July 31, 2020

Notes – August 2020

Personal Notes

What a busy month for the DeWitts…

We bought a new house and moved. Here at the end of July we are just getting settled in.

Aaron is busy at boot camp. We are getting several letters a week from him. It’s good that he is learning to write a letter. Just a few weeks of boot camp left, then he starts AIT. We don’t know if they’ll allow us to go to graduation or not yet.

Madeline is getting ready to start at the University of Arkansas. Some of her classes have gone “online.” She is not happy about that. Neither am I. Part of what you pay for is the experience. Now that is being taken away.

And we are busy taking care of people during this “new normal.”

I did spend a weekend at the family farm visiting…

Why You Should do Your Estate Planning…Now!

If you have a car, you probably have car insurance against accidents so you don’t have to worry.

If you have a house, you probably have house insurance against accidents and the forces of nature so you don’t have to worry.

Why insurance? So you don’t have to worry if something happens.

You do estate planning for the same reason, so you don’t have to worry if something happens.

Do you worry about probate? Worry about who will manage your finances if you can’t? Think about who will take care of you? Worry about who would make healthcare and nursing home decisions for you?

Even if you have made up your mind about these things, do you have a written, legally binding plan in place to make sure your wishes are carried out?

Without a written, legally binding plan, your wishes are just that, wishes. They don’t have any authority.

An estate plan is a written, legally binding plan to make sure your wishes are carried out so you don’t have to worry. The plan gives who you want the authority to carry out your wishes.

But, most people don’t have a plan in place to protect their legal, financial, and healthcare choices and affairs against the courts and State.

Most people just live with the worry.

Without a plan when something happens, the State steps in and tells your family how your affairs will be managed and who will be in charge, not you.

Estate planning reduces risk.
Estate planning protects you.
Estate planning protects your children.

But most people are walking around without the insurance and worrying about who will take care of them, how their affairs will be managed, or how their property will be handed out later. They don’t have an estate plan.

Estate planning is your way of managing the risk of loss of capacity and more.

Once you turn 18 nobody else can make financial, legal, or healthcare decisions for you. If you don’t have a plan in place, it will be difficult on your family to make those decisions because of the hurdles the legal system puts in place.

If anything unexpected happens, you and your family could find yourselves facing consequences you didn’t want.

First, if you are incapacitated because of an accident, medical incident, infection, heart attack stroke, or dementia your family faces trips to court to get permission to take care of you and make financial, legal, and healthcare decisions. Planning makes sure that the people you want will be in charge.

Second, if you should pass away without a plan, then your family faces probate. You won’t have a say in who gets what. You won’t get a say in when they get it or protecting their inheritance. The State’s laws will make those decisions. The Judge will enforce the State law. Planning is the way to avoid probate and give what you own to who you want when you want with the rules you want.

Estate planning reduces risk.
Estate planning protects you.
Estate planning protects your children.

Estate planning helps keeps assets in the family. Planning ensures your children’s inheritance is protected. Planning protects your children from losing half of their inheritance to a divorce. Planning protects your children in case they become incapacitated.

You do estate planning so you don’t have to worry about your wishes being carried out.

August Quotes

Every year, August lashes out in volcanic fury, rising with the din of morning traffic, its great metallic wings smashing against the ground, heating the air with ever-increasing intensity. – Henry Rollins

The month of August had turned into a griddle where the days just lay there and sizzled. – Sue Monk Kidd

I don’t have to get up in the morning and go beat up my body like I used to. I don’t have to be out there in August in 108 degree weather down in Texas. – Emmitt Smith

Recipe – Chicken Picatta

Floral, lemony, tangy. The best word that describes this dish is delicious.

Click Here for the Recipe from AllRecipes.com

PS:

Imagine for a minute you didn’t have insurance. I imagine you would feel vulnerable and exposed. I know I would. Just one accident, medical incident, or house fire would wipe a person out. The worry would be constant. I used to feel like that because I didn’t have an estate plan. I didn’t have protection against the risk of probate and more. Now I don’t worry about the risks because I have a plan. Helping people avoid the risks is what I do.

