What To Know About Naming Beneficiary Designations Following The Secure Act

Tax advantaged accounts, such as IRAs and qualified retirement plans like 403(b)s or 401(k)s require specific estate planning strategies. Creating a trust in and of itself may not be enough to protect the estate planning intentions of the creator of that trust. Revocable living trusts are usually funded with a person’s real estate, non-retirement financial accounts and bank accounts.

In a trust the person states where their assets are going when they pass away and names a backup plan as well. A trust, however, does not control any assets outside of the trust, such as tax advantaged retirement accounts that pass through beneficiary designation forms filed directly with the company manager. In January of 2020, the passing of the SECURE Act changed the rules about inheriting retirement accounts, and now forces earlier distribution and therefore tax consequences on everyone except a few specific people.

Beneficiaries typically fall into a few categories: the spouse of the person who owns the account, non-spouse individuals, such as children, and entities like charities or trusts. Each of these beneficiaries will have different options for what to do when they inherit a tax advantaged account. For people other than spouses with a few rare exceptions, they must receive all account assets within 10 years of the account owner’s death.

Spouses have the most discretion over these situations in that they can consolidate the inherited account into their own tax advantaged account, take a lump sum payment or roll the funds into an inherited IRA. Entities, including certain types of trusts, can include multiple options such as lump sums within five years of the account owner’s death or distribution over the expected lifetime of the account holder. Set up a time to work with an experienced estate planning lawyer to discuss your options.

Three Steps You Can Take to Add Asset Protection Planning to Your Virginia Estate Plan

Have you thought about the possibility of your assets being subjected to outside risks or threats? This could include lawsuits filed by other parties or potential creditor claims.

There are several different steps you can take with the help of an experienced Virginia asset protection planning lawyer to incorporate asset protection planning strategies that are legal and helpful. There are several simple steps that you can take to reduce your assets’ vulnerability to attack from potential creditors. Some of the most important include:

  • A review of your liability insurance policies to verify that you have appropriate coverage in place for your risks and assets.
  • Ensuring that your assets have been properly titled, such that they cannot be easily attached and accessed by creditors.
  • The use of tools such as a limited liability company to hold certain assets.

Asset protection planning involves using a forward-thinking approach to discourage potential creditors from initiating a lawsuit to begin with, or helping you when a lawsuit has already been initiated.

The best time to use Virginia asset protection planning is now. Waiting until a lawsuit has already been filed limits the way in which you can respond to this risk. It’s better to plan ahead and guard against the possibility of future issues.

A consultation with a lawyer can help you figure out what strategies and tools might be used for your individual situation to give you peace of mind. If you’re ready to take the next step with a holistic estate planning, find a Virginia Beach lawyer to help you put together your plan.



How Does Asset Protection Planning Fit into Your Virginia Estate?

Asset protection planning refers to the proactive steps that you take to protect your current assets from future divorce, judgements, lawsuits or creditors. There are many different legal techniques that can be used to help protect these assets or even deter people from filing a lawsuit in the first place. You can also obtain settlement negotiation power using asset protection planning and prevent the seizure of any of your assets in the event that a judgement occurs.

A thorough legal and professional examination is required to incorporate asset protection planning into your Virginia estate. This includes a conversation about your family goals, your personal objectives, the overall risks you are currently facing, your asset inventory and your financial situation.

Simple financial privacy might be at the foundation of judgement proof asset protection planning, however, this planning can also be customized based on the comfort level, risk mitigation strategies and assets associated with the family or individual seeking protection.

There are many different ways to approach asset protection planning but the most effective is to put it in place well before the need arises. Attempting to engage in asset protection planning after a lawsuit is already filed is likely to backfire.

Scheduling a consultation with an experienced Virginia asset protection planning attorney can help you to put a plan in place that is much more effective for anyone who has the foresight to set them up before a lawsuit strikes. Asset protection is an important component of your overall estate plan and should be something top of mind for you.

Talk to an estate planning lawyer in Virginia Beach for more information.



Trillions of Dollars Will Be Transferred Soon. Are You Ready?

High net worth wealth transfer is top of line for many estate planning and asset protection planning attorneys today. Across the world, more than $8.6 trillion in high net worth wealth will change hands in the coming decades. Nearly 40% of today’s high net worth investors are over age 60, and many of them will need to consider involving the next generation in the estate planning process.

