Downs Law Firm, P.C.

retirement planning

Too Busy for Retirement Planning?

Going straight from a busy work life to ‘retired’ can be difficult if you haven’t mapped out your path. Preparing yourself effectively involves both financial and lifestyle choices.

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Disinherit a child

When Is the Best Time to Disinherit a Child?

I have a sister, who I have not seen or heard from in 40 years, when she said she hated all of us and never wanted anything to do with us again. She even gave up her 5-year-old son for strangers to adopt and would not let my parents adopt him.

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retirement planning

Remarriage Can Create Estate Plan Challenge

When a remarriage takes place late in life, potential problems can arise over an existing home. It may be hard to broach the subject of death when you are getting married later in life. If you have children from a prior marriage, what will happen with assets and control is a necessary difficult conversation. It’s not always an easy situation when a spouse moves into the home of their spouse when they marry. Would the surviving spouse receive the home when the other dies? Does the home go to children from a previous marriage or previous arrangement? A good estate plan can resolve many potential problems in a remarriage situation, according to the Times Herald-Record, in “How to preserve your home’s value when remarrying.” With poor planning, you might end up with your assets going to your second spouse and then, to his or her own children, leaving your own children empty-handed. A common approach is to leave the surviving spouse the right to use and occupy the residence, with a provision in a trust or a will that the surviving spouse pays taxes and home insurance costs and maintains the house. The right to live in the house can be for a limited number of months or years or until they pass away or enter a care facility. When the surviving spouse dies, or the time limit is reached, he or she leaves the house, the house is sold and the proceeds are divided among the children of the owner’s spouse. Some questions to consider: What if the house needs to be sold? Can the spouse use the proceeds to purchase another house? How long is the usage of time? Who can be there? There are other ways to provide more flexibility to the surviving spouse. If the house is too large or expensive to maintain, he or she may be given the right to use and occupy a substituted property, which may be purchased with the proceeds from the owner spouses’ home. Another arrangement allows the owner spouse’s home to be sold with the surviving spouse using the income from the proceeds of the sale of the house to pay for a rental. When the surviving spouse dies (or when the term expires), the children of the first spouse inherit what is left. A few important things to consider: how well the surviving spouse will be able to maintain the house, either for financial or physical reasons. If the surviving spouse is not taking care of the house and it falls into disrepair, the children may have to file an eviction proceeding. If the trust or will does not specifically instruct the surviving spouse to pay for home maintenance, the children of the owner spouse would be responsible for those costs, and depending on how long the surviving spouse lives, that could be a large burden for a long period of time. This situation requires thoughtful planning, with many “what if’s” to be asked. An experienced estate planning

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Living Trust

A Revocable Living Trust Might Be a Good Fit

There are many kinds of trusts. They aren’t just for the wealthy. Our practice has featured the preparation of wills and trusts exclusively since 1995. In the intervening years, we have prepared thousands of each such plans, and now work extensively implementing them after a client has died. Our caseload is now about 45% administration of wills and/or trust. We are often asked by clients which is better. That depends on many factors. But Trusts seem like a much better choice often, after the time comes to use the planning. If maintained and funded, a trust can be more cost effective, private and easier to administer. On the other hand, I know many attorneys who scoff at the notion of using a trust for people who are not millionaires. Probate, they often assure, is not so bad. And is a trust necessary? Everyone needs an estate plan.  However, everyone should also at least consider a trust, according to The New York Times in “Life After Death? Here’s Why You Should Have a Trust.”It turns out that many people who are not wealthy, can also benefit from having a trust. There are many different kinds of trusts which serve different purposes. One is a revocable trust, which the owner can change. They are considered by many to be the “work horse” of modern estate planning. A revocable trust can avoid the need for a public probate court proceeding after the person dies, saving time and keeping money from being immediately available to heirs and executors alike. Trusts are also useful for times when people become incapacitated and need someone else to take care of their finances. Because many more people are living longer and the number of people with dementia is increasing, there are more situations where trusts are useful to the family and caregivers. A will is different than a trust and is a public document. The probate process requires a disclosure of assets, bank and other financial accounts and the names of beneficiaries. That information remains private with a revocable trust. Other considerations regarding trusts: You should have any type of trust set up by an estate and trust attorney. A house, real property, bank or investment accounts can be placed into a trust. A revocable trust does not always end at the death of the original owner. However, just how long it may last, depends upon the laws of your state. People also use trusts to protect their assets from others or to assure the long-term care of someone who is disabled. You can have a professional manager, family member or friend as a trustee or co-trustee of a trust. Sometimes having a licensed professional who has federal reporting requirements can provide an extra layer of protection. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include taking a close look at trusts. Reference: The New York Times (March 22, 2018) “Life After Death? Here’s Why You Should

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Money in Trust

Put Not Your Trust in Money, Put Your Money in Trust

“Put not your trust in money, put your money in trust”, per Oliver Wendell Holmes, Sr. is embraced by estate planning lawyers and shows that trusts are not a passing fad. Everyone needs an estate plan, and when you understand what a trust does, your plan should probably include one, at least conditionally. According to The New York Times in “Life After Death? Here’s Why You Should Have a Trust.” It turns out that many people who are not wealthy can also benefit from having a trust. I consider a trust essentially a box to manage assets. There are many different kinds of trusts which serve different purposes and can be effective now or at death. One is a revocable trust, which the owner can change. They are considered by many to be the “work horse” of modern estate planning. A revocable trust can avoid the need for a public probate court proceeding after the person dies, saving time and keeping money from being immediately available to heirs and executors alike. Such a trust is created and holds assets during your lifetime. Other considerations regarding revocable trusts: You should have any type of trust set up by an estate and trust attorney. A house, real property, bank or investment accounts can be placed into a trust. A revocable trust does not always end at the death of the original owner. However, just how long it may last, depends upon the laws of your state. People also use trusts to protect their assets from others or to assure the long-term care of someone who is disabled. You can have a professional manager, family member or friend as a trustee or co-trustee of a trust. Sometimes having a licensed professional who has federal reporting requirements can provide an extra layer of protection. They are not a public record, unlike your will. Trusts are also useful for times when people become incapacitated and need someone else to take care of their finances. Because many more people are living longer and the number of people with dementia is increasing, there are more situations where trusts are useful to the family and caregivers. A trust can also be created in your Last Will and Testament.  We rarely create a will without a trust. A trust created in a will is a “Testamentary Trusts” because it is within your Last Will and Testament, but it can manage assets in much the same way as a revocable trust would. The difference is mechanical: the Testamentary Trust receives asset often through a probate process, because wills work through probate. A Testamentary Trust can be a designated beneficiary of life insurance, retirement plans and annuities. Care should be taken in drafting and when doing so because of issues like stretching out IRA withdrawals. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include taking a close look at trusts. Reference: The New York Times (March 22, 2018) “Life After Death? Here’s

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