I know that protecting what you have against risk (i.e. insurance) is important to you. I’m sure at time, you feel insecure. I’m sure that you want to take all the steps you can to protect what you’ve worked so hard or. When you work with me, that’s just what we’ll do. You’ll know you’ve done all you can to protect you, your family, and your money.

I’ve been helping people for years by putting plans together, so naturally I have a wealth of knowledge. Obviously, as you know, every person is different and every situation is different as are goals, outcomes, and desires they want to achieve and fulfill. I pride myself on getting you the information you need to make good decisions. Clearly I don’t want to make any suggestions about a plan of action before finding out more about you, your situation, and what your goals are. I’m sure you would agree that is a good way to start.

Please use this link to schedule a free consultation and estate planning needs analysis. Thank you again, Gary.

March 1, 2016

Wills vs. Trusts: In Plain English

Everyone has heard of wills and trusts. Most articles written on these topics, however, often presume that everyone knows the basics of these important documents. But, in reality, many of us don’t – and with good reason – as they’re rooted in complicated, centuries-old law.

Let’s face it, if you’re not an estate planning attorney, these concepts tend to remain merely that – concepts. So, if you’re “fuzzy” about wills and trusts, know that you are not alone. After we show you the difference between these two documents, we’ll tell you why a trust is the better choice.

Wills vs. Trusts: Defined

Let’s take a minute and define both “will” and “trust”:

Will. A will is a written document that is signed and witnessed. A will is considered a “death” document as it only goes into effect when you die.
A will:

provides for the distribution of assets owned by you, but not assets directed to others through beneficiary designations (e.g. life insurance or retirement benefits)
sends assets in your individual name or payable to your estate through the probate process
allows you to appoint permanent guardians for your minor children
names the person you wish to settle your estate (e.g. executor or personal representative)
doesn’t always include protective trusts for beneficiaries and tax planning because many wills are simple 2-3 page documents
permits you to revoke or amend your instructions during your lifetime
tends to cost less than a trust on the outset but costs more to settle during court proceedings after death

Trust. A trust is a legal document, signed and witnessed, and effective during your lifetime, during any period of disability, and after death. Because the trust is effective during your lifetime and you can change it, it’s referred to as a “living” document.

A trust:

has lifetime benefits
provides for the distribution of your assets
avoids probate if fully funded
provides for a successor trustee upon your death or incapacity
allows for the management of your property – even if you’re incapacitated
can address appointing disability guardians for minor children
often includes protective trusts for beneficiaries and tax planning
permits you to revoke or amend your wishes during your lifetime
costs more than a simple will on the outset but much less upon administration, while typically providing significantly more value

The Probate Process: A Key Element in Deciding Between a Will and Trust
One key element in deciding between a will and a trust is understanding the probate process. The term “probate” – which literally means “proving” – refers to the process wherein a decedent’s will must be authenticated, outstanding legitimate debts paid, and assets transferred to the beneficiaries.

The downside is that probate can take a long time – even years – it’s expensive in many places and the entire process is completely public, meaning your nosey neighbor Nancy and evil predator Paul both know exactly who got what and how to contact them. In virtually all cases, the only upside of probate is that creditor claims are cut off.

Probate Guaranteed with a Will. If you use a will as your primary estate planning tool, you own property in your individual name, or property is made payable to your estate, probate is guaranteed.
Probate Avoided with a Trust. If you use a fully-funded trust as your estate planning tool, probate is avoided – saving your family time and money.

The Bottom Line on Wills vs. Trusts
HOW TO DECIDE: As everyone’s situation is different, it’s important to analyze every aspect of your situation – and what the future may hold – so that you can determine what’s right for you and whether probate avoidance, incapacity planning, and trust protections have value to you and those you love. Most people receive the greatest overall benefit from having a trust.

ACT NOW: Without an estate plan in place, you and your family are left completely unprotected. Call our office now and we’ll help you determine whether a will or a trust makes sense for your situation. You don’t have to make these decisions alone.

