estate plan. These assets are considered “non-probate” – they pass outside of your Will.
There are other non-probate assets that may constitute a part of your estate. For example, a joint tenancy arrangement on your home, IRA, and payable-on-death (POD) or transfer-on-death (TOD) accounts designate specific beneficiaries upon your death, and the assets pass to them without the delay and cost of the probate process. If your Will provides for a different beneficiary of your IRA account or another non-probate asset, it will be superseded by the beneficiary designation form on file with that account’s or asset’s administrator. Therefore, it is wise to review all of your beneficiary designations periodically, but certainly upon life-altering events like marriage, birth of a child, or divorce.
You are neither too young nor too poor to engage in estate planning! Just remember that a Will may be a necessary, but not the only means to plan your estate in an efficient and cost-effective manner. Keep on top of your assets, and your survivors will have another good thing to say about you at your memorial.
When a spouse passes away, thinking about “the estate” might be the last thing on your mind. And while it’s necessary to give yourself ample time to process the loss of your partner, it’s also imperative you talk with your estate planning attorney sooner rather than later — or you might be facing some pretty unpleasant consequences.
There are many immediate tasks at hand after the loss of a spouse such as notifying their friends, family, and colleagues, making funeral arrangements, and managing all the accompanying grief that arises.
It’s not a good time to take estate-related matters into your own hands
This is often too difficult a time to pay attention to the paperwork and legal details that need to be attended to. Surviving spouses may have the urge to settle outstanding issues themselves, but small mistakes made during these exhausting times may cause unintended consequences later.
Here are a couple of the most common ways improper handling of deceased spouses’ estates can lead to major issues:
- Acting slightly out of accordance with the law — even by mistake — can make you vulnerable to the appearance of having conducted criminal behavior.
- You could put your own personal estate and assets at risk by performing your duties as an executor incorrectly.
Estate planning attorneys remove the guesswork for you
That’s why it’s a crucial time to lean on the support of your estate planning attorney. It’s our job to use our extensive training and experience to make sure your family’s estate is well cared for. Let us take the initiative to ensure the smooth transition of his or her wealth and resources.
Here are the essential basics we will cover, along with time-sensitive developments that could affect your and your spouse’s estate:
- Tieing up licenses, addresses, and accounts
This includes notifying the post office, IRS, and social security office as well as handling his or her email and social media accounts. It’s also a good idea to contact his or her employer about benefits and pensions. We will work with you to take stock of outstanding credit and debts, although you may not necessarily want to pay any debts until you’ve had a chance to speak with us. Health insurance is also a crucial area to cover, as canceling policies can be time-consuming. These tasks can be completed without the help of your estate planning attorney, but we are available to assist you with any questions you may have during these processes.
2. Learning your exact role in your spouse’s estate plan
Once we formally meet to begin the process of executing the directives and transfers delineated in your spouse’s estate, we must go over the wills and trusts contained within it and clarify your specific legal and fiduciary role in carrying out his or her wishes. We will also assess the need for probate and if needed begin that judicial process at the appropriate time.
3. Investigating the possibility of a late election under Revenue Procedure 2017-34
Portability is the term used to describe a surviving spouse’s ability to take on the deceased spouse’s unused estate tax exemption and transfer it to your own plan. If you haven’t elected portability since it came into effect in 2011, there may still be time to take advantage of it thanks to a new IRS regulation called Revenue Procedure 2017-34. This rule allows surviving spouses to file for late portability election, which can, in turn, save significant taxes and create new opportunities for additional planning. Even if your spouse passed away several years ago, you might be able to take advantage of the new regulation – give us a call today to find out whether you’re eligible.
4. Beginning any necessary collaboration with other pertinent advisors
If the deceased spouse worked with other professionals like a tax or financial planner, we will get in touch with them to make sure the whole advisory team remains on the same page throughout the process.