High net worth families have unique concerns and questions to bring to the table with regard to leveraging tax strategies, protecting their assets from creditors, and other potential risks, and deciding how to support other efforts like their philanthropic goals through the means of estate planning.

Your family members might not be prepared for how to handle a major inheritance- this is where using tools like trusts can help you to accomplish your primary goals with estate planning and minimizing the risk of squandering those assets.

Even if you have a smaller estate, don’t overlook the opportunities to get organized and plan for a smooth transition of your assets. In the wake of coping with all the details of losing a loved one, your family members don’t need the additional stress of attempting to figure out what you intended. You can protect the value inside your estate and

Scheduling a consultation with an experienced Virginia estate planning lawyer is a great place to start if your estate planning has become extremely complex and you would like insight on how to properly leverage the passage of this transfer.



Does A Trust Offer Asset Protection?

There are numerous different reasons why it might make sense to establish a trust for the purpose of meeting your estate planning goals. Far too many people misunderstand how trusts can be appropriately used and this means that the trust never gets funded and therefore is never able to pass on the assets to the intended beneficiaries.

Because of all the complicated issues involved in crafting a trust that addresses all of your issues and is followed through so as to be viewed as valid under state law, you must work with an estate planning lawyer.

One of the most common reasons that people choose to use trust is because these enable asset protection. A revocable trust established during your lifetime becomes irrevocable after you pass away. If the assets are still inside the trust for the lifetime of your children, those assets are protected from litigation that could be filed against your children.

Another good reason to use a trust is because it can help to provide for children from multiple marriages. A trust is an outstanding tool to provide assets for your spouse during the course of his or her lifetime after you pass away, then enabling any remaining assets to be passed on to your children from your first marriage. This helps to protect your children as well as your grandchildren who might ultimately receive your assets.


Are You Ignoring These Digital Assets?

There are plenty of different studies and toolkits that recommend incorporating digital estate planning but it is only as good as the value of your comprehensive planning. Overlooking common digital accounts could lead to major mistakes if you were to suddenly pass away.ThinkstockPhotos-636230500 (1)
Research found that many participants have digital media assets in the form of emails, banking records and social media accounts but they can also include medical records, iTunes account, bitcoins, and online businesses.
Online service providers each have their own unique approach to how they deal with somebody’s account when that person passes away. In many cases if they are informed that someone has passed away, they will all automatically close the account. In other cases, family members must provide documentation indicating that they have the right to terminate such an account.
You may not wish to close these accounts immediately because they have information that your family members may wish to save, such as a social media account that includes all of your digital photos. Having clearly articulated plans and verifying that they are incompliance with the rules of that particular service provider is strongly recommended.
Having a consultation with an estate planning attorney can further illuminate you about the critical issues involved in digital estate planning and the steps that you should take to ensure that you have considered all of your accounts and have clearly articulated instructions and compliance rules associated with passing these on. While you may want these accounts closed immediately after you pass away, having a plan can make things easier for your family when they are already struggling with the loss of a loved one.

Do You Have Inherited Assets? Estate Planning is Even More Important

Estate planning can be complicated no matter who you are, but knowing how your assets and investments will be divided among your beneficiaries after passing on can give you a lot of peace of mind and it can also decrease your stress level about the potential pitfalls that your beneficiaries might have to cope with due to lack of planning.ThinkstockPhotos-645670208
One common issue for many people is wondering how their stock portfolios will be transferred from one individual to another when a person dies and who should have access to those investments before or after this occurs. If the stock portfolio is part of an individual’s trust, then the choice may be out of your hands and you may not be able to add another individual to the account even if you wanted to. Another important component is where the person lives when they pass away. Inheritors could be tied up in the court system, trying to obtain rightful assets with a revocable trust if the proper planning procedures have not been taken.
Receiving an asset as an inheritance http://host.madison.com/business/investment/markets-and-stocks/what-to-do-with-a-large-inheritance/article_eefb5cc8-5913-5998-9aea-5ea226d8849d.htmlfrom someone else is a special opportunity, but if you’re not going to exhaust that inheritance while you’re still alive, you should consider how you’ll add it to your own estate planning.
If you have inherited assets, you need to think not just about how these will be used over the course of your lifetime but how you intend to pass them on to others. Consulting with an experienced estate planning attorney is one of the most important steps that you can take to protect your interests.