February 6, 2016

How to Avoid Sending Your Assets and Loved Ones Into Probate Court

Over the years, we’ve discovered that many people make a BIG mistake, catapulting their assets and loved ones right into the court system. Most of our clients want to avoid probate because it has a reputation for being expensive, time consuming, stressful – and public, meaning anyone anywhere can see who got what and how to contact them. Beneficiaries may become victims to nosey neighbors, predators, and unscrupulous “charities.”

Q: What’s the one mistake that causes all these problems?

A: An unfunded trust.

In this issue you will learn:

What it means to fund your trust
What happens to assets left out of your trust
Which assets should, and should not, be funded into your trust
How funding your trust will ensure your final wishes are carried out and save your loved ones valuable time, money, and the frustration of going to court – while preserving privacy

What Does it Mean to Fund Your Trust?

Funding a trust is simply the process of transferring assets from your name into the name of your trust. Often, beneficiary designations are changed to your trust as well.

Funding is accomplished in three ways:

Changing the title of the asset from your individual name (or joint names if you’re married) to the name of your trust – for example, from Jane Smith to Jane Smith, Trustee of the Jane Smith Living Trust dated January 1, 2016.
Assigning your interest in an asset without a title (such as artwork, jewelry, collectibles or antiques) to your trust.
Changing the primary or contingent beneficiary of the asset to your trust. Think life insurance, retirement accounts, and annuities.

Planning Tip: Put together a list of your assets, their values, and locations, then start funding the most valuable ones and work your way down. Keep plugging away until your trust is fully funded. Our office can help.

What Happens to Assets Left Out of Your Trust?

For many people, avoiding probate court is a main reason they set up a revocable living trust in the first place. Unfortunately, you are not “done” when the trust documents are signed. If you don’t take the next step to fund, probate court is guaranteed.

WARNING: If your trust is left unfunded, you will send your family and assets into probate court.

Which Assets Should, and Should Not, Be Funded Into Your Trust?

In general, you will probably want to fund the following assets into your trust:

Real estate – homes, rental properties, vacant land and timeshares
Bank and credit union accounts – checking, savings, CDs
Safe deposit boxes
Investment accounts – brokerage, agency, custody
Notes payable to you
Life insurance – if you don’t have an irrevocable life insurance trust
Business interests
Intellectual property
Oil and gas interests
Personal effects – artwork, jewelry, collectibles, antiques

On the other hand, you will probably not want to fund the following assets into your trust:

IRAs and other tax-deferred retirement accounts – only the beneficiary should be changed
Incentive stock options and Section 1244 stock
Interests in professional corporations
Foreign assets – in some countries funding an asset into a U.S.- based trust causes adverse tax consequences, while in other countries trusts aren’t recognized or are ignored due to forced heirship laws
UTMA and UGMA accounts – your minor grandchild is the owner, not you as the custodian; instead, name a successor custodian
Cars, trucks, boats, motorcycles and scooters – most states allow a small amount of assets, including vehicles, to pass outside of probate, in others, a beneficiary can be designated for vehicles, and in others, vehicles don’t have to go through probate at all

Planning Tip: Work closely with your estate planning attorney to determine what should go into your trust and what should stay out. Our office can help.

What Are the Benefits of Trust Funding?

Funding your trust makes it possible to obtain trust benefits:

Your trust is easy to update.
Your trustee, instead of a judge, will take control of your trust assets if you become incapacitated or die.
Your trustee will have direct access to your trust assets without a court order.
Your trustee will be empowered to pay bills and manage, invest, sell, and reinvest your trust assets without court intervention.
Your private wishes will remain private instead of being publicized.
Settlement time, costs, and frustration are reduced.

The Bottom Line on Trust Funding

A trust has a myriad of benefits, including probate avoidance. Yet, in the end, an unfunded trust doesn’t avoid probate.

ACT NOW: Call our office now and we’ll help you make sure your assets are owned properly and that your trust is up to date.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.

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