The period immediately following the loss of a spouse is one of the most difficult challenges life puts in our paths. Concern yourself with the personal aspects of grieving and healing, and know that you aren’t alone when it comes to the complicated and often confusing task of sorting out his or her estate — far from it. Contact us right away and let us help you handle the legal and financial needs of the moment.
It’s no longer unique to include your pet in your estate plan. We can almost say, “everybody’s doing it.” After all, we spend billions of dollars each year on our beloved pets; why would we want them to be let out the back door or dropped off at a shelter?
It’s essential that you don’t assume your loved ones will take in and care for your pets; we’ve seen all too often when that hasn’t happened. Why? Families live at a distance, suffer allergies, work long hours, or just don’t feel the same attachment to your pet as you do. You can protect your pet with pet planning.
Here are pet planning, including pet trust, benefits:
- Documents your wishes and instructions on how to care for your pet.
- Authorizes a caretaker to take custody of and provide for day-to-day pet needs.
- Appoints a trustee to manage the money you leave for your pet’s care.
- Provides for a contingent caretaker and trustee in case your primary choices are not able or willing to serve.
Fortunately, you can avoid something bad happening to your pet by planning ahead. Chat with your loved ones and get their honest feedback. Can they and will they take in your pet? Let’s document those commitments and your wishes in your estate plan.
A durable power of attorney is a legal document where you designate a trusted person to act as your agent for the purpose of managing your day-to-day personal affairs if you are unable to act on your own. Through the general power of attorney you authorize someone to sign your name to contracts, pay your bills, make business decisions, manage your assets, give away your assets, purchase real estate, handle your mail, and participate in estate planning on your behalf, etc. The durable power of attorney is usually a very general power of attorney, covering a long list of powers, but you can also implement a limited power of attorney for a singular purpose, such as signing documents on a real estate transaction when you can’t be present at closing.
A healthcare power of attorney allows a loved one such as a trusted friend or family member to make medical treatment decisions for you if you are unable to make those decisions and communicate your wishes to doctors. A healthcare power of attorney not only saves precious decision-making time, but it also makes sure that the individual you trust the most has the power to make important healthcare decisions for you if you are unable to make the decisions on your own. Without this essential document in place, your loved ones will be forced into court where a guardianship or conservatorship will be held.
A living will, which is also known as an advanced health care directive, is a legal document where you direct your health care agent and doctors on your end of life choices regarding life extending treatment. It is a gift to your family to document your decisions before your loved ones have the burden of guessing your preference at a very difficult time.
During guardianship and conservatorship proceedings, a judge, in a public courtroom, hears testimony from your loved ones and medical professionals as to why you should be deemed incompetent and have a guardian named to make healthcare decisions for you. This procedure is public, expensive, time-consuming, and stressful for those who love you – and for the medical professionals as well; most doctors don’t like to go to court. Littleton Legal PLLC can help you avoid these proceedings through disability planning.
Guardians and conservators are court-appointed individuals who make decisions on a person’s behalf in the event of mental or physical incapacity. This can be avoided by adding proper powers of attorney, and explicit directions for them, to your estate plan.
Business Planning FAQ’s
A limited liability company (LLC) is a type of business structure that provides limited personal liability to its members for the company’s debts and liabilities. There are pros and cons to any type of business formation, depending upon your overall goals. Let’s discuss your business objectives and determine if a LLC is right for you and your organization. If an LLC is right for your business, Littleton Legal PLLC can take care of the details or registering the business, creating the Articles of Organization, Filings with the State and Internal Revenue Service. If you already have a LLC but need guidance on planning, updates, or dissolution, we can advise you on the necessary steps to accomplish your objective.
A corporation is an entity that is separate and distinct from its owners and is treated legally as a “person.” Corporations can have favorable tax treatment, but also have strict governance requirements and separate tax consequences from an ordinary LLC. If after consultation we determine that a corporation is the best way to organize your business, Littleton Legal PLLC can draft Articles of Incorporation, Bylaws, Minutes, etc. We can also register your business the Secretary of State and the Internal Revenue Service. If you have an existing corporation, Littleton Legal PLLC is happy to discuss our Outside General Counsel program or Business Advisory services. Let us help you manage the day-to-day legal matters of your company.