More Americans Are Passing Away with Debt Than Ever

A recent study of 220 million consumers in Experian’s File One database, indicated that up to 73% of consumers are passing away with debt in high numbers. For those individuals who do not have a home loan, the average debt was $12,875. However, consumers with a mortgage carried approximately $61,554 in debt.
You may assume that debts are no longer your issue if you pass away, but that’s not true if there are assets inside your estate that may cover a portion or all of these debts. If you have communicated to your loved ones that you intend to give them particular assets, but those are seized and sold as part of your estate plan, you may wish to discuss your options for changing your estate plan with an experienced lawyer.
thumb_alternateThe types of debts most common included credit card balances, mortgage debt, auto loans, personal loans and student loans. Debt belongs to the deceased individual when he or she passes away. That means that creditors can pursue asset sold in the estate as part of their payment.
If there aren’t enough assets to satisfy debts, then creditors may lose out on all or some of their payments. But in the event that there are assets in the estate to pay out creditors, then your beneficiaries may actually receive nothing. This is why it may be important to discuss other opportunities such as a life insurance policy or advanced planning strategies with your knowledgeable estate planning attorney.

Without A Will, Legislature’s Guesses Hold Sway

Last Will and Testament
Last Will and Testament
Most people should say that when it comes to dying without a will, there’s no way.
But far too many folks manage do find a way, and this can have potentially devastating consequences, according to the American Bar Association.
“If you die intestate, without a will, your state’s laws of descent and distribution will determine who receives your property by default,” according to the association. These laws vary from state to state, but typically the distribution would be to your spouse and children, or if none, to other family members. A state’s plan often reflects the legislature’s guess as to how most people would dispose of their estates and builds in protections for certain beneficiaries, particularly minor children.
“That plan may or may not reflect your actual wishes, and some of the built-in protections may not be necessary in a harmonious family setting. A will allows you to alter the state’s default plan to suit your personal preferences. It also permits you to exercise control over a myriad of personal decisions that broad and general state default provisions cannot address.”
A will, whether a simple one or a document of significant complexity, reflects the will of the person who signs his or her name to it, and can provide a lasting last memory for family and friends left behind.
Sometimes, however, the ABA warns, a will alone might not be enough to ensure a descendant’s wishes are fully and properly carried out.
“In many instances, consumers prepare wills believing that the will governs who will inherit their assets when in fact, the title (ownership) of various accounts or real property, for example, as joint tenants, or beneficiary designations for IRAs, life insurance and certain other assets control the distribution of most or even all assets,” the article states. “This is why merely addressing your will is rarely sufficient to accomplish your goals.”

Widows Face Special Issues In Financial Planning

Close-up of documents
Close-up of documents
Many older couples, those approaching or even well past retirement age, have wisely made financial plans for the rest of their lives together.
What few do, because it’s just too emotionally difficult in most cases, is make further plans for one or the other of them to carry on alone.
More often than not, it is going to be the woman who survives in a married couple, and women face much more difficulty in planning for a secure future, as noted in a recent article in The New York Times.
“The household income for widows typically declines 37 percent after a spouse dies, far more than the 22 percent income drop that men experience, according to government figures,” the story stated . “The assets of widows also tend to fall substantially more than widowers’.
“Women also typically live longer than men. One in four women from 65 to 74 are widows, according to census figures. When women reach 85, three out of four are widows.”
“Many people do not plan for income needs after the first death in a couple,” David Littell, program director of the American College of Financial Services, which offers financial education for securities, banking and insurance professionals, was quoted as saying. “And retirement planning is more of a struggle because life expectancy is longer.”
There is, however, some good news.
“Often neglected in the past, women are receiving more attention from banks and other financial institutions,” the article noted. “Regions Bank, which covers a 16-state area in the South and Midwest from its headquarters in Birmingham, Ala., for example, devotes a portion of its website to women and wealth management, with videos and other information.”
“More and more women control wealth,” said Amanda Weeks, a Regions private banker and wealth manager, “so they have to know their sources of income and how to manage their assets.”
“That includes figuring out when the mortgage will be paid off if it hasn’t been already, whether there is a pension plan or 401(k) for one or both spouses and whether there are other bank accounts or property. Often, one of the most complex issues is determining how to obtain the maximum payment from Social Security, a major income pillar for many older women.”
“When a spouse dies, it is an emotional time,” Weeks said. “It can take some time to find the information and make a plan. And everyone has their own timetable.”