What Is The Difference Between Will and Estate Planning?
Video Summary
What is the difference between a, Will and estate planning? Well, a Will is part of the estate planning process. Whenever I meet with someone, they say, well, I want to provide a Will. I take it that they want to plan for estate planning to say who they would like to receive their assets whenever they pass away. And one of the ways that you do that is by executing the Will. Most people don’t want to try and avoid probate, particularly if their assets or their assets are fairly simple. Basically, they just have their home bank accounts from a brokerage account that can be planned by having payable on death accounts and, or executing a life estate deed so that these assets pass automatically upon your death. And that’s what you call estate planning. Also, with your estate planning, you, you execute, and we discuss, or I discuss with my clients, about executing a living Will, which says that you don’t want your life prolonged artificially in the event that you are in a permanent vegetative state. Also, a healthcare proxy form called a healthcare surrogate whereby you designate someone to make healthcare decisions for you, and also, it’s a HIPAA waiver. And the third document is a durable power of attorney whereby you authorize someone to handle your business. It’s effective immediately, but also in the event you become incapacitated or it’s inconvenient for you to take care of business. The person you designate as your agent under a power of attorney, is able to transact business for in your behalf for you. They can’t do it for themselves. So, if you have any questions, give me a call at (727) 847-2288.
- Published in Estate Planning, Videos, Wills
Do I Need Require a POA For Assets And Healthcare Decisions?
Video Summary
Do I need power of attorney for assets and a healthcare decision? Well, those, I usually do that in two different forms. First, let’s talk about healthcare decisions. That’s called a healthcare surrogate form. And whenever I prepare that, it has what they call a HIPAA waiver whereby you authorize someone to make, to be able to receive your medical information and authorize the medical providers to talk, to whoever you designate. It also then provides you designate someone to make healthcare decisions for you if you are unable to do so. And so that’s a healthcare surrogate, which is specifically designed to designate someone or several people to be able to make healthcare decisions for you. A durable power of attorney is one usually used to take care of your business, such as your banking, being able to buy and sell assets. And so that is why you would sign a durable power of attorney, to appoint an agent to be able to take care of your business. I know many powers of attorney do also authorize the make certain medical decisions, but the healthcare surrogate form is specifically designed for that. But the power of attorney can authorize the setup of what they call a Miller trust in order to help qualify you for Medicaid. And so it has to do more with your business rather than for your healthcare decisions. So, yes, I think you should have both of those, so that you have someone to be able to make those healthcare decisions for you on the one hand, and then on the same person or someone else be able to make business decisions for you. If you have any questions, give me a call at (727) 847-2288.
- Published in Estate Planning, Medicaid Planning, Videos
Does a 401k Have To Go Through Probate?
Video Summary
Does the 401k have go through probate? No, it does not unless you designate the estate as the beneficiary or the person who sets up the 401k for. 401k is set up by an employer and they have a contract provision that designates you where you designate the beneficiaries. The federal law says that you must designate your spouse as the beneficiary. If you wish to name someone else of the beneficiary of your 401k, you must have the spouse sign a waiver, upon the participant, 401k’s death. The beneficiary or designated beneficiary need only present a death certificate if the designated beneficiary dies before the participant. Then there’s a question you’d have to check with the employer and what does the plan say? Does it go to, a family member or does it go to the estate? And that’s all going to be controlled by the provisions of a 401k. The general answer to your question though is, no. A 401k does not have to go through probate, and that it’s payable directly to the beneficiary, much like a life insurance policy. If you have any questions, give me a call at (727) 847-2288.
- Published in Estate Planning, Videos, Wills
Are My Assets Protected If I Place Them In A Trust?
Video Summary
Are my assets protected if I place them in a trust? No. This is a often cited myth that if you transfer your assets into a revocable trust, that you prepare for a state planning purposes, that they’re protected from your creditors. The law is that you, if you control the asset, which you do in a revocable trust, that a creditor could then still reach those assets. So that is not a method by which you can protect your assets. So, if you have any questions about doing that, please give me a call at (727) 847-2288.
- Published in Estate Planning, Probate, Trusts, Videos
Do I Have To Pay Income Tax On Money I Receive From An Estate?
Video Summary
Do I have to pay income tax on the money I received from an estate? The answer is no, you don’t, unless the money that you are receiving was interest, or other income from the sale or generated dividends or from estate assets. So let, if there’s a bank account, in the decedent’s name, I’ll say a hundred thousand dollars, and, and then that’s distributed to you, it’s cash. So there’s no income tax that you have to pay on that money. If there is a piece of real estate involved and the property is then sold, and then you get a portion of the sales proceeds of the from the sale of the real estate again, you don’t have to pay any income tax on it. If the property was sold for the same value as what it was at the time of the decedent died, that’s called a step up in basis, under the probate code. And, what that means is that when someone passes away, the Internal Revenue Service values, the property here says your basis or what you have to pay tax on is based upon the value as of the date of death versus the sales price. So, if the property is sold shortly after someone dies, then there’s not going to be any tax that has to be owed. If the property was not sold shortly after the person dies, it’s many years later, then you need to establish the value as the date of death and then subtract that from the amount that is sold. And then you would have to pay long-term capital gains on a portion of that. Sometimes you may receive dividends from stock that’s in the estate and that’s usually shown to you through a fiduciary tax return. And it’s called a K one. That’s many times offset by the attorney fees and cost. Of course this is, you know, it’s very specific because if you have a very large estate with lots of money coming in, well that would be one thing. Or if it’s a very small estate, then probably you’re not going to wind up having to pay any income tax on this. And the same things go if you get life insurance. You don’t have to pay on the death benefit if you receive some interest that had accumulated on the cash surrender value of the life insurance, well that is taxable income to you. Same thing with annuities that you have to pay tax on that money that you receive. Same thing with IRAs and 401, if you have any questions, give me a call at (727) 847-2288.
- Published in Estate Planning, Probate, Videos