A partnership is a type of arrangement between two or more people to share the profits and liabilities of a single business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. If you’ve decided you’d like to set up a partnership or if you’re just not sure what is right for you, we can help you review the pros and cons of this type of company. Regardless of which type of entity is right for your business, we can help walk you through each step in getting your business documents in order and filing them with the appropriate state and federal authorities.
A not-for-profit corporation must meet specific criteria, as seen in the IRS Code under 501(c)(3), to qualify for tax-exempt status. Common examples of not-for-profit companies are ones formed with “charitable, religious, education, or scientific purposes.” If you’re thinking of creating a non-profit organization, let us at Littleton Legal PLLC help you through the processes involved so that you can focus on your organization’s goals.
Littleton Legal PLLC is equipped to answer your residential and commercial real estate law questions whether you are the buyer, seller, landlord or tenant.
Buying and selling real property requires the expertise of a trusted real estate attorney to maximize your goals, minimize your risks, and understand your obligations and duties.
Let us assist you in negotiating and navigating the buying, selling, renting and leasing processes to make sure your real estate transactions go as smoothly as possible.
Whether your primary concern is creating a mechanism for retirement, retaining key employees, building a legacy to pass on to your heirs, avoiding transfer taxes, keeping your business assets out of probate, or managing the risks of unexpected life events, Littleton Legal PLLC can assist you in implementing an appropriate long-term plan and business transition strategy.
It is never too early to start thinking about what will happen to your company when you or your partner retire, become disabled, die, get into an unresolvable dispute with partners, or lose key employees. Utilizing thoughtfully created tools such as operating agreements, shareholder agreements, by-laws, buy-sell agreements, key-employee retention plans, deferred compensation plans, and company retirement plans Littleton Legal PLLC can help you prepare for the company’s succession during both planned and unplanned changes of circumstance. Call us today to plan for your future!
If you’re just creating your LLC or have been in business for quite a while, we can help you ensure your business and the protections of your limited liability company meet your business and legal needs. Keeping your LLC registered annually as well as keeping your company record books up-to-date are both items that we can help you with as part of our maintenance program. Give us a call to learn more about keeping your business in check.
At Littleton Legal PLLC we have extensive experience drafting, negotiating and reviewing the following real estate agreements:
- Contracts to Sell or Purchase Homes or Commercial Property
- Mortgages and Promissory Notes
- Sale By Owner Real Estate Contract and Closing Services
- Rental Agreements for Residential Properties
- Commercial Lease Agreements
- Mineral Interest and Royalty Interest Agreements and Deeds
- Home Owner Association Documents
- General Warranty Deeds, Quit Claim Deeds, Trustee’s Deeds
- Easements and Deed Restrictions
- Transfer on Death Deeds & Revocations
- Termination of Joint Tenancy Affidavits
Call us to draft or review your critical contract to ensure your interests are protected.
We are well-versed in negotiating, drafting, and reviewing contracts and agreements for all types of industries and needs. A few common business needs are:
- Operating Agreements & Bylaws
- Buy-Sell Agreements & Shareholder Agreements
- Company Minutes
- Business/Stock Sale and Purchase Agreements
- Commercial Real Estate Sales, Purchases & Leases
- Equipment Sales, Purchases & Leases
- Letters of Intents & Memorandums of Understanding
- Mediation/Arbitration Statements & Settlement Agreements
- Loans, Promissory Notes, Mortgages & Secured Transactions
- Materialmen & Mechanic Liens
- Employee & Severance Agreements
- Independent Contractor Agreements
- Non-Compete, Non-Disclosure, Non-Solicitation & Confidentiality Agreements
- Company Handbooks
- Insurance Contracts Review & Coverage Assessments
- Oil & Gas Transactions
Let us help you work through the concerns associated with any of these agreements to ensure you and your interests are protected. Call us today.